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): May 9, 2019
RumbleOn, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State
or Other Jurisdiction
of
Incorporation)
001-38248
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|
46-3951329
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(Commission
File Number)
|
|
(I.R.S. Employer
Identification No.)
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1350 Lakeshore Drive
Suite 160
Coppell, Texas
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75019
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(Address of Principal Executive Offices)
|
|
(Zip Code)
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(704) 448-5240
(Registrant’s
Telephone Number, Including Area Code)
(Former Name or Former Address, If Changed Since Last
Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
|
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 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
Emerging
growth company ☒
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☒
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, $0.001 par value
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RMBL
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The
Nasdaq Stock Market LLC
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Item 1.01 Entry into a Material Definitive Agreement.
Notes Offering
On May
9, 2019, RumbleOn, Inc. (the “Company”) entered into a
purchase agreement (the "Purchase Agreement") with JMP Securities
LLC (“JMP Securities”) to issue and sell $30.0 million
in aggregate principal amount of the Company’s 6.75%
Convertible Senior Notes due 2024 (the “Notes”) in a
private placement to qualified institutional buyers pursuant to
Rule 144A under the Securities Act of 1933, as amended (the
“Securities Act’) (the "Note Offering").
JMP Securities received a
discount in the amount of 7% of the gross proceeds in the
Note Offering. The net proceeds for the Note Offering,
after deducting the initial
purchaser’s discounts, advisory fees and estimated offering
expenses,
were
approximately $27.3 million.
The Notes were issued
on
May 14, 2019 pursuant to an Indenture (the
“Indenture”), by and between the Company and Wilmington
Trust, National Association, as trustee (the
“Trustee”). The Purchase Agreement includes customary
representations, warranties and covenants by the Company and
customary closing conditions. Under the terms of the Purchase
Agreement, the Company has agreed to indemnify JMP Securities
against certain liabilities. The Notes will bear interest at 6.75%
per annum, payable semiannually on May 1 and November 1 of each
year, beginning on November 1, 2019. The Notes may bear additional
interest under specified circumstances relating to the
Company’s failure to comply with its reporting obligations
under the Indenture or if the Notes are not freely tradeable as
required by the Indenture. The Notes will mature on May 1, 2024,
unless earlier converted, redeemed or repurchased pursuant to their
terms.
The
initial conversion rate of the Notes is 173.9130 shares of Class B
Common Stock, par value $0.001 per share (the “Class B Common
Stock”), per $1,000 principal amount of the Notes, subject to
adjustment (which is equivalent to an initial conversion price of
approximately $5.75 per share, subject to adjustment). The
conversion rate will be subject to adjustment in some events but
will not be adjusted for any accrued and unpaid interest. In
addition, upon the occurrence of a make-whole fundamental change
(as defined in the Indenture), the Company will, in certain
circumstances, increase the conversion rate by a number of
additional shares for a holder that elects to convert its Notes in
connection with such make-whole fundamental change.
Prior to the close of
business on the business day immediately preceding November 1,
2023, the Notes will be convertible only under the following
circumstances: (1) during any calendar quarter commencing
after the calendar quarter ending on September 30, 2019 (and only
during such calendar quarter), if the last reported sale price of
the Class B Common Stock for at least 20 trading days (whether or
not consecutive) during a period of 30 consecutive trading days
ending on, and including, the last trading day of the immediately
preceding calendar quarter is greater than or equal to 130% of the
conversion price on each applicable trading day; (2) during
the five consecutive business day period immediately following any
five consecutive trading day period, or the measurement period, in
which the trading price per $1,000 principal amount of notes for
each trading day of the measurement period was less than 98% of the
product of the last reported sale price of the Class B Common Stock
and the conversion rate for the notes on each such trading
day;(3)
if the Company calls
any or all of the notes for redemption, at any time prior to the
close of business on the scheduled trading day immediately
preceding the redemption date; or (4) upon the occurrence of
specified corporate events. On or after November 1, 2023, to the
close of business on the business day immediately preceding the
maturity date, holders may convert all or any portion of their
notes at the applicable conversion rate at any time, in multiples
of $1,000 principal amount, at the option of the holder regardless
of such conditions. Upon conversion, the Company will pay or
deliver, as the case may be, and subject to the “blocker
provision” described below, either cash, shares of Class B
Common Stock or a combination of cash and shares of Class B Common
Stock, at the Company’s election. In addition, on or after
May 14, 2020 or after
the occurrence of any 30 trading day
period during which the last reported sale price of the Class B
Common Stock has been at least 150% of the conversion price then in
effect for at least 20 trading days (whether or not consecutive),
the Company will make an interest make-whole payment to a
converting holder equal to the sum of the present values of the
scheduled payments of interest that would have been made on the
Notes to be converted had such Notes remained outstanding from the
conversion date through the earlier of (i) the date that is two
years after the conversion date and (ii) June 15, 2022 if the Notes
had not been so converted. The present values of the remaining
interest payments will be computed using a discount rate equal to
2.0%.
The Indenture contains a “blocker provision” which
provides that no holder (other than the depositary with respect to
the notes) or beneficial owner of a Note shall have the right to
receive shares of the Class B Common Stock upon conversion to the
extent that, following receipt of such shares, such holder or
beneficial owner (together with such holder’s affiliates and
any other persons whose beneficial ownership of common stock would
be aggregated with the holder’s for purposes of Section 13(d)
of the Exchange Act and the rules promulgated thereunder, including
any “group” of which such holder is a member) would be
the beneficial owner of more than 4.99% of the outstanding shares
of the Class B Common Stock;provided that if such holder or
beneficial owner is so prevented from receiving any shares to which
it would otherwise be entitled, the Company’s obligation to
deliver such shares will not be extinguished, and the Company will
deliver such shares (or any designated portion thereof) within two
business days following written notice from the converting holder
or beneficial owner that receipt of such shares (or any designated
portion thereof) would not be prohibited by this
sentence.
The Notes are not
redeemable by the Company prior to the May 6, 2022.
The Company
may redeem
for cash all or any portion of the Notes, at its option, on or
after May 6, 2022 if the last reported sale price of the Class B
Common Stock has been at least 150% of the conversion price then in
effect for at least 20 trading days (whether or not consecutive),
including the trading day immediately preceding the date on which
the Company provides notice of redemption, during any 30
consecutive trading day period ending on, and including, the
trading day immediately preceding the date on which the Company
provides notice of redemption at a redemption price equal to 100%
of the principal amount of the notes to be redeemed, plus accrued
and unpaid interest to, but excluding, the redemption date. No
sinking fund is provided for the notes.
The
Notes are the Company’s senior unsecured obligations and will
rank senior in right of payment to any of the Company’s
indebtedness that is expressly subordinated in right of payment to
the Notes; equal in right of payment to any of the Company’s
unsecured indebtedness that is not so subordinated; effectively
junior in right of payment to any of the Company’s secured
indebtedness to the extent of the value of the assets securing such
indebtedness; and structurally junior to all indebtedness and other
liabilities of current or future subsidiaries of the Company
(including trade payables).
The
Notes are subject to events of default typical for this type of
instrument. If an event of default, other than an event of default
in connection with certain events of bankruptcy, insolvency or
reorganization of the Company or any significant subsidiary, occurs
and is continuing, the Trustee by notice to the Company, or the
holders of at least 25% in principal amount of the outstanding
Notes by notice to the Company and the Trustee, may declare 100% of
the principal of and accrued and unpaid interest, if any, on all
the Notes then outstanding to be due and payable.
In
connection with the Note Offering, on May 14, 2019, the Company
entered into a registration rights agreement (the "Registration
Rights Agreement") with JMP Securities, pursuant to which the
Company has agreed to file with the SEC an automatic shelf
registration statement, if the Company is eligible to do so and has
not already done so, and, if the Company is not eligible for an
automatic shelf registration statement, then in lieu of the
foregoing the Company shall file a shelf registration statement for
the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the Notes pursuant to Rule 415 or any
similar rule that may be adopted by the Commission, and use its
commercially reasonable efforts to cause the shelf registration
statement to become or be declared effective under the Securities
Act on the day that is 120 days after the May 9, 2019.
The
foregoing description is qualified in its entirety by reference to
the text of the Indenture, the form of 6.75% Convertible Senior
Notes due 2024, the Registration Rights Agreement and the Purchase
Agreement, which are attached as Exhibits 4.1, 4.2, 4.3 and 10.1
respectively, to this Current Report on Form 8-K and are
incorporated herein by reference.
Class B Common Stock Offering
On May
9, 2019, the Company also entered into a Securities Purchase
Agreement (the “Securities Purchase Agreement”) with
certain accredited investors (the “Investors”) pursuant
to which the Company agreed to sell in a private placement (the
“Private Placement”) an aggregate of 1,900,000 shares
of the Class B Common Stock (the “Private Placement
Shares”), at a purchase price of $5.00 per share. JMP
Securities served as the placement agent for the Private Placement.
The Company paid JMP Securities a commission of 7% of the gross
proceeds in the Private Placement. Upon closing, the net proceeds
for the Private Placement, after deducting commissions and
estimated offering expenses, are expected to be approximately $8.8
million.
Pursuant to the
Securities Purchase Agreement, the Company has agreed to file with
the SEC a registration statement with respect to the resale of the
Private Placement Shares purchased by the Investors under the
Securities Purchase Agreement no later than 30 days after the
Placement Date, and to have such registration statement declared
effective by the SEC no later than (i) 90 days after the Placement
Date in the event the SEC does not review such registration
statement, or, if earlier, five business days after a determination
by the SEC that it will not review such registration statement, or
(ii) 180 days after the Placement Date in the event the SEC does
review such registration statement. In the event the Company does
not file such registration statement or does not cause such
registration statement to become effective by the applicable
deadline or after such registration statement becomes effective it
is suspended or ceases to be effective, then the Company will be
required to make certain payments as liquidated damages to the
Investors under the Securities Purchase Agreement.
The
foregoing summary of the Securities Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the complete text of the form of Securities Purchase
Agreement, which is attached hereto as Exhibit 10.2 and is
incorporated herein by reference.
The
Private Placement Shares will be issued in reliance on the
exemption from registration provided by Rule 506 of Regulation D of
the Securities Act of 1933, as amended, as a sale not involving any
public offering.
The
Private Placement and Note Offering are collectively referred to in
this report as the Offerings.
Item 1.02 Termination of a Material Definitive
Agreement.
Hercules Payoff
On May
14, 2019, the Company made a payment to Hercules Capital, Inc
("Hercules") of $11,134,696, representing the principal, accrued
and unpaid interest, fees, costs and expenses outstanding under its
Loan and Security Agreement (the "Loan Agreement") with Hercules
dated April 30, 2018 (the "Hercules Indebtedness"). Upon the
payment, all outstanding indebtedness and obligations of the
Company owed to Hercules under the Loan Agreement were paid in
full, and the Loan Agreement has been terminated. The Company used
a portion of the net proceeds from the Note Offering for the
Hercules Indebtedness.
The
Company intends to use the remaining net proceeds from the
Offerings for other general corporate purposes, which may include
increased spending on marketing and advertising, and expenditures
necessary to grow the business.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The
information set forth under Item 1.01 is incorporated herein by
reference.
Item 3.02 Unregistered Sales of Equity Securities.
The
information set forth under Item 1.01 is incorporated herein by
reference.
The
Notes were sold to JMP Securities LLC pursuant to the Purchase
Agreement in reliance on the exemption from the registration
requirements provided by Section 4(a)(2) of the Securities Act
and the Notes were resold to qualified institutional buyers as
defined in, and in reliance on, Rule 144A of the Securities Act. To
the extent that any shares of Class B Common Stock are issued upon
conversion of the Notes, they will be issued in transactions
anticipated to be exempt from registration under the Securities Act
by virtue of Section 3(a)(9) thereof, because no commission or
other remuneration is expected to be paid in connection with
conversion of the Notes, and any resulting issuance of shares of
Class B Common Stock.
Item 8.01. Other Events.
On May
14, 2019, the Company issued a press release announcing the closing
of the Note Offering. The press release is attached as Exhibit 99.1
to this report and is incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
Exhibit
No.
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Description
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Indenture,
dated May 14, 2019, between RumbleOn, Inc. and Wilmington Trust
National Association.
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Form of
6.75% Convertible Senior Note due 2024 (included as Exhibit A to
the Indenture filed as Exhibit 4.1).
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Registration
Rights Agreement, dated May 14, 2019, between the Company and JMP
Securities LLC
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Purchase
Agreement, dated May 9, 2019, between the Company and JMP
Securities LLC
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Form of
Securities Purchase Agreement, dated May 9, 2019
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Press
Release, dated May 14, 2019
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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RUMBLEON,
INC.
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Date: May 15,
2019
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By:
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/s/
Steven R.
Berrard
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Steven R.
Berrard
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Chief Financial
Officer
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RUMBLEON, INC.
AND
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee
INDENTURE
Dated as of May 14, 2019
6.75% Convertible Senior Notes due 2024
TABLE OF CONTENTS
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Page
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Article 1
DEFINITIONS
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1
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Section 1.01
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Definitions
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1
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Section 1.02
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References
to Interest
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15
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Article 2 ISSUE,
DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
NOTES
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16
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Section 2.01
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Designation
and Amount
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16
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Section 2.02
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Form
of Notes
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16
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Section 2.03
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Date
and Denomination of Notes; Payments of Interest and Defaulted
Amounts
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17
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Section 2.04
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Execution,
Authentication and Delivery of Notes
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18
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Section 2.05
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Exchange
and Registration of Transfer of Notes; Restrictions on Transfer;
Depositary
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18
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Section 2.06
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Mutilated,
Destroyed, Lost or Stolen Notes
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24
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Section 2.07
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Temporary
Notes
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25
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Section 2.08
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Cancellation
of Notes Paid, Converted, Etc
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25
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Section 2.09
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CUSIP
Numbers
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25
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Section 2.10
|
Repurchases
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26
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Article 3
SATISFACTION AND DISCHARGE
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26
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Section 3.01
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Satisfaction
and Discharge
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26
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Article 4
PARTICULAR COVENANTS OF THE COMPANY
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26
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Section 4.01
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Payment
of Principal and Interest
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26
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Section 4.02
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Maintenance
of Office or Agency
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26
|
Section 4.03
|
Appointments
to Fill Vacancies in Trustee’s Office
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27
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Section 4.04
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Provisions
as to Paying Agent
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27
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Section 4.05
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Existence
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28
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Section 4.06
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Rule 144A
Information Requirement and Annual Reports
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28
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Section 4.07
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Stay,
Extension and Usury Laws
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29
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Section 4.08
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Compliance
Certificate; Statements as to Defaults
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30
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Section 4.09
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Additional
Interest pursuant to the Registration Rights Agreement
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30
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Section 4.10
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Limitation
on Liens Securing Indebtedness
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30
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Section 4.11
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Further
Instruments and Acts
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30
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Article 5 LISTS OF
HOLDERS AND REPORTS BY THE COMPANY AND THE
TRUSTEE
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31
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Section 5.01
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Lists
of Holders
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31
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Section 5.02
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Preservation
and Disclosure of Lists
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31
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Article 6 DEFAULTS
AND REMEDIES
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31
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Section 6.01
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Events
of Default
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31
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Section 6.02
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Acceleration;
Rescission and Annulment
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32
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Section 6.03
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Additional
Interest
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33
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Section 6.04
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Payments
of Notes on Default; Suit Therefor
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34
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Section 6.05
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Application
of Monies Collected by Trustee
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35
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Section 6.06
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Proceedings
by Holders
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36
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Section 6.07
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Proceedings
by Trustee
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37
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Section 6.08
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Remedies
Cumulative and Continuing
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37
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Section 6.09
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Direction
of Proceedings and Waiver of Defaults by Majority of
Holders
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38
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Section 6.10
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Notice
of Defaults
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38
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Section 6.11
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Undertaking
to Pay Costs
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38
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Article 7
CONCERNING THE TRUSTEE
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39
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Section 7.01
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Duties
and Responsibilities of Trustee
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39
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Section 7.02
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Reliance
on Documents, Opinions, Etc
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40
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Section 7.03
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No
Responsibility for Recitals, Etc
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42
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Section 7.04
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Trustee,
Paying Agents, Conversion Agents, Bid Solicitation Agent or Note
Registrar May Own Notes
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42
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Section 7.05
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Monies
to Be Held in Trust
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42
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Section 7.06
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Compensation
and Expenses of Trustee
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42
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Section 7.07
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Officers’
Certificate as Evidence
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43
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Section 7.08
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Eligibility
of Trustee
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43
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Section 7.09
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Resignation
or Removal of Trustee
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43
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Section 7.10
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Acceptance
by Successor Trustee
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44
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Section 7.11
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Succession
by Merger, Etc
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45
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Section 7.12
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Trustee’s
Application for Instructions from the Company
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45
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Article 8
CONCERNING THE HOLDERS
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46
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Section 8.01
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Action
by Holders
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46
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Section 8.02
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Proof
of Execution by Holders
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46
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Section 8.03
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Who
Are Deemed Absolute Owners
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46
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Section 8.04
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Company-Owned
Notes Disregarded
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47
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Section 8.05
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Revocation
of Consents; Future Holders Bound
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47
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Article 9
HOLDERS’ MEETINGS
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47
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Section 9.01
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Purpose
of Meetings
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47
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Section 9.02
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Call
of Meetings by Trustee
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48
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Section 9.03
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Call
of Meetings by Company or Holders
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48
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Section 9.04
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Qualifications
for Voting
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48
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Section 9.05
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Regulations
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48
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Section 9.06
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Voting
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49
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Section 9.07
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No
Delay of Rights by Meeting
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49
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Article 10
SUPPLEMENTAL INDENTURES
|
49
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Section 10.01
|
Supplemental
Indentures Without Consent of Holders
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49
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Section 10.02
|
Supplemental
Indentures with Consent of Holders
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50
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Section 10.03
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Effect
of Supplemental Indentures
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51
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Section 10.04
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Notation
on Notes
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52
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Section 10.05
|
Evidence
of Compliance of Supplemental Indenture to Be Furnished
Trustee
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52
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Article 11
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND
LEASE
|
52
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Section 11.01
|
Company
May Consolidate, Etc. on Certain Terms
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52
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Section 11.02
|
Successor
Corporation to Be Substituted
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52
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Section 11.03
|
Opinion
of Counsel to Be Given to Trustee
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53
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Article 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
|
52
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Section 12.01
|
Indenture
and Notes Solely Corporate Obligations
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52
|
Article 13
[INTENTIONALLY OMITTED]
|
52
|
Article
14 CONVERSION OF NOTES
|
|
52
|
Section 14.01
|
Conversion
Privilege
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52
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Section 14.02
|
Conversion
Procedure; Settlement Upon Conversion
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57
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Section 14.03
|
Increased
Conversion Rate Applicable to Certain Notes Surrendered in
Connection with Make-Whole Fundamental Changes or Redemption
Notice
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61
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Section 14.04
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Adjustment
of Conversion Rate
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63
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Section 14.05
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Adjustments
of Prices
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69
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Section 14.06
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Shares
to Be Fully Paid
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69
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Section 14.07
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Effect
of Recapitalizations, Reclassifications and Changes of the Common
Stock
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69
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Section 14.08
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Certain
Covenants
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71
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Section 14.09
|
Responsibility
of Trustee
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71
|
Section 14.10
|
Notice
to Holders Prior to Certain Actions
|
71
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Section 14.11
|
Stockholder
Rights Plans
|
72
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Section 14.12
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Ownership
Limitation
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72
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Article 15
REPURCHASE OF NOTES AT OPTION OF HOLDERS
|
73
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Section 15.01
|
[Intentionally
Omitted]
|
73
|
Section 15.02
|
Repurchase
at Option of Holders Upon a Fundamental Change
|
73
|
Section 15.03
|
Withdrawal
of Fundamental Change Repurchase Notice
|
75
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Section 15.04
|
Deposit
of Fundamental Change Repurchase Price
|
75
|
Section 15.05
|
Covenant
to Comply with Applicable Laws Upon Repurchase of
Notes
|
76
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Article 16
OPTIONAL REDEMPTION
|
76
|
Section 16.01
|
Optional
Redemption
|
76
|
Section 16.02
|
Notice
of Optional Redemption; Selection of Notes
|
76
|
Section 16.03
|
Payment
of Notes Called for Redemption
|
78
|
Section 16.04
|
Restrictions
on Redemption
|
78
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Article 17
MISCELLANEOUS PROVISIONS
|
78
|
Section 17.01
|
Provisions
Binding on Company’s Successors
|
78
|
Section 17.02
|
Official
Acts by Successor Corporation
|
78
|
Section 17.03
|
Addresses
for Notices, Etc
|
78
|
Section 17.04
|
Governing
Law; Jurisdiction
|
79
|
Section 17.05
|
Evidence
of Compliance with Conditions Precedent; Certificates and Opinions
of Counsel to Trustee
|
79
|
Section 17.06
|
Legal
Holidays
|
80
|
Section 17.07
|
No
Security Interest Created
|
80
|
Section 17.08
|
Benefits
of Indenture
|
80
|
Section 17.09
|
Table
of Contents, Headings, Etc
|
80
|
Section 17.10
|
Authenticating
Agent
|
80
|
Section 17.11
|
Execution
in Counterparts
|
81
|
Section 17.12
|
Severability
|
81
|
Section 17.13
|
Waiver
of Jury Trial
|
81
|
Section 17.14
|
Force
Majeure
|
81
|
Section 17.15
|
Calculations
|
82
|
Section 17.16
|
USA
PATRIOT Act
|
82
|
EXHIBIT
Exhibit A
Form of Note
A-1
INDENTURE
dated as of May 14, 2019
between
RUMBLEON, INC.
, a
Delaware corporation, as issuer (the “
Company
,” as more fully set forth
in
Section 1.01
) and
WILMINGTON TRUST, NATIONAL
ASSOCIATION
, a national banking association, as trustee (the
“
Trustee
,” as
more fully set forth in
Section 1.01
).
W I T N E S S E T H:
WHEREAS
, for its lawful corporate
purposes, the Company has duly authorized the issuance of its 6.75%
Convertible Senior Notes due 2024 (the “
Notes
”), initially in an aggregate
principal amount not to exceed $30,000,000, and in order to provide
the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture;
and
WHEREAS
, the Form of Note, the
certificate of authentication to be borne by each Note, the Form of
Notice of Conversion, the Form of Fundamental Change Repurchase
Notice and the Form of Assignment and Transfer to be borne by the
Notes are to be substantially in the forms hereinafter provided;
and
WHEREAS
, all acts and things necessary
to make the Notes, when executed by the Company and authenticated
and delivered by the Trustee or a duly authorized authenticating
agent, as in this Indenture provided, the valid, binding and legal
obligations of the Company, and this Indenture a valid agreement
according to its terms, have been done and performed, and the
execution of this Indenture and the issuance hereunder of the Notes
have in all respects been duly authorized.
NOW,
THEREFORE, THIS INDENTURE WITNESSETH:
That in
order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of
the Notes by the Holders thereof, the Company covenants and agrees
with the Trustee for the equal and proportionate benefit of the
respective Holders from time to time of the Notes (except as
otherwise provided below), as follows:
ARTICLE 1
Section
1.01
Definitions
.
The terms defined in this
Section 1.01
(except as
herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in
this
Section 1.01
. The words
“herein,” “hereof,” “hereunder”
and words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision. The
terms defined in this Article include the plural as well as the
singular
“
Additional Interest
” means all
amounts, if any, payable pursuant to
Section 4.06(d)
and
Section 6.03
hereof and pursuant to the Registration Rights Agreement, as
applicable.
“
Additional Shares
” shall have the
meaning specified in
Section 14.03(a)
.
“
Affiliate
” of any specified Person
means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such
specified Person. For the purposes of this definition,
“control,” when used with respect to any specified
Person means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the
foregoing. Notwithstanding anything to the contrary herein, the
determination of whether one Person is an “
Affiliate
” of another Person for
purposes of this Indenture shall be made based on the facts at the
time such determination is made or required to be made, as the case
may be, hereunder.
“
Affiliated Holders
” means, (1)
with respect to any specified natural Person, any company,
partnership, trust, foundation or other entity or investment
vehicle for which such specified natural Person (or such specified
Person’s estate) retains sole dispositive and exclusive
voting power with respect to the Class A Common Stock and/or the
Common Stock, as the case may be, held by such company,
partnership, trust, foundation or other entity or investment
vehicle, and the trustees, legal representatives, beneficiaries
and/or beneficial owners, but solely in such capacity, of such
company, partnership, trust, foundation or other entity or
investment vehicle and (2) the estates of such specified natural
Person (it being understood, for the avoidance of doubt, that this
clause (2) will not cover any Person to whom any securities are
transferred from any such estate).
“
beneficial owner
,”
“
beneficial
ownership
” or “
beneficially owned
” shall have the
meaning ascribed to such term in Rule 13d-3 under the Exchange
Act.
“
Bid Solicitation Agent
” means the
Company or the Person appointed by the Company to solicit bids for
the Trading Price of the Notes in accordance with
Section 14.01(b)(i)
. The
Company shall initially act as the Bid Solicitation
Agent.
“
Board of Directors
” means the
board of directors of the Company or a committee of such board duly
authorized to act for it hereunder.
“
Board Resolution
” means a copy of
a resolution certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors,
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
“
Business Day
” means, with respect
to any Note, any day other than a Saturday, a Sunday or a day on
which the Federal Reserve Bank of New York is authorized or
required by law or executive order to close or be
closed.
“
Capital Lease Obligation
” means,
at the time any determination is to be made, the amount of the
liability in respect of a capital lease that would at that time be
required to be capitalized on a balance sheet prepared in
accordance with U.S. GAAP, and the stated maturity thereof shall be
the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be
prepaid by the lessee without payment of a penalty.
“
Capital Stock
” means, for any
entity, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that
entity.
“
Cash Settlement
” shall have the
meaning specified in
Section 14.02(a)
.
“
Class A Common Stock
” means the
Class A common stock of the Company, par value $0.001 per share, at
the date of this Indenture.
“
Clause A Distribution
” shall have
the meaning specified in
Section 14.04(c)
.
“
Clause B Distribution
” shall have
the meaning specified in
Section 14.04(c)
.
“
Clause C Distribution
” shall have
the meaning specified in
Section 14.04(c)
.
“
close of business
” means
5:00 p.m. (New York City time).
“
Combination Settlement
” shall have
the meaning specified in Section
14.02(a)
.
“
Commission
” means the U.S.
Securities and Exchange Commission.
“
Common Equity
” of any Person means
Capital Stock of such Person that is generally entitled (a) to
vote in the election of directors of such Person or (b) if
such Person is not a corporation, to vote or otherwise participate
in the selection of the governing body, partners, managers or
others that will control the management or policies of such
Person.
“
Common Stock
” means the Class B
common stock of the Company, par value $0.001 per share, at the
date of this Indenture, subject to
Section 14.07
.
“
Company
” shall have the meaning
specified in the first paragraph of this Indenture, and subject to
the provisions of
Article 11
, shall include
its successors and assigns.
“
Company Order
” means a written
order of the Company, signed by the Company’s Chief Executive
Officer, Chief Financial Officer, President, Executive or Senior
Vice President or any Vice President (whether or not designated by
a number or numbers or word or words added before or after the
title “
Vice
President
”), and delivered to the
Trustee.
“
Consumer Warehouse Facilities
”
means a revolving credit or repurchase facility intended to finance
the loans made by the Company or any of its Subsidiaries to
consumers acquiring vehicles of any nature from any of the
Company’s Subsidiaries which facility may include Liens on
the accounts, documents and other property of the entity making or
acquiring or otherwise involved with such consumer
loans.
“
Conversion Agent
” shall have the
meaning specified in
Section 4.02
.
“
Conversion Date
” shall have the
meaning specified in
Section 14.02(c)
.
“
Conversion Obligation
” shall have
the meaning specified in
Section 14.01(a)
.
“
Conversion Price
” means as of any
time, $1,000,
divided by
the Conversion Rate as of such time.
“
Conversion Rate
” shall have the
meaning specified in
Section 14.01(a)
.
“
Corporate Event
” shall have the
meaning specified in
Section
14.01(b)(iii)
.
“
Corporate Trust Office
” means the
designated office of the Trustee at which at any time this
Indenture shall be administered, which office at the date hereof is
located at Wilmington Trust, National Association, Global Capital
Markets, 50 South Sixth Street, Suite 1290, Minneapolis, Minnesota
55402, Attention: RumbleOn Notes Administrator, or such other
address as the Trustee may designate from time to time by notice to
the Holders and the Company, or the designated corporate trust
office of any successor trustee (or such other address as such
successor trustee may designate from time to time by notice to the
Holders and the Company).
“
Credit Facilities
” means one or
more (i) debt facilities or commercial paper facilities, providing
for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to lenders or to special
purpose entities formed to borrow from lenders against such
receivables), letters of credit, (ii) debt securities, indentures
or other forms of debt financing (including convertible or
exchangeable debt instruments or bank guarantees or bankers’
acceptances) or (iii) instruments or agreements evidencing any
other Indebtedness, in each case, as amended, supplemented,
modified, extended, restructured, renewed, refinanced, restated,
replaced or refunded in whole or in part from time to time
(including increasing the amount of available borrowings thereunder
or adding the Company’s Subsidiaries as additional borrowers
or guarantors thereunder).
“
Custodian
” means the Trustee, as
custodian for The Depository Trust Company, with respect to the
Global Notes, or any successor entity thereto.
“
Daily Conversion Value
” means, for
each of the 40 consecutive Trading Days during the Observation
Period, one-fortieth (1/40th) of the product of (a) the
Conversion Rate on such Trading Day and (b) the Daily VWAP for
such Trading Day.
“
Daily Measurement Value
” means the
Specified Dollar Amount (if any),
divided by
40.
“
Daily Settlement Amount
,” for each
of the 40 consecutive Trading Days during the Observation Period,
shall consist of:
(a)
cash
in an amount equal to the lesser of (i) the Daily Measurement
Value and (ii) the Daily Conversion Value on such Trading Day;
and
(b)
if
the Daily Conversion Value on such Trading Day exceeds the Daily
Measurement Value, a number of shares of Common Stock equal to
(i) the difference between the Daily Conversion Value and the
Daily Measurement Value,
divided by
(ii) the Daily VWAP for such Trading
Day.
“
Daily VWAP
” means the per share
volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page “RMBL
<equity> AQR” (or its equivalent successor if such page
is not available) in respect of the period from the scheduled open
of trading until the scheduled close of trading of the primary
trading session on such Trading Day (or if such volume-weighted
average price is unavailable, the market value of one share of the
Common Stock on such Trading Day determined, using a
volume-weighted average method, by a nationally recognized
independent investment banking firm retained for this purpose by
the Company). The “Daily VWAP” shall be determined
without regard to after-hours trading or any other trading outside
of the regular trading session trading hours.
“
Default
” means any event that is,
or after notice or passage of time, or both, would be, an Event of
Default.
“
Defaulted Amounts
” means any
amounts on any Note (including, without limitation, the Redemption
Price, the Fundamental Change Repurchase Price, principal and
interest) that are payable but are not punctually paid or duly
provided for, in each case, when due.
“
delivered
” means, with respect to
any notice to be delivered, given or mailed to a Holder pursuant to
this Indenture, notice (x) given to the Depositary (or its
designee) pursuant to the standing instructions from the Depositary
or its designee, including by electronic mail in accordance with
accepted practices or procedures at the Depositary (in the case of
a Global Note) or (y) mailed to such Holder by first class mail,
postage prepaid, at its address as it appears on the Note Register,
in each case in accordance with
Section 17.03
. Notice so
“delivered” shall be deemed to include any notice to be
“mailed” or “given,” as applicable, under
this Indenture.
“
Depositary
” means, with respect to
each Global Note, the Person specified in
Section 2.05(c)
as the
Depositary with respect to such Notes, until a successor shall have
been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, “
Depositary
” shall mean or include
such successor.
“
Distributed Property
” shall have
the meaning specified in
Section 14.04(c)
.
“
Effective Date
” shall have the
meaning specified in
Section 14.03(c)
, except
that, as used in
Section 14.04
and
Section 14.05
,
“
Effective Date
”
means the first date on which shares of the Common Stock trade on
the applicable exchange or in the applicable market, regular way,
reflecting the relevant share split or share combination, as
applicable.
“
Event of Default
” shall have the
meaning specified in
Section 6.01
.
“
Ex-Dividend Date
” means the first
date on which shares of the Common Stock trade on the applicable
exchange or in the applicable market, regular way, without the
right to receive the issuance, dividend or distribution in
question, from the Company or, if applicable, from the seller of
Common Stock on such exchange or market (in the form of due bills
or otherwise) as determined by such exchange or
market.
“
Exchange Act
” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“
Form of Assignment and Transfer
”
means the “Form of Assignment and Transfer” attached as
Attachment 3 to the Form of Note attached hereto as
Exhibit A
.
“
Form of Fundamental Change Repurchase
Notice
” means the “Form of Fundamental Change
Repurchase Notice” attached as Attachment 2 to the Form
of Note attached hereto as
Exhibit A
.
“
Form of Note
” means the
“Form of Note” attached hereto as
Exhibit A
.
“
Form of Notice of Conversion
”
means the “Form of Notice of Conversion” attached as
Attachment 1 to the Form of Note attached hereto as
Exhibit A
.
“
Fundamental Change
” shall be
deemed to have occurred at the time after the Notes are originally
issued if any of the following occurs:
(a)
a
“person” or “group” within the meaning of
Section 13(d) of the Exchange Act, other than the Company, its
Wholly Owned Subsidiaries and the employee benefit plans of the
Company and its Wholly Owned Subsidiaries, has become the direct or
indirect beneficial owner, of (i) the Common Stock representing
more than 50% of the voting power of the Common Stock or (ii) the
Company’s common equity representing more than 50% of the
voting power of its Common Equity on an aggregate basis; provided
that, for purposes of both clauses (i) and (ii), the voting power
of the Company’s Class A Common Stock and the Common Stock
directly or indirectly beneficially owned, by a Permitted Holder
(as defined below) or a “group” (composed solely of
Permitted Holders) will exclude (A) any shares of Class A Common
Stock and Common Stock directly or indirectly beneficially owned by
such Permitted Holder on the date of this Indenture for so long as
such shares of the Company’s Class A Common Stock or Common
Stock, as the case may be, are directly or indirectly beneficially
owned by such Permitted Holder and (B) any shares of Common Stock
directly or indirectly beneficially owned by such Permitted Holder
that are acquired after the date of this Indenture by such
Permitted Holder pursuant to equity grants (or the exercise,
vesting, settlement or conversion thereof by such Permitted Holder
outstanding on the date of this Indenture or subsequently granted
under one or more of the Company’s equity incentive plans;
or
(b)
the
consummation of (A) any recapitalization, reclassification or
change of the Common Stock (other than changes resulting from a
subdivision or combination) as a result of which the Common Stock
would be converted into, or exchanged for, stock, other securities,
other property or assets; (B) any share exchange,
consolidation or merger of the Company pursuant to which the Common
Stock will be converted into cash, securities or other property or
assets; or (C) any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all
of the consolidated assets of the Company and its Subsidiaries,
taken as a whole, to any Person other than one of the
Company’s direct or indirect Wholly Owned
Subsidiaries;
provided,
however
, that a transaction
described in clause (B) in which the holders of all classes of
the Company’s Common Equity immediately prior to such
transaction own, directly or indirectly, more than 50% of all
classes of Common Equity of the continuing or surviving corporation
or transferee or the parent thereof immediately after such
transaction in substantially the same proportions as such ownership
immediately prior to such transaction shall not be a Fundamental
Change pursuant to this clause (b); or
(c)
the
stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or
(d)
the
Common Stock (or other common stock underlying the Notes) ceases to
be listed or quoted on any of The New York Stock Exchange, The
NASDAQ Capital Market, The NASDAQ Global Select Market or The
NASDAQ Global Market (or any of their respective
successors);
provided
,
however
,
that a transaction or transactions described in clause (a) or
clause (b) above shall not constitute a Fundamental Change, if
at least 90% of the consideration received or to be received by the
holders of the Common Stock of the Company, excluding cash payments
for fractional shares, in connection with such transaction or
transactions consists of shares of common stock that are listed or
quoted on any of The New York Stock Exchange, The NASDAQ Capital
Market, The NASDAQ Global Select Market or The NASDAQ Global Market
(or any of their respective successors) or will be so listed or
quoted when issued or exchanged in connection with such transaction
or transactions and as a result of such transaction or transactions
the Notes become convertible into such consideration, excluding
cash payments for fractional shares (subject to the provisions of
Section 14.02(a)
). If any
transaction in which the Common Stock is replaced by the securities
of another entity occurs, following completion of any related
Make-Whole Fundamental Change Period (or, in the case of a
transaction that would have been a Fundamental Change or a
Make-Whole Fundamental Change but for the proviso immediately
following clause (d) of the definition thereof, following the
effective date of such transaction), references to the Company in
this definition shall instead be references to such other
entity.
For
purposes of this definition, any transaction that constitutes a
“Fundamental Change” pursuant to both clause (a) and
clause (b) above (without giving effect to the proviso to clause
(b)) shall be deemed a “Fundamental Change” solely
under clause (b) (subject to the proviso to clause
(b)).
“
Fundamental Change Company Notice
”
shall have the meaning specified in
Section 15.02(c)
.
“
Fundamental Change Repurchase
Date
” shall have the meaning specified in
Section 15.02(a)
.
“
Fundamental Change Repurchase
Notice
” shall have the meaning specified in
Section 15.02(b)(i)
.
“
Fundamental Change Repurchase
Price
” shall have the meaning specified in
Section 15.02(a)
.
“
Global Note
” shall have the
meaning specified in
Section 2.05(b)
.
“
Guarantee
” means a guarantee other
than by endorsement of negotiable instruments for collection in the
ordinary course of business, direct or indirect, in any manner
including, without limitation, by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by
virtue of partnership arrangements, or by agreements to keep-well,
to purchase assets, goods, securities or services, to take or pay
or to maintain financial statement conditions or
otherwise).
“
Hedging Obligations
” means, with
respect to any specified Person, the obligations of such Person
under:
(1)
interest rate swap
agreements (whether from fixed to floating or from floating to
fixed), interest rate cap agreements and interest rate collar
agreements;
(2)
other agreements or
arrangements designed to manage interest rates or interest rate
risk; and
(3)
other agreements or
arrangements designed to protect such Person against fluctuations
in currency exchange rates or commodity prices.
“
Holder
,” as applied to any Note,
or other similar terms (but excluding the term “beneficial
holder”), means any Person in whose name at the time a
particular Note is registered on the Note Register.
“
Indebtedness
”
means, with respect to any specified Person, any indebtedness of
such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1)
in respect of
borrowed money;
(2)
evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);
(3)
in respect of
banker’s acceptances;
(4)
representing
Capital Lease Obligations;
(5)
representing the
balance deferred and unpaid of the purchase price of any property
or services (other than trade payables not overdue by more than 60
days incurred in the ordinary course of such Person’s
business); or
(6)
representing any
Hedging Obligations,
if and
to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with
U.S. GAAP. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset
of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise
included, the Guarantee by the specified Person of any Indebtedness
of any other Person, to the extent, as applicable, of the amount of
Indebtedness covered by such Guarantee, or the lesser of the fair
market value (as determined in good faith by the Company) of the
asset or assets subject to such Lien or the principal (or accreted)
amount of the Indebtedness secured by such Lien; provided that
Indebtedness shall not include post-closing payment adjustments to
which the seller may become entitled to the extent such payment is
determined by a final closing balance sheet or such payment depends
on the performance of such business after the closing. Indebtedness
shall be calculated without giving effect to the effects of
Accounting Standards Codification 815 — Derivatives and
Hedging and related interpretations to the extent such effects
would otherwise increase or decrease an amount of Indebtedness for
any purpose under this Indenture as a result of accounting for any
embedded derivatives created by the terms of such
Indebtedness.
The
amount of any Indebtedness outstanding as of any date will
be:
(1)
the accreted value
of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;
(2)
the principal
amount of the Indebtedness, in the case of any other
Indebtedness;
(3)
in the case of the
Guarantee by the specified Person of any Indebtedness of any other
Person where the amount of the Guarantee is less than the principal
amount of such Indebtedness, such lesser amount; and
(4)
in respect of
Indebtedness of another Person secured by a Lien on the assets of
the specified Person, the lesser of:
(a)
the fair market
value of such assets at the date of determination, as determined in
good faith by the Company; and
(b)
the amount of the
Indebtedness of the other Person so secured.
“
Indenture
” means this instrument
as originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.
“
Interest Make-Whole Payment
” shall
have the meaning specified in Section 14.01(c).
“
Interest Payment Date
” means each
May 1 and November 1 of each year, beginning on
November 1, 2019.
“
Inventory Financing Agreement
”
means that certain Inventory Financing and Security Agreement, by
and among Inventory Financing Lenders and RMBL Missouri, dated
February 16, 2018, as it may be amended, and any similar agreements
entered into with any Inventory Financing Lender.
“
Inventory Financing Lenders
” means
Ally Bank and Ally Financial Inc., collectively and each of their
assigns or successors in interest, and any additional or
replacement lenders providing inventory financing to the Company or
any of its Subsidiaries, provided that such lender shall be
domiciled in the United States and shall be in the business of
extending credit of such type in the ordinary course of
business.
“
Last Reported Sale Price
” of the
Common Stock on any date means the closing sale price per share (or
if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on that date as reported in
composite transactions for the principal U.S. national or regional
securities exchange on which the Common Stock is traded. If the
Common Stock is not listed for trading on a U.S. national or
regional securities exchange on the relevant date, the
“
Last Reported Sale
Price
” shall be the last quoted bid price for the
Common Stock in the over-the-counter market on the relevant date as
reported by OTC Markets Group Inc. or a similar organization. If
the Common Stock is not so quoted, the “
Last Reported Sale Price
” shall be
the average of the mid-point of the last bid and ask prices for the
Common Stock on the relevant date from each of at least three
nationally recognized independent investment banking firms selected
by the Company for this purpose. The “Last Reported Sale
Price” shall be determined without regard to after-hours
trading or any other trading outside of the regular trading session
trading hours.
“
Liens
” means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in the nature of a security interest in
respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or
other title retention agreement or any lease in the nature thereof.
For the avoidance of doubt, a license shall not constitute a
“
Lien
” for
purposes of this section.
“
Make-Whole Fundamental Change
”
means any transaction or event that constitutes a Fundamental
Change (as defined above and determined after giving effect to any
exceptions to or exclusions from such definition, but without
regard to the
proviso
in
clause (b) of the definition thereof).
“
Make-Whole Fundamental Change
Period
” shall have the meaning specified in
Section 14.03(a)
.
“
Market Disruption Event
” means,
for the purposes of determining amounts due upon conversion and the
number of shares of Common Stock deliverable in respect of an
Interest Make-Whole Payment if the Company elects (or is deemed to
have elected) to make an Interest Make-Whole Payment in shares of
its Common Stock, (a) a failure by the primary U.S. national
or regional securities exchange or market on which the Common Stock
is listed or admitted for trading to open for trading during its
regular trading session or (b) the occurrence or existence
prior to 1:00 p.m., New York City time, on any Scheduled
Trading Day for the Common Stock for more than one half-hour period
in the aggregate during regular trading hours of any suspension or
limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the relevant stock exchange or
otherwise) in the Common Stock or in any options contracts or
futures contracts relating to the Common Stock.
“
Maturity Date
” means May 1,
2024.
“
Measurement Period
” shall have the
meaning specified in
Section 14.01(b)(i)
.
“
Note
” or “
Notes
” shall have the meaning
specified in the first paragraph of the recitals of this
Indenture.
“
Note Register
” shall have the
meaning specified in
Section 2.05(a)
.
“
Note Registrar
” shall have the
meaning specified in
Section 2.05(a)
.
“
Notice of Conversion
” shall have
the meaning specified in
Section 14.02(b)
.
“
Observation Period
” with respect
to any Note surrendered for conversion means: (i) subject to
clause (ii), if the relevant Conversion Date occurs prior to
November 1, 2023, the 40 consecutive Trading Day period
beginning on, and including, the second Trading Day immediately
succeeding such Conversion Date; (ii) if the relevant
Conversion Date occurs during a Redemption Period with respect to
the Notes pursuant to
Section 16.02
and prior to
the relevant Redemption Date, the 40 consecutive Trading Days
beginning on, and including, the 41st Scheduled Trading Day
immediately preceding such Redemption Date; and (iii) if the
relevant Conversion Date occurs on or after November 1, 2023, the
40 consecutive Trading Days beginning on, and including, the 41st
Scheduled Trading Day immediately preceding the Maturity
Date.
“
Offering Memorandum
” means the
preliminary offering memorandum dated May 9, 2019, as supplemented
by the related pricing term sheet dated May 9, 2019, relating
to the offering and sale of the Notes.
“
Officer
” means, with respect to
the Company, the President, the Chief Executive Officer, the Chief
Financial Officer, the Treasurer, the Secretary, any Executive or
Senior Vice President or any Vice President (whether or not
designated by a number or numbers or word or words added before or
after the title “Vice President”).
“
Officers’ Certificate
,” when
used with respect to the Company, means a certificate that is
delivered to the Trustee and that is signed by (a) two
Officers of the Company or (b) one Officer of the Company and
one of the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary or the Controller of the Company. Each such
certificate shall include the statements provided for in
Section 17.05
if and to the extent required by the provisions of such Section.
One of the Officers giving an Officers’ Certificate pursuant
to
Section 4.08
shall be the
principal executive, financial or accounting officer of the
Company.
“
open of business
” means
9:00 a.m. (New York City time).
“
Opinion of Counsel
” means an
opinion in writing signed by legal counsel, who may be an employee
of or counsel to the Company, or other counsel who is acceptable to
the Trustee, that is delivered to the Trustee. Each such opinion
shall include the statements provided for in
Section 17.05
if and to
the extent required by the provisions of such
Section 17.05
.
“
Optional Redemption
” shall have
the meaning specified in
Section 16.01
.
“
outstanding
,” when used with
reference to Notes, shall, subject to the provisions of
Section 8.04
,
mean, as of any particular time, all Notes authenticated and
delivered by the Trustee under this Indenture, except:
(a)
Notes
theretofore canceled by the Trustee or accepted by the Trustee for
cancellation;
(b)
Notes,
or portions thereof, that have become due and payable and in
respect of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other
than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own Paying
Agent);
(c)
Notes
that have been paid pursuant to
Section 2.06
or Notes in lieu of which, or in
substitution for which, other Notes shall have been authenticated
and delivered pursuant to the terms of
Section 2.06
unless proof satisfactory to the
Trustee is presented that any such Notes are held by protected
purchasers in due course;
(d)
Notes
converted pursuant to
Article 14
and required to be cancelled pursuant
to
Section 2.08
;
(e)
Notes
redeemed pursuant to
Article 16
;
and
(f)
Notes
repurchased by the Company pursuant to the penultimate sentence
of
Section 2.10
.
“
Ownership Limitation
” shall have
the meaning specified in
Section 14.12
.
“
Paying Agent
” shall have the
meaning specified in
Section 4.02
.
“
Permitted Holder
” means any of (1)
Marshall Chesrown, the Company’s Chief Executive Officer as
of the date of the Offering Memorandum, (2) Steven Berrard, the
Company’s Chief Financial Officer as of the date of the
Offering Memorandum and (3) each of the Affiliated Holders (as
defined below) of either of the natural persons referred to in
clauses (1) and (2) of this definition.
“
Permitted Liens
”
means:
(1)
Liens on any or all
of the Company’s and its Subsidiaries’ assets securing
one or more Credit Facilities (and borrowings thereunder) other
than Inventory Financing Agreements and Credit Facilities for
Consumer Warehouse Facilities; provided that the aggregate secured
borrowings under such Credit Facilities shall not at any one time
exceed $22.5 million in the aggregate;
(2)
Liens on property
(including equity interests) existing at the time of acquisition of
the property and/or person by the Company or any of its
Subsidiaries (plus improvements and accessions to such property or
proceeds or distributions thereof); provided that such Liens were
in existence prior to such acquisition and not incurred in
contemplation of such acquisition;
(3)
Liens arising under
this Indenture, including those that are for the benefit of the
Trustee;
(4)
Liens securing
Hedging Obligations entered into by the Company and/or any of its
Subsidiaries in the ordinary course of business and entered into
for bona fide hedging purposes (and not for speculative purposes)
as determined in good faith by the Company;
(5)
Liens securing
Indebtedness pursuant to a Qualified Inventory
Financing;
(6)
Liens securing
Indebtedness constituting Consumer Warehouse
Facilities;
(7)
Liens securing
Capital Lease Obligations in an amount not in excess of
$1,000,000.00; and
(8)
Liens securing
letters of credit (or reimbursement agreements in respect thereof)
in an amount not to exceed $500,000.00 at any time outstanding, and
Liens securing reimbursement obligations in connection with letters
of credit serving as a lease deposit.
“
Person
” means an individual, a
corporation, a limited liability company, an association, a
partnership, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a
political subdivision thereof.
“
Physical Notes
” means permanent
certificated Notes in registered form issued in minimum
denominations of $1,000 principal amount and integral multiples of
$1,000 in excess thereof.
“
Physical Settlement
” shall have
the meaning specified in
Section 14.02(a)
.
“
Predecessor Note
” of any
particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note;
and, for the purposes of this definition, any Note authenticated
and delivered under
Section 2.06
in lieu of or
in exchange for a mutilated, lost, destroyed or stolen Note shall
be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note that it replaces.
“
Qualified Inventory Financing
”
means Indebtedness owing to Inventory Financing Lenders pursuant to
an Inventory Financing Agreement, provided that, the aggregate
outstanding amount of the aggregate amount of such Indebtedness at
any time outstanding shall not exceed the aggregate book value of
all inventory of the Company and its Subsidiaries, on a
consolidated basis.
“
Record Date
” means, with respect
to any dividend, distribution or other transaction or event in
which the holders of Common Stock (or other applicable security)
have the right to receive any cash, securities or other property or
in which the Common Stock (or such other security) is exchanged for
or converted into any combination of cash, securities or other
property, the date fixed for determination of holders of the Common
Stock (or such other security) entitled to receive such cash,
securities or other property (whether such date is fixed by the
Board of Directors, by statute, by contract or
otherwise).
“
Redemption Date
” shall have the
meaning specified in
Section 16.02(a)
.
“
Redemption Notice
” shall have the
meaning specified in
Section 16.02(a)
.
“
Redemption Period
” shall the
meaning specified in
Section
14.02(a)(i)
.
“
Redemption Price
” means, for any
Notes to be redeemed pursuant to
Section 16.01
, 100% of the
principal amount of such Notes,
plus
accrued and unpaid interest, if
any, to, but excluding, the Redemption Date (unless the Redemption
Date falls after a Regular Record Date but on or prior to the
immediately succeeding Interest Payment Date, in which case
interest accrued to the Interest Payment Date will be paid to
Holders of record of such Notes on such Regular Record Date, and
the Redemption Price will be equal to 100% of the principal amount
of such Notes).
“
Reference Property
” shall have the
meaning specified in
Section 14.07(a)
.
“
Registration Rights Agreement
”
means that certain Registration Rights Agreement, dated as of May
14, 2019, among the Company and the Initial Purchaser, as amended
from time to time.
“
Regular Record Date
,” with respect
to any Interest Payment Date, means the April 15 or
October 15 (whether or not such day is a Business Day)
immediately preceding the applicable May 1 or November 1
Interest Payment Date, respectively.
“
Responsible Officer
” means, when
used with respect to the Trustee, any officer within the Corporate
Trust Office of the Trustee, including any vice president,
assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any
corporate trust matter relating to this Indenture is referred
because of such person’s knowledge of and familiarity with
the particular subject and, in each case, who shall have direct
responsibility for the administration of this
Indenture.
“
Restricted Securities
” shall have
the meaning specified in
Section 2.05(c)
.
“
Rule 144
” means Rule 144
as promulgated under the Securities Act.
“
Rule 144A
” means
Rule 144A as promulgated under the Securities
Act.
“
Scheduled Trading Day
” means a day
that is scheduled to be a Trading Day on the principal U.S.
national or regional securities exchange or market on which the
Common Stock is listed or admitted for trading. If the Common Stock
is not so listed or admitted for trading, “
Scheduled Trading Day
” means a
Business Day.
“
Securities Act
” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“
Settlement Amount
” has the meaning
specified in
Section 14.02(a)(iv)
.
“
Settlement Method
” means, with
respect to any conversion of Notes, Physical Settlement, Cash
Settlement or Combination Settlement, as elected (or deemed to have
been elected) by the Company.
“
Settlement Notice
” has the meaning
specified in
Section 14.02(a)(iii)
.
“
Share Exchange Event
” shall have
the meaning specified in
Section 14.07(a)
.
“
Significant Subsidiary
” means a
Subsidiary of the Company that meets the definition of
“significant subsidiary” in Article 1,
Rule 1-02 of Regulation S-X under the Exchange
Act.
“
Specified Dollar Amount
” means the
maximum cash amount per $1,000 principal amount of Notes to be
received upon conversion as specified in the Settlement Notice (or
as deemed specified pursuant to
Section 14.02
) related to any
converted Notes.
“
Spin-Off
” shall have the meaning
specified in
Section 14.04(c)
.
“
Stock Price
” shall have the
meaning specified in
Section 14.03(c)
.
“
Subsidiary
” means, with respect to
any Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers,
general partners or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person;
(ii) such Person and one or more Subsidiaries of such Person;
or (iii) one or more Subsidiaries of such Person.
“
Successor Company
” shall have the
meaning specified in
Section 11.01(a)
.
“
Trading Day
”, except for purposes
of determining amounts due upon conversion and the number of shares
of Common Stock, if any, deliverable in respect of an Interest
Make-Whole Payment, means a day on which (i) trading in the
Common Stock (or other security for which a closing sale price must
be determined) generally occurs on The NASDAQ Capital Market or, if
the Common Stock (or such other security) is not then listed on The
NASDAQ Capital Market, on the principal other U.S. national or
regional securities exchange on which the Common Stock (or such
other security) is then listed or, if the Common Stock (or such
other security) is not then listed on a U.S. national or regional
securities exchange, on the principal other market on which the
Common Stock (or such other security) is then traded and
(ii) a Last Reported Sale Price for the Common Stock (or such
other security) is available on such securities exchange or market;
provided
that if the Common
Stock (or such other security) is not so listed or traded,
“
Trading Day
”
means a Business Day; and
provided
further
that, for purposes of
determining amounts due upon conversion and the number of shares of
Common Stock deliverable in respect of an Interest Make-Whole
Payment if the Company elects (or is deemed to have elected) to
make an Interest Make-Whole Payment in shares of its Common Stock
only, “
Trading
Day
” means a day on which (x) there is no Market
Disruption Event and (y) trading in the Common Stock generally
occurs on The NASDAQ Capital Market or, if the Common Stock is not
then listed on The NASDAQ Capital Market, on the principal other
U.S. national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on
a U.S. national or regional securities exchange, on the principal
other market on which the Common Stock is then listed or admitted
for trading, except that if the Common Stock is not so listed or
admitted for trading, “
Trading Day
” means a Business
Day.
“
Trading Price
” of the Notes on any
date of determination means the average of the secondary market bid
quotations obtained by the Bid Solicitation Agent for $2,000,000
principal amount of Notes at approximately 3:30 p.m., New York
City time, on such determination date from three independent
nationally recognized securities dealers the Company selects for
this purpose;
provided
that
if three such bids cannot reasonably be obtained by the Bid
Solicitation Agent but two such bids are obtained, then the average
of the two bids shall be used, and if only one such bid can
reasonably be obtained by the Bid Solicitation Agent, that one bid
shall be used. If the Bid Solicitation Agent cannot reasonably
obtain at least one bid for $2,000,000 principal amount of Notes
from a nationally recognized securities dealer on any determination
date, then the Trading Price per $1,000 principal amount of Notes
on such determination date shall be deemed to be less than 98% of
the product of the Last Reported Sale Price of the Common Stock and
the Conversion Rate.
“
transfer
” shall have the meaning
specified in
Section 2.05(c)
.
“
Trigger Event
” shall have the
meaning specified in
Section 14.04(c)
.
“
Trust Indenture Act
” means the
Trust Indenture Act of 1939, as amended, as it was in force at the
date of execution of this Indenture;
provided
,
however
, that in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term
“Trust Indenture Act” shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939, as so
amended.
“
Trustee
” means the Person named as
the “
Trustee
” in
the first paragraph of this Indenture until a successor trustee
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter “
Trustee
” shall mean or include
each Person who is then a Trustee hereunder.
“
U.S. GAAP
” means generally
accepted accounting principles in the United States as in effect on
the date of this Indenture, without giving effect to ASU 2016-02,
Leases (Topic 842).
“
unit of Reference Property
” shall
have the meaning specified in
Section 14.07(a)
.
“
Valuation Period
” shall have the
meaning specified in
Section 14.04(c)
.
“
Wholly Owned Subsidiary
” means,
with respect to any Person, any Subsidiary of such Person, except
that, solely for purposes of this definition, the reference to
“more than 50%” in the definition of
“Subsidiary” shall be deemed replaced by a reference to
“100%”.
Section
1.02
References
to Interest
.
Unless the context otherwise
requires, any reference to interest on, or in respect of, any Note
in this Indenture shall be deemed to include Additional Interest
if, in such context, Additional Interest is, was or would be
payable pursuant to any of
Section 4.06(d)
and
Section 6.03
hereof or pursuant to the Registration Rights Agreement. Unless the
context otherwise requires, any express mention of Additional
Interest in any provision hereof shall not be construed as
excluding Additional Interest in those provisions hereof where such
express mention is not made.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES
Section
2.01
Designation
and Amount
.
The Notes shall be designated as the
“6.75% Convertible Senior Notes due 2024.” The
aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is limited to $30,000,000. Except
for Notes authenticated and delivered upon registration or transfer
of, or in exchange for, or in lieu of other Notes to the extent
expressly permitted hereunder, the Company may not issue additional
Notes without the consent of at least a majority of the aggregate
principal amount of the Notes then outstanding (determined in
accordance with
Article
8
).
Section
2.02
Form
of Notes
.
The Notes and the Trustee’s
certificate of authentication to be borne by such Notes shall be
substantially in the respective forms set forth in
Exhibit A
, the terms and
provisions of which shall constitute, and are hereby expressly
incorporated in and made a part of this Indenture. To the extent
applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Any
Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the
Custodian or the Depositary, or as may be required to comply with
any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange or automated quotation
system upon which the Notes may be listed or traded or designated
for issuance or to conform with any usage with respect thereto, or
to indicate any special limitations or restrictions to which any
particular Notes are subject.
Any of
the Notes may have such letters, numbers or other marks of
identification and such notations, legends or endorsements as the
Officer executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange
or automated quotation system on which the Notes may be listed or
designated for issuance, or to conform to usage or to indicate any
special limitations or restrictions to which any particular Notes
are subject.
Each
Global Note shall represent such principal amount of the
outstanding Notes as shall be specified therein and shall provide
that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby
may from time to time be increased or reduced to reflect
redemptions, repurchases, cancellations, conversions, transfers or
exchanges permitted hereby. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee
or the Note Registrar, at the direction of the Trustee, in such
manner and upon instructions given by the Holder of such Notes in
accordance with this Indenture. Payment of principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, and accrued and unpaid interest on, a Global Note
shall be made to the Holder of such Note on the date of payment,
unless a record date or other means of determining Holders eligible
to receive payment is provided for herein.
Section
2.03
Date
and Denomination of Notes; Payments of Interest and Defaulted
Amounts
.
(a) The Notes shall be issuable only
in registered form without coupons and only in minimum
denominations of $1,000 principal amount and integral multiples of
$1,000 in excess thereof. Each Note shall be dated the date of its
authentication and shall bear interest from, and including, the
date specified on the face of such Note. Accrued interest on the
Notes shall be computed on the basis of a 360-day year composed of
twelve 30-day months and, for partial months, on the basis of the
number of days actually elapsed in a 30-day month.
(b)
The
Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on any
Regular Record Date with respect to any Interest Payment Date shall
be entitled to receive the interest payable on such Interest
Payment Date. The principal amount of any Note (x) in the case
of any Physical Note, shall be payable at the office or agency of
the Company maintained by the Company for such purposes in the
contiguous United States, which shall initially be the Corporate
Trust Office and (y) in the case of any Global Note, shall be
payable by wire transfer of immediately available funds to the
account of the Depositary or its nominee. The Company shall pay, or
cause the Paying Agent to pay (to the extent funded by the
Company),interest (i) on any Physical Notes (A) to
Holders holding Physical Notes having an aggregate principal amount
of $5,000,000 or less, by check mailed (at the Company’s
expense) to the Holders of these Notes at their address as it
appears in the Note Register and (B) to Holders holding
Physical Notes having an aggregate principal amount of more than
$5,000,000, either by check mailed to each Holder or, upon
application by such a Holder to the Trustee not later than the
relevant Regular Record Date, by wire transfer in immediately
available funds to that Holder’s account within the United
States, which application shall remain in effect until the Holder
notifies, in writing, the Trustee to the contrary or (ii) on
any Global Note by wire transfer of immediately available funds to
the account of the Depositary or its nominee.
(c)
Any
Defaulted Amounts shall forthwith cease to be payable to the Holder
on the relevant payment date but shall accrue interest per annum at
the rate borne by the Notes, subject to the enforceability thereof
under applicable law, from, and including, such relevant payment
date, and such Defaulted Amounts together with such interest
thereon shall be paid by the Company, at its election in each case,
as provided in clause (i) or (ii) below:
(i)
The
Company may elect to make payment of any Defaulted Amounts to the
Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record
date for the payment of such Defaulted Amounts, which shall be
fixed in the following manner. The Company shall notify the Trustee
in writing of the amount of the Defaulted Amounts proposed to be
paid on each Note and the date of the proposed payment (which shall
be not less than 25 days after the receipt by the Trustee of such
notice), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount to be paid
in respect of such Defaulted Amounts or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted
Amounts as in this clause provided. Thereupon the Company shall fix
a special record date for the payment of such Defaulted Amounts
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment, and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Company shall promptly notify the Trustee of such
special record date at least five (5) Business Days before
such notice is to be sent to the Holders, and the Trustee, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Amounts and the special record
date therefor to be sent to each Holder not less than 10 days
prior to such special record date. Notice of the proposed payment
of such Defaulted Amounts and the special record date therefor
having been so sent, such Defaulted Amounts shall be paid to the
Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the
following clause (ii) of this
Section 2.03(c)
.
The Trustee shall have no responsibility for the calculation of
Defaulted Amounts.
(ii)
The
Company may make payment of any Defaulted Amounts in any other
lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the
Notes may be listed or designated for issuance, and upon such
notice as may be required by such exchange or automated quotation
system, if, after written notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be practicable in consultation with the
Trustee.
Section
2.04
Execution,
Authentication and Delivery of Notes
.
The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature
by one of its Chief Executive Officer, President, Chief Financial
Officer, Treasurer, Secretary or any of its Executive or Senior
Vice Presidents.
At any
time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to
the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Notes, such Company Order
to specify the amount of Notes to be authenticated, the applicable
rate at which interest will accrue on such Notes, the date on which
the original issuance of such Notes is to be authenticated, the
date from which interest on such Notes will begin to accrue, the
date or dates on which interest on such Notes will be payable and
the date on which the principal of such Notes will be payable and
other terms relating to such Notes; provided that the Trustee shall
be entitled to receive an Officers’ Certificate and an
Opinion of Counsel with respect to the issuance, authentication and
delivery of such Notes as provided in
Section 17.05
. The Trustee
shall thereupon in accordance with such Company Order manually
authenticate and deliver such Notes, without any further action by
the Company hereunder.
Only
such Notes as shall bear thereon a certificate of authentication
substantially in the form set forth on the Form of Note attached as
Exhibit A
hereto, executed manually by an authorized officer of the Trustee
(or an authenticating agent appointed by the Trustee as provided by
Section 17.10
), shall be
entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Note executed by the Company
shall be conclusive evidence that the Note so authenticated has
been duly authenticated and delivered hereunder and that the Holder
is entitled to the benefits of this Indenture.
In case
any Officer of the Company who shall have signed any of the Notes
shall cease to be such Officer before the Notes so signed shall
have been authenticated and delivered by the Trustee, or disposed
of by the Company, such Notes nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Notes
had not ceased to be such Officer of the Company; and any Note may
be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Note, shall be the Officers of
the Company, although at the date of the execution of this
Indenture any such person was not such an Officer.
Section
2.05
Exchange
and Registration of Transfer of Notes; Restrictions on Transfer;
Depositary
.
(a) The Company shall cause to be
kept at the Corporate Trust Office a register (the register
maintained in such office or in any other office or agency of the
Company designated pursuant to
Section 4.02
, the
“
Note Register
”)
in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes
and of transfers of Notes. Such register shall be in written form
or in any form capable of being converted into written form within
a reasonable period of time. The Trustee is hereby initially
appointed the “
Note
Registrar
” for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may appoint one
or more co-Note Registrars in accordance with
Section 4.02
.
Upon
surrender for registration of transfer of any Note to the Note
Registrar or any co-Note Registrar, and satisfaction of the
requirements for such transfer set forth in this
Section 2.05
, the Company
shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more
new Notes of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes
may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at any such office or agency maintained by
the Company pursuant to
Section 4.02
. Whenever any
Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes that the
Holder making the exchange is entitled to receive, bearing
registration numbers not contemporaneously
outstanding.
All
Notes presented or surrendered for registration of transfer or for
exchange, repurchase or conversion shall (if so required by the
Company, the Trustee, the Note Registrar or any co-Note Registrar)
be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the
Note Registrar and duly executed, by the Holder thereof or its
attorney-in-fact duly authorized in writing. Each Holder presenting
or surrendering for registration or transfer or for exchange shall
(if so required by the Trustee),
provide to
the Trustee such security or
indemnity satisfactory to the Trustee against any loss, liability
or expense to be incurred therein or thereby.
No
service charge shall be imposed by the Company, the Trustee, the
Note Registrar, any co-Note Registrar or the Paying Agent for any
exchange or registration of transfer of Notes, but the Company may
require a Holder to pay a sum sufficient to cover any documentary,
stamp or similar issue or transfer tax required in connection
therewith as a result of the name of the Holder of new Notes issued
upon such exchange or registration of transfer being different from
the name of the Holder of the old Notes surrendered for exchange or
registration of transfer.
None of
the Company, the Trustee, the Note Registrar or any co-Note
Registrar shall be required to exchange or register a transfer of
(i) any Notes surrendered for conversion or, if a portion of
any Note is surrendered for conversion, such portion thereof
surrendered for conversion, (ii) any Notes, or a portion of
any Note, surrendered for repurchase (and not withdrawn) in
accordance with
Article 15
or
(iii) any Notes selected for redemption in accordance with
Article 16
,
except the unredeemed portion of any Note being redeemed in
part.
All
Notes issued upon any registration of transfer or exchange of Notes
in accordance with this Indenture shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture as the Notes surrendered upon such
registration of transfer or exchange.
(b)
So
long as the Notes are eligible for book-entry settlement with the
Depositary, unless otherwise required by law, subject to the fourth
paragraph from the end of
Section 2.05(c)
all Notes shall be represented by one
or more Notes in global form (each, a “
Global Note
”) registered in the name of the Depositary
or the nominee of the Depositary. The transfer and exchange of
beneficial interests in a Global Note that does not involve the
issuance of a Physical Note shall be effected through the
Depositary (but not the Trustee or the Custodian) in accordance
with this Indenture (including the restrictions on transfer set
forth herein) and the procedures of the Depositary
therefor.
(c)
Every
Note that bears or is required under this
Section 2.05(c)
to bear the legend set forth in
this
Section 2.05(c)
(together with any Common Stock issued
upon conversion of the Notes that is required to bear the legend
set forth in
Section 2.05(d)
,
collectively, the “
Restricted
Securities
”) shall be
subject to the restrictions on transfer set forth in this
Section 2.05(c)
(including the legend set forth
below), unless such restrictions on transfer shall be eliminated or
otherwise waived by written consent of the Company, and the Holder
of each such Restricted Security, by such Holder’s acceptance
thereof, agrees to be bound by all such restrictions on transfer.
As used in this
Section 2.05(c)
and
Section 2.05(d)
,
the term “
transfer
” encompasses any sale, pledge, transfer or
other disposition whatsoever of any Restricted
Security.
Any
certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock,
if any, issued upon conversion thereof, which shall bear the legend
set forth in
Section 2.05(d)
, if
applicable) shall bear a legend in substantially the following form
(unless (i) such Notes have been transferred pursuant to a
registration statement that has become or been declared effective
under the Securities Act and that continues to be effective at the
time of such transfer, (ii) such Notes have been or sold pursuant
to the exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act, which
results in such Notes not being subject to transfer restrictions
under the Securities Act and pursuant to which the Company
reasonably believes such legend may be removed in compliance with
applicable law, or (iii)otherwise agreed by the Company in writing,
with notice thereof to the Trustee):
THIS
SECURITY AND THE CLASS B COMMON STOCK, IF ANY, ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT
”), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF
OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS
THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A
“QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,
AND
(2) AGREES
FOR THE BENEFIT OF RUMBLEON, INC. (THE “
COMPANY
”) THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN, EXCEPT:
(A)
TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B)
PURSUANT
TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER,
OR
(C)
TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR
(D)
PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
PRIOR
TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE
RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN
ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS
BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.
No
transfer of any Note that bears the legend set forth in this
Section 2.05(c) will be registered by the Note Registrar unless the
applicable box on the Form of Assignment and Transfer has been
checked.
Any
Note (or security issued in exchange or substitution therefor)
(i) that has been transferred pursuant to a registration
statement that has become effective or been declared effective
under the Securities Act and that continues to be effective at the
time of such transfer or (ii) that has been sold pursuant to
the exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act which
results in such Notes not being subject to transfer restrictions
under the Securities Act and pursuant to which the Company
reasonably believes such legend may be removed in compliance with
applicable laws, may, upon surrender of such Note for exchange to
the Note Registrar in accordance with the provisions of this
Section 2.05
,
be exchanged for a new Note or Notes, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend
required by this
Section 2.05(c)
and shall
not be assigned a restricted CUSIP number. The Company shall be
entitled to instruct the Custodian in writing to so surrender any
Global Note as to which any of the conditions set forth in
clause (i) through (iii) of the immediately preceding sentence
have been satisfied, and, upon such instruction, the Custodian
shall so surrender such Global Note for exchange in accordance with
the applicable procedures of the Depositary; and any new Global
Note so exchanged therefor shall not bear the restrictive legend
specified in this
Section 2.05(c)
and shall
not be assigned a restricted CUSIP number. The Company shall
promptly notify the Trustee after a registration statement, if any,
with respect to the Notes or any Common Stock issued upon
conversion of the Notes has been declared effective under the
Securities Act. Any exchange pursuant to the forgoing paragraph
shall be in accordance with the applicable procedures of the
Depositary.
Notwithstanding any
other provisions of this Indenture (other than the provisions set
forth in this
Section 2.05(c)
), a Global
Note may not be transferred as a whole or in part except
(i) by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of
the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary and
(ii) for exchange of a Global Note or a portion thereof for
one or more Physical Notes in accordance with the second
immediately succeeding paragraph.
The
Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to
act as Depositary with respect to each Global Note. Initially, each
Global Note shall be issued to the Depositary, registered in the
name of Cede & Co., as the nominee of the Depositary, and
deposited with the Trustee as custodian for Cede &
Co.
If
(i) the Depositary notifies the Company at any time that the
Depositary is unwilling or unable to continue as depositary for the
Global Notes and a successor depositary is not appointed within
90 days, (ii) the Depositary ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary
is not appointed within 90 days or (iii) an Event of Default
with respect to the Notes has occurred and is continuing, subject
to the Depositary’s applicable procedures, and a beneficial
owner of any Note requests that its beneficial interest therein be
issued as a Physical Note, the Company shall execute, and the
Trustee, upon receipt of an Officers’ Certificate and a
Company Order for the authentication and delivery of Notes, shall
authenticate and deliver (x) in the case of clause (iii),
a Physical Note to such beneficial owner in a principal amount
equal to the principal amount of such Note corresponding to such
beneficial owner’s beneficial interest and (y) in the
case of clause (i) or (ii), Physical Notes to each beneficial
owner of the related Global Notes (or a portion thereof) in an
aggregate principal amount equal to the aggregate principal amount
of such Global Notes in exchange for such Global Notes, and upon
delivery of the Global Notes to the Trustee such Global Notes shall
be canceled.
Physical Notes
issued in exchange for all or a part of the Global Note pursuant to
this
Section 2.05(c)
shall be
registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, or, in the case of clause
(iii) of the immediately preceding paragraph, the relevant
beneficial owner, shall instruct the Trustee. Upon execution and
authentication, the Trustee shall deliver such Physical Notes to
the Persons in whose names such Physical Notes are so
registered.
At such
time as all interests in a Global Note have been converted,
canceled, repurchased, redeemed or transferred, such Global Note
shall be, upon receipt thereof, canceled by the Trustee in
accordance with standing procedures and existing instructions
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is exchanged for
Physical Notes, converted, canceled, repurchased, redeemed or
transferred to a transferee who receives Physical Notes therefor or
any Physical Note is exchanged or transferred for part of such
Global Note, the principal amount of such Global Note shall, in
accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced
or increased, as the case may be, and an endorsement shall be made
on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or
increase.
None of
the Company, the Trustee, the Paying Agent, the Conversion Agent or
any agent of the Company or the Trustee shall have any
responsibility or liability for the payment of amounts to
beneficial holders, any aspect of the records relating to or
payments made on account of beneficial ownership interests of a
Global Note or maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
(d)
Any
stock certificate representing Common Stock issued upon conversion
of a Note (including any Common Stock delivered in connection with
the payment of an Interest Make-Whole Payment) shall bear a legend
in substantially the following form (unless (i) such Common Stock
has been transferred pursuant to a registration statement that has
become or been declared effective under the Securities Act and that
continues to be effective at the time of such transfer, or (ii) the
Note or such Common Stock has been sold pursuant to the exemption
from registration provided by Rule 144 or any similar
provision then in force under the Securities Act, which results in
such Common Stock not being subject to transfer restrictions under
the Securities Act and pursuant to which the Company reasonably
believes such legend may be removed in compliance with applicable
law, or (iii) such Common Stock has been issued upon conversion of
a Note that has transferred pursuant to a registration statement
that has become or been declared effective under the Securities Act
and that continues to be effective at the time of such transfer, or
pursuant to the exemption from registration provided by
Rule 144 or any similar provision then in force under the
Securities Act, which results in such Notes not being subject to
transfer restrictions under the Securities Act and pursuant to
which the Company reasonably believes such legend may be removed in
compliance with applicable law, or unless otherwise agreed by the
Company with written notice thereof to the Trustee and any transfer
agent for the Common Stock):
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “
SECURITIES
ACT
”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER:
(1) REPRESENTS
THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A
“QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,
AND
(2) AGREES
FOR THE BENEFIT OF RUMBLEON, INC. (THE “
COMPANY
”) THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN, EXCEPT:
(A)
TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B)
PURSUANT
TO, AND IN ACCORDANCE WITH A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER,
OR
(C)
TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR
(D)
PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
PRIOR
TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR
THE COMPANY’S CLASS B COMMON STOCK RESERVE THE RIGHT TO
REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR
OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER FOR THE
COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN
COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
Any
such Common Stock (i) as to which such restrictions on
transfer shall have expired in accordance with their terms,
(ii) that has been transferred pursuant to a registration
statement that has become or been declared effective under the
Securities Act and that continues to be effective at the time of
such transfer or (iii) that has been sold pursuant to the
exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act, which
results in such Common Stock not being subject to transfer
restrictions under the Securities Act and pursuant to which the
Company reasonably believes such legend may be removed in
compliance with applicable law, may, upon surrender of the
certificates representing such shares of Common Stock for exchange
in accordance with the procedures of the transfer agent for the
Common Stock, be exchanged for a new certificate or certificates
for a like aggregate number of shares of Common Stock, which shall
not bear the restrictive legend required by this
Section 2.05(d)
.
(e)
Any
Note or Common Stock issued upon the conversion or exchange of a
Note that is repurchased or owned by any Affiliate of the Company
(or any Person who was an Affiliate of the Company at any time
during the three months immediately preceding) may not be resold by
such Affiliate (or such Person, as the case may be) unless
registered under the Securities Act or resold pursuant to an
exemption from the registration requirements of the Securities Act
in a transaction that results in such Note or Common Stock, as the
case may be, no longer being a “restricted security”
(as defined under Rule 144). The Company shall cause any Note
that is repurchased or owned by it to be surrendered to the Trustee
for cancellation in accordance with
Section 2.08
.
(f)
The
Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any securities laws or restrictions
on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Note (including
any transfers between or among Depositary participants or
beneficial owners of interests in any Global Note) other than to
require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine
the same to determine substantial compliance as to form with the
express requirements hereof.
(g)
Neither
the Trustee nor any agent shall have any responsibility or
liability for any actions taken or not taken by the
Depositary.
Section
2.06
Mutilated,
Destroyed, Lost or Stolen Notes
.
In case any Note shall become
mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon receipt of a Company Order the
Trustee or an authenticating agent appointed by the Trustee shall
authenticate and deliver, a new Note, bearing a registration number
not contemporaneously outstanding, in exchange and substitution for
the mutilated Note, or in lieu of and in substitution for the Note
so destroyed, lost or stolen. In every case the applicant for a
substituted Note shall furnish to the Company, to the Trustee and,
if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless
from any loss, liability, cost or expense caused by or connected
with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent evidence
to their satisfaction of the destruction, loss or theft of such
Note and of the ownership thereof.
The
Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of a Company
Order and such security or indemnity as the Trustee, the Company
and, if applicable, such authenticating agent may require. No
service charge shall be imposed by the Company, the Trustee, the
Note Registrar, any co-Note Registrar or the Paying Agent upon the
issuance of any substitute Note, but the Company may require a
Holder to pay a sum sufficient to cover any documentary, stamp or
similar issue or transfer tax required in connection therewith as a
result of the name of the Holder of the new substitute Note being
different from the name of the Holder of the old Note that became
mutilated or was destroyed, lost or stolen. In case any Note that
has matured or is about to mature or has been surrendered for
required repurchase or is about to be converted in accordance with
Article 14
shall become mutilated or be destroyed, lost or stolen, the Company
may, in its sole discretion, instead of issuing a substitute Note,
pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the
case of a mutilated Note), as the case may be, if the applicant for
such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of
them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of
destruction, loss or theft, evidence satisfactory to the Company,
the Trustee and, if applicable, any Paying Agent or Conversion
Agent evidence of their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
Every
substitute Note issued pursuant to the provisions of this
Section 2.06
by virtue of the fact that any Note is destroyed, lost or stolen
shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Note shall be
found at any time, and shall be entitled to all the benefits of
(but shall be subject to all the limitations set forth in) this
Indenture equally and proportionately with any and all other Notes
duly issued hereunder. To the extent permitted by law, all Notes
shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement,
payment, redemption, conversion or repurchase of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all
other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement, payment, redemption, conversion or repurchase of
negotiable instruments or other securities without their
surrender.
Section
2.07
Temporary
Notes
.
Pending the preparation of Physical
Notes, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon written request of the
Company, authenticate and deliver temporary Notes (printed or
lithographed). Temporary Notes shall be issuable in any authorized
denomination, and substantially in the form of the Physical Notes
but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the
Company. Every such temporary Note shall be executed by the Company
and authenticated by the Trustee or such authenticating agent upon
the same conditions and in substantially the same manner, and with
the same effect, as the Physical Notes. Without unreasonable delay,
the Company shall execute and deliver to the Trustee or such
authenticating agent Physical Notes (other than any Global Note)
and thereupon any or all temporary Notes (other than any Global
Note) may be surrendered in exchange therefor, at each office or
agency maintained by the Company pursuant to
Section 4.02
and the
Trustee or such authenticating agent upon receipt of a Company
Order shall authenticate and deliver in exchange for such temporary
Notes an equal aggregate principal amount of Physical Notes. Such
exchange shall be made by the Company at its own expense and
without any charge therefor. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Physical
Notes authenticated and delivered hereunder.
Section
2.08
Cancellation
of Notes Paid, Converted, Etc
. The Company shall
cause all Notes surrendered for the purpose of payment, repurchase,
redemption, registration of transfer or exchange or conversion, if
surrendered to any Person other than the Trustee (including any of
the Company’s agents, Subsidiaries or Affiliates), to be
surrendered to the Trustee for cancellation. All Notes delivered to
the Trustee shall be canceled promptly by it, and, except for Notes
surrendered for transfer or exchange, no Notes shall be
authenticated in exchange thereof except as expressly permitted by
any of the provisions of this Indenture. The Trustee shall deliver
an acknowledgment of such cancellation to the Company, at the
Company’s written request in a Company Order.
Section
2.09
CUSIP
Numbers
.
The Company in issuing the Notes may
use “CUSIP” numbers (if then generally in use), and, if
so, the Trustee shall use “CUSIP” numbers in all
notices issued to Holders as a convenience to such Holders;
provided
that any such
notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or on
such notice and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company shall
promptly notify the Trustee in writing of any change in the
“CUSIP” numbers.
Section
2.10
Repurchases
.
The Company may, to the extent permitted by law, and directly or
indirectly (regardless of whether such Notes are surrendered to the
Company), repurchase Notes in the open market or otherwise, whether
by the Company or its Subsidiaries or through a private or public
tender or exchange offer or through counterparties to private
agreements, including by cash-settled swaps or other derivatives.
The Company shall cause any Notes so repurchased (other than Notes
repurchased pursuant to cash-settled swaps or other derivatives) to
be surrendered to the Trustee for cancellation in accordance with
Section 2.08
,
and the Trustee and no one else shall cancel all Notes so
surrendered and such Notes shall no longer be considered
outstanding under this Indenture upon their
cancellation.
ARTICLE 3
SATISFACTION AND
DISCHARGE
Section
3.01
Satisfaction
and Discharge
.
This Indenture shall upon request of
the Company contained in an Officers’ Certificate cease to be
of further effect, and the Trustee, at the expense of the Company,
shall execute such instruments acknowledging satisfaction and
discharge of this Indenture as reasonably requested by the Company,
when (a) (i) all Notes theretofore authenticated and
delivered (other than Notes which have been destroyed, lost or
stolen and which have been replaced, paid or converted as provided
in
Section 2.06
) have been
delivered to the Trustee for cancellation; or (ii) the Company
has deposited with the Trustee or delivered to Holders, as
applicable, after the Notes have become due and payable, whether on
the Maturity Date, any Redemption Date, any Fundamental Change
Repurchase Date, upon conversion or otherwise, cash or cash, shares
of Common Stock or a combination thereof, as applicable (which
shall be delivered directly to the Holders and not to the Trustee),
solely to satisfy the Company’s Conversion Obligation,
sufficient to pay all of the outstanding Notes and all other sums
due and payable under this Indenture by the Company, including any
Interest Make-Whole Payment; and (b) the Company has delivered
to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture
have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture, the obligations of the Company to the
Trustee under
Section 7.06
shall
survive.
ARTICLE 4
PARTICULAR COVENANTS OF THE
COMPANY
Section
4.01
Payment
of Principal and Interest
.
The Company covenants and agrees that
it will cause to be paid the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, and accrued and unpaid interest on, each of the Notes at the
places, at the respective times and in the manner provided herein
and in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than
the Company, holds as of 12:00 p.m. (New York City time) on the due
date money deposited by the Company in immediately available funds
and designated for and sufficient to pay all principal, premium, if
any, and interest then due.
Section
4.02
Maintenance
of Office or Agency
.
The Company will maintain in the
contiguous United States an office or agency where the Notes may be
surrendered for registration of transfer or exchange or for
presentation for payment or repurchase (“
Paying Agent
”) or for conversion
(“
Conversion
Agent
”). The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations
and surrenders may be made or served at the Corporate Trust
Office.
The
Company may also from time to time designate as co-Note Registrars
one or more other offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may from
time to time rescind such designations;
provided
that no such designation or
rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the contiguous United
States for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of
any change in the location of any such other office or agency. The
terms “
Paying
Agent
” and “
Conversion Agent
” include any such
additional or other offices or agencies, as
applicable.
The
Company hereby initially designates the Trustee as the Paying Agent
(other than for purposes of Article 15, which shall be appointed by
the Company in connection with a Fundamental Change), Note
Registrar, Custodian and Conversion Agent and the Corporate Trust
Office as the office or agency in the contiguous United States,
where Notes may be surrendered for registration of transfer or
exchange or for presentation for payment or repurchase or for
conversion.
Section
4.03
Appointments
to Fill Vacancies in Trustee’s
Office
.
The Company, whenever necessary to
avoid or fill a vacancy in the office of Trustee, will appoint, in
the manner provided in
Section 7.09
, a Trustee,
so that there shall at all times be a Trustee
hereunder.
Section
4.04
Provisions
as to Paying Agent
.
(a) If the Company shall appoint a
Paying Agent other than the Trustee, the Company will cause such
Paying Agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the
provisions of this
Section 4.04
:
(i)
that
it will hold all sums held by it as such agent for the payment of
the principal (including the Redemption Price and the Fundamental
Change Repurchase Price, if applicable) of, and accrued and unpaid
interest on, the Notes in trust for the benefit of the Holders of
the Notes;
(ii)
that
it will give the Trustee prompt written notice of any failure by
the Company to make any payment of the principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, and accrued and unpaid interest on, the Notes when
the same shall be due and payable; and
(iii)
that
at any time during the continuance of an Event of Default, upon
request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust.
The
Company shall, on or before each due date of the principal
(including the Redemption Price and the Fundamental Change
Repurchase Price, if applicable) of, or accrued and unpaid interest
on, the Notes, deposit with the Paying Agent a sum in immediately
available funds sufficient to pay such principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) or accrued and unpaid interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee
in writing of any failure to take such action;
provided
that if such deposit is made
on the due date, such deposit must be received by the Paying Agent
by 11:00 a.m., New York City time, on such
date.
(b)
If
the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, and accrued and unpaid interest on, the Notes, set aside,
segregate and hold in trust for the benefit of the Holders of the
Notes a sum sufficient to pay such principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) and accrued and unpaid interest so becoming due and
will promptly notify the Trustee in writing of any failure to take
such action and of any failure by the Company to make any payment
of the principal (including the Redemption Price and the
Fundamental Change Repurchase Price, if applicable) of, or accrued
and unpaid interest on, the Notes when the same shall become due
and payable. The Company or any Affiliate of the Company may act as
Paying Agent (except for the purposes of
Article 3
).
Upon the occurrence of any Event of Default under
Section 6.01(i)
or
Section 6.01(j)
,
the Trustee shall automatically be the Paying
Agent.
(c)
Anything
in this
Section 4.04
to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other
reason, pay, cause to be paid or deliver to the Trustee all sums or
amounts held in trust by the Company or any Paying Agent hereunder
as required by this
Section 4.04
,
such sums or amounts to be held by the Trustee upon the trusts
herein contained and upon such payment or delivery by the Company
or any Paying Agent to the Trustee, the Company or such Paying
Agent shall be released from all further liability but only with
respect to such sums or amounts.
(d)
Subject
to applicable abandoned property laws, any money or property
deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, accrued and unpaid interest on and the
consideration due upon conversion of any Note and remaining
unclaimed for two years after such principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable), interest or consideration due upon conversion has
become due and payable shall be paid or delivered, as the case may
be, to the Company on request of the Company contained in an
Officers’ Certificate, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money or property, and
all liability of the Company as trustee thereof, shall thereupon
cease.
Section
4.05
Existence
.
Subject to
Article 11
, the Company
shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence.
Section
4.06
Rule 144A
Information Requirement and Annual
Reports
.
(a) At any time the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company shall, so long as any of the
Notes or any shares of Common Stock issuable upon conversion
thereof shall, at such time, constitute “restricted
securities” within the meaning of Rule 144(a)(3) under
the Securities Act, promptly deliver to the Trustee and, upon
written request, any Holder, beneficial owner or prospective
purchaser of such Notes or any shares of Common Stock issuable upon
conversion of such Notes, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act to
facilitate the resale of such Notes or shares of Common Stock
pursuant to Rule 144A. The Company shall take such further
action as any Holder or beneficial owner of such Notes or such
Common Stock may reasonably request to the extent from time to time
required to enable such Holder or beneficial owner to sell such
Notes or shares of Common Stock in accordance with Rule 144A,
as such rule may be amended from time to time.
(b)
The
Company shall deliver to the Trustee, within 15 days after the
same are required to be filed with the Commission, copies of any
documents or reports that the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act
(giving effect to any grace period provided by Rule 12b-25
under the Exchange Act). Any such document or report that the
Company files with the Commission via the Commission’s EDGAR
system shall be deemed to be delivered to the Trustee for purposes
of this
Section 4.06(b)
at the time such documents are filed
via the EDGAR system, it being understood that the Trustee shall
not be responsible for determining whether such filings have been
made.
(c)
Delivery
of the reports and documents described in subsection (b) above
to the Trustee is for informational purposes only, and the
Trustee’s receipt of such shall not constitute actual or
constructive notice or knowledge of any information contained
therein or determinable from information contained therein,
including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to conclusively rely
on an Officers’ Certificate).
(d)
If,
at any time during the six-month period beginning on, and
including, the date that is six months after May 14, 2019, the
Company fails to timely file any document or report that it is
required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act, as applicable (after giving effect to
all applicable grace periods thereunder and other than reports on
Form 8-K), or the Notes offered by the Offering Memorandum are not
otherwise freely tradable pursuant to Rule 144 by Holders
other than the Company’s Affiliates or Holders that were the
Company’s Affiliates at any time during the three months
immediately preceding (as a result of restrictions pursuant to U.S.
securities laws or the terms of this Indenture or the Notes), the
Company shall pay Additional Interest on such Notes. Such
Additional Interest shall accrue on such Notes at the rate of 0.50%
per annum of the principal amount of such Notes outstanding for
each day during such period for which the Company’s failure
to file has occurred and is continuing or such Notes are not
otherwise freely tradable pursuant to Rule 144 by Holders
other than the Company’s Affiliates (or Holders that were the
Company’s Affiliates at any time during the three months
immediately preceding). As used in this
Section 4.06(d)
,
documents or reports that the Company is required to
“file” with the Commission pursuant to Section 13
or 15(d) of the Exchange Act does not include documents or reports
that the Company furnishes to the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.
(e)
Additional
Interest will be payable in arrears on each Interest Payment Date
following accrual in the same manner as regular interest on the
Notes.
(f)
The
Additional Interest that is payable in accordance with
Section 4.06(d)
shall be in addition to, and not in
lieu of, any Additional Interest that may be payable as a result of
the Company’s election pursuant to
Section 6.03
hereof or pursuant to the Registration
Rights Agreement.
(g)
If
Additional Interest is payable by the Company pursuant to
Section 4.06(d)
,
the Company shall deliver to the Trustee an Officers’
Certificate stating (i) the amount of such Additional Interest
that is payable, (ii) the date on which such Additional
Interest is payable and (iii) accompanied by a form of notice to be
delivered to Holders of such Additional Interest payment with a
direction to the Trustee to deliver such notice to the Holders.
Unless and until a Responsible Officer of the Trustee receives at
the Corporate Trust Office such a certificate, the Trustee may
assume without inquiry that no such Additional Interest is payable.
If the Company has paid such Additional Interest directly to the
Persons entitled to it, the Company shall deliver to the Trustee an
Officers’ Certificate setting forth the particulars of such
payment.
Section
4.07
Stay,
Extension and Usury Laws
.
The Company covenants (to the extent
that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law or other law that
would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter
in force, or that may affect the covenants or the performance of
this Indenture; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section
4.08
Compliance
Certificate; Statements as to Defaults
.
The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of
the Company (beginning with the fiscal year ending on
December 31, 2019) an Officers’ Certificate stating
whether the signers thereof have knowledge of any failure by the
Company to comply with all conditions and covenants then required
to be performed under this Indenture, any Default or Event of
Default, and, if so, specifying each such failure, the nature
thereof and what actions the Company is taking or proposes to take
with respect thereto.
In
addition, the Company shall deliver to the Trustee, as soon as
possible, and in any event within 30 days after the occurrence of
any Event of Default or Default, an Officers’ Certificate
setting forth the details of such Event of Default or Default, its
status and the action that the Company is taking or proposing to
take in respect thereof. Unless and until a Responsible Officer of
the Trustee shall have received such Officers’ Certificate,
the Trustee shall not be deemed to have knowledge of any such Event
of Default or Default.
Section
4.09
Additional
Interest pursuant to the Registration Rights
Agreement
. If Additional
Interest is payable by the Company pursuant to the Registration
Rights Agreement, the Company shall deliver to the Trustee an
Officers’ Certificate to that effect stating (a) the amount
of such Additional Interest that is payable, (b) the date on which
such interest is payable and (c) accompanied by a form of notice to
be delivered to Holders of such Additional Interest payment with a
direction to the Trustee to deliver such notice to the Holders.
Unless and until a Responsible Officer of the Trustee receives at
the Corporate Trust Office such a certificate, the Trustee may
assume without inquiry that no such Additional Interest is
payable.
Section
4.10
Limitation
on Liens Securing Indebtedness
.
The Company will not, nor will the
Company permit any of its Subsidiaries to create, assume or suffer
to exist any Lien to secure Indebtedness on any asset now owned or
hereafter acquired by the Company or any of its Subsidiaries except
for Permitted Liens; provided, however, that any Lien on such asset
shall be permitted notwithstanding that it is not a Permitted Lien
if all payments due under this Indenture and the Notes are secured
on an equal and ratable (or senior) basis with the obligations so
secured by such Lien until such time as such obligations are no
longer secured by a Lien.
The
foregoing covenant will immediately terminate, and any then
existing default thereof will immediately be deemed cured, upon the
earliest to occur of: (i) a Fundamental Change described in clause
(1) or (2) of the definition thereof, (ii) such time as less than
$3.0 million aggregate principal amount of Notes are outstanding
and (iii) both of (x) the conclusion of any 30 Trading Day period
during which the Last Reported Sale Price of the Common Stock has
been at least 150% of the Conversion Price then in effect for at
least 20 Trading Days (whether or not consecutive) and (y) the
initial effectiveness of the registration statement filed pursuant
to the Company’s obligations under the Registration Rights
Agreement. Any Lien created for the benefit of the Holders pursuant
to the foregoing covenant shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged
upon the earlier of (x) the termination of such Indebtedness and
(y) the termination of the foregoing covenant.
Section
4.11
Further
Instruments and Acts
.
Upon request of the Trustee, the
Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry
out more effectively the purposes of this Indenture.
ARTICLE 5
LISTS OF HOLDERS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section
5.01
Lists
of Holders
.
The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee,
semi-annually, not more than 5 days after each April 15 and
October 15 in each year beginning with October 15, 2019,
and at such other times as the Trustee may request in writing,
within 15 days after receipt by the Company of any such request (or
such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders as of a date not
more than 15 days (or such other date as the Trustee may reasonably
request in order to so provide any such notices) prior to the time
such information is furnished, except that no such list need be
furnished so long as the Trustee is acting as Note
Registrar.
Section
5.02
Preservation
and Disclosure of Lists
.
The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to
the names and addresses of the Holders contained in the most recent
list furnished to it as provided in
Section 5.01
or maintained
by the Trustee in its capacity as Note Registrar, if so acting. The
Trustee may destroy any list furnished to it as provided in
Section 5.01
upon receipt of a new list so furnished.
ARTICLE 6
Section
6.01
Events
of Default
.
Each of the following events shall be
an “
Event of
Default
” with respect to the Notes:
(a)
default
in any payment of interest on any Note when due and payable, and
the default continues for a period of 30 days;
(b)
default
in the payment of principal of any Note when due and payable on the
Maturity Date, upon Optional Redemption, upon any required
repurchase, upon declaration of acceleration or
otherwise;
(c)
failure
by the Company to comply with its obligation to convert the Notes
in accordance with this Indenture upon exercise of a Holder’s
conversion right, including the payment of any Interest Make-Whole
Payment;
(d)
failure
by the Company to issue a Fundamental Change Company Notice in
accordance with
Section 15.02(c)
,
notice of the Effective Date of a Make-Whole Fundamental Change in
accordance with
Section 14.03(b)
or notice of a specified distribution
or specified Corporate Event in accordance with
Section 14.01(b)(ii)
or
14.01(b)(iii)
,
in each case, when due;
(e)
failure
by the Company to comply with its obligations under
Article 11
;
(f)
failure
by the Company for 60 days after written notice from the Trustee or
the Holders of at least 25% in principal amount of the Notes then
outstanding has been received by the Company to comply with any of
its other agreements contained in the Notes or this
Indenture;
(g)
default
by the Company or any Significant Subsidiary of the Company with
respect to any mortgage, agreement or other instrument under which
there may be outstanding, or by which there may be secured or
evidenced, any indebtedness for money borrowed in excess of
$5,000,000 (or its foreign currency equivalent) in the aggregate of
the Company and/or any such Significant Subsidiary, whether such
indebtedness now exists or shall hereafter be created
(i) resulting in such indebtedness becoming or being declared
due and payable or (ii) constituting a failure to pay the
principal or interest of any such debt when due and payable at its
stated maturity, upon required repurchase, upon declaration of
acceleration or otherwise;
(h)
a
final judgment or judgments for the payment of $5,000,000 (or its
foreign currency equivalent) or more (excluding any amounts covered
by insurance) in the aggregate rendered against the Company or any
Subsidiary of the Company, which judgment is not discharged,
bonded, paid, waived or stayed within 90 days after
(i) the date on which the right to appeal thereof has expired
if no such appeal has commenced, or (ii) the date on which all
rights to appeal have been extinguished;
(i)
the
Company or any Significant Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or
other relief with respect to the Company or any such Significant
Subsidiary or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of the Company or any such Significant Subsidiary or any
substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become
due; or
(j)
an
involuntary case or other proceeding shall be commenced against the
Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to the Company or such
Significant Subsidiary or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of the Company or such
Significant Subsidiary or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 30 consecutive
days.
Section
6.02
Acceleration;
Rescission and Annulment
. If one or more
Events of Default shall have occurred and be continuing (whatever
the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body), then, and in each and every such case (other than an Event
of Default specified in
Section 6.01(i)
or
Section 6.01(j)
with
respect to the Company or any of its Significant Subsidiaries),
unless the principal of all of the Notes shall have already become
due and payable, the Trustee may, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding determined
in accordance with
Section 8.04
, by notice in
writing to the Company (and to the Trustee if given by Holders),
may declare 100% of the principal of, and accrued and unpaid
interest on, all the Notes to be due and payable immediately, and
upon any such declaration the same shall become and shall
automatically be immediately due and payable, anything contained in
this Indenture or in the Notes to the contrary notwithstanding. If
an Event of Default specified in
Section 6.01(i)
or
Section 6.01(j)
with
respect to the Company or any of its Significant Subsidiaries
occurs and is continuing, 100% of the principal of, and accrued and
unpaid interest, if any, on, all Notes shall become and shall
automatically be immediately due and payable.
The
immediately preceding paragraph, however, is subject to the
conditions that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any
judgment or decree for the payment of the monies due shall have
been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum in immediately
available funds sufficient to pay installments of accrued and
unpaid interest upon all Notes and the principal of any and all
Notes that shall have become due otherwise than by acceleration
(with interest on overdue installments of accrued and unpaid
interest to the extent that payment of such interest is enforceable
under applicable law, and on such principal at the rate borne by
the Notes at such time) and amounts due to the Trustee pursuant to
Section 7.06
,
and if (1) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (2) any and
all existing Events of Default under this Indenture, other than the
nonpayment of the principal of and accrued and unpaid interest, if
any, on Notes that shall have become due solely by such
acceleration, shall have been cured or waived pursuant to
Section 6.09
,
then and in every such case (except as provided in the immediately
succeeding sentence) the Holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all Defaults or Events
of Default with respect to the Notes and rescind and annul such
declaration and its consequences and such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such
waiver or rescission and annulment shall extend to or shall affect
any subsequent Default or Event of Default, or shall impair any
right consequent thereon. Notwithstanding anything to the contrary
herein, no such waiver or rescission and annulment shall extend to
or shall affect any Default or Event of Default resulting from
(i) the nonpayment of the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, or accrued and unpaid interest on, any Notes, (ii) a
failure to repurchase any Notes when required or (iii) a
failure to pay or deliver, as the case may be, the consideration
due upon conversion of the Notes.
Section
6.03
Additional
Interest
. Notwithstanding
anything in this Indenture or in the Notes to the contrary, to the
extent the Company elects, the sole remedy for an Event of Default
relating to the Company’s failure to (i) comply with its
obligations as set forth in
Section 4.06(b)
or (ii)
deliver to the Trustee pursuant to Section 314(a)(1) of the Trust
Indenture Act any documents or reports that it is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act
shall after the occurrence of such an Event of Default consist
exclusively of the right to receive Additional Interest on the
Notes at a rate equal to 0.25% per annum of the principal amount of
the Notes outstanding for each day during the 60-day period on
which such Event of Default is continuing beginning on, and
including, the date on which such an Event of Default first occurs.
Additional Interest payable pursuant to this
Section 6.03
shall be in
addition to, not in lieu of, any Additional Interest payable
pursuant to
Section 4.06(d)
hereof or
pursuant to the Registration Rights Agreement. If the Company so
elects, such Additional Interest shall be payable in the same
manner and on the same dates as the stated interest payable on the
Notes. On the 61st day after such Event of Default (if the Event of
Default relating to the Company’s failure to comply with (i)
its obligations as set forth in
Section 4.06(b)
or (ii) the
requirements of Section 314(a(1) of the Trust Indenture Act is not
cured or waived prior to such 61st day), the Notes shall be
immediately subject to acceleration as provided in
Section 6.02
. The
provisions of this paragraph will not affect the rights of Holders
of Notes in the event of the occurrence of any Event of Default
other than the Company’s failure to comply with (i) its
obligations as set forth in
Section 4.06(b)
or (ii)
the requirements of Section 314(a(1) of the Trust Indenture Act. In
the event the Company does not elect to pay Additional Interest
following an Event of Default in accordance with this
Section 6.03
or the
Company elected to make such payment but does not pay the
Additional Interest when due, the Notes shall be immediately
subject to acceleration as provided in
Section 6.02
.
In
order to elect to pay Additional Interest as the sole remedy during
the first 60 days after the occurrence of any Event of Default
described in the immediately preceding paragraph, the Company must
notify in writing all Holders of the Notes, the Trustee and the
Paying Agent in writing of such election prior to the beginning of
such 60-day period. Upon the failure to timely give such written
notice, the Notes shall be immediately subject to acceleration as
provided in
Section 6.02
.
Section
6.04
Payments
of Notes on Default; Suit Therefor
.
If an Event of Default described in
clause (a) or (b) of
Section 6.01
shall have
occurred, the Company shall, upon demand of the Trustee, pay to the
Trustee, for the benefit of the Holders of the Notes, the whole
amount then due and payable on the Notes for principal and
interest, if any, with interest on any overdue principal and
interest, if any, at the rate borne by the Notes at such time, and,
in addition thereto, such further amount as shall be sufficient to
cover any amounts due to the Trustee under
Section 7.06
. If the
Company shall fail to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums
so due and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company or any
other obligor upon the Notes and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes,
wherever situated.
In the
event there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes
under Title 11 of the United States Code, or any other
applicable law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such
other obligor, or in the event of any other judicial proceedings
relative to the Company or such other obligor upon the Notes, or to
the creditors or property of the Company or such other obligor, the
Trustee, irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this
Section 6.04
, shall be
entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount
of principal and accrued and unpaid interest, if any, in respect of
the Notes, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents and to take such
other actions as it may deem necessary or advisable in order to
have the claims of the Trustee (including any claim for the
compensation, reasonable expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceedings relative to the Company or any other
obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due to the Trustee under
Section 7.06
;
and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby
authorized by each of the Holders to make such payments to the
Trustee, as administrative expenses, and, in the event that the
Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due to it for
compensation, reasonable expenses, advances and disbursements,
including agents and counsel fees, and including any other amounts
due to the Trustee under
Section 7.06
, incurred by
it up to the date of such distribution. To the extent that such
payment of compensation, reasonable expenses, advances and
disbursements out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a
lien on, and shall be paid out of, any and all distributions,
dividends, monies, securities and other property that the Holders
of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
Nothing
herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition
affecting such Holder or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.
All
rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the
possession of any of the Notes, or the production thereof at any
trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders
of the Notes.
In any
proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to
represent all the Holders of the Notes, and it shall not be
necessary to make any Holders of the Notes parties to any such
proceedings.
In case
the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or
abandoned because of any waiver pursuant to
Section 6.09
or any
rescission and annulment pursuant to
Section 6.02
or for any
other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company, the Holders and
the Trustee shall, subject to any determination in such proceeding,
be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Company, the
Holders and the Trustee shall continue as though no such proceeding
had been instituted.
Section
6.05
Application
of Monies Collected by Trustee
.
Any monies or property collected by
the Trustee pursuant to this
Article 6
with respect to
the Notes shall be applied in the following order, at the date or
dates fixed by the Trustee for the distribution of such monies,
upon presentation of the several Notes:
First,
to the payment of all amounts due the Trustee (in each of its
capacities) under
Section 7.06
;
Second,
in case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of interest on, and any
cash due upon conversion of, the Notes in default in the order of
the date due of the payments of such interest and cash due upon
conversion, as the case may be, with interest (to the extent that
such interest has been collected by the Trustee) upon such overdue
payments at the rate borne by the Notes at such time, such payments
to be made ratably to the Persons entitled thereto;
Third,
in case the principal of the outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid to the payment of
the whole amount (including, if applicable, the payment of the
Redemption Price, the Fundamental Change Repurchase Price and any
cash due upon conversion) then owing and unpaid upon the Notes for
principal and interest, if any, with interest on the overdue
principal and, to the extent that such interest has been collected
by the Trustee, upon overdue installments of interest at the rate
borne by the Notes at such time, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid
upon the Notes, then to the payment of such principal (including,
if applicable, the Redemption Price and the Fundamental Change
Repurchase Price and the cash due upon conversion) and interest
without preference or priority of principal over interest, or of
interest over principal or of any installment of interest over any
other installment of interest, or of any Note over any other Note,
ratably to the aggregate of such principal (including, if
applicable, the Redemption Price, the Fundamental Change Repurchase
Price and any cash due upon conversion) and accrued and unpaid
interest; and
Fourth,
to the payment of the remainder, if any, to the
Company.
Section
6.06
Proceedings
by Holders
.
Except to enforce the right to
receive payment of principal (including, if applicable, the
Redemption Price and the Fundamental Change Repurchase Price) or
interest when due, or the right to receive payment or delivery of
the consideration due upon conversion, no Holder of any Note shall
have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or
at law upon or under or with respect to this Indenture, or for the
appointment of a receiver, trustee, liquidator, custodian or other
similar official, or for any other remedy hereunder,
unless:
(a)
such
Holder previously shall have given to the Trustee written notice of
an Event of Default and of the continuance thereof, as herein
provided;
(b)
Holders
of at least 25% in aggregate principal amount of the Notes then
outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder;
(c)
such
Holders shall have offered to the Trustee such security or
indemnity reasonably satisfactory to it against any loss, liability
or expense;
(d)
the
Trustee shall have not complied with such notice within 60 days
after the receipt of the notice and the offer of such security or
indemnity; and
(e)
no
direction that, in the opinion of the Trustee, is inconsistent with
such written request shall have been given to the Trustee by the
Holders of a majority of the aggregate principal amount of the
Notes then outstanding within such 60-day period pursuant to
Section 6.09
,
it being understood and intended, and being expressly covenanted by
the taker and Holder of every Note with every other taker and
Holder and the Trustee that no one or more Holders shall have any
right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the
rights of any other Holder, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any
right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders
(except as otherwise provided herein). For the protection and
enforcement of this
Section 6.06
,
each and every Holder and the Trustee shall be entitled to such
relief as can be given either at law or in
equity.
Notwithstanding any
other provision of this Indenture and any provision of any Note,
each Holder shall have the right to receive payment or delivery, as
the case may be, of (x) the principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, (y) accrued and unpaid interest, if any, on,
and (z) the consideration due upon conversion of, such Note,
on or after the respective due dates expressed or provided for in
such Note or in this Indenture, or to institute suit for the
enforcement of any such payment or delivery, as the case may be and
such right to receive such payment or delivery, as the case may be,
on or after such respective dates shall not be impaired or affected
without the consent of such Holder.
Section
6.07
Proceedings
by Trustee
.
In case of an Event of Default, the
Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial
proceedings as are necessary to protect and enforce any of such
rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested
in the Trustee by this Indenture or by law.
Section
6.08
Remedies
Cumulative and Continuing
.
Except as provided in the last
paragraph of
Section 2.06
, all powers
and remedies given by this
Article 6
to the Trustee
or to the Holders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers
and remedies available to the Trustee or the Holders of the Notes,
by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Holder
of any of the Notes to exercise any right or power accruing upon
any Default or Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Default or
Event of Default or any acquiescence therein; and, subject to the
provisions of
Section 6.06
, every power
and remedy given by this
Article 6
or by law to the
Trustee or to the Holders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the
Holders.
Section
6.09
Direction
of Proceedings and Waiver of Defaults by Majority of
Holders
.
The Holders of a majority of the
aggregate principal amount of the Notes at the time outstanding
determined in accordance with
Section 8.04
shall have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the
Notes;
provided
,
however
, that (a) such
direction shall not be in conflict with any rule of law or with
this Indenture, and (b) the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such
direction. The Trustee may refuse to follow any direction that it
determines is unduly prejudicial to the rights of any other Holder
(it being understood that the Trustee does not have an affirmative
duty to ascertain whether or not such directions are unduly
prejudicial to such Holder) or that would involve the Trustee in
personal liability, unless the Trustee is offered indemnity or
security satisfactory to it against any loss, liability or expense;
provided
,
however
, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent
with such direction. The Holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in
accordance with
Section 8.04
may on behalf
of the Holders of all of the Notes waive any past Default or Event
of Default hereunder and its consequences except (i) a default
in the payment of accrued and unpaid interest, if any, on, or the
principal (including any Redemption Price and any Fundamental
Change Repurchase Price) of, the Notes when due that has not been
cured pursuant to the provisions of
Section 6.01
, (ii) a
failure by the Company to pay or deliver, as the case may be, the
consideration due upon conversion of the Notes or (iii) a
default in respect of a covenant or provision hereof which under
Article 10
cannot be modified or amended without the consent of each Holder of
an outstanding Note affected. Upon any such waiver the Company, the
Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder; but no such waiver shall
extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon. Whenever any Default or Event
of Default hereunder shall have been waived as permitted by this
Section 6.09
,
said Default or Event of Default shall for all purposes of the
Notes and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent
thereon.
Section
6.10
Notice
of Defaults
.
The Trustee shall, within 90 days
after a Responsible Officer obtains actual knowledge of the
occurrence and continuance of a Default or Event of Default,
deliver to all Holders at the name and address set forth in the
Note Register (at the Company’s expense) notice of all
Defaults known to the Trustee, unless such Defaults or Events of
Default shall have been cured or waived before the giving of such
notice;
provided
that,
except in the case of a Default in the payment of the principal of
(including the Redemption Price and the Fundamental Change
Repurchase Price, if applicable), or accrued and unpaid interest
on, any of the Notes or a Default in the payment or delivery of the
consideration due upon conversion, the Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer
of the Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders.
Section
6.11
Undertaking
to Pay Costs
.
All parties to this Indenture agree,
and each Holder of any Note by its acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion,
require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit and that such court may in its discretion assess reasonable
costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party
litigant;
provided
that the
provisions of this
Section 6.11
(to the
extent permitted by law) shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount
of the Notes at the time outstanding determined in accordance with
Section 8.04
,
or to any suit instituted by any Holder for the enforcement of the
payment of the principal of or accrued and unpaid interest, if any,
on any Note (including, but not limited to, the Redemption Price
and the Fundamental Change Repurchase Price, if applicable) on or
after the due date expressed or provided for in such Note or to any
suit for the enforcement of the right to convert any Note, or
receive the consideration due upon conversion, in accordance with
the provisions of
Article 14
.
ARTICLE 7
Section
7.01
Duties
and Responsibilities of Trustee
.
The Trustee, prior to the occurrence
of an Event of Default of which a Responsible Officer of the
Trustee has actual knowledge and after the curing or waiver of all
Events of Default that may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in
this Indenture. In the event an Event of Default has occurred and
is continuing and a Responsible Officer of the Trustee has written
notice or actual knowledge of such Event of Default, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs;
provided
that if an Event
of Default occurs and is continuing and a Responsible Officer has
written notice or actual knowledge of such Event of Default, the
Trustee will be under no obligation to exercise any of the rights
or powers under this Indenture at the request or direction of any
of the Holders unless such Holders have offered (and, if requested,
provided) to the Trustee indemnity or security satisfactory to it
in its sole discretion against any loss, liability or expense that
might be incurred by it in compliance with such request or
direction.
No
provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its
own grossly negligent failure to act or its own willful misconduct,
except that:
(a)
prior
to the occurrence of an Event of Default of which a Responsible
Officer of the Trustee has actual knowledge and after the curing or
waiving of all Events of Default that may have
occurred:
(i)
the
duties of the Trustee shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties as are specifically set
forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(ii)
in
the absence of gross negligence and willful misconduct on the part
of the Trustee, the Trustee may conclusively and without liability
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions
that by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate
the accuracy of any mathematical calculations or other facts stated
therein);
(b)
the
Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless
it shall be proved that the Trustee was grossly negligent in
ascertaining the pertinent facts;
(c)
the
Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority of the
aggregate principal amount of the Notes at the time outstanding
determined as provided in
Section 8.04
relating to the time, method and place
of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;
(d)
whether
or not therein provided, every provision of this Indenture relating
to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of
this Section;
(e)
the
Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any
Paying Agent or any records maintained by any co-Note Registrar
with respect to the Notes;
(f)
if
any party fails to deliver a notice relating to an event the fact
of which, pursuant to this Indenture, requires notice to be sent to
the Trustee, the Trustee may conclusively and without liability
rely on its failure to receive such notice as reason to act as if
no such event occurred, unless a Responsible Officer of the Trustee
had actual knowledge of such event;
(g)
all
cash received by the Trustee shall be placed in a non-interest
bearing trust account and shall not be invested unless agreed in
writing by the Company and the Trustee;
(h)
in
the event that the Trustee is also acting as Custodian, Note
Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent
or transfer agent hereunder, the rights and protections afforded to
the Trustee pursuant to this
Article 7
shall also be afforded to such
Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid
Solicitation Agent or transfer agent; and
(i)
under
no circumstances shall the Trustee be liable in its individual
capacity for the obligations evidenced by the
Notes.
None of
the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers. The Trustee shall not
be required to give any bond or surety in respect of the
performance of its powers or duties hereunder. The Trustee will be
under no obligation to exercise any of its rights and powers under
this Indenture at the request or direction of the Holders unless
such Holder has offered (and if requested, provided) to the Trustee
security or indemnity satisfactory to it in its sole discretion
against any loss, liability or expense.
Section
7.02
Reliance
on Documents, Opinions, Etc
. Except as
otherwise provided in
Section 7.01
:
(a)
(b)
before
the Trustee acts or refrains from acting, it may require an
Officers’ Certificate and/or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officers’ Certificate or
Opinion of Counsel.
(c)
the
Trustee may conclusively and without liability rely and shall be
fully protected in acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, bond, note, coupon or other paper or document believed by it
in good faith to be genuine and to have been signed or presented by
the proper party or parties;
(d)
any
request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers’ Certificate
(unless other evidence in respect thereof be herein specifically
prescribed); and any Board Resolution may be evidenced to the
Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(e)
the
Trustee may consult with counsel of its own selection and require
an Opinion of Counsel and any written or verbal advice of such
counsel or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(f)
the
Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the expense of the
Company and shall incur no liability of any kind by reason of such
inquiry or investigation;
(g)
the
Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through a
co-trustee, agents, custodians, nominees or attorneys and the
Trustee shall not be responsible for any misconduct or negligence
on the part of any agent, custodian, nominee or attorney appointed
by it with due care hereunder;
(h)
the
permissive rights of the Trustee enumerated herein shall not be
construed as duties;
(i)
the
Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(j)
the
Trustee shall not be responsible for monitoring the performance of
other persons or for the failure of others to perform their
duties;
(k)
the
Holders will not direct the Trustee to take action contrary to this
Indenture, the Notes or applicable law, and the Trustee is not
obligated to follow any instruction of the Holders that is contrary
to this Indenture, the Notes or applicable law;
(l)
the
Trustee may request that the Company deliver an Officers’
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant
to this Indenture, which Officers’ Certificate may be signed
by any Person authorized to sign an Officers’ Certificate,
including any Person specified as so authorized in any such
certificate previously delivered and not
superseded;
(m)
the
Trustee shall not be required to give any bond or surety in respect
of the execution of the trusts and powers under this
Indenture;
(n)
in
no event shall the Trustee be liable for any special, punitive,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee
has been advised of the likelihood of such loss or damage and
regardless of the form of action; and
(o)
the
Trustee shall not be charged with knowledge of any Default or Event
of Default with respect to the Notes, unless either (1) a
Responsible Officer shall have actual knowledge of such Default or
Event of Default or (2) written notice of such Default or
Event of Default shall have been given to the Trustee by the
Company or actually received by a Responsible Officer at the
Corporate Trust Office of the Trustee from the Company, a Paying
Agent, any Holder or any agent of any Holder, referencing this
Indenture and stating that it is a “notice of
default”.
Section
7.03
No
Responsibility for Recitals, Etc
. The recitals,
statements, warranties and representations contained herein and in
the Notes (except in the Trustee’s certificate of
authentication) shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for the correctness of
the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes. The Trustee shall
not be accountable for the use or application by the Company of any
Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Notwithstanding the generality of the foregoing, each Holder shall
be solely responsible for making its own independent appraisal of,
and investigation into, the financial condition, creditworthiness,
condition, affairs, status and nature of the Company, and the
Trustee shall not at any time have any responsibility for the same
and each Holder shall not rely on the Trustee in respect
thereof.
Section
7.04
Trustee,
Paying Agents, Conversion Agents, Bid Solicitation Agent or Note
Registrar May Own Notes
.
The Trustee, any Paying Agent (if
other than the Company or an Affiliate thereof), any Conversion
Agent, Bid Solicitation Agent (if other than the Company or an
Affiliate thereof) or Note Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes with the
same rights it would have if it were not the Trustee, Paying Agent,
Conversion Agent, Bid Solicitation Agent or Note
Registrar.
Section
7.05
Monies
to Be Held in Trust
.
All monies received by the Trustee
shall, until used or applied as herein provided, be held in trust
for the purposes for which they were received. Money held by the
Trustee in trust hereunder need not be segregated from other funds
except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except
as may be agreed in writing from time to time by the Company and
the Trustee. The Trustee shall not be obligated to take possession
of any Common Stock, whether upon conversion or in connection with
any discharge of this Indenture pursuant to
Article 3
hereof, but
shall satisfy its obligation as Conversion Agent by working through
the stock transfer agent of the Company from time to time as
directed by the Company.
Section
7.06
Compensation
and Expenses of Trustee
.
The Company covenants and agrees to
pay to the Trustee, in any of its capacities under this Indenture,
from time to time, and the Trustee shall be entitled to,
compensation as agreed in writing between the Company and the
Trustee for all services rendered by it hereunder in any capacity
(which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually
agreed to in writing between the Trustee and the Company, and the
Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances reasonably incurred
or made by the Trustee in accordance with any of the provisions of
this Indenture in any capacity thereunder (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel and of all Persons not regularly in its employ and
including reasonable attorneys’ fees in connection with
enforcement of its rights to indemnity herein) except any such
expense, disbursement or advance as shall have been caused by its
gross negligence or willful misconduct, as determined by a final,
non-appealable order of a court of competent jurisdiction. The
Company also covenants to indemnify the Trustee in any capacity
under this Indenture and any other document or transaction entered
into in connection herewith and its agents and any authenticating
agent for, and to hold them harmless against, any loss, claim,
damage, liability, fee, cost, loss, tax, claim, action or expense
incurred without gross negligence or willful misconduct on the part
of the Trustee, its officers, directors, agents or employees, or
such agent or authenticating agent, as the case may be, and arising
out of or in connection with the acceptance or administration of
this Indenture or in any other capacity hereunder, including
third-party claims and claims involving the Company, and including
the costs and expenses of defending themselves against any claim of
liability in the premises. The obligations of the Company under
this
Section 7.06
to compensate
or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a senior
lien to which the Notes are hereby made subordinate on all money or
property held or collected by the Trustee, except, subject to the
effect of
Section 6.05
, funds held
in trust herewith for the benefit of the Holders of particular
Notes. The Trustee’s right to receive payment of any amounts
due under this
Section 7.06
shall not be
subordinate to any other liability or indebtedness of the Company.
The indemnity under this Section 7.06 is payable upon demand by the
Trustee. The obligation of the Company under this
Section 7.06
shall survive
the satisfaction and discharge of this Indenture, the payment of
the Notes and the earlier resignation or removal of the Trustee.
The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld. The
indemnification provided in this
Section 7.06
shall extend
to the officers, directors, agents and employees of the
Trustee.
Without
prejudice to any other rights available to the Trustee under
applicable law, when the Trustee and its agents and any
authenticating agent incur expenses or render services after an
Event of Default specified in
Section 6.01(i)
or
Section 6.01(j)
occurs,
the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
Section
7.07
Officers’
Certificate as Evidence
.
Except as otherwise provided in
Section 7.01
,
whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of gross
negligence or willful misconduct on the part of the Trustee, as
determined by a final, non-appealable order of a court of competent
jurisdiction, be deemed to be conclusively proved and established
by an Officers’ Certificate delivered to the Trustee, and
such Officers’ Certificate, in the absence of gross
negligence or willful misconduct on the part of the Trustee, as
determined by a final, non-appealable order of a court of competent
jurisdiction, shall be full warrant to the Trustee for any action
taken or omitted by it under the provisions of this Indenture upon
the faith thereof.
Section
7.08
Eligibility
of Trustee
.
There shall at all times be a Trustee
hereunder which shall be a Person that is eligible pursuant to the
Trust Indenture Act (as if the Trust Indenture Act were applicable
hereto) to act as such and has a combined capital and surplus of at
least $50,000,000. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of any
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this
Article.
Section
7.09
Resignation
or Removal of Trustee
.
(a) The Trustee may at any time
resign by giving written notice of such resignation to the Company
and by delivering notice thereof to the Holders. Upon receiving
such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 60 days after the giving of such
notice of resignation to the Holders, the resigning Trustee may at
the expense of the Company, upon ten Business Days’ notice to
the Company and the Holders, petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Holder who has been a bona fide holder of a Note or Notes for at
least six months (or since the date of this Indenture) may, subject
to the provisions of
Section 6.11
, on behalf of
himself or herself and all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee, and the Company shall bear
the expense associated with such appointment.
(b)
In
case at any time any of the following shall
occur:
(i)
the
Trustee shall cease to be eligible in accordance with the
provisions of
Section 7.08
and shall fail to resign after written
request therefor by the Company or by any such Holder,
or
(ii)
the
Trustee shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then,
in either case, the Company may by a Board Resolution remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of
which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions
of
Section 6.11
,
any Holder who has been a bona fide holder of a Note or Notes for
at least six months (or since the date of this Indenture) may, on
behalf of himself or herself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor
trustee.
(c)
The
Holders of a majority in aggregate principal amount of the Notes at
the time outstanding, as determined in accordance with
Section 8.04
,
may at any time remove the Trustee and nominate a successor trustee
that shall be deemed appointed as successor trustee unless within
ten days after notice to the Company of such nomination the Company
objects thereto, in which case the Trustee so removed or any
Holder, upon the terms and conditions and otherwise as in
Section 7.09(a)
provided, may petition any court of
competent jurisdiction for an appointment of a successor
trustee.
(d)
Any
resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this
Section 7.09
shall become effective upon acceptance
of appointment by the successor trustee as provided in
Section 7.10
.
Section
7.10
Acceptance
by Successor Trustee
.
Any successor trustee appointed as
provided in
Section 7.09
shall
execute, acknowledge and deliver to the Company and to its
predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as
Trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act
shall, upon payment of any amounts then due it pursuant to the
provisions of
Section 7.06
, execute and
deliver an instrument transferring to such successor trustee all
the rights and powers of the trustee so ceasing to act. Upon
request of any such successor trustee, the Company shall execute
any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain
a senior lien to which the Notes are hereby made subordinate on all
money or property held or collected by such trustee as such, except
for funds held in trust for the benefit of Holders of particular
Notes, to secure any amounts then due to it pursuant to the
provisions of
Section 7.06
.
No
successor trustee shall accept appointment as provided in this
Section 7.10
unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of
Section 7.08
.
Upon
acceptance of appointment by a successor trustee as provided in
this
Section 7.10
, each of the
Company and the successor trustee, at the written direction and at
the expense of the Company shall deliver or cause to be delivered
notice of the succession of such trustee hereunder to the Holders
at their addresses as they shall appear on the Note Register. If
the Company fails to deliver such notice within ten days after
acceptance of appointment by the successor trustee, the successor
trustee may cause such notice to be delivered at the expense of the
Company.
Section
7.11
Succession
by Merger, Etc
. Any corporation
or other entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation or other
entity resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation or other
entity succeeding to all or substantially all of the corporate
trust business of the Trustee (including the administration of this
Indenture), shall be the successor to the Trustee hereunder without
the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided that in the case of any
corporation or other entity succeeding to all or substantially all
of the corporate trust business of the Trustee such corporation or
other entity shall be eligible under the provisions of
Section 7.08
.
In case
at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor
trustee or authenticating agent appointed by such predecessor
trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by
such successor trustee may authenticate such Notes either in the
name of any predecessor trustee hereunder or in the name of the
successor trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Notes or in this
Indenture provided that the certificate of the Trustee shall have;
provided
,
however
, that the right to adopt the
certificate of authentication of any predecessor trustee or to
authenticate Notes in the name of any predecessor trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
Section
7.12
Trustee’s
Application for Instructions from the
Company
.
Any application by the Trustee for
written instructions from the Company (other than with regard to
any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the Holders of the Notes under
this Indenture) may, at the option of the Trustee, set forth in
writing any action proposed to be taken or omitted by the Trustee
under this Indenture and the date on and/or after which such action
shall be taken or such omission shall be effective. The Trustee
shall not be liable for any action taken by, or omission of, the
Trustee in accordance with a proposal included in such application
on or after the date specified in such application (which date
shall not be less than three Business Days after the notice has
been deemed to have been given pursuant to
Section 17.03
, unless any such
officer shall have consented in writing to any earlier date),
unless, prior to taking any such action (or the effective date in
the case of any omission), the Trustee shall have received written
instructions in accordance with this Indenture in response to such
application specifying the action to be taken or
omitted.
Section
8.01
Action
by Holders
.
Whenever in this Indenture it is
provided that the Holders of a specified percentage of the
aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the Holders of
such specified percentage have joined therein may be evidenced
(a) by any instrument or any number of instruments of similar
tenor executed by Holders in person or by agent or proxy appointed
in writing, or (b) by the record of the Holders voting in
favor thereof at any meeting of Holders duly called and held in
accordance with the provisions of
Article 9
, or (c) by
a combination of such instrument or instruments and any such record
of such a meeting of Holders. Whenever the Company or the Trustee
solicits the taking of any action by the Holders of the Notes, the
Company or the Trustee may, but shall not be required to, fix in
advance of such solicitation, a date as the record date for
determining Holders entitled to take such action. The record date
if one is selected shall be not more than fifteen days prior to the
date of commencement of solicitation of such action.
Section
8.02
Proof
of Execution by Holders
.
Subject to the provisions of
Section 7.01
,
Section 7.02
and
Section 9.05
, proof of the
execution of any instrument by a Holder or its agent or proxy shall
be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner
as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note Register or by a certificate of the Note
Registrar. The record of any Holders’ meeting shall be proved
in the manner provided in
Section 9.06
.
Section
8.03
Who
Are Deemed Absolute Owners
.
The Company, the Trustee, any
authenticating agent, any Paying Agent, any Conversion Agent and
any Note Registrar may deem the Person in whose name a Note shall
be registered upon the Note Register to be, and may treat it as,
the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other
writing thereon made by any Person other than the Company or any
Note Registrar) for the purpose of receiving payment of or on
account of the principal (including any Redemption Price and any
Fundamental Change Repurchase Price) of and (subject to
Section 2.03
)
accrued and unpaid interest on such Note, for conversion of such
Note and for all other purposes; and neither the Company nor the
Trustee nor any Paying Agent nor any Conversion Agent nor any Note
Registrar shall be affected by any notice to the contrary. The sole
registered Holder of a Global Note shall be the Depositary or its
nominee. All such payments or deliveries so made to any Holder for
the time being, or upon its order, shall be valid, and, to the
extent of the sums or shares of Common Stock so paid or delivered,
effectual to satisfy and discharge the liability for monies payable
or shares deliverable upon any such Note. Notwithstanding anything
to the contrary in this Indenture or the Notes following an Event
of Default, any holder of a beneficial interest in a Global Note
may directly enforce against the Company, without the consent,
solicitation, proxy, authorization or any other action of the
Depositary or any other Person, such holder’s right to
exchange such beneficial interest for a Note in certificated form
in accordance with the provisions of this Indenture.
Section
8.04
Company-Owned
Notes Disregarded
.
In determining whether the Holders of
the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this
Indenture, Notes that are owned by the Company, by any Subsidiary
thereof or by any Affiliate of the Company or any Subsidiary
thereof shall be disregarded and deemed not to be outstanding for
the purpose of any such determination;
provided
that for the purposes of
determining whether the Trustee shall be protected in relying on
any such direction, consent, waiver or other action only Notes that
a Responsible Officer knows are so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded
as outstanding for the purposes of this
Section 8.04
if the
pledgee shall establish to the satisfaction of the Trustee the
pledgee’s right to so act with respect to such Notes and that
the pledgee is not the Company, a Subsidiary thereof or an
Affiliate of the Company or a Subsidiary thereof. In the case of a
dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers’ Certificate listing and identifying all
Notes, if any, known by the Company to be owned or held by or for
the account of any of the above described Persons; and, subject to
Section 7.01
,
the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Notes not listed therein are outstanding
for the purpose of any such determination.
Section
8.05
Revocation
of Consents; Future Holders Bound
.
At any time prior to (but not after)
the evidencing to the Trustee, as provided in
Section 8.01
, of the
taking of any action by the Holders of the percentage of the
aggregate principal amount of the Notes specified in this Indenture
in connection with such action, any Holder of a Note that is shown
by the evidence to be included in the Notes the Holders of which
have consented to such action may, by filing written notice with
the Trustee at its Corporate Trust Office and upon proof of holding
as provided in
Section 8.02
, revoke such
action so far as concerns such Note. Except as aforesaid, any
action taken by the Holder of any Note shall be conclusive and
binding upon such Holder and upon all future Holders and owners of
such Note and of any Notes issued in exchange or substitution
therefor or upon registration of transfer thereof, irrespective of
whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor or upon
registration of transfer thereof.
ARTICLE 9
Section
9.01
Purpose
of Meetings
.
A meeting of Holders may be called at
any time and from time to time pursuant to the provisions of this
Article 9
for
any of the following purposes:
(a)
to
give any notice to the Company or to the Trustee or to give any
directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any Default or Event of Default hereunder
(in each case, as permitted under this Indenture) and its
consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of
Article 6
;
(b)
to
remove the Trustee and nominate a successor trustee pursuant to the
provisions of
Article 7
;
(c)
to
consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of
Section 10.02
;
or
(d)
to
take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable
law.
Section
9.02
Call
of Meetings by Trustee
.
The Trustee may at any time call a
meeting of Holders to take any action specified in
Section 9.01
, to be held
at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Holders, setting forth the time and
the place of such meeting and in general terms the action proposed
to be taken at such meeting and the establishment of any record
date pursuant to
Section 8.01
, shall be
delivered to Holders of such Notes at their addresses as they shall
appear on the Note Register. Such notice shall also be delivered to
the Company. Such notices shall be delivered not less than 20 nor
more than 90 days prior to the date fixed for the
meeting.
Any
meeting of Holders shall be valid without notice if the Holders of
all Notes then outstanding are present in person or by proxy or if
notice is waived before or after the meeting by the Holders of all
Notes then outstanding, and if the Company and the Trustee are
either present by duly authorized representatives or have, before
or after the meeting, waived notice.
Section
9.03
Call
of Meetings by Company or Holders
.
In case at any time the Company,
pursuant to a Board Resolution, or the Holders of at least 10% of
the aggregate principal amount of the Notes then outstanding, shall
have requested the Trustee to call a meeting of Holders, by written
request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have delivered
the notice of such meeting within 20 days after receipt of such
request, then the Company or such Holders may determine the time
and the place for such meeting and may call such meeting to take
any action authorized in
Section 9.01
, by
delivering notice thereof as provided in
Section 9.02
.
Section
9.04
Qualifications
for Voting
.
To be entitled to vote at any meeting
of Holders a Person shall (a) be a Holder of one or more Notes
on the record date pertaining to such meeting or (b) be a
Person appointed by an instrument in writing as proxy by a Holder
of one or more Notes on the record date pertaining to such meeting.
The only Persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company and
its counsel.
Section
9.05
Regulations
.
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for
any meeting of Holders, in regard to proof of the holding of Notes
and of the appointment of proxies, and in regard to the appointment
and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it
shall think fit.
The
Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called
by the Company or by Holders as provided in
Section 9.03
, in which
case the Company or the Holders calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall
be elected by vote of the Holders of a majority in aggregate
principal amount of the Notes represented at the meeting and
entitled to vote at the meeting.
Subject
to the provisions of
Section 8.04
, at any
meeting of Holders each Holder or proxyholder shall be entitled to
one vote for each $1,000 principal amount of Notes held or
represented by him or her;
provided
,
however
, that no vote shall be cast or
counted at any meeting in respect of any Note challenged as not
outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to
vote other than by virtue of Notes held by it or instruments in
writing as aforesaid duly designating it as the proxy to vote on
behalf of other Holders. Any meeting of Holders duly called
pursuant to the provisions of
Section 9.02
or
Section 9.03
may be adjourned from time to time by the Holders of a majority of
the aggregate principal amount of Notes represented at the meeting,
whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.
.
The vote upon any resolution
submitted to any meeting of Holders shall be by written ballot on
which shall be subscribed the signatures of the Holders or of their
representatives by proxy and the outstanding aggregate principal
amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes
cast at the meeting. A record in duplicate of the proceedings of
each meeting of Holders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more Persons having knowledge of
the facts setting forth a copy of the notice of the meeting and
showing that said notice was delivered as provided in
Section 9.02
. The record
shall show the aggregate principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary
of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting.
Any
record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section
9.07
No
Delay of Rights by Meeting
.
Nothing contained in this
Article 9
shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Holders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the
provisions of this Indenture or of the Notes.
ARTICLE 10
Section
10.01
Supplemental
Indentures Without Consent of Holders
.
The Company, when authorized by the
resolutions of the Board of Directors and the Trustee, at the
Company’s expense and direction, may from time to time and at
any time enter into an indenture or indentures supplemental hereto
for one or more of the following purposes:
(a)
to
cure any ambiguity, omission, defect or
inconsistency;
(b)
to
provide for the assumption by a Successor Company of the
obligations of the Company under this Indenture pursuant to
Article 11
;
(c)
to
add guarantees with respect to the Notes;
(d)
to
secure the Notes;
(e)
to
add to the covenants or Events of Default of the Company for the
benefit of the Holders or surrender any right or power conferred
upon the Company;
(f)
to
make any change that does not adversely affect the rights of any
Holder;
(g)
in
connection with any Share Exchange Event, to provide that the notes
are convertible into Reference Property, subject to the provisions
of
Section 14.02
,
and make such related changes to the terms of the Notes to the
extent expressly required by
Section 14.07
;
(h)
irrevocably
elect a Settlement Method or a specified dollar amount, or
eliminate the Company’s right to elect a Settlement
Method;
(i)
comply
with any requirement of the SEC in connection with the
qualification of this Indenture under the Trust Indenture Act, to
the extent that this Indenture is required to comply with the Trust
Indenture Act; or
(j)
to
conform the provisions of this Indenture or the Notes to the
“Description of Notes” section of the Offering
Memorandum.
Upon
the written request of the Company, the Trustee is hereby
authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee
shall not be obligated to, but may in its discretion, enter into
any supplemental indenture that affects the Trustee’s own
rights, duties, liabilities or immunities under this Indenture or
otherwise.
Any
supplemental indenture authorized by the provisions of this
Section 10.01
may be executed by the Company and the Trustee without the consent
of the Holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of
Section 10.02
.
Section
10.02
Supplemental
Indentures with Consent of Holders
.
With the consent (evidenced as
provided in
Article 8
) of the Holders
of at least a majority of the aggregate principal amount of the
Notes then outstanding (determined in accordance with
Article 8
and including,
without limitation, consents obtained in connection with a
repurchase of, or tender or exchange offer for, Notes), the
Company, when authorized by the resolutions of the Board of
Directors, at the Company’s expense, may from time to time
and at any time enter into an indenture or indentures supplemental
hereto with the Trustee for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any
manner the rights of the Holders;
provided
,
however
, that, without the consent of
each Holder of an outstanding Note affected, no such supplemental
indenture shall:
(a)
reduce
the amount of Notes whose Holders must consent to an
amendment;
(b)
reduce
the rate of or extend the stated time for payment of interest on
any Note;
(c)
reduce
the principal of or extend the Maturity Date of any
Note;
(d)
make
any change that adversely affects the conversion rights of any
Notes;
(e)
reduce
the Redemption Price or the Fundamental Change Repurchase Price of
any Note or amend or modify in any manner adverse to the Holders
the Company’s obligation to make such payments, whether
through an amendment or waiver of provisions in the covenants,
definitions or otherwise;
(f)
make
any Note payable in a currency, or at a place of payment, other
than that stated in the Note;
(g)
change
the ranking of the Notes;
(h)
impair
the right of any Holder to receive payment of principal and
interest (including any interest Make-Whole Payment, if applicable)
on such Holder’s Notes on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with
respect to such Holder’s Notes; or
(i)
make
any change in this
Article 10
that requires each Holder’s
consent or in the waiver provisions in
Section 6.02
or
Section 6.09
.
Upon
the written request of the Company, and upon the delivery to the
Trustee of evidence of the requisite consent of Holders as
aforesaid and subject to
Section 10.05
, the Trustee
shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the
Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
Holders
do not need under this
Section 10.02
to approve
the particular form of any proposed supplemental indenture. It
shall be sufficient if such Holders approve the substance thereof.
After any such supplemental indenture becomes effective, the
Company shall deliver to the Holders (with a copy to the Trustee) a
notice briefly describing such supplemental indenture. However, the
failure to give such notice to all the Holders, or any defect in
the notice, will not impair or affect the validity of the
supplemental indenture.
Section
10.03
Effect
of Supplemental Indentures
.
Upon the execution of any
supplemental indenture pursuant to the provisions of this
Article 10
,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of
rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the Holders shall thereafter be
determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and
conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for
any and all purposes.
Section
10.04
Notation
on Notes
.
Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the
provisions of this
Article 10
may, at the
Company’s expense, bear a notation in form acceptable to the
Trustee as to any matter provided for in such supplemental
indenture. If the Company or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and
the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the
Company’s expense, be prepared and executed by the Company,
authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to
Section 17.10
) and
delivered in exchange for the Notes then outstanding, upon
surrender of such Notes then outstanding.
Section
10.05
Evidence
of Compliance of Supplemental Indenture to Be Furnished
Trustee
.
In addition to the documents required
by
Section 17.05
, the Trustee
shall receive an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this
Article 10
and
is permitted or authorized by this Indenture.
ARTICLE 11
CONSOLIDATION, MERGER, SALE,
CONVEYANCE AND LEASE
Section
11.01
Company
May Consolidate, Etc. on Certain Terms
.
Subject to the provisions of
Section 11.02
,
the Company shall not consolidate with, merge with or into, or
sell, convey, transfer or lease all or substantially all of its
consolidated properties and assets of the Company and its
Subsidiaries, taken as a whole, to another Person,
unless:
(a)
the
resulting, surviving or transferee Person (the
“
Successor
Company
”), if not the
Company, shall be a corporation organized and existing under the
laws of the United States of America, any State thereof or the
District of Columbia, and the Successor Company (if not the
Company) shall expressly assume, (A) by supplemental indenture all
of the obligations of the Company under the Notes and this
Indenture, and (B) to the extent the Registration Rights Agreement
is then still operative, all of the Company’s obligations
under the Registration Rights Agreement; and
(b)
immediately
after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing under this
Indenture.
For
purposes of this
Section 11.01
, the sale,
conveyance, transfer or lease of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company to
another Person, which properties and assets, if held by the Company
instead of such Subsidiaries, would constitute all or substantially
all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the sale, conveyance, transfer or
lease of all or substantially all of the properties and assets of
the Company to another Person.
Section
11.02
Successor
Corporation to Be Substituted
.
In case of any such consolidation,
merger, sale, conveyance, transfer or lease and upon the assumption
by the Successor Company, by supplemental indenture, executed and
delivered to the Trustee, of the due and punctual payment of the
principal of and accrued and unpaid interest on all of the Notes,
the due and punctual delivery or payment, as the case may be, of
any consideration due upon conversion of the Notes and the due and
punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such Successor Company
(if not the Company) shall succeed to and, except in the case of a
lease of all or substantially all of the Company’s properties
and assets, shall be substituted for the Company, with the same
effect as if it had been named herein as the party of the first
part. Such Successor Company thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company any
or all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee; and,
upon the order of such Successor Company instead of the Company and
subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall
deliver, or cause to be authenticated and delivered, any Notes that
previously shall have been signed and delivered by the Officers of
the Company to the Trustee for authentication, and any Notes that
such Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued
shall in all respects have the same legal rank and benefit under
this Indenture as the Notes theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such
Notes had been issued at the date of the execution hereof. In the
event of any such consolidation, merger, sale, conveyance or
transfer (but not in the case of a lease), upon compliance with
this
Article 11
the Person
named as the “Company” in the first paragraph of this
Indenture (or any successor that shall thereafter have become such
in the manner prescribed in this
Article 11
) may be
dissolved, wound up and liquidated at any time thereafter and,
except in the case of a lease, such Person shall be released from
its liabilities as obligor and maker of the Notes and from its
obligations under this Indenture and the Notes.
In case of any such
consolidation, merger, sale, conveyance, transfer or lease, such
changes in phraseology and form (but not in substance) may be made
in the Notes thereafter to be issued as may be
appropriate.
Section
11.03
Opinion
of Counsel to Be Given to Trustee
.
No such consolidation, merger, sale,
conveyance, transfer or lease shall be effective unless the Trustee
shall receive an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or lease, as the case may be, and any
such assumption and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture,
comply with the provisions of this
Article 11
, and which
Opinion of Counsel shall state that the Notes and such supplemental
indenture are valid and binding obligations of the Successor
Company.
ARTICLE 12
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
Section
12.01
Indenture
and Notes Solely Corporate Obligations
.
No recourse for the payment of the
principal of or accrued and unpaid interest on any Note, nor for
any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in
any Note, nor because of the creation of any indebtedness
represented thereby, shall be had against any incorporator,
stockholder, employee, agent, Officer or director or Subsidiary, as
such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE 13
ARTICLE 14
Section
14.01
Conversion
Privilege
.
(a) Subject to and upon compliance
with the provisions of this
Article 14
, each Holder of
a Note shall have the right, at such Holder’s option, to
convert all or any portion (if the portion to be converted is
$1,000 principal amount or an integral multiple thereof) of such
Note (i) subject to satisfaction of the conditions described
in
Section 14.01(b)
, at any
time prior to the close of business on the Business Day immediately
preceding November 1, 2023 under the circumstances and during the
periods set forth in
Section 14.01(b)
, and
(ii) regardless of the conditions described in
Section 14.01(b)
, on or
after November 1, 2023 and prior to the close of business on the
Business Day immediately preceding the Maturity Date, in each case,
at an initial conversion rate of 173.9130 shares of Common Stock
(subject to adjustment as provided in this
Article 14
, the
“
Conversion
Rate
”) per $1,000 principal amount of Notes (subject
to, and in accordance with, the settlement provisions of
Section 14.02
,
the “
Conversion
Obligation
”).
(b)
(i)
Prior to the close of business on the Business Day immediately
preceding November 1, 2023, a Holder may surrender all or any
portion of its Notes for conversion at any time during the five
consecutive Business Day period immediately following any five
consecutive Trading Day period (the “
Measurement
Period
”) in which the
Trading Price per $1,000 principal amount of Notes, as determined
following a request by a Holder of Notes in accordance with this
subsection (b)(i), for each Trading Day of the Measurement
Period was less than 98% of the product of the Last Reported Sale
Price of the Common Stock on each such Trading Day and the
Conversion Rate on each such Trading Day. The Trading Prices shall
be determined by the Bid Solicitation Agent pursuant to this
subsection (b)(i) and the definition of Trading Price set
forth in this Indenture. The Company shall provide written notice
to the Bid Solicitation Agent of the three independent nationally
recognized securities dealers selected by the Company pursuant to
the definition of Trading Price, along with appropriate contact
information for each. The Bid Solicitation Agent shall have no
obligation to determine the Trading Price per $1,000 principal
amount of Notes unless the Company has requested such determination
in writing and the Company shall have no obligation to make such
request unless a Holder provides the Company with reasonable
evidence that the Trading Price per $1,000 principal amount of
Notes on any Trading Day would be less than 98% of the product of
the Last Reported Sale Price of the Common Stock on such Trading
Day and the Conversion Rate on such Trading Day, at which time the
Company shall instruct the Bid Solicitation Agent in writing to
determine the Trading Price per $1,000 principal amount of Notes
beginning on the next Trading Day and on each successive Trading
Day until the Trading Price per $1,000 principal amount of Notes is
greater than or equal to 98% of the product of the Last Reported
Sale Price of the Common Stock and the Conversion Rate and instruct
three independent nationally recognized securities dealers to
deliver bids to the Bid Solicitation Agent. If the Company does not
instruct the Bid Solicitation Agent to determine the Trading Price
per $1,000 principal amount of Notes when obligated as provided in
the preceding sentence, or if the Company instructs the Bid
Solicitation Agent in writing to obtain bids and the Bid
Solicitation Agent fails to make such determination, then, in
either case, the Trading Price per $1,000 principal amount of Notes
shall be deemed to be less than 98% of the product of the Last
Reported Sale Price of the Common Stock and the Conversion Rate on
each Trading Day of such failure. If the Trading Price condition
set forth above has been met, the Company shall so notify the
Holders, the Trustee and the Conversion Agent (if other than the
Trustee) in writing. If, at any time after the Trading Price
condition set forth above has been met, the Trading Price per
$1,000 principal amount of Notes is greater than or equal to 98% of
the product of the Last Reported Sale Price of the Common Stock and
the Conversion Rate for such date, the Company shall so notify the
Holders of the Notes, the Trustee and the Conversion Agent (if
other than the Trustee) in writing.
(ii)
If,
prior to the close of business on the Business Day immediately
preceding November 1, 2023, the Company elects
to:
(A)
issue
to all or substantially all holders of the Common Stock any rights,
options or warrants (other than pursuant to a stockholder rights
plan in respect of which the stockholder rights have not separated
from the shares of Common Stock) entitling them, for a period of
not more than 45 calendar days after the announcement date of such
issuance, to subscribe for or purchase shares of the Common Stock
at a price per share that is less than the average of the Last
Reported Sale Prices of the Common Stock for the 10 consecutive
Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of such issuance;
or
(B)
distribute
to all or substantially all holders of the Common Stock the
Company’s assets, securities or rights to purchase securities
of the Company (other than pursuant to a stockholder rights plan in
respect of which the stockholder rights have not separated from the
shares of Common Stock), which distribution has a per share value,
as reasonably determined by the Board of Directors, exceeding 10%
of the Last Reported Sale Price of the Common Stock on the Trading
Day preceding the date of announcement for such
distribution,
then,
in either case, the Company shall notify all Holders of the Notes,
the Trustee and the Conversion Agent (if other than the Trustee) in
writing at least 50 Scheduled Trading Days prior to the Ex-Dividend
Date for such issuance or distribution. Once the Company has given
such notice, a Holder may surrender all or any portion of its Notes
for conversion at any time until the earlier of (1) the close
of business on the Business Day immediately preceding the
Ex-Dividend Date for such issuance or distribution and (2) the
Company’s announcement that such issuance or distribution
will not take place, in each case, even if the Notes are not
otherwise convertible at such time.
(iii)
If
(A) a transaction or event that constitutes (x) a Fundamental
Change or (y) a Make-Whole Fundamental Change occurs prior to the
close of business on the Business Day immediately preceding
November 1, 2023, regardless of whether a Holder has the right to
require the Company to repurchase the Notes pursuant to
Section 15.02
,
or (B) the Company is a party to a Share Exchange that occurs prior
to the close of business on the Business Day immediately preceding
November 1, 2023 (each such Fundamental Change, Make-Whole
Fundamental Change or Share Exchange Event a
“
Corporate
Event
”), then, in each
case, all or any portion of a Holder’s Notes may be
surrendered for conversion at any time on or after the effective
date of such Corporate Event until 35 Trading Days after the
effective date of such Corporate Event or, if such Corporate Event
also constitutes a Fundamental Change, until the related
Fundamental Change Repurchase Date. The Company shall notify
Holders, the Trustee and the Conversion Agent (if other than the
Trustee) in writing no later than the effective date of such
Corporate Event.
(iv)
Prior
to the close of business on the Business Day immediately preceding
November 1, 2023, a Holder may surrender all or any portion of its
Notes for conversion at any time during any calendar quarter
commencing after the calendar quarter ending on September 30,
2019 (and only during such calendar quarter), if the Last Reported
Sale Price of the Common Stock for at least 20 Trading Days
(whether or not consecutive) during the period of 30 consecutive
Trading Days ending on, and including, the last Trading Day of the
immediately preceding calendar quarter is greater than or equal to
130% of the Conversion Price on each applicable Trading Day. The
Company shall determine at the beginning of each calendar quarter
commencing after October 1, 2019 whether the Notes may be
surrendered for conversion in accordance with this clause (iv)
and shall notify in writing the Holders, the Trustee and the
Conversion Agent (if other than the Trustee) if the Notes become
convertible in accordance with this
clause (iv).
(v)
If
the Company calls any or all of the Notes for redemption pursuant
to
Article 16
,
then a Holder may surrender all or any portion of its Notes for
conversion at any time prior to the close of business on the
Scheduled Trading Day prior to the Redemption Date, even if the
Notes are not otherwise convertible at such time. After that time,
the right to convert on account of the Company’s delivery of
the Redemption Notice shall expire, unless the Company defaults in
the payment of the Redemption Price, in which case a Holder of
Notes may convert its Notes until the Business Day immediately
preceding the date on which the Redemption Price has been paid or
duly provided for.
(c)
For
any Conversion Date that occurs on or after May 14, 2020 or after
the occurrence of any 30 Trading Day period during which the Last
Reported Sale Price of the Common Stock has been at least 150% of
the Conversion Price then in effect for at least 20 Trading Days
(whether or not consecutive), the Company shall, in addition to the
other consideration payable or deliverable in connection with any
conversion of Notes, make an interest make-whole payment (an
“
Interest Make-Whole
Payment
”) to such
converting Holder equal to the sum of the present values of the
scheduled payments of interest that would have been made on the
Notes to be converted had such Notes remained outstanding from the
Conversion Date through the earlier of (i) the date that is two
years after the Conversion Date and (ii) June 15, 2022, if the
Notes had not been so converted. The present values of the
remaining interest payments shall be computed by the Company in
good faith using a discount rate equal to 2.0%.
If a
Conversion Date occurs after the close of business on a Regular
Record Date but prior to the open of business on the Interest
Payment Date corresponding to such Regular Record Date, the Company
shall not pay accrued interest to any converting Holder and shall
instead pay the full amount of the relevant interest payment on
such Interest Payment Date to the Holder of record on such Regular
Record Date. In such case, the Interest Make-Whole Payment to such
converting Holder shall equal the present value of all remaining
interest payments, starting with the next Interest Payment Date for
which interest has not been provided for until the earlier of (i)
the date that is two years after the Conversion Date and (ii) June
15, 2022, if the notes had not been so converted, computed by the
Company in good faith using a discount rate equal to
2.0%.
The
Company may pay any Interest Make-Whole Payment either in cash or
shares of Common Stock, at its election. In order to make an
election to pay any Interest Make-Whole Payment in cash or shares
of Common Stock, the Company shall notify in writing all Holders of
the Notes, the Trustee, Paying Agent and the Conversion Agent (if
other than the Trustee) of such election at least 15 Scheduled
Trading Days prior to May 14, 2020. Thereafter, the Company shall
be permitted to make such an election no earlier than 30 Scheduled
Trading Days prior to, but no later than 15 Scheduled Trading Days
before, the first Scheduled Trading Day of each calendar quarter
that begins on or after July 1, 2020, which election shall be
effective from the period that begins at the open of business on
the first Scheduled Trading Day of such calendar quarter and ends
immediately prior to the open of business on the first Scheduled
Trading Day of the immediately succeeding calendar quarter. If the
Company does not make an election with respect to any Interest
Make-Whole Payment to pay in cash or shares of Common Stock, the
payment of any such Interest Make-Whole Payment shall be in shares
of Common Stock. The Company’s election with respect to any
Interest Make-Whole Payment required to be paid prior to May 14,
2020 is to pay in shares of Common Stock. If the Company elects (or
is deemed to have elected) to pay any Interest Make-Whole Payment
by delivering shares Common Stock, the number of shares of Common
Stock a converting Holder of Notes shall receive shall be equal to
the amount of the Interest Make-Whole Payment due divided by the
greater of (A) the product of (x) 95.0% and (y) the simple average
of the daily VWAP of the Common Stock for the 10 trading days
ending on and including the Trading Day immediately preceding the
Conversion Date and (B) the Conversion Price (rounded to the
nearest ten-thousandth) on the applicable Conversion Date. The
Company shall pay cash in lieu of delivering any fractional share
of Common Stock as described under Section 14.02(j). If the Company
elects to pay any Interest Make-Whole Payment in cash, the Company
shall pay cash in an amount equal to the Interest Make-Whole
Payment.
Notwithstanding the
foregoing, (x) if the Company elects (or is deemed to have elected)
to pay any Interest Make-Whole Payment in shares of Common Stock,
the number of shares of Common Stock the Company may deliver in
connection with a conversion of the Notes, including those
delivered in connection with an Interest Make-Whole Payment, shall
not exceed 197.0440 shares of Common Stock per $1,000 principal
amount of Notes, subject to adjustment at the same time and in the
same manner as the Conversion Rate as set forth under Section 14.04
and (y) if the Company elects to pay any Interest Make-Whole
Payment in cash, the amount of cash the Company may deliver in
connection with any such Interest Make-Whole Payment shall not
exceed $117.39 per $1,000 principal amount of Notes. The Company
shall not be required to make any cash payments in lieu of any
fractional share or have any further obligation to deliver any
shares of Common Stock or pay any cash in excess of the threshold
described in the preceding sentence. In addition, if in connection
with any conversion the Conversion Rate is adjusted pursuant to
Section 14.03
, then
such Holder shall not receive the Interest Make-Whole Payment with
respect to such Note. None of the Trustee, Paying Agent or
Conversion Agent shall be responsible for determining, calculating
or verifying the Company’s calculations of, the Interest
Make-Whole Payment.
Section
14.02
Conversion
Procedure; Settlement Upon Conversion
.
(a)
Subject
to this
Section 14.02
,
Section 14.03(b)
,
Section 14.07(a)
and
Section 14.12
,
upon conversion of any Note, the Company shall pay or deliver, as
the case may be, to the converting Holder, in respect of each
$1,000 principal amount of Notes being converted, cash
(“
Cash
Settlement
”), shares of
Common Stock, together with cash, if applicable, in lieu of
delivering any fractional share of Common Stock in accordance with
subsection (j) of this
Section 14.02
(“
Physical
Settlement
”) or a
combination of cash and shares of Common Stock, together with cash,
if applicable, in lieu of delivering any fractional share of Common
Stock in accordance with subsection (j) of this
Section 14.02
(“
Combination
Settlement
”), at its
election, as set forth in this
Section 14.02
.
(i)
All
conversions for which the relevant Conversion Date occurs on or
after November 1, 2023, and all conversions for which the relevant
Conversion Date occurs on or after the Company’s issuance of
a Redemption Notice with respect to the Notes and prior to the
related Redemption Date (a “
Redemption
Period
”), shall be
settled using the same Settlement Method.
(ii)
Except
for any conversions for which the relevant Conversion Date occurs
on or after November 1, 2023, and any conversions for which the
relevant Conversion Date occurs during a Redemption Period, the
Company shall use the same Settlement Method for all conversions
with the same Conversion Date, but the Company shall not have any
obligation to use the same Settlement Method with respect to
conversions with different Conversion Dates.
(iii)
If,
in respect of any Conversion Date (or one of the periods described
in the third immediately succeeding set of parentheses, as the case
may be), the Company elects to deliver a notice (the
“
Settlement
Notice
”) of the relevant
Settlement Method in respect of such Conversion Date (or such
period, as the case may be), the Company shall deliver such
Settlement Notice in writing to converting Holders, the Trustee and
the Conversion Agent (if other than the Trustee) no later than the
close of business on the Scheduled Trading Day immediately
following the relevant Conversion Date (or, in the case of any
conversions for which the relevant Conversion Date occurs
(x) during a Redemption Period, in the related Redemption
Notice or (y) on or after November 1, 2023, no later than
November 1, 2023). If the Company does not elect a Settlement
Method prior to the deadline set forth in the immediately preceding
sentence, the Company shall no longer have the right to elect Cash
Settlement or Physical Settlement for such conversion or during
such period and the Company shall be deemed to have elected
Combination Settlement in respect of its Conversion Obligation, and
the Specified Dollar Amount per $1,000 principal amount of Notes
shall be equal to $1,000. Such Settlement Notice shall specify the
relevant Settlement Method and in the case of an election of
Combination Settlement, the relevant Settlement Notice shall
indicate the Specified Dollar Amount per $1,000 principal amount of
Notes. If the Company timely delivers a Settlement Notice electing
Combination Settlement in respect of its Conversion Obligation but
does not indicate a Specified Dollar Amount per $1,000 principal
amount of Notes in such Settlement Notice, the Specified Dollar
Amount per $1,000 principal amount of Notes shall be deemed to be
$1,000.
(iv)
The
cash, shares of Common Stock or combination of cash and shares of
Common Stock in respect of any conversion of Notes (the
“
Settlement
Amount
”) shall be
computed as follows:
(A)
if
the Company elects to satisfy its Conversion Obligation in respect
of such conversion by Physical Settlement, subject to the Ownership
Limitation, the Company shall deliver to the converting Holder in
respect of each $1,000 principal amount of Notes being converted a
number of shares of Common Stock equal to the Conversion Rate in
effect on the Conversion Date, together with the amount of cash
payable in lieu of delivering any fractional share of Common Stock,
and an Interest Make-Whole Payment, if
applicable;
(B)
if
the Company elects to satisfy its Conversion Obligation in respect
of such conversion by Cash Settlement, subject to the Ownership
Limitation, the Company shall pay to the converting Holder in
respect of each $1,000 principal amount of Notes being converted
cash in an amount equal to the sum of the Daily Conversion Values
for each of the 40 consecutive Trading Days during the related
Observation Period, together with the amount of cash payable in
lieu of delivering any fractional share of Common Stock, and an
Interest Make-Whole Payment, if applicable; and
(C)
if
the Company elects (or is deemed to have elected) to satisfy its
Conversion Obligation in respect of such conversion by Combination
Settlement, subject to the Ownership Limitation, the Company shall
pay or deliver, as the case may be, in respect of each $1,000
principal amount of Notes being converted, a Settlement Amount
equal to the sum of the Daily Settlement Amounts for each of the 40
consecutive Trading Days during the related Observation Period,
together with the amount of cash payable in lieu of delivering any
fractional share of Common Stock, and an Interest Make-Whole
Payment, if applicable.
(v)
The
Daily Settlement Amounts (if applicable) and the Daily Conversion
Values (if applicable) shall be determined by the Company promptly
following the last day of the Observation Period. Promptly after
such determination of the Daily Settlement Amounts or the Daily
Conversion Values, as the case may be, and the amount of cash
payable in lieu of delivering any fractional share of Common Stock,
the Company shall notify the Trustee and the Conversion Agent (if
other than the Trustee) of the Daily Settlement Amounts or the
Daily Conversion Values, as the case may be, and the amount of cash
payable in lieu of delivering fractional shares of Common Stock.
The Trustee and the Conversion Agent (if other than the Trustee)
shall have no responsibility for any such
determination.
(b)
Subject
to
Section 14.02(e)
,
before any Holder of a Note shall be entitled to convert a Note as
set forth above, such Holder shall (i) in the case of a Global
Note, comply with the procedures of the Depositary in effect at
that time and, if required, pay funds equal to interest payable on
the next Interest Payment Date to which such Holder is not entitled
as set forth in
Section 14.02(h)
and (ii) in the case of a
Physical Note (1) complete, manually sign and deliver an
irrevocable notice to the Conversion Agent as set forth in the Form
of Notice of Conversion (or a facsimile or other electronic
transmission thereof) (a “
Notice of
Conversion
”) at the
office of the Conversion Agent and state in writing therein the
principal amount of Notes to be converted and the name or names
(with addresses) in which such Holder wishes the certificate or
certificates for any shares of Common Stock to be delivered upon
settlement of the Conversion Obligation to be registered,
(2) surrender such Notes, duly endorsed to the Company or in
blank (and accompanied by appropriate endorsement and transfer
documents), at the office of the Conversion Agent, (3) if
required, furnish appropriate endorsements and transfer documents
and (4) if required, pay funds equal to interest payable on
the next Interest Payment Date to which such Holder is not entitled
as set forth in
Section 14.02(h)
.
The Trustee (and if different, the Conversion Agent) shall notify
the Company of any conversion pursuant to this
Article 14
on the Conversion Date for such
conversion. No Notice of Conversion with respect to any Notes may
be surrendered by a Holder thereof if such Holder has also
delivered a Fundamental Change Repurchase Notice to the Company in
respect of such Notes and has not validly withdrawn such
Fundamental Change Repurchase Notice in accordance with
Section 15.03
.
If more
than one Note shall be surrendered for conversion at one time by
the same Holder, the Conversion Obligation with respect to such
Notes shall be computed on the basis of the aggregate principal
amount of the Notes (or specified portions thereof to the extent
permitted thereby) so surrendered.
(c)
A
Note shall be deemed to have been converted immediately prior to
the close of business on the date (the “
Conversion
Date
”) that the Holder
has complied with the requirements set forth in subsection (b)
above. Except as set forth in
Section 14.03(b)
and
Section 14.07(a)
,
the Company shall pay or deliver, as the case may be, the
consideration due in respect of the Conversion Obligation on the
second Business Day immediately following the relevant Conversion
Date, if the Company elects Physical Settlement, or on the second
Business Day immediately following the last Trading Day of the
Observation Period, in the case of any other Settlement Method. If
any shares of Common Stock are due to a converting Holder, the
Company shall issue or cause to be issued, and deliver (if
applicable) to the Conversion Agent or to such Holder, or such
Holder’s nominee or nominees, the full number of shares of
Common Stock to which such Holder shall be entitled, in book-entry
format through the Depositary, in satisfaction of the
Company’s Conversion Obligation.
(d)
In
case any Physical Note shall be surrendered for partial conversion,
the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the Holder of the Physical
Note so surrendered a new Physical Note or Notes in authorized
denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Physical Note, without
payment of any service charge by the converting Holder but, if
required by the Company or Trustee, with payment of a sum
sufficient to cover any documentary, stamp or similar issue or
transfer tax or similar governmental charge required by law or that
may be imposed in connection therewith as a result of the name of
the Holder of the new Physical Notes issued upon such conversion
being different from the name of the Holder of the old Physical
Notes surrendered for such conversion.
(e)
If
a Holder submits a Note for conversion, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the
issue of any shares of Common Stock upon conversion, unless the tax
is due because the Holder requests such shares to be issued in a
name other than the Holder’s name, in which case the Holder
shall pay that tax. The Conversion Agent may refuse to deliver the
certificates representing the shares of Common Stock being issued
in a name other than the Holder’s name until the Trustee
receives a sum sufficient to pay any tax that is due by such Holder
in accordance with the immediately preceding
sentence.
(f)
Except
as provided in
Section 14.04
,
no adjustment shall be made for dividends on any shares of Common
Stock issued upon the conversion of any Note as provided in
this
Article 14
.
(g)
Upon
the conversion of an interest in a Global Note, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on
such Global Note as to the reduction in the principal amount
represented thereby. The Company shall notify the Trustee in
writing of any conversion of Notes effected through any Conversion
Agent other than the Trustee.
(h)
Upon
conversion, a Holder shall not receive any separate cash payment
for accrued and unpaid interest, if any, except as set forth below
and under
Section
14.01(c)
. The Company’s
settlement of the full Conversion Obligation shall be deemed to
satisfy in full its obligation to pay the principal amount of the
Note and accrued and unpaid interest, if any, to, but not
including, the relevant Conversion Date. As a result, accrued and
unpaid interest, if any, to, but not including, the relevant
Conversion Date shall be deemed to be paid in full rather than
cancelled, extinguished or forfeited. Upon a conversion of Notes
into a combination of cash and shares of Common Stock, accrued and
unpaid interest will be deemed to be paid first out of the cash
paid upon such conversion. Notwithstanding the foregoing, if Notes
are converted after the close of business on a Regular Record Date
but prior to the open of business on the Interest Payment Date
corresponding to such Regular Record Date, Holders of such Notes as
of the close of business on such Regular Record Date will receive
the full amount of interest payable on such Notes on the
corresponding Interest Payment Date notwithstanding the conversion.
Notes surrendered for conversion during the period from the close
of business on any Regular Record Date to the open of business on
the immediately following Interest Payment Date must be accompanied
by funds equal to the amount of interest payable on the Notes so
converted;
provided
that no such payment shall be required
(1) for conversions following the Regular Record Date
immediately preceding the Maturity Date; (2) if the Company
has specified a Redemption Date that is after a Regular Record Date
and on or prior to the second Business Day immediately following
the corresponding Interest Payment Date (or, if such Interest
Payment Date is not a Business Day, the third Business Day
immediately following such Interest Payment Date); (3) if the
Company has specified a Fundamental Change Repurchase Date that is
after a Regular Record Date and on or prior to the Business Day
immediately following the corresponding Interest Payment Date (or,
if such Interest Payment Date is not a Business Day, the second
Business Day immediately following such Interest Payment Date);
(4) for Notes in respect of which an Interest Make-Whole
Payment is payable upon conversion; or (5) to the extent of
any Defaulted Amounts, if any Defaulted Amounts exists at the time
of conversion with respect to such Note. Therefore, for the
avoidance of doubt, all Holders of record after the close of
business on the Regular Record Date immediately preceding the
Maturity Date, a Redemption Date or Fundamental Change Repurchase
Date described in
clauses (2)
and
(3)
of this
Section
14.02(h)
, and any Holders of
record entitled to receive an Interest Make-Whole Payment upon
conversion described in clause (4) of this
Section
14.02(h)
shall receive the full
interest payment due on the Maturity Date or other applicable
Interest Payment Date in cash regardless of whether their Notes
have been converted following such Regular Record
Date.
(i)
The
Person in whose name the shares of Common Stock shall be issuable
upon conversion shall be treated as a stockholder of record as of
the close of business on the relevant Conversion Date (if the
Company elects to satisfy the related Conversion Obligation by
Physical Settlement) or the last Trading Day of the relevant
Observation Period (if the Company elects to satisfy the related
Conversion Obligation by Combination Settlement), as the case may
be. Upon a conversion of Notes, such Person shall no longer be a
Holder of such Notes surrendered for
conversion.
(j)
The
Company shall not issue any fractional share of Common Stock upon
conversion of the Notes and shall instead pay cash in lieu of
delivering any fractional share of Common Stock issuable upon
conversion based on the Daily VWAP for the relevant Conversion Date
(in the case of Physical Settlement) or based on the Daily VWAP for
the last Trading Day of the relevant Observation Period (in the
case of Combination Settlement). For each Note surrendered for
conversion, if the Company has elected Combination Settlement, the
full number of shares that shall be issued upon conversion thereof
shall be computed on the basis of the aggregate Daily Settlement
Amounts for the relevant Observation Period and any fractional
shares remaining after such computation shall be paid in
cash.
Section
14.03
Increased
Conversion Rate Applicable to Certain Notes Surrendered in
Connection with Make-Whole Fundamental Changes or Redemption
Notice
. (a) If
(x) the Effective Date of a Make-Whole Fundamental Change
occurs prior to the Maturity Date or (y) the Company gives a
Redemption Notice with respect to any or all of the Notes in
accordance with
Section 16.02
and, in each
case, a Holder elects to convert its Notes in connection with such
Make-Whole Fundamental Change or Redemption Notice, as applicable,
the Company shall, under the circumstances described below,
increase the Conversion Rate for the Notes so surrendered for
conversion by a number of additional shares of Common Stock (the
“
Additional
Shares
”), as described below. A conversion of Notes
shall be deemed for these purposes to be “in connection
with” such Make-Whole Fundamental Change if the relevant
Notice of Conversion is received by the Conversion Agent from, and
including, the Effective Date of the Make-Whole Fundamental Change
up to, and including, the Business Day immediately prior to the
related Fundamental Change Repurchase Date (or, in the case of a
Make-Whole Fundamental Change that would have been a Fundamental
Change but for the proviso in clause (b) of the definition
thereof, the 35th Trading Day immediately following the Effective
Date of such Make-Whole Fundamental Change) (such period, the
“
Make-Whole Fundamental
Change Period
”). A conversion of Notes shall be deemed
for these purposes to be “in connection with” a
Redemption Notice if the relevant Notice of Conversion is received
by the Conversion Agent from, and including, the date of the
Redemption Notice until the close of business on the Scheduled
Trading Day immediately preceding corresponding Redemption
Date.
(b)
Upon
surrender of Notes for conversion in connection with a Make-Whole
Fundamental Change pursuant to
Section 14.01(b)(iii)
or Redemption Notice pursuant
to
Section 14.01(b)(v)
,
the Company shall, at its option, satisfy the related Conversion
Obligation by Physical Settlement, Cash Settlement or Combination
Settlement in accordance with
Section 14.02
based on the Conversion Rate as
increased to reflect the Additional Shares pursuant to the table
set forth in
Section
14.03(f)
below;
provided
,
however
, that if, at the effective time of a Make-Whole
Fundamental Change described in clause (b) of the definition
of Fundamental Change, the Reference Property following such
Make-Whole Fundamental Change is composed entirely of cash, for any
conversion of Notes following the Effective Date of such Make-Whole
Fundamental Change, the Conversion Obligation shall be calculated
based solely on the Stock Price for the transaction and shall be
deemed to be an amount of cash per $1,000 principal amount of
converted Notes equal to the Conversion Rate (including any
adjustment for Additional Shares),
multiplied by
such Stock Price. In such event, the
Conversion Obligation shall be paid to Holders in cash on the
second Business Day following the Conversion Date. The Company
shall notify the Holders of Notes, the Trustee and the Conversion
Agent (if other than the Trustee) in writing of the Effective Date
of any Make-Whole Fundamental Change and issue a press release
announcing such Effective Date no later than five Business Days
after such Effective Date.
(c)
The
number of Additional Shares, if any, by which the Conversion Rate
shall be increased shall be determined by reference to the table
below, based on the date on which the Make-Whole Fundamental Change
occurs or becomes effective, or the date of the relevant Redemption
Notice, as the case may be (in each case, the
“
Effective
Date
”), and the price
paid (or deemed to be paid) per share of the Common Stock in the
Make-Whole Fundamental Change or with respect to the Optional
Redemption, as the case may be (the “
Stock Price
”). If the holders of the Common Stock
receive in exchange for their Common Stock only cash in a
Make-Whole Fundamental Change described in clause (b) of the
definition of Fundamental Change, the Stock Price shall be the cash
amount paid per share. Otherwise, the Stock Price shall be the
average of the Last Reported Sale Prices of the Common Stock over
the five consecutive Trading Day period ending on, and including,
the Trading Day immediately preceding the Effective Date of the
Make-Whole Fundamental Change or the date of the Redemption Notice,
as the case may be.
(d)
In
the event that a conversion in connection with a Redemption Notice
would also be deemed to be in connection with a Make-Whole
Fundamental Change, a Holder of the Notes to be converted will be
entitled to a single increase to the Conversion Rate with respect
to the first to occur of the date of the applicable Redemption
Notice or the Effective Date of the applicable Make-Whole
Fundamental Change, and the later event will be deemed not to have
occurred for purposes of this
Section
14.03
. The Board of Directors
shall make appropriate adjustments to the Stock Price, in its good
faith determination, to account for any adjustment to the
Conversion Rate that becomes effective, or any event requiring an
adjustment to the Conversion Rate where the Ex-Dividend Date,
Effective Date (as such term is used in
Section 14.04
)
or expiration date of the event occurs during such five consecutive
Trading Day period.
(e)
The
Stock Prices set forth in the column headings of the table below
shall be adjusted as of any date on which the Conversion Rate for
the Notes is otherwise adjusted. The adjusted Stock Prices shall
equal the Stock Prices applicable immediately prior to such
adjustment,
multiplied by
a fraction, the numerator of which is
the Conversion Rate immediately prior to such adjustment giving
rise to the Stock Price adjustment and the denominator of which is
the Conversion Rate as so adjusted. The number of Additional Shares
set forth in the table below shall be adjusted in the same manner
and at the same time as the Conversion Rate as set forth in
Section 14.04
.
(f)
The
following table sets forth the number of Additional Shares of
Common Stock by which the Conversion Rate shall be increased per
$1,000 principal amount of Notes pursuant to this
Section 14.03
for each Stock Price and Effective
Date set forth below:
|
Stock Price
|
Effective Date
|
$5.075
|
$5.75
|
$6.00
|
$7.00
|
$8.00
|
$9.00
|
$10.00
|
$11.00
|
$12.00
|
May 14,
2019
|
23.1310
|
20.0000
|
18.7500
|
15.8857
|
13.1250
|
8.8889
|
4.5000
|
2.1818
|
0.0000
|
May 1,
2020
|
23.1310
|
19.5000
|
18.2813
|
15.4886
|
12.7969
|
8.6667
|
4.3875
|
2.1273
|
0.0000
|
May 1,
2021
|
23.1310
|
18.8000
|
17.6250
|
14.9326
|
12.3375
|
8.3556
|
4.2300
|
2.0509
|
0.0000
|
May 1,
2022
|
23.1310
|
18.0000
|
16.8750
|
14.2971
|
11.8125
|
8.0000
|
4.0500
|
1.9636
|
0.0000
|
May 1,
2023
|
23.1310
|
17.5000
|
16.4063
|
13.9000
|
11.4844
|
7.7778
|
3.9375
|
1.9091
|
0.0000
|
May 1,
2024
|
23.1310
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
The
exact Stock Price and Effective Date may not be set forth in the
table above, in which case:
(i)
if
the Stock Price is between two Stock Prices in the table above or
the Effective Date is between two Effective Dates in the table, the
number of Additional Shares shall be determined by a straight-line
interpolation between the number of Additional Shares set forth for
the higher and lower Stock Prices and the earlier and later
Effective Dates, as applicable, based on a 365-day
year;
(ii)
if
the Stock Price is greater than $12.00 per share (subject to
adjustment in the same manner as the Stock Prices set forth in the
column headings of the table above pursuant to subsection (d)
above), no Additional Shares shall be added to the Conversion Rate;
and
(iii)
if
the Stock Price is less than $5.075 per share (subject to
adjustment in the same manner as the Stock Prices set forth in the
column headings of the table above pursuant to subsection (d)
above), no Additional Shares shall be added to the Conversion
Rate.
Notwithstanding
the foregoing, in no event shall the Conversion Rate per $1,000
principal amount of Notes exceed 197.0440 shares of Common Stock,
subject to adjustment in the same manner as the Conversion Rate
pursuant to
Section 14.04
.
(g)
Nothing
in this
Section 14.03
shall prevent an adjustment to the
Conversion Rate pursuant to
Section 14.04
in respect of a Make-Whole Fundamental
Change.
Section
14.04
Adjustment
of Conversion Rate
.
The Conversion Rate shall be adjusted
from time to time by the Company if any of the following events
occurs, except that the Company shall not make any adjustments to
the Conversion Rate if Holders of the Notes participate (other than
in the case of (x) a share split or share combination or
(y) a tender or exchange offer), at the same time and upon the
same terms as holders of the Common Stock and solely as a result of
holding the Notes, in any of the transactions described in this
Section 14.04
,
without having to convert their Notes, as if they held a number of
shares of Common Stock equal to the Conversion Rate,
multiplied by
the principal amount
(expressed in thousands) of Notes held by such Holder.
(a)
If
the Company exclusively issues shares of Common Stock as a dividend
or distribution on shares of the Common Stock, or if the Company
effects a share split or share combination in respect of the Common
Stock, the Conversion Rate shall be adjusted based on the following
formula:
where,
CR
0
= the
Conversion Rate in effect immediately prior to the open of business
on the Ex- Dividend Date of such dividend or distribution, or
immediately prior to the open of business on the Effective Date of
such share split or share combination, as applicable;
CR
1
= the
Conversion Rate in effect immediately after the open of business on
such Ex- Dividend Date or 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 Effective Date;
and
OS
1
= the
number of shares of Common Stock outstanding immediately after
giving effect to such dividend, distribution, share split or share
combination.
Any
adjustment made under this
Section 14.04(a)
shall
become effective immediately after the open of business on the
Ex-Dividend Date for such dividend or distribution, or immediately
after the open of business on the Effective Date for such share
split or share combination, as applicable. If any dividend or
distribution of the type described in this
Section 14.04(a)
is
declared but not so paid or made, the Conversion Rate shall be
immediately readjusted, effective as of the date the Board of
Directors determines not to pay such dividend or distribution, to
the Conversion Rate that would then be in effect if such dividend
or distribution had not been declared.
(b)
If
the Company issues to all or substantially all holders of the
Common Stock any rights, options or warrants (other than in
connection with a stockholder rights plan) entitling them, for a
period of not more than 45 calendar days after the announcement
date of such issuance, to subscribe for or purchase shares of the
Common Stock at a price per share that is less than the average of
the Last Reported Sale Prices of the Common Stock for the 10
consecutive Trading Day period ending on, and including, the
Trading Day immediately preceding the date of announcement of such
issuance, the Conversion Rate shall be increased based on the
following formula:
where,
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 14.04(b)
shall be
made successively whenever any such rights, options or warrants are
issued and shall become effective immediately after the open of
business on the Ex-Dividend Date for such issuance. To the extent
that shares of the Common Stock are not delivered after the
expiration of such rights, options or warrants, the Conversion Rate
shall be decreased to the Conversion Rate that would then be in
effect had the increase with respect to the issuance of such
rights, options or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. If
such rights, options or warrants are not so issued, the Conversion
Rate shall be decreased to the Conversion Rate that would then be
in effect if such Ex-Dividend Date for such issuance had not
occurred.
For
purposes of this
Section 14.04(b)
and for
the purpose of
Section 14.01(b)(ii)(A)
,
in determining whether any rights, options or warrants entitle the
holders to subscribe for or purchase shares of the Common Stock at
less than such average of the Last Reported Sale Prices of the
Common Stock for the 10 consecutive Trading Day period ending on,
and including, the Trading Day immediately preceding the date of
announcement for such issuance, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such
rights, options or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than
cash, to be determined by the Board of Directors.
(c)
If
the Company distributes shares of its Capital Stock, evidences of
its indebtedness, other assets or property of the Company or
rights, options or warrants to acquire its Capital Stock or other
securities, to all or substantially all holders of the Common
Stock, excluding (i) dividends, distributions or issuances as
to which an adjustment was effected pursuant to
Section 14.04(a)
or
Section 14.04(b)
,
(ii) dividends or distributions paid exclusively in cash as to
which an adjustment was effected pursuant to
Section 14.04(d)
,
(iii) except as otherwise provided in
Section 14.11
,
rights issued under a stockholder rights plan of the Company,
(iv) distributions of Reference Property in exchange for or
upon conversion of the Common Stock in a Share Exchange Event and
(v) Spin-Offs as to which the provisions set forth below in
this
Section 14.04(c)
shall apply (any of such shares of
Capital Stock, evidences of indebtedness, other assets or property
or rights, options or warrants to acquire Capital Stock or other
securities, the “
Distributed
Property
”), then the
Conversion Rate shall be increased based on the following
formula:
where,
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 Distributed
Property with respect to each outstanding share of the Common Stock
on the Ex- Dividend Date for such distribution.
Any
increase made under the portion of this
Section 14.04(c)
above
shall become effective immediately after the open of business on
the Ex-Dividend Date for such distribution. If such distribution is
not so paid or made, the Conversion Rate shall be decreased to the
Conversion Rate that would then be in effect if such distribution
had not been declared. Notwithstanding the foregoing, if
“FMV” (as defined above) is equal to or greater than
“SP0” (as defined above), in lieu of the foregoing
increase, each Holder of a Note shall receive, in respect of each
$1,000 principal amount thereof, at the same time and upon the same
terms as holders of the Common Stock receive the Distributed
Property, the amount and kind of Distributed Property such Holder
would have received if such Holder owned a number of shares of
Common Stock equal to the Conversion Rate in effect on the
Ex-Dividend Date for the distribution. If the Board of Directors
determines the “FMV” (as defined above) of any
distribution for purposes of this
Section 14.04(c)
by
reference to the actual or when-issued trading market for any
securities, it shall in doing so consider the prices in such market
over the same period used in computing the Last Reported Sale
Prices of the Common Stock over the 10 consecutive Trading Day
period ending on, and including, the Trading Day immediately
preceding the Ex-Dividend Date for such distribution.
With
respect to an adjustment pursuant to this
Section 14.04(c)
where
there has been a payment of a dividend or other distribution on the
Common Stock of shares of Capital Stock of any class or series, or
similar equity interest, of or relating any Subsidiaries or other
business units of the Company, that are, or, when issued, will be,
listed or admitted for trading on a U.S. national securities
exchange (a “
Spin-Off
”), the Conversion Rate
shall be increased based on the following formula:
where,
CR
0
= the
Conversion Rate in effect immediately prior to the end of the
Valuation Period;
CR
1
= the
Conversion Rate in effect immediately after the end of the
Valuation Period;
FMV
0
=
the average of the
Last Reported Sale Prices of the Capital Stock or similar equity
interest distributed to holders of the Common Stock applicable to
one share of the Common Stock (determined by reference to the
definition of Last Reported Sale Price as set forth in
Section 1.01
as if
references therein to Common Stock were to such Capital Stock or
similar equity interest) over the first 10 consecutive Trading Day
period after, and including, the Ex-Dividend Date of the Spin-Off
(the “
Valuation
Period
”); and
MP
0
= the
average of the Last Reported Sale Prices of the Common Stock over
the Valuation Period.
The
adjustment to the Conversion Rate under the preceding paragraph
shall occur at the close of business on the last Trading Day of the
Valuation Period;
provided
that (x) in respect of any conversion of Notes for which
Physical Settlement is applicable, if the relevant Conversion Date
occurs during the Valuation Period, references to “10”
in the preceding paragraph shall be deemed to be replaced with such
lesser number of Trading Days as have elapsed between the
Ex-Dividend Date of such Spin-Off and the Conversion Date in
determining the Conversion Rate and (y) in respect of any
conversion of Notes for which Cash Settlement or Combination
Settlement is applicable, for any Trading Day that falls within the
relevant Observation Period for such conversion and within the
Valuation Period, references to “10” in the preceding
paragraph shall be deemed to be replaced with such lesser number of
Trading Days as have elapsed between the Ex-Dividend Date of such
Spin-Off and such Trading Day in determining the Conversion Rate as
of such Trading Day.
For
purposes of this
Section 14.04(c)
(and
subject in all respect to
Section 14.11
), rights,
options or warrants distributed by the Company to all holders of
the Common Stock entitling them to subscribe for or purchase shares
of the Company’s Capital Stock, including Common Stock
(either initially or under certain circumstances), which rights,
options or warrants, until the occurrence of a specified event or
events (“
Trigger
Event
”): (i) are deemed to be transferred with
such shares of the Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of the
Common Stock, shall be deemed not to have been distributed for
purposes of this
Section 14.04(c)
(and no
adjustment to the Conversion Rate under this
Section 14.04(c)
will be
required) until the occurrence of the earliest Trigger Event,
whereupon such rights, options or warrants shall be deemed to have
been distributed and an appropriate adjustment (if any is required)
to the Conversion Rate shall be made under this
Section 14.04(c)
. If any
such right, option or warrant, including any such existing rights,
options or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such
rights, options or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be
deemed to be the date of distribution and Ex-Dividend Date with
respect to new rights, options or warrants with such rights (in
which case the existing rights, options or warrants shall be deemed
to terminate and expire on such date without exercise by any of the
holders thereof). In addition, in the event of any distribution (or
deemed distribution) of rights, options or warrants, or any Trigger
Event or other event (of the type described in the immediately
preceding sentence) with respect thereto that was counted for
purposes of calculating a distribution amount for which an
adjustment to the Conversion Rate under this
Section 14.04(c)
was made,
(1) in the case of any such rights, options or warrants that
shall all have been redeemed or purchased without exercise by any
holders thereof, upon such final redemption or purchase
(x) the Conversion Rate shall be readjusted as if such rights,
options or warrants had not been issued and (y) the Conversion
Rate shall then again be readjusted to give effect to such
distribution, deemed distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share
redemption or purchase price received by a holder or holders of
Common Stock with respect to such rights, options or warrants
(assuming such holder had retained such rights, options or
warrants), made to all holders of Common Stock as of the date of
such redemption or purchase, and (2) in the case of such
rights, options or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion
Rate shall be readjusted as if such rights, options and warrants
had not been issued.
For
purposes of
Section 14.04(a)
,
Section 14.04(b)
and this
Section 14.04(c)
, if any
dividend or distribution to which this
Section 14.04(c)
is
applicable also includes one or both of:
(A)
a
dividend or distribution of shares of Common Stock to which
Section 14.04(a)
is applicable (the
“
Clause A
Distribution
”);
or
(B)
a
dividend or distribution of rights, options or warrants to
which
Section 14.04(b)
is applicable (the
“
Clause B
Distribution
”),
then,
in either case, (1) such dividend or distribution, other than
the Clause A Distribution and the Clause B Distribution, shall be
deemed to be a dividend or distribution to which this
Section 14.04(c)
is
applicable (the “
Clause C
Distribution
”) and any Conversion Rate adjustment
required by this
Section 14.04(c)
with
respect to such Clause C Distribution shall then be made, and
(2) the Clause A Distribution and Clause B Distribution shall
be deemed to immediately follow the Clause C Distribution and any
Conversion Rate adjustment required by
Section 14.04(a)
and
Section 14.04(b)
with
respect thereto shall then be made, except that, if determined by
the Company (I) the “Ex-Dividend Date” of the
Clause A Distribution and the Clause B Distribution shall be deemed
to be the Ex-Dividend Date of the Clause C Distribution and
(II) any shares of Common Stock included in the Clause A
Distribution or Clause B Distribution shall be deemed not to be
“outstanding immediately prior to the open of business on
such Ex-Dividend Date or Effective Date” within the meaning
of
Section 14.04(a)
or
“outstanding immediately prior to the open of business on
such Ex-Dividend Date” within the meaning of
Section 14.04(b)
.
(d)
If
any cash dividend or distribution is made to all or substantially
all holders of the Common Stock, the Conversion Rate shall be
adjusted based on the following formula:
where,
CR
0
= the
Conversion Rate in effect immediately prior to the open of business
on the Ex-Dividend Date for such dividend or
distribution;
CR
1
= the
Conversion Rate in effect immediately after the open of business on
the Ex-Dividend Date for such dividend or
distribution;
SP
0
= the
Last Reported Sale Price of the Common Stock on the Trading Day
immediately preceding the Ex-Dividend Date for such dividend or
distribution; and
C = the
amount in cash per share the Company distributes to all or
substantially all holders of the Common Stock.
Any
increase pursuant to this
Section 14.04(d)
shall
become effective immediately after the open of business on the
Ex-Dividend Date for such dividend or distribution. If such
dividend or distribution is not so paid, the Conversion Rate shall
be decreased, effective as of the date the Board of Directors
determines not to make or pay such dividend or distribution, to be
the Conversion Rate that would then be in effect if such dividend
or distribution had not been declared. Notwithstanding the
foregoing, if “C” (as defined above) is equal to or
greater than “SP0” (as defined above), in lieu of the
foregoing increase, each Holder of a Note shall receive, for each
$1,000 principal amount of Notes such Holder holds, at the same
time and upon the same terms as holders of shares of the Common
Stock, the amount of cash that such Holder would have received if
such Holder owned a number of shares of Common Stock equal to the
Conversion Rate in effect on the Ex-Dividend Date for such cash
dividend or distribution.
(e)
If
the Company or any of its Subsidiaries make a payment in respect of
a tender or exchange offer for the Common Stock, to the extent that
the cash and value of any other consideration included in the
payment per share of the Common Stock exceeds the average of the
Last Reported Sale Prices of the Common Stock over the 10
consecutive Trading Day period commencing on, and including, the
Trading Day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer,
the Conversion Rate shall be increased based on the following
formula:
where,
CR
0
= the
Conversion Rate in effect immediately prior to the close of
business on the 10th Trading Day immediately following, and
including, the Trading Day next succeeding the date such tender or
exchange offer expires;
CR
1
= the
Conversion Rate in effect immediately after the close of business
on the 10th Trading Day immediately following, and including, the
Trading Day next succeeding the date such tender or exchange offer
expires;
AC = the
aggregate value of all cash and any other consideration (as
determined by the Board of Directors) paid or payable for shares of
Common Stock purchased in such tender or exchange
offer;
OS
0
= the
number of shares of Common Stock outstanding immediately prior to
the date such tender or exchange offer expires (prior to giving
effect to the purchase of all shares of Common Stock accepted for
purchase or exchange in such tender or exchange
offer);
OS
1
= the
number of shares of Common Stock outstanding immediately after the
date such tender or exchange offer expires (after giving effect to
the purchase of all shares of Common Stock 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 date such tender or exchange
offer expires.
The
increase to the Conversion Rate under this
Section 14.04(e)
shall
occur at the close of business on the 10th Trading Day immediately
following, and including, the Trading Day next succeeding the date
such tender or exchange offer expires;
provided
that (x) in respect of
any conversion of Notes for which Physical Settlement is
applicable, if the relevant Conversion Date occurs during the 10
Trading Days immediately following, and including, the Trading Day
next succeeding the expiration date of any tender or exchange
offer, references to “10” or “10th” in the
preceding paragraph shall be deemed replaced with such lesser
number of Trading Days as have elapsed between the date that such
tender or exchange offer expires and the Conversion Date in
determining the Conversion Rate and (y) in respect of any
conversion of Notes for which Cash Settlement or Combination
Settlement is applicable, for any Trading Day that falls within the
relevant Observation Period for such conversion and within the 10
Trading Days immediately following, and including, the Trading Day
next succeeding the expiration date of any tender or exchange
offer, references to “10” or “10th” in the
preceding paragraph shall be deemed replaced with such lesser
number of Trading Days as have elapsed between the expiration date
of such tender or exchange offer and such Trading Day in
determining the Conversion Rate as of such Trading
Day.
Notwithstanding
this
Section 14.04
or any other
provision of this Indenture or the Notes, if a Conversion Rate
adjustment becomes effective on any Ex-Dividend Date, and a Holder
that has converted its Notes on or after such Ex-Dividend Date and
on or prior to the related Record Date would be treated as the
record holder of the shares of Common Stock as of the related
Conversion Date as described under
Section 14.02(i)
based on
an adjusted Conversion Rate for such Ex-Dividend Date, then,
notwithstanding the Conversion Rate adjustment provisions in this
Section 14.04
,
the Conversion Rate adjustment relating to such Ex-Dividend Date
shall not be made for such converting Holder. Instead, such Holder
shall be treated as if such Holder were the record owner of the
shares of Common Stock on an unadjusted basis and participate in
the related dividend, distribution or other event giving rise to
such adjustment.
(f)
Except
as stated herein, the Company shall not adjust the Conversion Rate
for the issuance of shares of the Common Stock or any securities
convertible into or exchangeable for shares of the Common Stock or
the right to purchase shares of the Common Stock or such
convertible or exchangeable securities.
(g)
In
addition to those adjustments required by clauses (a), (b),
(c), (d) and (e) of this
Section 14.04
,
and to the extent permitted by applicable law and subject to the
applicable listing standards of The NASDAQ Capital Market, the
Company from time to time may increase the Conversion Rate by any
amount for a period of at least 20 Business Days if the Board of
Directors determines that such increase would be in the
Company’s best interest. In addition, to the extent permitted
by applicable law and subject to the applicable listing standards
of The NASDAQ Capital Market, the Company may (but is not required
to) increase the Conversion Rate to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock
in connection with a dividend or distribution of shares of Common
Stock (or rights to acquire shares of Common Stock) or similar
event. Whenever the Conversion Rate is increased pursuant to either
of the preceding two sentences, the Company shall deliver to the
Holder of each Note, the Trustee and the Conversion Agent (if other
than the Trustee) a written notice of the increase at least 15 days
prior to the date the increased Conversion Rate takes effect, and
such notice shall state the increased Conversion Rate and the
period during which it will be in effect.
(h)
Notwithstanding
anything to the contrary in this
Article 14
,
the Conversion Rate shall not be adjusted:
(i)
upon
the issuance of any shares of Common Stock pursuant to any present
or future plan providing for the reinvestment of dividends or
interest payable on the Company’s securities and the
investment of additional optional amounts in shares of Common Stock
under any plan;
(ii)
upon
the issuance of any shares of Common Stock or options or rights to
purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of or assumed by the
Company or any of the Company’s Subsidiaries (other than
rights plans described in
Section
14.11
);
(iii)
upon
the issuance of any shares of the Common Stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible
security not described in clause (ii) of this subsection and
outstanding as of the date the Notes were first
issued;
(iv)
solely
for a change in the par value of the Common Stock;
or
(v)
for
accrued and unpaid interest, if any.
(i)
All
calculations and other determinations under this
Article 14
shall be made by the Company and shall
be made to the nearest one-ten thousandth (1/10,000th) of a
share.
(j)
Whenever
the Conversion Rate is adjusted as herein provided, the Company
shall promptly deliver to the Trustee (and the Conversion Agent if
not the Trustee) an Officers’ Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Unless and until
a Responsible Officer of the Trustee shall have received such
Officers’ Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may
assume without inquiry that the last Conversion Rate of which it
has knowledge is still in effect. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment
of the Conversion Rate setting forth the adjusted Conversion Rate
and the date on which each adjustment becomes effective and shall
deliver such notice of such adjustment of the Conversion Rate to
each Holder at its address appearing in the Note Register. Failure
to deliver such notice shall not affect the legality or validity of
any such adjustment. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such
certificate or the information and calculations contained
therein.
(k)
For
purposes of this
Section 14.04
,
the number of shares of Common Stock at any time outstanding shall
not include shares of Common Stock held in the treasury of the
Company so long as the Company does not pay any dividend or make
any distribution on shares of Common Stock held in the treasury of
the Company, but shall include shares of Common Stock issuable in
respect of scrip certificates issued in lieu of fractions of shares
of Common Stock.
Section
14.05
Adjustments
of Prices
.
Whenever any provision of this
Indenture requires the Company to calculate the Last Reported Sale
Prices, the Daily VWAPs, the Daily Conversion Values or the Daily
Settlement Amounts over a span of multiple days (including an
Observation Period and the period for determining the Stock Price
for purposes of a Make-Whole Fundamental Change or Optional
Redemption), the Board of Directors shall make appropriate
adjustments to each to account for any adjustment to the Conversion
Rate that becomes effective, or any event requiring an adjustment
to the Conversion Rate where the Ex-Dividend Date, Effective Date
or expiration date, as the case may be, of the event occurs, at any
time during the period when the Last Reported Sale Prices, the
Daily VWAPs, the Daily Conversion Values or the Daily Settlement
Amounts are to be calculated.
Section
14.06
Shares
to Be Fully Paid
.
The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or
shares held in treasury, sufficient shares of Common Stock to
provide for conversion of the Notes from time to time as such Notes
are presented for conversion (assuming delivery of the maximum
number of Additional Shares pursuant to
Section 14.03
and that at
the time of computation of such number of shares, all such Notes
would be converted by a single Holder and that Physical Settlement
were applicable).
Section
14.07
Effect
of Recapitalizations, Reclassifications and Changes of the Common
Stock
.
(a)
In
the case of:
(i)
any
recapitalization, reclassification or change of the Common Stock
(other than changes resulting from a subdivision or combination or
a change of par value or to no par value),
(ii)
any
consolidation, merger, combination or similar transaction involving
the Company,
(iii)
any
sale, lease or other transfer to a third party of the consolidated
assets of the Company and the Company’s Subsidiaries
substantially as an entirety or
(iv)
any
statutory share exchange,
in each
case, as a result of which the Common Stock would be converted
into, or exchanged for, stock, other securities, other property or
assets (including cash or any combination thereof) (any such event,
a “
Share Exchange
Event
”), then, at the effective time of the Share
Exchange Event, the Company or the successor or acquiring
corporation, as the case may be, shall execute with the Trustee a
supplemental indenture, without the consent of Holders, providing
that at and after the effective time of such Share Exchange Event,
the right to convert each $1,000 principal amount of Notes shall be
changed into a right to convert such principal amount of Notes into
the kind and amount of shares of stock, other securities or other
property or assets (including cash or any combination thereof) that
a holder of a number of shares of Common Stock equal to the
Conversion Rate immediately prior to such Share Exchange Event
would have owned or been entitled to receive (the
“
Reference
Property
,” with each “
unit of Reference Property
”
meaning the kind and amount of Reference Property that a holder of
one share of Common Stock is entitled to receive) upon such Share
Exchange Event and, prior to or at the effective time of such Share
Exchange Event, the Company or the successor or purchasing Person,
as the case may be, shall execute with the Trustee a supplemental
indenture permitted under
Section 10.01(g)
providing
for such change in the right to convert each $1,000 principal
amount of Notes;
provided
,
however
, that at and after
the effective time of the Share Exchange Event (A) the Company
shall continue to have the right to determine the form of
consideration to be paid or delivered, as the case may be, upon
conversion of Notes in accordance with
Section 14.02
and
(B) (I) any amount payable in cash upon conversion of the
Notes in accordance with
Section 14.02
shall
continue to be payable in cash, (II) any shares of Common
Stock that the Company would have been required to deliver upon
conversion of the Notes in accordance with
Section 14.02
shall
instead be deliverable in the amount and type of Reference Property
that a holder of that number of shares of Common Stock would have
been entitled to receive in such Share Exchange Event and
(III) the Daily VWAP shall be calculated based on the value of
a unit of Reference Property.
If the
Share Exchange Event causes the Common Stock to be converted into,
or exchanged for, the right to receive more than a single type of
consideration (determined based in part upon any form of
stockholder election), then the Reference Property into which the
Notes will be convertible shall be deemed to be the weighted
average of the types and amounts of consideration received by the
holders of Common Stock. If the holders of the Common Stock receive
only cash in such Share Exchange Event, then for all conversions
for which the relevant Conversion Date occurs after the effective
date of such Share Exchange Event (A) the consideration due
upon conversion of each $1,000 principal amount of Notes shall be
solely cash in an amount equal to the Conversion Rate in effect on
the Conversion Date (as may be increased by any Additional Shares
pursuant to
Section 14.03
),
multiplied by
the price
paid per share of Common Stock in such Share Exchange Event, and,
if applicable, an Interest Make-Whole Payment, which the Company
shall pay in cash (B) the Company shall satisfy the Conversion
Obligation by paying cash to converting Holders on the second
Business Day immediately following the relevant Conversion Date.
The Company shall notify Holders, the Trustee and the Conversion
Agent (if other than the Trustee) in writing of such weighted
average of the types and amounts of consideration received by the
holders of the Common Stock as soon as practicable after such
determination is made.
Such
supplemental indenture described in the second immediately
preceding paragraph shall provide for anti-dilution and other
adjustments that shall be as nearly equivalent as is possible to
the adjustments provided for in this
Article 14
. If, in the
case of any Share Exchange Event, the Reference Property includes
shares of stock, securities or other property or assets (including
cash or any combination thereof) of a Person other than the
successor or acquiring corporation, as the case may be, in such
Share Exchange Event, then such supplemental indenture shall also
be executed by such other Person and shall contain such additional
provisions to protect the interests of the Holders of the Notes as
the Board of Directors shall reasonably consider necessary by
reason of the foregoing, including the provisions providing for the
purchase rights set forth in
Article 15
.
(b)
When
the Company executes a supplemental indenture pursuant to
subsection (a) of this
Section 14.07
,
the Company shall promptly deliver to the Trustee an
Officers’ Certificate briefly stating the reasons therefor,
the kind or amount of cash, securities or property or asset that
will comprise a unit of Reference Property after any such Share
Exchange Event, any adjustment to be made with respect thereto and
that all conditions precedent have been complied with, and shall
promptly deliver notice thereof to all Holders. The Company shall
cause notice of the execution of such supplemental indenture to be
delivered to each Holder within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
(c)
The
Company shall not become a party to any Share Exchange Event unless
its terms are consistent with this
Section 14.07
.
None of the foregoing provisions shall affect the right of a holder
of Notes to convert its Notes into cash, shares of Common Stock or
a combination of cash and shares of Common Stock, as applicable, as
set forth in
Section 14.01
and
Section 14.02
prior to the effective date of such
Share Exchange Event.
(d)
The
above provisions of this Section shall similarly apply to
successive Share Exchange Events.
Section
14.08
Certain
Covenants
.
(a) The Company covenants that all
shares of Common Stock issued upon conversion of Notes will be
fully paid and non-assessable by the Company and free from all
taxes, liens and charges with respect to the issue
thereof.
(b)
The
Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require
registration with or approval of any governmental authority under
any federal or state law before such shares of Common Stock may be
validly issued upon conversion, the Company will, to the extent
then permitted by the rules and interpretations of the Commission,
secure such registration or approval, as the case may
be.
(c)
The
Company further covenants that if at any time the Common Stock
shall be listed on any national securities exchange or automated
quotation system the Company will list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated
quotation system, any Common Stock issuable upon conversion of the
Notes.
Section
14.09
Responsibility
of Trustee
.
The Trustee and any other Conversion
Agent shall not at any time be under any duty or responsibility to
any Holder to determine the Conversion Rate (or any adjustment
thereto) or whether any facts exist that may require any adjustment
(including any increase) of the Conversion Rate, or with rspect to
the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same.
The Trustee and any other Conversion Agent shall not be accountable
with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities, property or cash
that may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other Conversion Agent make no
representations with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or
stock certificates or other securities or property or cash upon the
surrender of any Note for the purpose of conversion, the accuracy
or inaccuracy of any mathematical calculation or formulae under
this Indenture, whether by the Company or any Person so authorized
by the Company for such purpose under this Indenture or the failure
by the Company or to comply with any of the duties,
responsibilities or covenants of the Company contained in this
Article. Without limiting the generality of the foregoing, neither
the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to
Section 14.07
relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders upon
the conversion of their Notes after any event referred to in such
Section 14.07
or to any adjustment to be made with respect thereto, but, subject
to the provisions of
Section 7.01
, may accept
(without any independent investigation) as conclusive evidence of
the correctness of any such provisions, and shall be protected in
relying upon, the Officers’ Certificate and Opinion of
Counsel (which the Company shall be obligated to deliver to the
Trustee prior to the execution of any such supplemental indenture)
with respect thereto. Neither the Trustee nor the Conversion Agent
shall be responsible for determining whether any event contemplated
by
Section 14.01(b)
has
occurred that makes the Notes eligible for conversion or no longer
eligible therefor until the Company has delivered to the Trustee
and the Conversion Agent the notices referred to in
Section 14.01(b)
with
respect to the commencement or termination of such conversion
rights, on which notices the Trustee and the Conversion Agent may
conclusively rely, and the Company agrees to deliver such notices
to the Trustee and the Conversion Agent immediately after the
occurrence of any such event or at such other times as shall be
provided for in
Section 14.01(b)
. Except
as otherwise expressly provided herein, neither the Trustee nor any
other agent acting under this Indenture (other than the Company, if
acting in such capacity) shall have any obligation to make any
calculation or to determine whether the Notes may be surrendered
for conversion pursuant to this Indenture, or to notify the Company
or the Depositary or any of the Holders if the Notes have become
convertible pursuant to the terms of this Indenture.
Section
14.10
Notice
to Holders Prior to Certain Actions
. In case of
any:
(a)
action
by the Company or one of its Subsidiaries that would require an
adjustment in the Conversion Rate pursuant to
Section 14.04
or
Section 14.11
;
(b)
Share
Exchange Event; or
(c)
voluntary
or involuntary dissolution, liquidation or winding-up of the
Company or any of its Subsidiaries;
then,
in each case (unless notice of such event is otherwise required
pursuant to another provision of this Indenture), the Company shall
cause to be delivered to the Trustee and the Conversion Agent (if
other than the Trustee) and to be delivered to each Holder at its
address appearing on the Note Register, as promptly as possible but
in any event at least 20 days prior to the applicable date
hereinafter specified, a notice stating (i) the date on which
a record is to be taken for the purpose of such action by the
Company or one of its Subsidiaries or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
are to be determined for the purposes of such action by the Company
or one of its Subsidiaries, or (ii) the date on which such
Share Exchange Event, dissolution, liquidation or winding-up is
expected to become effective or occur, and the date as of which it
is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other
property deliverable upon such Share Exchange Event, dissolution,
liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such
action by the Company or one of its Subsidiaries, Share Exchange
Event, dissolution, liquidation or winding-up.
Section
14.11
Stockholder
Rights Plans
.
If the Company has a stockholder
rights plan in effect upon conversion of the Notes, each share of
Common Stock, if any, issued upon such conversion shall be entitled
to receive the appropriate number of rights, if any, and the
certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be
provided by the terms of any such stockholder rights plan, as the
same may be amended from time to time. The Company shall not adjust
the Conversion Rate upon the adoption of a stockholder rights plan,
so long as the rights are not currently exercisable and have not
separated from the shares of Common Stock in accordance with the
provisions of the applicable rights plan. However, if, prior to any
conversion of Notes, the rights have separated from the shares of
Common Stock in accordance with the provisions of the applicable
stockholder rights plan, the Conversion Rate shall be adjusted at
the time of separation as if the Company distributed to all or
substantially all holders of the Common Stock Distributed Property
as provided in
Section 14.04(c)
, subject
to readjustment in the event of the expiration, termination or
redemption of such rights.
Section
14.12
Ownership
Limitation
.
Notwithstanding anything herein to
the contrary, no Holder (other than the Depositary with respect to
the Notes) or beneficial owner of a Note shall have the right to
receive shares of Common stock upon Conversion, and any purported
delivery of shares of Common Stock to such Holder or beneficial
owner, shall be null and void, to the extent that, following
receipt of such shares of Common Stock, such Holder or beneficial
owner (together with such Holder’s Affiliates and any other
persons whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act and the rules promulgated thereunder, including
any “group” of which such holder is a member) would be
the beneficial owner of more than 4.99% of the outstanding shares
of Common Stock. For the avoidance of doubt, if a Holder or
beneficial owner is prevented from receiving any shares of Common
Stock to which it would otherwise be entitled pursuant to this
Section 14.12
, the
Company’s obligation to deliver such shares of Common Stock
shall not be extinguished, and the Company shall deliver such
shares of Common Stock (or any designated portion thereof) within
two Business Days following written notice from the converting
Holder or beneficial owner that receipt of such shares of Common
Stock (or any designated portion thereof) would not be prohibited
by this sentence (this sentence being referred to as the
“
Ownership
Limitation
”); provided, however, that the Ownership
Limitation shall not apply in connection with and subject to
completion of a third party tender offer for the Common Stock
issuable thereupon. The provisions of this
Section 14.12
may be construed
and implemented by the Company in a manner that is otherwise than
in strict conformity with the terms of this
Section 14.12
in order to
correct this
Section
14.12
(or any portion hereof) which may be defective or
inconsistent with the intended ownership limitation herein
contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations
contained in this
Section
14.12
shall apply to a successor Holder of Notes. The
Trustee (including in its capacities as Note Registrar, Paying
Agent and, if applicable, Conversion Agent) shall have no
responsibility for construing or implementing the provisions of
this
Section 14.12
or for determining whether any Holder or beneficial owner of a Note
would upon conversion be prevented from receiving any shares of
Common Stock as a result of this
Section 14.12
.
ARTICLE 15
REPURCHASE OF NOTES AT OPTION OF
HOLDERS
Section
15.01
[Intentionally
Omitted]
.
Section
15.02
Repurchase
at Option of Holders Upon a Fundamental
Change
.
(a) If a Fundamental Change occurs at
any time, each Holder shall have the right, at such Holder’s
option, to require the Company to repurchase for cash all of such
Holder’s Notes, or any portion thereof that is equal to
$1,000 or an integral multiple of $1,000, on the date (the
“
Fundamental Change
Repurchase Date
”) specified by the Company that is not
less than 20 calendar days or more than 35 calendar days following
the date of the Fundamental Change Company Notice at a repurchase
price equal to 100% of the principal amount thereof,
plus
accrued and unpaid interest
thereon to, but excluding, the relevant Fundamental Change
Repurchase Date (the “
Fundamental Change Repurchase
Price
”), unless the Fundamental Change Repurchase Date
falls after a Regular Record Date but on or prior to the Interest
Payment Date to which such Regular Record Date relates, in which
case the Company shall instead pay the full amount of accrued and
unpaid interest to Holders of record as of such Regular Record Date
on such Interest Payment Date, and the Fundamental Change
Repurchase Price shall be equal to 100% of the principal amount of
Notes to be repurchased pursuant to this
Article 15
.
(b)
Repurchases
of Notes under this
Section 15.02
shall be made, at the option of the
Holder thereof, upon:
(i)
delivery
to the Paying Agent by a Holder of a duly completed notice (the
“
Fundamental Change Repurchase
Notice
”) in the form set
forth in Attachment 2 to the Form of Note attached hereto
as
Exhibit A
,
if the Notes are Physical Notes, or in compliance with the
Depositary’s procedures for surrendering interests in Global
Notes, if the Notes are Global Notes, in each case on or before the
close of business on the Business Day immediately preceding the
Fundamental Change Repurchase Date; and
(ii)
delivery
of the Notes, if the Notes are Physical Notes, to the Paying Agent
at any time after delivery of the Fundamental Change Repurchase
Notice (together with all necessary endorsements for transfer) at
the Corporate Trust Office of the Paying Agent located in the
contiguous United States as notified by the Company, as the case
may be, or book-entry transfer of the Notes, if the Notes are
Global Notes, in compliance with the procedures of the Depositary,
in each case such delivery being a condition to receipt by the
Holder of the Fundamental Change Repurchase Price
therefor.
The
Fundamental Change Repurchase Notice in respect of any Notes to be
repurchased shall state:
(iii)
in
the case of Physical Notes, the certificate numbers of the Notes to
be delivered for repurchase;
(iv)
the
portion of the principal amount of Notes to be repurchased, which
must be $1,000 or an integral multiple thereof;
and
(v)
that
the Notes are to be repurchased by the Company pursuant to the
applicable provisions of the Notes and this
Indenture;
provided
,
however
,
that if the Notes are Global Notes, the Fundamental Change
Repurchase Notice must comply with appropriate Depositary
procedures.
Notwithstanding
anything herein to the contrary, any Holder delivering to the
Paying Agent, the Fundamental Change Repurchase Notice contemplated
by this
Section 15.02
shall have
the right to withdraw, in whole or in part, such Fundamental Change
Repurchase Notice at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change
Repurchase Date by delivery of a written notice of withdrawal to
the Paying Agent in accordance with
Section 15.03
.
The
Paying Agent shall promptly notify the Company of the receipt by it
of any Fundamental Change Repurchase Notice or written notice of
withdrawal thereof.
(c)
On
or before the 20th calendar day after the occurrence of the
effective date of a Fundamental Change, the Company shall provide
to all Holders of Notes and the Trustee, the Paying Agent (if other
than the Trustee) and the Conversion Agent (if other than the
Trustee) a written notice (the “
Fundamental Change Company
Notice
”) of the
occurrence of the effective date of the Fundamental Change and of
the repurchase right at the option of the Holders arising as a
result thereof. In the case of Physical Notes, such notice shall be
by first class mail or, in the case of Global Notes, such notice
shall be delivered in accordance with the applicable procedures of
the Depositary. Simultaneously with providing such notice, the
Company shall publish a notice containing the information set forth
in the Fundamental Change Company Notice in a newspaper of general
circulation in The City of New York or publish such information on
the Company’s website or through such other public medium as
the Company may use at that time. Each Fundamental Change Company
Notice shall specify:
(i)
the
events causing the Fundamental Change;
(ii)
the
date of the Fundamental Change;
(iii)
the
last date on which a Holder may exercise the repurchase right
pursuant to this
Article 15
;
(iv)
the
Fundamental Change Repurchase Price;
(v)
the
Fundamental Change Repurchase Date;
(vi)
the
name and address of the Paying Agent and the Conversion Agent, if
applicable;
(vii)
if
applicable, the Conversion Rate and any adjustments to the
Conversion Rate;
(viii)
that
the Notes with respect to which a Fundamental Change Repurchase
Notice has been delivered by a Holder may be converted only if the
Holder withdraws the Fundamental Change Repurchase Notice in
accordance with the terms of this Indenture;
and
(ix)
the
procedures that Holders must follow to require the Company to
repurchase their Notes.
No
failure of the Company to give the foregoing notices and no defect
therein shall limit the Holders’ repurchase rights or affect
the validity of the proceedings for the repurchase of the Notes
pursuant to this
Section 15.02
.
At the
Company’s request, the Paying Agent shall give such notice in
the Company’s name and at the Company’s expense;
provided
,
however
, that, in all cases, the text
of such Fundamental Change Company Notice shall be prepared by the
Company and delivered to the Paying Agent no later than two (2)
Business Days (or such shorter period as is acceptable to the
Paying Agent) prior to the date the Fundamental Change Company
Notice is to be sent.
(d)
Notwithstanding
the foregoing, no Notes may be repurchased by the Company on any
date at the option of the Holders upon a Fundamental Change if the
principal amount of the Notes has been accelerated, and such
acceleration has not been rescinded, on or prior to such date
(except in the case of an acceleration resulting from a Default by
the Company in the payment of the Fundamental Change Repurchase
Price with respect to such Notes). The Paying Agent will promptly
return to the respective Holders thereof any Physical Notes held by
it during the acceleration of the Notes (except in the case of an
acceleration resulting from a Default by the Company in the payment
of the Fundamental Change Repurchase Price with respect to such
Notes), or any instructions for book-entry transfer of the Notes in
compliance with the procedures of the Depositary shall be deemed to
have been cancelled, and, upon such return or cancellation, as the
case may be, the Fundamental Change Repurchase Notice with respect
thereto shall be deemed to have been withdrawn.
Section
15.03
Withdrawal
of Fundamental Change Repurchase Notice
.
(a) A Fundamental Change Repurchase
Notice may be withdrawn (in whole or in part) by means of a written
notice of withdrawal delivered to the Paying Agent located in the
contiguous United States as notified to Holders and the Trustee in
accordance with this
Section 15.03
at any time
prior to the close of business on the Business Day immediately
preceding the Fundamental Change Repurchase Date,
specifying:
(i)
the
principal amount of the Notes with respect to which such notice of
withdrawal is being submitted, which must be $1,000 or an integral
multiple thereof,
(ii)
if
Physical Notes have been issued, the certificate number of the Note
in respect of which such notice of withdrawal is being submitted,
and
(iii)
the
principal amount, if any, of such Note that remains subject to the
original Fundamental Change Repurchase Notice, which portion must
be in a minimum principal amount of $1,000 or an integral multiple
of $1,000;
provided
,
however
,
that if the Notes are Global Notes, the notice must comply with
appropriate procedures of the Depositary.
Section
15.04
Deposit
of Fundamental Change Repurchase Price
.
(a) The Company will deposit with the
Trustee (or other Paying Agent appointed by the Company, or if the
Company is acting as its own Paying Agent, set aside, segregate and
hold in trust as provided in
Section 4.04
) on or prior
to 11:00 a.m., New York City time, on the Fundamental
Change Repurchase Date an amount of money sufficient to repurchase
all of the Notes to be repurchased at the appropriate Fundamental
Change Repurchase Price. Subject to receipt of funds and/or Notes
by the Trustee (or other Paying Agent appointed by the Company),
payment for Notes surrendered for repurchase (and not withdrawn
prior to the close of business on the Business Day immediately
preceding the Fundamental Change Repurchase Date) will be made on
the later of (i) the Fundamental Change Repurchase Date
(
provided
the Holder has
satisfied the conditions in
Section 15.02
) and
(ii) the time of book-entry transfer or the delivery of such
Note to the Trustee (or other Paying Agent appointed by the
Company) by the Holder thereof in the manner required by
Section 15.02
by mailing checks for the amount payable to the Holders of such
Notes entitled thereto as they shall appear in the Note Register;
provided
,
however
, that payments to the
Depositary shall be made by wire transfer of immediately available
funds to the account of the Depositary or its nominee. The Trustee
or Paying Agent shall, promptly after such payment and upon written
demand by the Company, return to the Company any funds in excess of
the Fundamental Change Repurchase Price.
(b)
If
by 11:00 a.m. New York City time, on the Fundamental Change
Repurchase Date, the Trustee (or other Paying Agent appointed by
the Company) holds money sufficient to make payment on all the
Notes or portions thereof that are to be repurchased on such
Fundamental Change Repurchase Date, then, with respect to the Notes
that have been properly surrendered for repurchase to the Paying
Agent and have not been validly withdrawn, (i) such Notes will
cease to be outstanding, (ii) interest will cease to accrue on
such Notes (whether or not book-entry transfer of the Notes has
been made or the Notes have been delivered to the Trustee or Paying
Agent) and (iii) all other rights of the Holders of such Notes
will terminate (other than the right to receive the Fundamental
Change Repurchase Price and, if applicable, accrued and unpaid
interest).
(c)
Upon
surrender of a Physical Note that is to be repurchased in part
pursuant to
Section 15.02
,
the Company shall execute and the Trustee shall authenticate and
deliver to the Holder a new Physical Note in an authorized
denomination equal in principal amount to the unrepurchased portion
of the Physical Note surrendered.
Section
15.05
Covenant
to Comply with Applicable Laws Upon Repurchase of
Notes
. In connection
with any repurchase offer, the Company will, if
required:
(a)
comply
with the provisions of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange
Act;
(b)
file
a Schedule TO or any other required schedule under the
Exchange Act; and
(c)
otherwise
comply with all federal and state securities laws in connection
with any offer by the Company to repurchase the
Notes;
in each
case, so as to permit the rights and obligations under this
Article 15
to
be exercised in the time and in the manner specified in this
Article 15
.
ARTICLE 16
Section
16.01
Optional
Redemption
. No sinking fund
is provided for the Notes. The Notes shall not be redeemable by the
Company prior to May 6, 2022. On or after May 6, 2022,
the Company may redeem (an “
Optional Redemption
”) for cash all
or any portion of the Notes, at the Redemption Price, if the Last
Reported Sale Price of the Common Stock has been at least 150% of
the Conversion Price then in effect for at least 20 Trading Days
(whether or not consecutive), including the Trading Day immediately
preceding the date on which the Company provides the relevant
Redemption Notice, during any 30 consecutive Trading Day period
ending on, and including, the Trading Day immediately preceding the
date on which the Company provides the Redemption Notice in
accordance with
Section 16.02
.
Section
16.02
Notice
of Optional Redemption; Selection of
Notes
.
(a) In case the Company exercises its Optional Redemption right to
redeem all or, as the case may be, any part of the Notes pursuant
to
Section 16.01
, it shall
fix a date for redemption (each, a “
Redemption Date
”) and it or, at
its written request received by the Trustee not less than five
Business Days prior to the date the Redemption Notice is to be
delivered to the Holders (or such shorter period of time as may be
acceptable to the Trustee), the Trustee, in the name of and at the
expense of the Company, shall deliver or cause to be delivered a
notice of such Optional Redemption (a “
Redemption Notice
”) not less than
50 nor more than 65 Scheduled Trading Days prior to the Redemption
Date to each Holder of Notes so to be redeemed as a whole or in
part;
provided
,
however
, that, if the
Company shall give such notice, it shall also give written notice
of the Redemption Date to the Trustee. The Redemption Date must be
a Business Day. The Company shall not specify a Redemption Date
that falls on or after November 1, 2023.
(b)
The
Redemption Notice, if delivered in the manner herein provided,
shall be conclusively presumed to have been duly given, whether or
not the Holder receives such notice. In any case, failure to give
such Redemption Notice by mail or any defect in the Redemption
Notice to the Holder of any Note designated for redemption as a
whole or in part shall not affect the validity of the proceedings
for the redemption of any other Note.
(c)
Each
Redemption Notice shall specify:
(i)
the
Redemption Date;
(ii)
the
Redemption Price;
(iii)
that
on the Redemption Date, the Redemption Price will become due and
payable upon each Note to be redeemed, and that interest thereon,
if any, shall cease to accrue on and after the Redemption
Date;
(iv)
the
place or places where such Notes are to be surrendered for payment
of the Redemption Price;
(v)
that
Holders may surrender their Notes for conversion at any time prior
to the close of business on the Scheduled Trading Day immediately
preceding the Redemption Date (unless the Company fails to pay the
Redemption Price, in which case a Holder may convert such Notes
until the Business Day immediately preceding the date on which the
Redemption Price has been paid or duly provided
for);
(vi)
the
procedures a converting Holder must follow to convert its Notes and
the Settlement Method and Specified Cash Amount, if
applicable;
(vii)
the
Conversion Rate and, if applicable, the number of Additional Shares
added to the Conversion Rate in accordance with
Section 14.03
;
(viii)
the
CUSIP, ISIN or other similar numbers, if any, assigned to such
Notes; and
(ix)
in
case any Note is to be redeemed in part only, the portion of the
principal amount thereof to be redeemed and on and after the
Redemption Date, upon surrender of such Note, a new Note in
principal amount equal to the unredeemed portion thereof shall be
issued.
A
Redemption Notice shall be irrevocable.
If fewer than all of the outstanding Notes are to be redeemed, the
Notes to be redeemed will be selected according to the applicable
procedures of the Depositary, in the case of Notes represented by a
Global Note, or, in the case of Physical Notes, the Trustee shall
select, pro rata or by lot in such other manner as it shall deem
appropriate and fair, Notes to be redeemed in whole or in part. If
any Note selected for partial redemption is submitted for
conversion in part after such selection, the portion of the Note
submitted for conversion shall be deemed (so far as may be
possible) to be the portion selected for redemption.
Section
16.03
Payment
of Notes Called for Redemption
. (a) If any
Redemption Notice has been given in respect of the Notes in
accordance with
Section 16.02
, the Notes
shall become due and payable on the Redemption Date at the place or
places stated in the Redemption Notice and at the applicable
Redemption Price. On presentation and surrender of the Notes at the
place or places stated in the Redemption Notice, the Notes shall be
paid and redeemed by the Company at the applicable Redemption
Price.
(b)
Prior
to the open of business on the Redemption Date, the Company shall
deposit with the Paying Agent or, if the Company or a Subsidiary of
the Company is acting as the Paying Agent, shall segregate and hold
in trust as provided in
Section 7.05
an amount of cash (in immediately
available funds if deposited on the Redemption Date), sufficient to
pay the Redemption Price of all of the Notes to be redeemed on such
Redemption Date. Subject to receipt of funds by the Paying Agent,
payment for the Notes to be redeemed shall be made on the
Redemption Date for such Notes. The Paying Agent shall, promptly
after such payment and upon written demand by the Company, return
to the Company any funds in excess of the Redemption
Price.
Section
16.04
Restrictions
on Redemption
. The Company may
not redeem any Notes on any date if the principal amount of the
Notes has been accelerated in accordance with the terms of this
Indenture, and such acceleration has not been rescinded, on or
prior to the Redemption Date (except in the case of an acceleration
resulting from a Default by the Company in the payment of the
Redemption Price with respect to such Notes).
ARTICLE 17
Section
17.01
Provisions
Binding on Company’s Successors
.
All the covenants, stipulations,
promises and agreements of the Company contained in this Indenture
shall bind its successors and assigns whether so expressed or
not.
Section
17.02
Official
Acts by Successor Corporation
.
Any act or proceeding by any
provision of this Indenture authorized or required to be done or
performed by any board, committee or Officer of the Company shall
and may be done and performed with like force and effect by the
like board, committee or officer of any corporation or other entity
that shall at the time be the lawful sole successor of the
Company.
Section
17.03
Addresses
for Notices, Etc
. Any notice or
demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders on
the Company shall be deemed to have been sufficiently given or
made, for all purposes if given or served by being deposited
postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company
with the Trustee) to RumbleOn, Inc., 1350 Lakeshore Drive, Suite
160, Coppell, Texas 75019, Attention: General Counsel. Any notice,
direction, request or demand hereunder to the Trustee by any Holder
or by the Company shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing and delivered in
person or by first-class mail (registered or certified, return
receipt requested), facsimile transmission (confirmed by delivery
in Person or by first-class mail (registered or certified, return
receipt requested)) or guaranteed overnight courier at the
Corporate Trust Office, or such other means reasonably acceptable
to the Trustee (it being agreed that such notice to the Trustee
shall be deemed to have been sufficiently given or made, for all
purposes, if it is in writing and actually received by the
Trustee).
The
Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or
communications.
Any
notice or communication delivered or to be delivered to a Holder of
Physical Notes shall be sent to each Holder at its address as it
appears on the Note Register and shall be sufficiently given to it
if so sent within the time prescribed. Any notice or communication
delivered or to be delivered to a Holder of Global Notes shall be
delivered in accordance with the applicable procedures of the
Depositary and shall be sufficiently given to it if so delivered
within the time prescribed.
Failure
to mail or deliver a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other
Holders. If a notice or communication is sent or delivered, as the
case may be, in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section
17.04
Governing
Law; Jurisdiction
.
THIS INDENTURE AND EACH NOTE, AND ANY
CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS
INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICTS OF LAWS PROVISIONS THEREOF).
The
Company irrevocably consents and agrees, for the benefit of the
Holders from time to time of the Notes and the Trustee, that any
legal action, suit or proceeding against it with respect to
obligations, liabilities or any other matter arising out of or in
connection with this Indenture or the Notes may be brought in the
courts of the State of New York or the courts of the United
States located in the Borough of Manhattan, New York City,
New York and, until amounts due and to become due in respect
of the Notes have been paid, hereby irrevocably consents and
submits to the non-exclusive jurisdiction of each such court
in personam
, generally and
unconditionally with respect to any action, suit or proceeding for
itself in respect of its properties, assets and
revenues.
The
Company irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid
actions, suits or proceedings arising out of or in connection with
this Indenture brought in the courts of the State of New York
or the courts of the United States located in the Borough of
Manhattan, New York City, New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient
forum.
Section
17.05
Evidence
of Compliance with Conditions Precedent; Certificates and Opinions
of Counsel to Trustee
.
Upon any application or demand by the
Company to the Trustee to take any action under any of the
provisions of this Indenture, the Trustee shall be entitled to
receive: (a) an Officers’ Certificate stating that, in
the opinion of the signers, all conditions precedent (including any
covenants, compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such
conditions precedent (including any covenants, compliance with
which constitutes a condition precedent) have been complied
with.
Each
Officers’ Certificate and Opinion of Counsel provided for, by
or on behalf of the Company in this Indenture and delivered to the
Trustee with respect to compliance with this Indenture (other than
the Officers’ Certificates provided for in
Section 4.08
) shall
include (a) a statement that the person signing such
certificate is familiar with the requested action and this
Indenture; (b) a brief statement as to the nature and scope of
the examination or investigation upon which the statement contained
in such certificate is based; (c) a statement that, in the
judgment of such person, he or she has made such examination or
investigation as is necessary to enable him or her to express an
informed judgment as to whether or not such action is permitted by
this Indenture and as to whether all conditions precedent
(including any covenants, compliance with which constitutes a
condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(d) a statement as to whether or not, in the judgment of such
person, such action is permitted by this Indenture and all such
conditions precedent (including any covenants, compliance with
which constitutes a condition precedent) have been complied
with.
Section
17.06
Legal
Holidays
.
In any case where any Interest
Payment Date, any Redemption Date, any Fundamental Change
Repurchase Date or the Maturity Date is not a Business Day, then
any action to be taken on such date need not be taken on such date,
but may be taken on the next succeeding Business Day with the same
force and effect as if taken on such date, and no interest shall
accrue in respect of the delay.
Section
17.07
No
Security Interest Created
.
Nothing in this Indenture or in the
Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any
jurisdiction.
Section
17.08
Benefits
of Indenture
.
Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than
the Holders, the parties hereto, any Paying Agent, any Conversion
Agent, any authenticating agent, any Note Registrar and their
successors hereunder, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section
17.09
Table
of Contents, Headings, Etc
. The table of
contents and the titles and headings of the articles and sections
of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions
hereof.
Section
17.10
Authenticating
Agent
.
The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf
and subject to its direction in the authentication and delivery of
Notes in connection with the original issuance thereof and
transfers and exchanges of Notes hereunder, including under
Section 2.04
,
Section 2.05
,
Section 2.06
,
Section 2.07
,
Section 10.04
and
Section 15.04
as fully to
all intents and purposes as though the authenticating agent had
been expressly authorized by this Indenture and those Sections to
authenticate and deliver Notes. For all purposes of this Indenture,
the authentication and delivery of Notes by the authenticating
agent shall be deemed to be authentication and delivery of such
Notes “by the Trustee” and a certificate of
authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement
hereunder or in the Notes for the Trustee’s certificate of
authentication. Such authenticating agent shall at all times be a
Person eligible to serve as trustee hereunder pursuant to
Section 7.08
.
Any
corporation or other entity into which any authenticating agent may
be merged or converted or with which it may be consolidated, or any
corporation or other entity resulting from any merger,
consolidation or conversion to which any authenticating agent shall
be a party, or any corporation or other entity succeeding to the
corporate trust business of any authenticating agent, shall be the
successor of the authenticating agent hereunder, if such successor
corporation or other entity is otherwise eligible under this
Section 17.10
,
without the execution or filing of any paper or any further act on
the part of the parties hereto or the authenticating agent or such
successor corporation or other entity.
Any
authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The
Trustee may at any time terminate the agency of any authenticating
agent by giving written notice of termination to such
authenticating agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any
time any authenticating agent shall cease to be eligible under this
Section, the Trustee may appoint a successor authenticating agent
(which may be the Trustee), shall give written notice of such
appointment to the Company and shall deliver notice of such
appointment to all Holders.
The
Company agrees to pay to the authenticating agent from time to time
compensation for its services as agreed to in writing
.
The
provisions of
Article 7
and
Section 8.03
and this
Section 17.10
shall be applicable to any authenticating agent.
If an
authenticating agent is appointed pursuant to this
Section 17.10
, the Notes
may have endorsed thereon, in addition to the Trustee’s
certificate of authentication, an alternative certificate of
authentication in the following form:
as
Authenticating Agent, certifies that this is one
of the
Notes described in the within-named
Indenture.
By:
Authorized
Officer
Section
17.11
Execution
in Counterparts
.
This Indenture may be executed in any
number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same
instrument. The exchange of copies of this Indenture and of
signature pages by facsimile or PDF transmission shall constitute
effective execution and delivery of this Indenture as to the
parties hereto and may be used in lieu of the original Indenture
for all purposes. Signatures of the parties hereto transmitted by
facsimile or PDF shall be deemed to be their original signatures
for all purposes.
Section
17.12
Severability
.
In the event any provision of this Indenture or in the Notes shall
be invalid, illegal or unenforceable, then (to the extent permitted
by law) the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or
impaired.
Section
17.13
Waiver
of Jury Trial
.
EACH OF THE COMPANY AND THE TRUSTEE
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
17.14
Force
Majeure
.
In no event shall the Trustee (in any
of its capacities hereunder) be responsible or liable for any
failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond
its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or
computer (software and hardware) services; it being understood that
the Trustee shall use reasonable efforts that are consistent with
accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances.
Section
17.15
Calculations
.
Except as otherwise provided herein, the Company shall be
responsible for making all calculations called for under the Notes.
These calculations include, but are not limited to, determinations
of the Last Reported Sale Prices of the Common Stock, the Daily
VWAPs, the Daily Conversion Values, the Daily Settlement Amounts,
accrued interest payable on the Notes, any Interest Make-Whole
Payment, the Conversion Rate of the Notes and Defaulted Amounts.
The Company shall make all these calculations in good faith and,
absent manifest error, the Company’s calculations shall be
final and binding on Holders of Notes. The Company shall provide a
schedule of its calculations to each of the Trustee, the Paying
Agent and the Conversion Agent, and each of the Trustee, the Paying
Agent and Conversion Agent is entitled to rely conclusively and
without liability upon the accuracy of the Company’s
calculations without independent verification. The Trustee will
forward the Company’s calculations to any registered Holder
of Notes upon the request of that Holder at the sole cost and
expense of the Company. The Trustee, the Paying Agent and any other
Conversion Agent, and their respective agents, shall not be under
any duty or responsibility to monitor the accuracy of any
calculation made by the Company.
Section
17.16
USA
PATRIOT Act
.
The parties hereto acknowledge that
in accordance with Section 326 of the USA PATRIOT Act, the
Trustee, like all financial institutions and in order to help fight
the funding of terrorism and money laundering, is required to
obtain, verify, and record information that identifies each person
or legal entity that establishes a relationship or opens an account
with the Trustee. The parties to this Indenture agree that they
will provide the Trustee with such information as it may request in
order for the Trustee to satisfy the requirements of the USA
PATRIOT Act.
[
Remainder
of page intentionally left blank
]
IN WITNESS WHEREOF
, the parties hereto
have caused this Indenture to be duly executed as of the date first
written above.
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RUMBLEON,
INC.
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By:
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/s/ Steven R.
Berrard
|
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Name: Steven R.
Berrard
|
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Title:
Chief Financial Officer
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WILMINGTON TRUST, NATIONAL ASSOCIATION
,
as Trustee
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By:
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/s/ Jane Y.
Schweiger
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Name: Jane Y.
Schweiger
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Title:
Vice President
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EXHIBIT A
[
FORM
OF FACE OF NOTE
]
[INCLUDE
FOLLOWING LEGEND IF A GLOBAL NOTE]
[UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE
FOLLOWING LEGEND IF A RESTRICTED SECURITY]
[THIS
SECURITY AND THE CLASS B COMMON STOCK, IF ANY, ISSUABLE UPON
CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
ACQUIRER:
(1) REPRESENTS
THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A
“QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE
INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,
AND
(2) AGREES
FOR THE BENEFIT OF RUMBLEON, INC. (THE “COMPANY”) THAT
IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY
OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT:
(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT
TO, AND IN ACCORDANCE WITH A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER,
OR
(C) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR
(D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR
TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE
RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN
ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS
BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.]
RumbleOn,
Inc.
6.75%
Convertible Senior Note due 2024
No. [
] [Initially]
1
$[ ]
CUSIP
No. [ ]
RumbleOn, Inc., a
corporation duly organized and validly existing under the laws of
the State of Delaware (the “
Company
,” which term includes any
successor corporation or other entity under the Indenture referred
to on the reverse hereof), for value received hereby promises to
pay to [CEDE & CO.]
2
[ ]
3
, or registered assigns, the principal
sum [as set forth in the “Schedule of Exchanges of
Notes” attached hereto]
4
[of $[ ]]
5
, which amount, taken together with the
principal amounts of all other outstanding Notes, shall not exceed
$30,000,000 in aggregate at any time, in accordance with the rules
and procedures of the Depositary, on May 1, 2024, and interest
thereon as set forth below.
This
Note shall bear interest at the rate of 6.75% per year from, and
including, May 14, 2019, or from, and including, the most recent
date to which interest had been paid or provided for to, but
excluding, the next scheduled Interest Payment Date until
May 1, 2024. Interest is payable semi-annually in arrears on
each May 1 and November 1, commencing on November 1,
2019, to Holders of record at the close of business on the
preceding April 15 and October 15 (whether or not such day is
a Business Day), respectively. Additional Interest will be payable
as set forth in
Section 4.06(d)
and
Section 6.03
of the within-mentioned Indenture, and pursuant to the Registration
Rights Agreement, and any reference to interest on, or in respect
of, any Note therein shall be deemed to include Additional Interest
if, in such context, Additional Interest is, was or would be
payable pursuant to any of such
Section 4.06(d)
or
Section 6.03
,
or the Registration Rights Agreement, and any express mention of
the payment of Additional Interest in any provision therein shall
not be construed as excluding Additional Interest in those
provisions thereof where such express mention is not
made.
Any
Defaulted Amounts shall accrue interest per annum at the rate borne
by the Notes, subject to the enforceability thereof under
applicable law, from, and including, the relevant payment date to,
but excluding, the date on which such Defaulted Amounts shall have
been paid by the Company, at its election, in accordance with
Section 2.03(c)
of the
Indenture.
The
Company shall pay the principal of and interest on this Note, if
and so long as such Note is a Global Note, by wire transfer in
immediately available funds to the Depositary or its nominee, as
the case may be, as the registered Holder of such Note. As provided
in and subject to the provisions of the Indenture, the Company,
through the Paying Agent, shall pay the principal of any Notes
(other than Notes that are Global Notes) at the office or agency
designated by the Company for that purpose. The Company has
initially designated the Trustee as its Paying Agent, Note
Registrar, Custodian and Conversion Agent in respect of the Notes
and the Corporate Trust Office as a place where Notes may be
presented for payment or for registration of transfer and
exchange.
1
Include if a global note.
2
Include if a global note.
3
Include if a physical note.
4
Include if a global note.
5
Include if a physical note.
Reference is made
to the further provisions of this Note set forth on the reverse
hereof, including, without limitation, provisions giving the Holder
of this Note the right to convert this Note into cash, shares of
Common Stock or a combination of cash and shares of Common Stock,
as applicable, on the terms and subject to the limitations set
forth in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this
place.
This
Note, and any claim, controversy or dispute arising under or
related to this Note, shall be construed in accordance with and
governed by the laws of the State of New York (without regard to
the conflicts of laws provisions thereof).
In the
case of any conflict between this Note and the Indenture, the
provisions of the Indenture shall control and govern.
This
Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been signed
manually by the Trustee or a duly authorized authenticating agent
under the Indenture.
[
Remainder
of page intentionally left blank
]
IN WITNESS WHEREOF
, the Company has
caused this Note to be duly executed.
RUMBLEON,
INC.
Name:
Title:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as
Trustee, certifies that this is
one of
the Notes described in the within-named
Indenture.
By:
Authorized
signatory
[
FORM
OF REVERSE OF NOTE
]
RumbleOn,
Inc.
6.75%
Convertible Senior Note due 2024
This
Note is one of a duly authorized issue of Notes of the Company,
designated as its 6.75% Convertible Senior Notes due 2024 (the
“
Notes
”),
limited to the aggregate principal amount of $30,000,000, all
issued or to be issued under and pursuant to an Indenture dated as
of May 14, 2019 (the “
Indenture
”), between the Company
and Wilmington Trust, National Association (the “
Trustee
”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the Holders of the Notes. Capitalized terms used in this Note and
not defined in this Note shall have the respective meanings set
forth in the Indenture.
In case
certain Events of Default shall have occurred and be continuing,
the principal of, and interest on, all Notes may be declared, by
either the Trustee or Holders of at least 25% in aggregate
principal amount of Notes then outstanding, and upon said
declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions and certain exceptions set
forth in the Indenture.
Subject
to the terms and conditions of the Indenture, the Company will make
all payments and deliveries in respect of the Fundamental Change
Repurchase Price on the Fundamental Change Repurchase Date (if
applicable), the Redemption Price on any Redemption Date (if
applicable) and the principal amount on the Maturity Date, as the
case may be, to the Holder who surrenders a Note to a Paying Agent
to collect such payments in respect of the Note. The Company will
pay cash amounts in money of the United States that at the time of
payment is legal tender for payment of public and private
debts.
The
Indenture contains provisions permitting the Company and the
Trustee in certain circumstances, without the consent of the
Holders of the Notes, and in certain other circumstances, with the
consent of the Holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures
modifying the terms of the Indenture and the Notes as described
therein. It is also provided in the Indenture that, subject to
certain exceptions, the Holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf
of the Holders of all of the Notes waive any past Default or Event
of Default under the Indenture and its consequences.
Each
Holder shall have the right to receive payment or delivery, as the
case may be, of (x) the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, (y) accrued and unpaid interest, if any, on, and
(z) the consideration due upon conversion of, this Note at the
place, at the respective times, at the rate and in the lawful money
or shares of Common Stock, as the case may be, herein
prescribed.
The
Notes are issuable in registered form without coupons in minimum
denominations of $1,000 principal amount and integral multiples
thereof. At the office or agency of the Company referred to on the
face hereof, and in the manner and subject to the limitations
provided in the Indenture, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized
denominations, without payment of any service charge but, if
required by the Company or Trustee, with payment of a sum
sufficient to cover any transfer or similar tax that may be imposed
in connection therewith as a result of the name of the Holder of
the new Notes issued upon such exchange of Notes being different
from the name of the Holder of the old Notes surrendered for such
exchange.
The
Notes shall be redeemable at the Company’s option on or after
May 6, 2022 in accordance with the terms and subject to the
conditions specified in the Indenture. No sinking fund is provided
for the Notes.
Upon
the occurrence of a Fundamental Change, the Holder has the right,
at such Holder’s option, to require the Company to repurchase
for cash all of such Holder’s Notes or any portion thereof
(in principal amounts of $1,000 or integral multiples of $1,000 in
excess thereof) on the Fundamental Change Repurchase Date at a
price equal to the Fundamental Change Repurchase
Price.
Subject
to the provisions of the Indenture, the Holder hereof has the
right, at its option, during certain periods and upon the
occurrence of certain conditions specified in the Indenture, prior
to the close of business on the Business Day immediately preceding
the Maturity Date, to convert any Notes or portion thereof that is
$1,000 or an integral multiple thereof, into cash, shares of Common
Stock or a combination of cash and shares of Common Stock, as
applicable, at the Conversion Rate specified in the Indenture, as
adjusted from time to time as provided in the
Indenture.
For
any Conversion Date that occurs on or after May 14, 2020 or after
the occurrence of any 30 Trading Day period during which the Last
Reported Sale Price of the Common Stock has been at least 150% of
the Conversion Price then in effect for at least 20 Trading Days
(whether or not consecutive), the Company shall, in addition to the
other consideration payable or deliverable in connection with any
conversion of Notes, make an Interest Make-Whole Payment as
provided in the Indenture.
ABBREVIATIONS
The
following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM
= as tenants in common
UNIF
GIFT MIN ACT = Uniform Gifts to Minors Act
CUST =
Custodian
TEN ENT
= as tenants by the entireties
JT TEN
= joint tenants with right of survivorship and not as tenants in
common
Additional
abbreviations may also be used though not in the above
list.
SCHEDULE OF EXCHANGES OF NOTES
RumbleOn,
Inc.
6.75%
Convertible Senior Notes due 2024
The
initial principal amount of this Global Note is DOLLARS ($[ ]). The
following increases or decreases in this Global Note have been
made:
Date of exchange
|
Amount of decrease in principal amount of this Global
Note
|
Amount of increase in principal amount of this Global
Note
|
Principal amount of this Global Note following such decrease or
increase
|
Signature of authorized signatory of Trustee or
Custodian
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ATTACHMENT 1
[
FORM
OF NOTICE OF CONVERSION
]
To:
Wilmington Trust,
National Association
Global
Capital Markets
50
South Sixth Street, Suite 1290
Minneapolis,
Minnesota 55402
Attn:
RumbleOn Notes Administrator
The
undersigned registered owner of this Note hereby exercises the
option to convert this Note, or the portion hereof (that is $1,000
principal amount or an integral multiple thereof) below designated,
into cash, shares of Common Stock or a combination of cash and
shares of Common Stock, as applicable, in accordance with the terms
of the Indenture referred to in this Note, and directs that any
cash payable and any shares of Common Stock issuable and
deliverable upon such conversion, together with any cash for any
fractional share, and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the registered
Holder hereof unless a different name has been indicated below. If
any shares of Common Stock or any portion of this Note not
converted are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all documentary, stamp or
similar issue or transfer taxes, if any in accordance with
Section 14.02(d)
and
Section 14.02(e)
of the
Indenture. Any amount required to be paid to the undersigned on
account of interest accompanies this Note. Capitalized terms used
herein but not defined shall have the meanings ascribed to such
terms in the Indenture.
Signature(s)
Signature
Guarantee
Signature(s)
must be guaranteed by
an
eligible Guarantor Institution
(banks,
stock brokers, savings and
loan
associations and credit unions)
with
membership in an approved
signature
guarantee medallion program
pursuant
to Securities and Exchange
Commission
Rule 17Ad-15 if shares
of
Common Stock are to be issued, or
Notes
are to be delivered, other than
to and
in the name of the registered holder.
Fill in
for registration of shares if to be issued,
and
Notes if to be delivered, other than to and in
the
name of the registered holder:
(Name)
(Street
Address)
(City,
State and Zip Code)
Please
print name and address
Principal amount to
be converted (if less than all):
$_______,000
NOTICE:
The above signature(s) of the Holder(s) hereof must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change
whatever.
Social
Security or Other Taxpayer
Identification
Number
ATTACHMENT 2
[
FORM
OF FUNDAMENTAL CHANGE REPURCHASE NOTICE
]
To:
Wilmington Trust,
National Association
Global
Capital Markets
50
South Sixth Street, Suite 1290
Minneapolis,
Minnesota 55402
Attn:
RumbleOn Notes Administrator
The
undersigned registered owner of this Note hereby acknowledges
receipt of a notice from RumbleOn, Inc. (the “
Company
”) as to the occurrence of
a Fundamental Change with respect to the Company and specifying the
Fundamental Change Repurchase Date and requests and instructs the
Company to pay to the registered holder hereof in accordance with
Section 15.02
of the Indenture referred to in this Note (1) the entire
principal amount of this Note, or the portion thereof (that is
$1,000 principal amount or an integral multiple thereof) below
designated, and (2) if such Fundamental Change Repurchase Date
does not fall during the period after a Regular Record Date and on
or prior to the corresponding Interest Payment Date, accrued and
unpaid interest, if any, thereon to, but excluding, such
Fundamental Change Repurchase Date. Capitalized terms used herein
but not defined shall have the meanings ascribed to such terms in
the Indenture.
In the
case of Physical Notes, the certificate numbers of the Notes to be
repurchased are as set forth below:
Signature(s)
Social
Security or Other Taxpayer
Identification
Number
Principal amount to
be repaid (if less than all):
$_______,000
NOTICE:
The above signature(s) of the Holder(s) hereof must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change
whatever.
ATTACHMENT 3
[
FORM
OF ASSIGNMENT AND TRANSFER
]
Wilmington
Trust, National Association
Global
Capital Markets
50
South Sixth Street, Suite 1290
Minneapolis,
Minnesota 55402
Attn:
RumbleOn Notes Administrator
For
value received ____________________ hereby sell(s), assign(s) and
transfer(s) unto
_____________________________________________________________
_____________________________________________________________
(Please
insert social security or Taxpayer Identification Number of
assignee)
the
within Note, and hereby irrevocably constitutes and appoints
attorney to transfer the said Note on the books of the Company,
with full power of substitution in the premises.
In
connection with any transfer of the within Note occurring during
the time that such Note includes the legend set forth in Section
2.05(c), the undersigned confirms that such Note is being
transferred:
To RumbleOn, Inc. or a subsidiary thereof; or
Pursuant to a registration statement that has become or been
declared effective under the Securities Act of 1933, as amended;
or
Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended, or any other available
exemption from the registration requirements of the Securities Act
of 1933, as amended.
Signature(s)
Signature Guarantee
Signature(s)
must be guaranteed
by an
eligible Guarantor Institution
(banks,
stock brokers, savings and
loan
associations and credit unions)
with
membership in an approved
signature
guarantee medallion
program
pursuant to Securities and
Exchange
Commission Rule 17Ad-15
if
Notes are to be delivered, other than
to and
in the name of the registered holder.
NOTICE:
The signature on the assignment
must
correspond with the name as written
upon
the face of the Note in every particular
without
alteration or enlargement or any
change
whatever.
$30,000,000
RUMBLEON, INC.
6.75% Convertible Senior Notes Due 2024
Registration Rights Agreement
May
14, 2019
JMP Securities LLC
600 Montgomery Street, Suite 1100
San Francisco, CA 94111
RumbleOn, Inc., a Nevada corporation (the
“
Company
”), proposes to issue and sell to JMP
Securities LLC (the “
Initial
Purchaser
”), pursuant to
the purchase agreement dated May 9, 2019, between the Company and
the Initial Purchaser (the “
Purchase
Agreement
”), $30,000,000
aggregate principal amount of its 6.75% Convertible Senior Notes
due 2024 (the “
Notes
”) upon the terms and subject to the
conditions set forth in the Purchase Agreement.
As
an inducement to the Initial Purchaser to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of
the Initial Purchaser thereunder, the Company agrees with the
Initial Purchaser, for the benefit of the Holders (as defined
below), as follows:
Capitalized
terms used but not defined herein shall have the meanings given to
such terms in the Purchase Agreement. For purposes of this
Registration Rights Agreement, the following terms shall have the
following meanings:
(a)
“
Additional
Interest
” has the meaning
assigned thereto in Section 2(d).
(b)
“
Additional
Interest Payment Date
”
has the meaning assigned thereto in Section
2(d).
(c)
“
Affiliate
”
has the meaning set forth in Rule 405 under the Securities Act,
except as otherwise expressly provided herein.
(d)
“
Agreement
”
means this Registration Rights Agreement, as the same may be
amended from time to time pursuant to the terms
hereof.
(e)
“
Automatic
Shelf Registration Statement
” has the meaning set forth in Rule 405
under the Securities Act.
(f)
“
Business
Day
” means any day that
is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain
closed.
(g)
“
Commission
”
means the Securities and Exchange Commission, or any other federal
agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular
purpose.
(h)
“
Company
”
has the meaning assigned thereto in the first paragraph of this
Agreement.
(i)
“
Deferral
Notice
” has the meaning
assigned thereto in Section 3(b).
(j)
“
Deferral
Period
” has the meaning
assigned thereto in Section 3(b).
(k)
“
Effective
Period
” has the meaning
assigned thereto in Section 2(a).
(l)
“
Exchange
Act
” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
(m)
“
FINRA
”
means the Financial Industry Regulatory Authority,
Inc.
(n)
“
Holder
”
means each holder, from time to time, of Registrable Securities
(including the Initial Purchaser).
(o)
“
Indemnified
Holder
” has the meaning
assigned thereto in Section 6(a).
(p)
“
Indenture
”
means the Indenture dated as of May 14, 2019 between the Company
and the Trustee, pursuant to which the Notes are being
issued.
(q)
“
Initial
Purchaser
” has the
meaning assigned thereto in the first paragraph of this
Agreement.
(r)
“
Last
Reported Sale Price
” has
the meaning assigned to it in the Indenture.
(s)
“
Material
Event
” has the meaning
assigned thereto in Section 3(a)(iv).
(t)
“
Majority
Holders
” means, on any
date, the holders of the majority in aggregate amount of the
Registrable Securities; provided that such aggregate amount, with
respect to Notes that are Registrable Securities will be based on
the aggregate principal amount of Notes that are Registrable
Securities, and with respect to Shares that are Registrable
Securities, will be based on the average of the Last Reported Sale
Prices of the Company’s Common Stock for each of five
consecutive trading days ending on a date chosen by the Company in
a reasonable manner to effect the intent of this Agreement
multiplied by the number of such Shares that are Registrable
Securities; provided further that whenever the consent or approval
of the Majority Holders is required hereunder, any Registrable
Securities owned directly or indirectly by the Company or any
Affiliate shall not be counted in determining whether such consent
or approval was given by the Majority Holders.
(u)
“
Notice
and Questionnaire
” means
a written notice delivered to the Company containing substantially
the information called for by the Form of Selling Securityholder
Notice and Questionnaire attached as Annex A to the Offering
Memorandum.
(v)
“
Notice
Holder
” means, on any
date, any Holder that has delivered a properly completed Notice and
Questionnaire to the Company on or prior to such
date.
(w)
“
Notes
”
has the meaning assigned thereto in the first paragraph of this
Agreement.
(x)
“
Offering
Memorandum
” means the
Final Offering Memorandum dated May 9, 2019 relating to the offer
and sale of the Notes.
(y)
“
Person
”
means a corporation, limited liability company, association,
partnership, organization, business, individual, government or
political subdivision thereof or governmental
agency.
(z)
“
Prospectus
”
means the prospectus included in any Shelf Registration Statement
(including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A,
430B or 430C under the Securities Act), as amended or supplemented
by any amendment or prospectus supplement, including post-effective
amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such
Prospectus.
(aa) “
Purchase
Agreement
” has the
meaning assigned thereto in the first paragraph of this
Agreement.
(bb) “
Registrable
Securities
” means the
Securities;
provided, however,
that such Securities shall not be
Registrable Securities if as of the applicable date of
determination (i) such Securities have ceased to be outstanding;
(ii) in the circumstances contemplated by Section 2(a), a
registration statement registering such Securities under the
Securities Act has been declared or becomes effective and such
Securities have been sold or otherwise transferred or disposed of
by the Holder thereof pursuant to such effective registration
statement; or (iii) Securities that have been transferred or sold
in a transaction in which the Company delivered a new security in
place of the Securities and such new security (x) is not subject to
transfer restrictions under the Securities Act, (y) does not bear a
restrictive legend and (z) is assigned an unrestricted
CUSIP.
(cc) “
Registration
Default
” has the meaning
assigned thereto in Section 2(d).
(dd) “
Registration
Expenses
” has the meaning
assigned thereto in Section 5.
(ee) “
Rule 144
,” “
Rule 144A
,” “
Rule 405,
” “
Rule 415
” and “
Rule 433
” mean, in each case, such rule as
promulgated under the Securities Act.
(ff)
“
Securities
” means the Notes and the
Shares.
(gg) “
Securities
Act
” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
(hh) “
Shares
” means the shares of Class B Common Stock
of the Company, par value $0.001 per share (the
“
Common Stock
”), as of the date hereof (and subject to
Section 14.07 of the Indenture), into which the Notes are
convertible or that have been issued upon any conversion of Notes
into Common Stock of the Company, including any Interest Make-Whole
Payment (as defined in the Indenture).
(ii)
“
Shelf
Inspectors
” has the
meaning assigned thereto in Section 3(a)(vii).
(jj)
“
Shelf
Registration Statement
”
means the shelf registration statement referred to in Section 2(a),
as amended or supplemented by any amendment or supplement,
including post-effective amendments and any additional information
contained in a form of prospectus or prospectus supplement that is
deemed retroactively to be a part of the Shelf Registration
Statement pursuant to Rules 430A, 430B or 430C, and all materials
incorporated by reference or explicitly deemed to be incorporated
by reference in such Shelf Registration Statement, which may be an
Automatic Shelf Registration Statement.
(kk) “
Special
Counsel
” shall have the
meaning assigned thereto in Section 5.
(ll)
“
Trust
Indenture Act
” means the
Trust Indenture Act of 1939, as amended, or any successor thereto,
and the rules, regulations and forms promulgated thereunder, all as
the same shall be amended from time to time.
(mm) “
Trustee
” shall have the meaning assigned such term
in the Indenture.
Unless
the context otherwise requires, any reference herein to a
“Section” or “clause” refers to a Section
or clause, as the case may be, of this Agreement, and the words
“herein,” “hereof” and
“hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Section or
other subdivision. Unless the context otherwise requires, any
reference to a statute, rule or regulation refers to the same
(including any successor statute, rule or regulation thereto) as it
may be amended from time to time.
2.
Registration Under the Securities Act.
(a)
The
Company shall file an Automatic Shelf Registration Statement, if
the Company is eligible to do so and has not already done so
(provided such previously filed Automatic Shelf Registration
Statement covers all Holders of Registrable Securities determined
as of the date such subsequent obligation arose), and, if the
Company is not eligible for an Automatic Shelf Registration
Statement, then in lieu of the foregoing the Company shall file a
Shelf Registration Statement for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the
Registrable Securities pursuant to Rule 415 or any similar rule
that may be adopted by the Commission, and use its commercially
reasonable efforts to cause the Shelf Registration Statement to
become or be declared effective under the Securities Act on the day
that is 120 days after the date of the Offering Memorandum. It
being understood that if there are no Registrable Securities
entitled to be included in the Shelf Registration Statement at such
time that the Company shall have no obligation to file such Shelf
Registration Statement at such time.
The Company agrees to use its commercially
reasonable efforts to keep such Shelf Registration Statement
continuously effective, subject to Section 3(b), until the earliest
of (x) the date by which all Registrable Securities have been sold
pursuant to such Shelf Registration Statement; and (y) such date as
each of the Registrable Securities covered by the Shelf
Registration Statement ceases to be a Registrable Security (the
“
Effective
Period
”).
(b)
The
Company further agrees that it shall cause the Shelf Registration
Statement, the related Prospectus and any amendment or supplement
thereto, as of the effective date of the Shelf Registration
Statement, as of the time of sale of any Securities under such
Shelf Registration Statement, and as of the date of any such
amendment or supplement, (i) to comply in all material respects
with the applicable requirements of the Securities Act and (ii) not
to contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order
to make the statements therein (in the case of the Prospectus, in
the light of the circumstances under which they were made) not
misleading, and the Company agrees to furnish to the Holders such
number of copies as such Holders may reasonably request of any
supplement or amendment prior to its being used or promptly
following its filing with the Commission;
provided, however,
that the Company shall have no
obligation to deliver to Holders copies of any amendment consisting
exclusively of an Exchange Act report or other Exchange Act filing
otherwise publicly available on the Commission’s Edgar
database. If the Shelf Registration Statement, as amended or
supplemented from time to time, ceases to be effective for any
reason at any time during the Effective Period (other than because
all Registrable Securities registered thereunder shall have been
sold pursuant thereto or shall have otherwise ceased to be
Registrable Securities), the Company shall use its commercially
reasonable efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof.
(c)
Each
Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to the Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(c)
and Section 3(c) and Section 4 hereof. From and after the date the
Shelf Registration Statement is initially effective and until the
tenth (10
th
)
Business Day prior to the expiration of the Effective Period, the
Company shall, as promptly as is reasonably practicable after the
date a Notice and Questionnaire is delivered by a Notice Holder,
and in any event within (x) ten (10) Business Days after the date
such Notice and Questionnaire is received by the Company, (y) if a
Notice and Questionnaire is so received during a Deferral Period,
ten (10) Business Days after the expiration of such Deferral Period
or (z) if a Notice and Questionnaire is received prior to a
Deferral Period, but a Deferral Period occurs prior to ten (10)
Business Days after such receipt, ten (10) Business Days after the
expiration of such Deferral Period,
(i)
if
required by applicable law, file with the Commission a
post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required
document so that the Holder delivering such Notice and
Questionnaire is named as a selling security holder in the Shelf
Registration Statement and the related Prospectus in such a manner
as to permit such Holder to deliver such Prospectus to purchasers
of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement and such amendment is not
automatically effective, use its commercially reasonable efforts to
cause such post-effective amendment to be declared or to otherwise
become effective under the Securities Act as promptly as is
reasonably practicable;
(ii)
provide
such Holder with as many copies of any documents filed pursuant to
Section 2(c)(i) as such Holder may reasonably request in connection
with the Securities covered by such Holder’s Notice and
Questionnaire; and
(iii)
notify
such Holder as promptly as reasonably practicable after the
effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(c)(i);
provided that
if such Notice
and Questionnaire is delivered during a Deferral Period, the
Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in this Section
2(c) above upon expiration of the Deferral Period in accordance
with Section 3(b). Notwithstanding anything contained herein to the
contrary, the Company shall be under no obligation to name any
Holder that is not a Notice Holder as a selling securityholder in
any Shelf Registration Statement or related Prospectus or
prospectus supplement;
provided, however,
that any Holder that becomes a Notice
Holder pursuant to the provisions of this Section 2(c) (whether or
not such Holder was a Notice Holder at the time the Shelf
Registration Statement was declared or otherwise became effective)
shall be named as a selling securityholder in the Shelf
Registration Statement or related Prospectus in accordance with the
requirements of this Section 2(c). Notwithstanding the forgoing, in
no event shall the Company be required to file more than one
post-effective amendment to the Shelf Registration Statement
pursuant to Section 2(c)(i) during any 45-day
period.
(d)
If
any of the following events (any such event a
“
Registration
Default
”) shall occur,
then additional interest (the “
Additional
Interest
”) shall become
payable by the Company to Holders in respect of the Notes as
follows:
(i)
if
on the day that is 120 days after the date of the Offering
Memorandum, Registrable Securities are held by any Person other
than the Company or an Initial Purchaser and the Shelf Registration
Statement has not been filed with and declared effective by the
Commission by such date (other than pursuant to Section 3(b)
hereof), and the Company does not file and have declared effective
a Shelf Registration Statement within five (5) Business Days, then,
commencing on the day following the Registration Default,
Additional Interest shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of
0.50% per annum;
(ii)
[Reserved];
(iii)
if
the Shelf Registration Statement has become or been declared
effective but such Shelf Registration Statement ceases to be
effective or the prospectus contained therein ceases to be usable
in connection with the resales of Registrable Securities at any
time during the Effective Period (other than pursuant to Section
3(b) hereof), and the Company does not cure the Registration
Default within five (5) Business Days by a post-effective amendment
or a report filed pursuant to the Exchange Act, then, commencing on
the day such Shelf Registration Statement ceases to be effective,
Additional Interest shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of
0.50% per annum;
(iv)
if
the aggregate duration of Deferral Periods in any period exceeds
the number of days permitted in respect of such period pursuant to
Section 3(b) hereof, then, commencing on the day the aggregate
duration of Deferral Periods in any period exceeds the number of
days permitted in respect of such period, Additional Interest shall
accrue on the principal amount of the outstanding Notes that are
Registrable Securities at a rate of 0.50% per annum;
provided, however,
that the Additional Interest rate on
the Notes shall not exceed in the aggregate 0.50% per annum and
shall not be payable under more than one clause above for any given
period of time;
provided
further
, however, that
Additional Interest on the Notes that are Registrable Securities as
a result of clauses (i) through (iv) above, shall cease to accrue
upon the earlier of (1) the filing and effectiveness of the Shelf
Registration Statement (in the case of clause (i) above), (2) the
effectiveness of the Shelf Registration Statement which had ceased
to remain effective (in the case of clause (iii) above), (3) the
termination of the Deferral Period that caused the limit on the
aggregate duration of Deferral Periods in a period set forth in
Section 3(b) to be exceeded (in the case of clause (iv) above), (4)
the date the Notes cease to be Registrable Securities or (5) the
date the Notes cease to be outstanding (as determined in accordance
with the terms of the Indenture).
Additional Interest on the Notes, if any, will be
payable in arrears in cash on May 1 and November 1 of each year
(the “
Additional Interest Payment
Date
”) to holders of
record of outstanding Notes that are Registrable Securities at the
close of business on April 15 or October 15 (whether or not a
Business Day), as the case may be, immediately preceding the
relevant Additional Interest Payment Date;
provided
that (x) any accrued and unpaid Additional
Interest with respect to any Notes or portion thereof submitted for
conversion shall be paid in the manner and to the extent provided
for the payment of interest in Section 14.02(h) of the Indenture
and (y) that any accrued and unpaid Additional Interest with
respect to any Notes or portion thereof submitted for repurchase on
a Fundamental Change Repurchase Date (as defined in the Indenture),
and not withdrawn in compliance with Section 15.03 of the
Indenture, shall be paid in the manner provided for the payment of
interest in Section 15.02(a) of the Indenture. Following the cure
of all Registration Defaults requiring the payment of Additional
Interest to the Holders of Notes that are Registrable Securities
pursuant to this Section 2(d), the accrual of Additional Interest
will cease (without in any way limiting the effect of any
subsequent Registration Default requiring the payment of Additional
Interest). Additional Interest on the Notes, if any, will accrue
beginning on the date provided for in clauses 2(d)(i) through (iv)
above, as applicable, to, but excluding, the date on which all
Registration Defaults have been cured. If a Holder converts some or
all of the Notes into Shares, such Holder will not be entitled to
receive Additional Interest on such Shares.
The
Company shall notify the Trustee as promptly as reasonably
practicable upon the happening of each and every Registration
Default. The Trustee shall be entitled, on behalf of Holders, to
seek any available remedy for the enforcement of this Agreement,
including for the payment of any Additional Interest if any becomes
due.
Notwithstanding
the foregoing, the parties agree that the sole monetary damages
payable for a violation of the terms of this Agreement with respect
to which additional monetary amounts are expressly provided shall
be as set forth in this Section 2(d). Nothing shall preclude a
Notice Holder or Holder from pursuing or obtaining specific
performance or other equitable relief with respect to this
Agreement.
3.
Registration
Procedures
.
The
following provisions shall apply to the Shelf Registration
Statement filed pursuant to Section 2:
(i)
notify
the Holders of Registrable Securities at least 20 (twenty) Business
Days before filing any Shelf Registration Statement pursuant to
Section 2 of the Company’s intent to file such Shelf
Registration Statement and seeking a determination from such Holder
as to whether such Holder elects to have its Registrable Securities
included in such Shelf Registration Statement;
(ii)
before
filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto with the Commission, furnish to
the Initial Purchaser copies of all such documents proposed to be
filed and use its commercially reasonable efforts to reflect in
each such document when so filed with the Commission such comments
as such Initial Purchaser reasonably shall propose within three (3)
Business Days of the delivery of such copies to the Initial
Purchaser;
provided
,
however
, that the
Company shall be permitted to file prospectus supplements or
post-effective amendments to reflect additional selling
securityholders without prior review of the Initial
Purchaser;
(iii)
use
its commercially reasonable efforts to prepare and file with the
Commission such amendments and post-effective amendments to the
Shelf Registration Statement and file with the Commission any other
required document as may be necessary to keep such Shelf
Registration Statement continuously effective until the expiration
of the Effective Period; cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with
the provisions of the Securities Act applicable to it with respect
to the disposition of all Securities covered by such Shelf
Registration Statement during the Effective Period in accordance
with the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such
Prospectus as so supplemented;
(iv)
as
promptly as reasonably practicable, notify the Notice Holders (A)
when such Shelf Registration Statement or the Prospectus included
therein or any amendment or supplement to the Prospectus or
post-effective amendment has been filed with the Commission, and,
with respect to such Shelf Registration Statement or any
post-effective amendment that is not an Automatic Shelf
Registration Statement, when the same is declared or has become
effective,
provided
, that the availability of such Shelf Registration
Statement or any Prospectus or post-effective amendment on the
Commission’s EDGAR database shall be considered notice for
the purpose of this Section 3(a)(iv)
,
(
B
)
of any request (but not the nature or
details regarding such request), following the effectiveness of the
Shelf Registration Statement, by the Commission or any other
federal or state governmental authority for amendments or
supplements to the Shelf Registration Statement or related
Prospectus (other than any such request relating to a review of the
Company’s Exchange Act filings), (C) of the issuance by the
Commission of any stop order suspending the effectiveness of such
Shelf Registration Statement or the initiation or written threat of
any proceedings for that purpose, (D) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or written threat of any proceeding
for such purpose, (E) of the occurrence of any event or the
existence of any fact (but not the nature of or details concerning
such event or fact) (a “
Material
Event
”) as a result of
which any Shelf Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading;
provided, however,
that no notice by the Company shall be
required pursuant to this clause (E) in the event that the Company
either promptly files a prospectus supplement, amendment to the
Shelf Registration Statement to update the Prospectus or a Form 8-K
or other appropriate Exchange Act report that is incorporated by
reference into the Shelf Registration Statement, which, in either
case, contains the requisite information with respect to such
Material Event that results in such Shelf Registration Statement or
Prospectus, as the case may be, no longer containing any untrue
statement of material fact or omitting to state a material fact
required to be stated therein or necessary to make the statements
contained therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, (F) of
the determination by the Company that a post-effective amendment to
the Shelf Registration Statement (other than for the purpose of
naming a Notice Holder as a selling securityholder therein) will be
filed with the Commission, which notice may, at the discretion of
the Company (or as required pursuant to Section 3(b)), state that
it constitutes a Deferral Notice, in which event the provisions of
Section 3(b) shall apply or (G) at any time when a Prospectus is
required (or but for the exemption contained in Rule 172 would be
required) to be delivered under the Securities Act, that the Shelf
Registration Statement, Prospectus, Prospectus amendment or
supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities
Act and the rules and regulations of the Commission
thereunder;
(v)
prior
to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, use its commercially reasonable
efforts to register or qualify, or cooperate with the Notice
Holders included therein and their respective counsel in connection
with the registration or qualification of Securities for offer and
sale under the securities or blue sky laws of such jurisdictions
within the United States as any such Notice Holders reasonably
request in writing and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities covered by the Shelf
Registration Statement; prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration
Statement, use its commercially reasonable efforts to keep each
such registration or qualification (or exemption therefrom)
effective during the Effective Period in connection with such
Notice Holder’s offer and sale of Registrable Securities
pursuant to such registration or qualification (or exemption
therefrom) and use its commercially reasonable efforts to provide
for the disposition in such jurisdictions of such Registrable
Securities in the manner set forth in the Shelf Registration
Statement and the related Prospectus;
provided
that for purposes of this Section 3(a)(v), the
Company will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so
subject;
(vi)
use
its commercially reasonable efforts to lift any suspension of the
qualification of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in each
case at the earliest practicable date;
(vii)
upon
reasonable written notice, and only in connection with a
disposition of Securities under the Shelf Registration Statement,
for a reasonable period prior to the filing of the Shelf
Registration Statement, and throughout the Effective Period (but
not during a Deferral Period), (i) make reasonably available for
inspection by a representative of, and Special Counsel acting for,
the Majority Holders and any underwriter (and its counsel)
participating in any disposition of Securities pursuant to such
Shelf Registration Statement (collectively, the
“
Shelf
Inspectors
”), all
relevant and material financial and other records and pertinent
corporate documents of the Company and its subsidiaries and (ii)
use commercially reasonable efforts to have its officers,
employees, accountants and counsel make available all relevant
material information reasonably requested by such representative,
Special Counsel or any such underwriter in connection with such
Shelf Registration Statement, in each case as is reasonable and
customary for similar “due diligence” examinations of
issuers of similar size and business of the Company;
provided
,
however
, that such persons shall first agree with the
Company that any information that is reasonably designated by the
Company as confidential at the time of delivery shall be kept
confidential by such persons and shall be used solely for the
purposes of exercising rights under this Agreement and satisfying
“due diligence” obligations under the Securities Act
and such person shall not engage in trading any securities of the
Company until such material non-public information becomes properly
publicly available, unless (w) disclosure of such information is
required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (x) disclosure of
such information is required by law, including any disclosure
requirements pursuant to federal securities laws in connection with
the filing of any Shelf Registration Statement or the use of any
Prospectus or prospectus supplement referred to in this Agreement
upon a customary opinion of counsel for such persons delivered and
reasonably satisfactory to the Company, (y) such information
becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person, or (z)
such information becomes available to any such person from a source
(other than the Company, its Affiliates, officers, employees,
accountants, agents and counsel) and such source is not bound by a
confidentiality agreement;
provided
,
further
, that with respect to any Special Counsel engaged
by the Majority Holders, the foregoing inspection and information
gathering shall be coordinated by one counsel designated by the
Majority Holders;
(viii)
if
requested by the Majority Holders, their Special Counsel or the
managing underwriters (if any) in connection with an underwritten
offering of the Registrable Securities pursuant to the Shelf
Registration Statement, use its commercially reasonable efforts to
cause (i) its counsel to deliver an opinion relating to the Shelf
Registration Statement and the Securities in a customary form, (ii)
its officers to execute and deliver all customary documents and
certificates reasonably requested by the Majority Holders, their
Special Counsel or the managing underwriters (if any) and (iii) its
registered independent public accounting firm to provide a comfort
letter or letters relating to the Shelf Registration Statement in a
reasonable and customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72 or any successor statement thereto,
covering matters of the type customarily covered in comfort letters
in connection with secondary underwritten offerings;
provided,
that in no event shall the Company be
required to furnish such opinions, documents or comfort letters
pursuant to the provisions of this Section in more than three
underwritten offerings.
(ix)
if
reasonably requested in writing by any Initial Purchaser or any
Notice Holder as a result of the “due diligence”
examination referred to in Section 3(a)(vii) above, promptly
incorporate in a prospectus supplement or post-effective amendment
to the Shelf Registration Statement such information as such
Initial Purchaser or such Notice Holder shall, on the basis of a
written opinion of Special Counsel, determine to be required to be
included therein by applicable law and make any required filings of
such prospectus supplement or such post-effective amendment;
provided
, that the Company shall not be required to take
any actions under this Section 3(a)(ix) that are not, in the
reasonable opinion of counsel for the Company, in compliance with
applicable law;
provided,
further
, that the Company shall
have no liability for Additional Interest under this Agreement if
it reasonably objects to making such additional filing and if such
additional filing would otherwise cause the Company to pay
Additional Interest.
(x)
as
promptly as practicable furnish to each Notice Holder and the
Initial Purchaser, upon their request and without charge, at least
one (1) conformed copy of the Shelf Registration Statement and any
amendments thereto, including financial statements but excluding
schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits;
provided, however,
that the Company shall have no
obligation to deliver to Notice Holders or the Initial Purchaser a
copy of any amendment publicly available on the Company’s
website or in the Commission’s EDGAR
database;
(xi)
during
the Effective Period, deliver to each Notice Holder in connection
with any sale of Registrable Securities pursuant to the Shelf
Registration Statement, upon their request and without charge, as
many copies of the Prospectus relating to such Registrable
Securities (including each preliminary prospectus) and any
amendment or supplement thereto as such Notice Holder may
reasonably request; and the Company hereby consents (except during
such periods that a Deferral Notice is outstanding and has not been
revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any
offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto in the manner set
forth therein and subject to applicable law; and
(xii)
during
the Effective Period, cooperate with the Notice Holders to
facilitate the timely preparation and delivery of certificates
representing Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends, unless
required by applicable law, and in such denominations as permitted
by the Indenture and registered in such names as the Holders
thereof may request in writing at least one (1) Business Days prior
to sales of Securities pursuant to such Shelf Registration
Statement;
provided
, that nothing herein shall require the Company to
deliver certificated Securities to any beneficial holder of
Securities, except as required by the Indenture;
provided
further
however, such Notice
Holders shall pay any such tax that is due because such Notice
Holder requests any shares of Common Stock to be issued in a name
other than the holder’s name as provided for in Sections
2.05(a) and 14.02(e) of the Indenture.
(b)
Upon
(A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation
of proceedings with respect to the Shelf Registration Statement
under Section 8(d) or 8(e) of the Securities Act, (B) the
occurrence of any event or the existence of any Material Event as a
result of which the Shelf Registration Statement shall contain any
untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or
(C) the occurrence or existence of any corporate development or
business reason that, in the sole discretion of the Company, makes
it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, including,
without limitation, the acquisition of assets, pending corporate
developments, public filings with Commission and similar events,
the Company will (i) in the case of clause (B) above, subject to
the second sentence of this provision, use its commercially
reasonable efforts to prepare and file an amendment to such Shelf
Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other
required document that would be incorporated by reference into such
Shelf Registration Statement and Prospectus so that (1) such Shelf
Registration Statement does not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (2) such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered or made available to
the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to the Shelf
Registration Statement, subject to the second sentence of this
provision, use its commercially reasonable efforts to cause it to
be declared effective or otherwise become effective and (ii) give
notice to the Notice Holders that the availability of the Shelf
Registration Statement is suspended (a “
Deferral
Notice
”). The Company
will use its commercially reasonable efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A)
above, as promptly as reasonably practicable, (y) in the case of
clause (B) above, as soon as, in the sole judgment of the Company,
public disclosure of such Material Event would not be prejudicial
to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as, in
the sole discretion of the Company, such suspension is no longer
appropriate;
provided
that the period during which the availability of
the Shelf Registration Statement and any Prospectus is suspended
(the “
Deferral
Period
”), without the
Company incurring any obligation to pay Additional Interest
pursuant to Section 2(d), shall not exceed forty-five (45) days in
the aggregate in any ninety (90) day period or an aggregate of
ninety (90) days in any 12-month period.
(c)
Each
Holder agrees that upon receipt of any Deferral Notice from the
Company, such Holder shall forthwith discontinue (and cause any
placement or sales agent or underwriters acting on their behalf to
discontinue) the disposition of Registrable Securities pursuant to
the Shelf Registration Statement until such Holder (i) shall have
received copies of such amended or supplemented Prospectus and, if
so directed by the Company, such Holder shall deliver to the
Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Holder’s possession of
the Prospectus covering such Registrable Securities at the time of
receipt of such notice or
(ii)
shall have received notice from the Company that the disposition of
Registrable Securities pursuant to the Shelf Registration may
continue. Each Holder shall keep confidential any communication
received by it from the Company regarding the suspension of the use
of the Prospectus, except as required by applicable
law.
(d)
The
Company may require each Holder as to which any registration
pursuant to Section 2(a) is being effected to furnish to the
Company such information regarding such Holder and such
Holder’s intended method of distribution of such Registrable
Securities as the Company may from time to time reasonably request
in writing, but only to the extent such information is required to
comply with the Securities Act.
(e)
The
Company shall provide a CUSIP number for all Registrable Securities
covered by the Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement and provide the
Trustee and the transfer agent for the Shares with printed
certificates for the Registrable Securities that are in a form
eligible for deposit with The Depository Trust
Company.
(f)
The
Company shall use commercially reasonable efforts to provide such
information as is required for any filings required to be made with
FINRA.
(g)
Until
the expiration of the Effective Period, the Company will not
resell, and will use its commercially reasonable efforts to prevent
its “affiliates” (as defined in Rule 144) from
reselling, any of the Notes that have been reacquired by any of
them except pursuant to an effective registration statement under
the Securities Act.
(h)
The
Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a the manner prescribed by the Trust Indenture Act
and shall enter into any necessary supplemental indentures in
connection therewith.
(i)
The
Company shall enter into such customary agreements and take such
other reasonable and lawful actions in connection therewith
(including those reasonably requested by the Majority Holders) in
order to expedite or facilitate disposition of such Registrable
Securities.
()
The
Company shall cause the Shares covered by the Shelf Registration
Statement to be listed or quoted, as the case may be, on each
securities exchange or automated quotation system on which the
Common Stock is then listed or quoted.
4.
Holders’
Obligations
.
(a)
In
addition to the other limitations and requirements described
herein, each Holder agrees, by acquisition of the Registrable
Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to the Shelf Registration Statement
or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a completed Notice and Questionnaire as
required pursuant to Section 2(c) hereof (including the information
required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Notice Holder
agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such
Notice Holder to the Company or of the occurrence of any event in
either case as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a
material fact regarding such Notice Holder or such Notice
Holder’s intended method of disposition of such Registrable
Securities or omits to state any material fact regarding such
Notice Holder or such Notice Holder’s intended method of
disposition of such Registrable Securities necessary to make the
statements therein, in light of circumstances in which they were
made, not misleading, and promptly to furnish to the Company (i)
any additional information required to correct and update any
previously furnished information or required so that such
Prospectus shall not contain, with respect to such Notice Holder or
the disposition of such Registrable Securities, an untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading and (ii) any other information
regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the
Shelf Registration Statement under applicable law or pursuant to
Commission comments. Each Holder further agrees not to sell any
Registrable Securities pursuant to the Shelf Registration Statement
without delivering, causing to be delivered, or, if permitted by
applicable law, making available, a Prospectus to the purchaser
thereof and, following termination of the Effective Period, to
notify the Company, within ten (10) Business Days of a request by
the Company, of the amount of Registrable Securities sold pursuant
to the Shelf Registration Statement and, in the absence of a
response, the Company may assume that all of the Holder’s
Registrable Securities were so sold in compliance with applicable
law and this Agreement unless and until the Company is notified
otherwise.
(b)
Any
sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of
such sale contain any untrue statement of a material fact relating
to or provided by such Holder or its plan of distribution and that
such Prospectus does not as of the time of such sale omit to state
any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were
made, not misleading. Each Holder further agrees that such Holder
will not make any offer relating to the Registrable Securities that
would constitute an “issuer free writing prospectus”
(as defined in Rule 433) or that would otherwise constitute a
“free writing prospectus” (as defined in Rule 405)
required to be filed by the Company with the Commission or retained
by the Company under Rule 433 of the Securities Act, unless it has
obtained the prior written consent of the Company.
(c)
The
Holders shall not offer Registrable Securities under the Shelf
Registration Statement in an underwritten offering without the
Company’s prior written consent. Any underwritten offering
agreed to by the Company shall be on terms and conditions agreed to
by the Company in connection with such offering. The Company shall
not be required to undertake more than three underwritten offerings
pursuant to this Agreement.
5.
Registration
Expenses
.
The Company agrees to bear and to pay or cause to
be paid promptly after request being made therefor all fees and
expenses incident to the Company’s performance of or
compliance with this Agreement, including, but not limited to, (a)
all Commission and any FINRA registration and filing fees and
expenses, (b) all fees and expenses in connection with the
qualification of the Securities for offering and sale under the
state securities and blue sky laws referred to in Section 3(a)(v)
hereof, including reasonable fees and disbursements of one counsel
for the placement agent or underwriters, if any, in connection with
such qualifications, (c) all expenses relating to the preparation,
printing, distribution and reproduction of the Shelf Registration
Statement, the related Prospectus, each amendment or supplement to
each of the foregoing, the certificates representing the Securities
and all other documents relating hereto, (d) fees and expenses of
the Trustee under the Indenture, any escrow agent or custodian, and
of the registrar and transfer agent for the Shares, (e) in
connection with an underwritten offering, fees, disbursements and
expenses of counsel and the registered independent public
accounting firm of the Company (including the expenses of any
opinions or “cold comfort” letters required by or
incident to such performance and compliance) and (f) reasonable
fees, disbursements and expenses of one counsel for all Holders
retained in connection with the Shelf Registration Statement, as
selected by the Company (unless reasonably objected to by the
Majority Holders, in which case the Majority Holders shall select
such counsel for the Holders) (“
Special
Counsel
”), and fees,
expenses and disbursements of any other Persons, including special
experts, retained by the Company in connection with such
registration (collectively, the “
Registration
Expenses
”). To the extent
that any reasonable and proper Registration Expenses are incurred,
assumed or paid by any Holder or any underwriter or placement agent
therefor, the Company shall reimburse such Person for the full
amount of the Registration Expenses so incurred, assumed or paid
promptly after receipt of a documented request therefor.
Notwithstanding the foregoing, the Holders of the Registrable
Securities being registered shall pay all underwriting discounts
and commissions and placement agent fees and commissions
attributable to the sale of such Registrable Securities and the
fees and disbursements of any counsel or other advisors or experts
retained by such Holders (severally or jointly), other than the
Special Counsel and experts specifically referred to
above.
6.
Indemnification
.
(a)
The
Company shall indemnify and hold harmless each Notice Holder
(including, without limitation, the Initial Purchaser), its
Affiliates, their respective officers, directors, employees,
representatives and agents, and each Person, if any, who controls
such Notice Holder within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section
6 and Section 7 as an “
Indemnified
Holder
”) from and against
any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, without limitation, any loss,
claim, damage, liability or action relating to purchases and sales
of Registrable Securities), to which that Indemnified Holder may
become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state
statutory law or regulation, at common law or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of
a material fact contained in any such Shelf Registration Statement
or any Prospectus forming part thereof, or (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein
(in the case of any Prospectus, in the light of the circumstances
under which they were made) not misleading, and shall reimburse
each Indemnified Holder promptly upon demand for any legal or other
expenses reasonably incurred by that Indemnified Holder in
connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action as such expenses
are incurred;
provided, however,
that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, an untrue
statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in
conformity with any information provided by such Indemnified Holder
in writing to the Company expressly for use therein including its
Notice and Questionnaire. This indemnity agreement shall be in
addition to any liability that the Company may otherwise
have.
(b)
Each
Notice Holder (including, without limitation, the Initial
Purchaser) shall indemnify and hold harmless the Company, its
Affiliates, their respective officers, directors, employees,
representatives and agents, and each Person, if any, who controls
the Company within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section
6(b) and Section 7 as the Company), from and against any loss,
claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange
Act, any other federal or state statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained
in any such Shelf Registration Statement or any Prospectus forming
part thereof, or (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
in order to make the statements therein (in the case of any
Prospectus, in the light of the circumstances under which they were
made) not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with any
information furnished to the Company in writing by such Notice
Holder expressly for use therein including its Notice and
Questionnaire, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection
with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are
incurred;
provided, however,
that no such Notice Holder shall be
liable for any indemnity claims hereunder in excess of the amount
of net proceeds received by such Notice Holder from the sale of
Registrable Securities pursuant to such Shelf Registration
Statement. This indemnity agreement will be in addition to any
liability which any such Notice Holder may otherwise
have.
(b)
Promptly
after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party pursuant to Section 6(a) or
6(b), notify the indemnifying party in writing of the claim or the
commencement of that action;
provided, however,
that the failure to notify the
indemnifying party shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; and
provided, further,
that the failure to notify the
indemnifying party shall not relieve it from any liability that it
may have to an indemnified party otherwise than under this Section
6. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the
indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than the reasonable costs
of investigation;
provided, however,
that an indemnified party shall have
the right to employ its own counsel in any such action, but the
fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party
unless (1) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based upon advice of
counsel to the indemnified party) that there may be legal defenses
available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based upon advice of
counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will
not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each
of which cases the reasonable fees, disbursements and other charges
of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties
shall not, in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of
attorneys (in addition to any local counsel) at any one time for
all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 6(a)
and 6(b), shall use its reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for fees and expenses or counsel as contemplated by this
section, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of a request in writing
setting forth proposed settlement terms from the indemnified party
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with the aforesaid request prior to
the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding and (ii) does not include a statement or
admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
(d)
The
provisions of this Section 6 and Section 7 shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any Notice Holder, the Company, or any of the indemnified
Persons referred to in this Section 6 and Section 7, and shall
survive the sale by a Notice Holder of Registrable Securities
covered by the Shelf Registration Statement.
7.
Contribution.
If the indemnification provided for in Section 6
is unavailable or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b), then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute
to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company from the offering and
sale of the Notes, on the one hand, and a Holder with respect to
the sale by such Holder of Registrable Securities, on the other, or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand
and such Holder on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and a Holder on the other with respect to
such offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes
(before deducting expenses) received by or on behalf of the
Company, on the one hand, and the total net proceeds (before
deducting expenses) received by such Holder upon a resale of the
Registrable Securities, on the other, bear to the total gross
proceeds from the sale of all Registrable Securities pursuant to
the Shelf Registration Statement in the offering of the Registrable
Securities from which the contribution claim arises. The relative
fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to the Company or information supplied by the Company on
the one hand or to any informationcontained in the relevant Notice
and Questionnaire supplied by such Holder on the other, the intent
of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Notice Holders’ respective obligations to
contribute pursuant to this Section 7 are several in proportion to
the respective number of Registrable Securities they have sold
pursuant to the Shelf Registration Statement and not joint. The
parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be determined
by
pro
rata
allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 7 shall be deemed to include, for purposes of this Section
7, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the
provisions of this Section 7, an indemnifying party that is a
Holder shall not be required to contribute any amount in excess of
the amount by which the total price at which the Registrable
Securities sold by such indemnifying party to any purchaser exceeds
the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
8.
Information
Requirements.
The
Company covenants that, if at any time before the end of the
Effective Period the Company is not subject to the reporting
requirements of the Exchange Act, it will cooperate with any Holder
and take such further customary action as any Holder may reasonably
request in writing (including, without limitation, making such
representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144
and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written
request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing
requirements, unless such a statement has been included in the
Company’s most recent report filed pursuant to Section 13 or
Section 15(d) of Exchange Act. Notwithstanding the foregoing,
nothing in this Section 8 shall be deemed to require the Company to
register any of its securities under any section of the Exchange
Act.
9.
Miscellaneous
.
(a)
Amendments
and Waivers
. The provisions of
this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may
not be given, unless the Company has obtained the written consent
of the Majority Holders. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose
Registrable Securities are being sold pursuant to the Shelf
Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of a
majority in aggregate amount of the Registrable Securities being
sold by such Holders pursuant to the Shelf Registration
Statement;
provided
that such aggregate amount, with respect to such
Registrable Securities that are Notes will be based on the
aggregate principal amount of such Notes that are Registrable
Securities, and with respect to such Registrable Securities that
are Shares, will be based on the average of the Last Reported Sale
Prices of the Company’s Common Stock for each of five
consecutive trading days ending on a date chosen by the Company in
a reasonable manner to effect the intent of this Agreement
multiplied by the number of such Registrable Securities that are
Shares. Notwithstanding the foregoing sentence, (i) this Agreement
may be amended by written agreement signed by the Company and the
Initial Purchaser, without the consent of the Holders, to cure any
ambiguity or to correct or supplement any provision contained
herein that may be defective or inconsistent with any other
provision contained herein, or to make such other provisions in
regard to matters or questions arising under this Agreement that
shall not adversely affect the interests of the Holders. Each
Holder at the time of any such amendment, modification, supplement,
waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected
pursuant to this Section 9(a), whether or not any notice, writing
or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Registrable Securities or is
delivered to such Holder.
(b)
Notices
.
All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day
delivery:
(1)
If
to the Company, initially at the address set forth in the
Indenture;
(2)
If
to the Initial Purchaser, initially at c/o JMP Securities, 600
Montgomery Street, Suite 1100, San Francisco, CA 94111 (fax: (212)
906-3551); Attention: Forrest Koenig, with a copy to General
Counsel and Goodwin Procter LLP, 100 Northern Avenue, Boston, MA
02210, Attention: James Barri; and
(3)
If
to a Holder, to the address of such Holder set forth in the
register (described in Section 2.06 of the Indenture), the Notice
and Questionnaire or other records of the Company.
All
such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one (1)
Business Day after being delivered to a next-day air courier; five
(5) Business Days after being deposited in the mail, if being
delivered by first-class mail; and when receipt is acknowledged by
the recipient’s telecopier machine, if sent by
telecopier.
Notwithstanding
the foregoing, the notice required pursuant to Section 3(a)(i)
shall be given in the same manner that notices are required to be
delivered to holders of Notes pursuant to the
Indenture.
(c)
Successors
and Assigns
. This Agreement
shall be binding upon the Company and each of its successors and
assigns. Any Person who purchases any Securities from any Initial
Purchaser shall be deemed, for purposes of this Agreement, to be an
assignee of such Initial Purchaser. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be
binding upon each Holder,
provided that
nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture. If any
transferee of any Holder shall acquire Registrable Securities, in
any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Registrable
Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of
this Agreement and such Person shall be entitled to receive the
benefits hereof.
(d)
Counterparts
.
This Agreement may be executed in any number of counterparts (which
may be delivered in original form or by telecopier) and by the
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same
agreement.
(e)
Headings
.
The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning
hereof.
(f)
Governing
Law
. THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW
YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS
THEREOF).
(g)
Remedies
.
In the event of a breach by the Company or by any Holder of any of
their respective obligations under this Agreement, each Holder or
the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages
(other than the recovery of damages for a breach by the Company of
its obligations under Section 3 hereof for which Additional
Interest has been paid pursuant to Section 2 hereof), will be
entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages
would not be adequate compensation for any loss incurred by reason
of a breach by it of any of the provisions of this Agreement and
hereby further agree that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.
(h)
No
Inconsistent Agreements
. The
Company represents, warrants and agrees that (i) it has not entered
into and shall not on or after the date of this Agreement enter
into any agreement that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any
agreement which remains in effect and does not currently
contemplate entering into any agreement granting any registration
rights with respect to any of its debt securities to any Person
other than this Agreement and (iii) without limiting the generality
of the foregoing, without the written consent of the Majority
Holders, it shall not grant to any Person the right to request the
Company to register any securities of the Company under the
Securities Act unless the rights so granted are not in conflict or
inconsistent with the provisions of this
Agreement.
(i)
Piggyback
on Registrations
. The Company
may grant registration rights that would permit any person that is
a third party the right to piggyback on any Shelf Registration
Statement, provided that if the managing underwriter, if any, of
any underwritten offering conducted pursuant to Section 4(c) hereof
notifies the Company that the total amount of securities which the
Notice Holders and the holders of such piggyback rights intend to
include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the
price at which such securities can be sold), then the amount,
number or kind of securities to be offered for the account of
holders of such piggyback rights will be reduced to the extent
necessary to reduce the total amount of securities to be included
in such offering to the amount, number and kind recommended by the
managing underwriter prior to any reduction in the amount of
Registrable Securities to be included in such Shelf Registration
Statement; provided that it would not be a default under the
agreements granting such piggyback rights to make such reduction;
provided further that to the extent it would be such a default
under any such agreement to make such reduction, the Company will
use its commercially reasonable efforts to obtain appropriate
waivers.
(j)
Severability
.
The remedies provided herein are cumulative and not exclusive of
any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no
way be affected, impaired or invalidated, and the parties hereto
shall use their commercially reasonable efforts to find and employ
an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any term, provision, covenant or restriction that may be
hereafter declared invalid, illegal, void or
unenforceable.
(k)
Survival
.
The respective indemnities, agreements, representations, warranties
and each other provision set forth in this Agreement or made
pursuant hereto shall remain in full force and effect regardless of
any investigation (or statement as to the results thereof) made by
or on behalf of any Holder, any director, officer or partner of
such Holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling Person of any of the foregoing,
and shall survive (x) the delivery and payment for the Notes
pursuant to the Purchase Agreement and (y) the transfer and
registration of Registrable Securities by holders of Registrable
Securities.
(l)
Securities
Held by the Company, etc.
Whenever the consent or approval of Holders of a
specified percentage of Securities is required hereunder,
Securities held by the Company or its Affiliates (other than
subsequent Holders if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or
approval was given by the Holders of such required
percentage.
If
the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof,
whereupon this instrument will become a binding agreement between
the Company and the Initial Purchaser in accordance with its
terms.
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Very
truly yours,
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RUMBLEON,
INC.
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By:
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/s/
Steven R. Berrard
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Steven R. Berrard
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Chief Financial
Officer
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Accepted:
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May 14, 2019
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JMP
SECURITIES LLC
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By:
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/s/
Forrest Koenig
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Forrest Koenig
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Managing
Director
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RumbleOn,
Inc.
6.75%
Convertible Senior Notes due 2024
Purchase Agreement
May 9,
2019
JMP
Securities LLC
As
Initial Purchaser
600
Montgomery Street, Suite 1100
San
Francisco, CA 94111
Ladies
and Gentlemen:
RumbleOn, Inc., a
Nevada corporation (the “
Company
”), proposes to issue and
sell to the initial purchaser (the “
Initial Purchaser
”) $30,000,000
aggregate principal amount of its 6.75% Convertible Senior Notes
due 2024 (the “
Securities
”). The Securities will
be convertible into cash, shares (the “
Underlying Securities
”) of Class B
common stock of the Company, par value $0.001 per share (the
“
Common Stock
”),
or a combination thereof, at the Company’s election. The
Securities will be issued pursuant to an Indenture, to be dated as
of May 14, 2019 (the “
Indenture
”), between the Company
and Wilmington Trust, N.A., as trustee (the “
Trustee
”).
The
holders of the Securities will be entitled to the benefits of a
registration rights agreement, to be dated as of the Closing Date
(as defined below) and substantially in the form attached hereto as
Exhibit B
(the
“
Registration Rights
Agreement
”), between the Company and the Initial
Purchaser, pursuant to which the Company will agree to file one or
more registration statements with the Commission (as defined below)
providing for the registration under the Securities Act (as defined
below) of the resale of the Securities and the Underlying
Securities. This Agreement, the Registration Rights Agreement and
the Indenture are referred to herein as the “
Transaction
Documents
.”
The
Company hereby confirms its agreement with the Initial Purchaser
concerning the purchase and sale of the Securities, as
follows:
1.
Offering Memorandum and Transaction
Information
. The Securities will be sold to the Initial
Purchaser without being registered under the Securities Act of
1933, as amended, and the rules and regulations of the Securities
and Exchange Commission (the “
Commission
”)
thereunder (the
“
Securities
Act
”), in reliance upon an exemption therefrom. The
Company has prepared a preliminary offering memorandum dated May 9,
2019 (the “
Preliminary
Offering Memorandum
”) and will prepare an offering
memorandum dated the date hereof (the “
Offering Memorandum
”) setting
forth information concerning the Company and the Securities. Copies
of the Preliminary Offering Memorandum have been, and copies of the
Offering Memorandum will be, delivered by the Company to the
Initial Purchaser pursuant to the terms of this purchase agreement
(this “
Agreement
”). The Company hereby
confirms that it has authorized the use of the Preliminary Offering
Memorandum, the other Time of Sale Information (as defined below)
and the Offering Memorandum in connection with the offering and
resale of the Securities by the Initial Purchaser in the manner
contemplated by this Agreement. References herein to the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum shall be deemed to refer to and include any
document incorporated by reference therein and any reference to
“amend,” “amendment” or
“supplement” with respect to the Preliminary Offering
Memorandum or the Offering Memorandum shall be deemed to refer to
and include any documents filed after such date and incorporated by
reference therein.
At or
prior to the time when sales of the Securities were first made (the
“
Time of Sale
”),
the Company had prepared the following information (collectively,
the “
Time of Sale
Information
”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on
Annex A
hereto.
2.
Purchase and Resale of the
Securities
.
(a)
The Company agrees
to issue and sell the Securities to the Initial Purchaser as
provided in this Agreement, and the Initial Purchaser, on the basis
of the representations, warranties and agreements set forth herein
and subject to the conditions set forth herein, agrees to purchase
from the Company the aggregate principal amount of Securities set
forth in
Schedule 1
hereto at a price equal to 93% of the principal amount thereof (the
“
Purchase
Price
”). The offering and sale of the Securities is
hereinafter referred to as the “
Offering
.”
(b)
The Company
understands that the Initial Purchaser intends to offer the
Securities for resale on the terms set forth in the Time of Sale
Information. Initial Purchaser represents, warrants and agrees
that:
(i)
it is a qualified
institutional buyer within the meaning of Rule 144A under the
Securities Act (a “
QIB
”) and an accredited investor
within the meaning of Rule 501(a) of Regulation D under the
Securities Act (“
Regulation
D
”);
(ii)
it
has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities by means of
any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D or in any manner involving a
public offering within the meaning of Section 4(a)(2) of the
Securities Act; and
(iii)
it
has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities as part of
their initial offering, except to persons whom it reasonably
believes to be QIBs in transactions pursuant to Rule 144A under the
Securities Act (“
Rule
144A
”) and in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
the Securities is aware that such sale is being made in reliance on
Rule 144A.
(c)
Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the
“no registration” opinions to be delivered to the
Initial Purchaser pursuant to
Sections 6(f)
and
6(g)
, counsels for the Company
and counsel for the Initial Purchaser, respectively, may rely upon
the accuracy of the representations and warranties of the Initial
Purchaser, and compliance by the Initial Purchaser with its
agreements, contained in paragraph (c) above, and the Initial
Purchaser hereby consents to such reliance.
(d)
The Company
acknowledges and agrees that the Initial Purchaser may offer and
sell Securities to or through any affiliate of the Initial
Purchaser and that any such affiliate may offer and sell Securities
purchased by it to or through the Initial Purchaser.
(e)
Payment for the
Securities shall be made by wire transfer in immediately available
funds to the account specified by the Company at the offices of
McGuireWoods LLP, 1251 Avenue of the Americas, 20
th
Floor, New York,
New York 10020 at 10:00 A.M. New York City time on May 14, 2019, or
at such other time or place on the same or such other date, not
later than the fifth business day thereafter, as the Initial
Purchaser and the Company may agree upon in writing. The time and
date of such payment for the Securities is referred to herein as
the “
Closing
Date
.”
Payment
for the Securities to be purchased on the Closing Date shall be
made against delivery to the nominee of The Depository Trust
Company (“
DTC
”),
for the accounts of the Initial Purchaser of the Securities to be
purchased on such date of one or more global notes representing the
Securities (collectively, the “
Global Note
”), with any transfer
taxes payable in connection with the sale of such Securities duly
paid by the Company. The Global Note will be made available for
inspection by the Initial Purchaser at the office of JMP Securities
LLC set forth above not later than 1:00 P.M., New York City time,
on the business day prior to the Closing Date.
(f)
The Company
acknowledges and agrees that the Initial Purchaser is acting solely
in the capacity of an arm’s length contractual counterparty
to the Company with respect to the offering of Securities
contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company or any other person.
Additionally, the Initial Purchaser is not advising the Company or
any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and
appraisal of the transactions contemplated hereby, and the Initial
Purchaser shall have no responsibility or liability to the Company
with respect thereto. Any review by the Initial Purchaser of the
Company, the transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the
benefit of the Initial Purchaser and shall not be on behalf of the
Company.
3.
Representations and Warranties of the
Company
. The Company represents and warrants to the Initial
Purchaser that:
(a)
Preliminary Offering Memorandum.
The
Preliminary Offering Memorandum, as of its date, did not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
provided
that the Company makes
no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use in any
Preliminary Offering Memorandum, it being understood and agreed
that the only such information furnished by the Initial Purchaser
consists of the information described as such in
Section 7(b)
.
(b)
Time of Sale Information
. The Time of
Sale Information, at the Time of Sale, did not, and at the Closing
Date, will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
provided
that the Company makes
no representation or warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use in such Time of
Sale Information, it being understood and agreed that the only such
information furnished by the Initial Purchaser consists of the
information described as such in
Section 7(b)
(the
“
Initial Purchaser
Information
”). No statement of material fact included
in the Offering Memorandum has been omitted from the Time of Sale
Information and no statement of material fact included in the Time
of Sale Information that is required to be included in the Offering
Memorandum has been omitted therefrom.
(c)
Additional Written Communications.
Other than the Preliminary Offering Memorandum and the Offering
Memorandum, the Company (including its agents and representatives,
other than the Initial Purchaser in its capacity as such) has not
prepared, made, used, authorized, approved or referred to and will
not prepare, make, use, authorize, approve or refer to any
“written communication” (as defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or
solicitation of an offer to buy the Securities (each such
communication by the Company or its agents and representatives
(other than a communication referred to in clauses (i), (ii) and
(iii) below) an “
Issuer
Written Communication
”) other than (i) the Preliminary
Offering Memorandum, (ii) the Offering Memorandum, (iii) the
documents listed on
Annex
A
hereto, including a term sheet substantially in the form
of
Annex B
hereto,
which constitute part of the Time of Sale Information, and (iv)
each electronic road show and any other written communications
approved in writing in advance by the Initial Purchaser. Each such
Issuer Written Communication does not conflict with the information
contained in the Time of Sale Information, and when taken together
with the Time of Sale Information, did not, and at the Closing
Date, will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
provided
that the Company makes
no representation or warranty with respect to any statements or
omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to the
Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use in such Issuer Written
Communication, it being understood and agreed that the only such
information furnished by the Initial Purchaser consists of the
Initial Purchaser Information.
(d)
Offering Memorandum.
As of the date of
the Offering Memorandum and as of the Closing Date, the Offering
Memorandum does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
provided
that the Company makes
no representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use in the Offering
Memorandum, it being understood and agreed that the only such
information furnished by the Initial Purchaser consists of the
Initial Purchaser Information.
(e)
Incorporated Documents
. The documents
incorporated by reference in the Offering Memorandum or the Time of
Sale Information, when they were filed with the Commission
conformed or will conform, as the case may be, in all material
respects to the requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “
Exchange Act
”) and such documents
did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(f)
Distribution of Offering Material by the
Company
. The Company and its affiliates have not distributed
and will not distribute, prior to the completion of the Initial
Purchaser’s distribution of the Securities, any written
offering material in connection with the offering and sale of the
Securities other than the Preliminary Offering Memorandum, Time of
Sale Information and Offering Memorandum.
(g)
Authorization of the Transaction
Documents
. The Transaction Documents have been duly
authorized by the Company and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors’ rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(h)
Authorization of the Securities
. The
Company has all requisite corporate power and authority to execute,
issue, sell and perform its obligations under the Securities. The
Securities have been duly authorized and, at the Closing Date, will
have been duly executed by the Company and, when authenticated,
issued and delivered in the manner provided for in the Indenture
and delivered against payment of the Purchase Price therefor as
provided in this Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the
form contemplated by, and entitled to the benefits of, the
Indenture.
(i)
Authorization of the Underlying
Securities
. Upon issuance and delivery of the Securities in
accordance with this Agreement and the Indenture, the Securities
will be convertible at the option of the holder thereof into cash,
shares of the Underlying Securities or a combination thereof, in
accordance the terms of the Securities and the Indenture; the
Underlying Securities (assuming physical settlement and the maximum
conversion rate under any “make-whole” adjustment
applies) reserved for issuance upon conversion of the Securities
have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the
Securities and the Indenture, will be validly issued, fully paid
and non assessable, no holder of the Underlying Securities will be
subject to personal liability by reason of being such a holder and
the issuance of the Underlying Securities will not be subject to
any preemptive right, right of first refusal or other similar
rights of any securityholder of the Company or any other
person.
(j)
Description of Securities
. The
Securities and Indenture conform in all material respects to the
description thereof contained in the sections of the Time of Sale
Information and the Offering Memorandum titled “Description
of notes.”
(k)
Rule 144A Eligibility
. On the Closing
Date, the Securities will not be of the same class as securities
listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in an automated inter-dealer
quotation system; and each of the Time of Sale Information, as of
the Time of Sale, and the Offering Memorandum, as of its date,
contains or will contain all the information that, if requested by
a prospective purchaser of the Securities, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4)
under the Securities Act.
(l)
No Integration
. Neither the Company nor
any of its affiliates (as defined in Rule 501(b) of Regulation D)
has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would
require registration of the Securities under the Securities
Act.
(m)
No General Solicitation or Directed Selling
Efforts
. None of the Company or any of its affiliates or any
other person acting on its or their behalf (other than the Initial
Purchaser, as to which no representation is made) has (i) solicited
offers for, or offered or sold, the Securities by means of any form
of general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(a)(2) of the Securities
Act or (ii) engaged in any directed selling efforts within the
meaning of Regulation S under the Securities Act
(“
Regulation
S
”), and all such persons have complied with the
offering restrictions requirement of Regulation S.
(n)
Securities Law Exemptions
. Assuming the
accuracy of the representations and warranties of the Initial
Purchaser contained in
Section 2(b)
and its compliance
with its agreements set forth therein, it is not necessary, in
connection with the issuance and sale of the Securities to the
Initial Purchaser and the offer, resale and delivery of the
Securities by the Initial Purchaser in the manner contemplated by
this Agreement, the Time of Sale Information and the Offering
Memorandum, to register the offer, issue and sale of the Securities
under the Securities Act or to qualify the Indenture under the
Trust Indenture Act.
(o)
Regulations
. The disclosures in the
Preliminary Offering Memorandum and the Offering Memorandum
concerning the effects of federal, state, local and all foreign
regulation on the Offering and the Company’s business as
currently contemplated are correct in all material respects and no
other such regulations are required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum which
are not so disclosed.
(p)
No Material Adverse Change
. Since the
respective dates as of which information is given in the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum, except as otherwise specifically stated
therein: (i) there has been no material adverse change in the
financial position or results of operations of the Company, nor any
change or development that, singularly or in the aggregate, would
involve a material adverse change or a prospective material adverse
change, in or affecting the condition (financial or otherwise),
results of operations, business, assets or prospects of the Company
(a “
Material Adverse
Change
”); (ii) there have been no material
transactions entered into by the Company, other than as
contemplated pursuant to this Agreement; and (iii) no officer or
director of the Company has resigned from any position with the
Company.
(q)
Recent Securities Transactions, etc.
Subsequent to the respective dates as of which information is given
in the Preliminary Offering Memorandum, the Time of Sale
Information and the Offering Memorandum, and except as may
otherwise be indicated or contemplated herein or disclosed in the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum, the Company has not: (i) issued any
securities or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any
dividend or made any other distribution on or in respect to its
capital stock.
(r)
Independent Accountants
. Scharf Pera
& Co., PLCC (the “
Auditor
”), whose report is filed
with the Commission as part of the Company’s Annual Report on
Form 10-K for the year ended December 31, 2018, is an independent
registered public accounting firm as required by the Securities Act
and the Public Company Accounting Oversight Board. The Auditor has
not, during the periods covered by the financial statements
included or incorporated by reference in the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum, provided to the Company any non-audit services, as such
term is used in Section 10A(g) of the Exchange Act, except as
disclosed in the Company’s proxy statement filed with the
Commission on April 19, 2019.
(s)
Financial Statements, etc
. The
financial statements, including the notes thereto and supporting
schedules, included or incorporated by reference in the Preliminary
Offering Memorandum, the Time of Sale Information or the Offering
Memorandum, fairly present the financial position and the results
of operations of the Company at the dates and for the periods to
which they apply; and such financial statements have been prepared
in conformity with U.S. generally accepted accounting principles
(“
GAAP
”),
consistently applied throughout the periods involved (
provided
that unaudited interim
financial statements are subject to year-end audit adjustments that
are not expected to be material in the aggregate and do not contain
all footnotes required by GAAP). All disclosures contained in the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum regarding “non-GAAP financial
measures” (as such term is defined by the rules and
regulations of the Commission), if any, comply with Regulation G of
the Exchange Act and Item 10 of Regulation S-K of the Securities
Act, to the extent applicable. Each of the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum discloses all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), and
other relationships of the Company with unconsolidated entities or
other persons that may have a material current or future effect on
the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures,
capital resources, or significant components of revenues or
expenses. Except as disclosed or incorporated by reference in the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum, (a) the Company has not incurred any
material liabilities or obligations, direct or contingent, or
entered into any material transactions other than in the ordinary
course of business, (b) the Company has not declared or paid any
dividends or made any distribution of any kind with respect to its
capital stock, (c) there has not been any change in the capital
stock of the Company, or, other than in the course of business, any
grants under any stock compensation plan, and (d) there has not
been any material adverse change in the Company’s long-term
or short-term debt.
(t)
Authorized Capital, etc
. The Company
had, at the date or dates indicated in the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum, the duly authorized, issued and outstanding
capitalization as set forth therein. Based on the assumptions
stated in the Preliminary Offering Memorandum, the Time of Sale
Information and the Offering Memorandum, the Company will have on
the Closing Date the adjusted stock capitalization set forth
therein. Except as set forth in, or contemplated by, the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum, at the Time of Sale and on the Closing
Date, there will be no stock options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued shares
of the Company’s Class A Common Stock, $0.001 per share (the
“
Class A Common
Stock
”) or the Class B Common Stock, $0.001 per share
(the “
Class B Common
Stock
”), or any security convertible or exercisable
into shares of Class A Common Stock or Class B Common Stock, or any
contracts or commitments to issue or sell shares of Class A Common
Stock, Class B Common Stock or any such options, warrants, rights
or convertible securities.
(u)
Outstanding Securities
. All issued and
outstanding securities of the Company issued prior to the
transactions
contemplated
by this Agreement have been duly authorized and validly issued and
are fully paid and non-assessable; the holders thereof have no
rights of rescission with respect thereto, and are not subject to
personal liability by reason of being such holders; and none of
such securities were issued in violation of the preemptive rights
of any holders of any security of the Company or similar
contractual rights granted by the Company. The Underlying
Securities conform in all material respects to all statements
relating thereto contained in the Preliminary Offering Memorandum,
the Time of Sale Information and the Offering Memorandum. The
offers and sales of the outstanding shares of Class A Common Stock
and Class B Common Stock were at all relevant times either
registered under the Securities Act and the applicable state
securities or “blue sky” laws or, based in part on the
representations and warranties of the purchasers of such shares of
Class A Common Stock and Class B Common Stock, exempt from such
registration requirements.
(v)
Registration Rights of Third Parties
.
Except as set forth in the Preliminary Offering Memorandum, the
Time of Sale Information and the Offering Memorandum, no holders of
any securities of the Company or any rights exercisable for or
convertible or exchangeable into securities of the Company have the
right to require the Company to (i) register the sale or resale of
any such securities of the Company under the Securities Act (other
than pursuant to the Registration Rights Agreement), (ii) include
any such securities in a registration statement to be filed by the
Company (including any registration statement required to be filed
pursuant to the Registration Rights Agreement, other than the
holders of the Securities) or (iii) register the resale of any
securities of the Company held by such persons, or that such
persons may acquire upon the exercise or conversion of any other
securities of the Company or pursuant to the prospectus as part of
the Concurrent Common Stock Offering.
(w)
Validity and Binding Effect of
Agreement
. This Agreement has been duly and validly
authorized by the Company, and, when duly executed and delivered in
accordance with its terms by the Initial Purchaser, will
constitute, the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors’ rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(x)
No Conflicts, etc
. The execution,
delivery and performance by the Company of the Transaction
Documents, the consummation by the Company of the transactions
herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or
without the giving of notice or the lapse of time or both: (i)
result in a material breach of, or conflict with any of the terms
and provisions of, or constitute a material default under, or
result in the creation, modification, termination or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company pursuant to the terms of any agreement or instrument to
which the Company is a party; (ii) result in any violation of the
provisions of the Company’s Articles of Incorporation (as the
same may be amended or restated from time to time, the
“
Charter
”) or
the Company’s bylaws (the “
Bylaws
”); or (iii) violate any
existing applicable law, rule, regulation, judgment, order or
decree of any governmental agency or court, domestic or foreign,
having jurisdiction over the Company or any of its assets or
businesses (each, a “
Governmental Entity
”) as of the
date hereof.
(y)
No Defaults; Violations
. No material
default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or
credit
agreement, or any other
agreement or instrument evidencing an obligation for borrowed
money, or any other material agreement or instrument to which the
Company is a party or by which the Company may be bound or to which
any of the properties or assets of the Company is subject. The
Company is not in violation of any term or provision of its Charter
or Bylaws, or in violation of any franchise, license, permit,
applicable law, rule, regulation, judgment or decree of any
Governmental Entity.
(z)
Corporate Power; Licenses;
Consents
.
(i)
Conduct of Business
. The Company has
all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and
permits of and from all governmental regulatory officials and
bodies that it needs as of the date hereof to conduct its business
purpose as described in the Preliminary Offering Memorandum, the
Time of Sale Information and the Offering Memorandum.
(ii)
Transactions
Contemplated Herein
. The Company has all corporate power and
authority to enter into this Agreement and the other Transaction
Documents and to carry out the provisions and conditions hereof and
thereof, and all consents, authorizations, approvals and orders
required in connection therewith have been obtained. No consent,
authorization or order of, and no filing with, any court,
Governmental Entity or other body is required for the valid
issuance, sale and delivery of the Securities and the consummation
of the transactions and agreements contemplated by this Agreement
and the other Transaction Documents and as contemplated by the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum, except with respect to applicable federal
and state securities laws.
(aa)
Directors,
Officers and Principal Shareholders
. To the Company’s
knowledge, all information concerning the Company’s
directors, officers and principal shareholders as described in the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum, as well as in the Lock-Up Agreement (as
defined in
Section
3(ii)
), is true and correct in all material respects and the
Company has not become aware of any information which would cause
such information to become materially inaccurate and
incorrect.
(bb)
Litigation;
Governmental Proceedings
. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s
knowledge, threatened against, or involving the Company which has
not been disclosed in the Preliminary Offering Memorandum, the Time
of Sale Information and the Offering Memorandum, which if resolved
adversely to the Company is reasonably likely to result in a
Material Adverse Change.
(cc)
Good
Standing
. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of
the State of Nevada as of the date hereof, and is duly qualified to
do business and is in good standing in each other jurisdiction in
which its ownership or lease of property or the conduct of business
requires such qualification, except where the failure to qualify,
singularly or in the aggregate, would not have or reasonably be
expected to result in a Material Adverse Change.
(dd)
Insurance
.
The Company carries or is entitled to the benefits of insurance,
with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, including, but not limited
to, directors and officers insurance coverage at least equal to
$5,000,000. The Company has no reason to believe that it will not
be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result
in a Material Adverse Change.
(ee)
Foreign
Corrupt Practices Act
. The Company or, to the
Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any other person acting on behalf of
the Company, has not, directly or indirectly, given or agreed to
give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of the
Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage or
penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, might have had a
Material Adverse Change, or (iii) if not continued in the future,
might adversely affect the assets, business, operations or
prospects of the Company. The Company has taken reasonable steps to
ensure that its accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
(ff)
Compliance
with OFAC
. Neither the Company nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of
the Company or any other person acting on behalf of the Company, is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Department of the Treasury
(“
OFAC
”), and
the Company will not, directly or indirectly, use the proceeds of
the Offering hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
(gg)
Money
Laundering Laws
. The operations of the Company are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental
Entity (collectively, the “
Money Laundering Laws
”); and no
action, suit or proceeding by or before any Governmental Entity
involving the Company with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company,
threatened.
(hh)
Officers’
Certificate
. Any certificate signed by any duly authorized
officer of the Company and delivered to the Initial Purchaser or to
the Initial Purchaser’s counsel shall be deemed a
representation and warranty by the Company to the Initial Purchaser
as to the matters covered thereby.
(ii)
Lock-Up
Agreements
.
Schedule 2
hereto contains a
complete and accurate list of the Company’s executive
officers and directors as well as any stockholders deemed to be
affiliates through their ownership of the Company’s Class B
Common Stock or Class A Common Stock (collectively, the
“
Lock-Up
Parties
”). The Company has caused each of the Lock-Up
Parties to deliver to the Initial Purchaser an executed Lock-Up
Agreement, in the form attached hereto as
Exhibit A
(the
“
Lock-Up
Agreement
”), prior to the execution of this
Agreement.
(jj)
Subsidiaries
.
Except as set forth in the Preliminary Offering Memorandum, the
Time of Sale Information and the Offering Memorandum, the Company
has no direct or indirect subsidiaries.
(kk)
Related
Party Transactions
. There are no business relationships or
related party transactions involving the Company or any other
person required to be described in the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum that have not been described as required.
(ll)
Board
of Directors
. The Board of Directors of the Company is
comprised of the persons set forth in the Company’s Annual
Report on Form 10-K filed with the Commission on April 1, 2019 and
incorporated by reference into the Preliminary Offering Memorandum,
the Time of Sale Information and the Offering Memorandum. The
qualifications of the persons serving as board members and the
overall composition of the board comply with the Exchange Act, the
Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder
(the “
Sarbanes-Oxley
Act
”) applicable to the Company and the listing rules
of the NASDAQ Capital Market. At least one member of the Audit
Committee of the Board of Directors of the Company qualifies as an
“audit committee financial expert,” as such term is
defined under Regulation S-K and the listing rules of the NASDAQ
Capital Market.
(mm)
Sarbanes-Oxley
Compliance
.
(i)
Disclosure Controls.
The Company has
developed and currently maintains disclosure controls and
procedures that comply with Rule 13a-15 or 15d-15 under the
Exchange Act Regulations, and such controls and procedures are
effective to ensure that all material information concerning the
Company is made known on a timely basis to the individuals
responsible for the preparation of the Company’s Exchange Act
filings and other public disclosure documents.
(ii)
Compliance
.
The Company is, or at the Time of Sale and on the Closing Date will
be, in material compliance with the provisions of the
Sarbanes-Oxley Act applicable to it, and has implemented or will
implement such programs and taken reasonable steps to ensure the
Company’s future compliance (not later than the relevant
statutory and regulatory deadlines therefor) with all of the
material provisions of the Sarbanes-Oxley Act.
(nn)
Accounting
Controls
. The Company maintains systems of “internal
control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act Regulations) that comply
with the requirements of the Exchange Act and have been designed
by, or under the supervision of, its principal executive and
principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the Preliminary
Offering Memorandum, the Time of Sale Information and the Offering
Memorandum, the Company is not aware of any material weaknesses in
its internal controls. The Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been
advised of: (i) all significant deficiencies and material
weaknesses in the design or operation of internal controls over
financial reporting which are known to the Company’s
management and that have adversely affected or are reasonably
likely to adversely affect the Company’ ability to record,
process, summarize and report financial information; and (ii) any
fraud known to the Company’s management, whether or not
material, that involves management or other employees who have a
significant role in the Company’s internal controls over
financial reporting.
(oo)
No
Investment Company Status
. The Company is not and, after
giving effect to the Offering and the application of the proceeds
thereof as described in the Preliminary Offering Memorandum, the
Time of Sale Information and the Offering Memorandum, will not be,
required to register as an “investment company,” as
defined in the Investment Company Act of 1940, as
amended.
(pp)
No
Labor Disputes
. No labor dispute with the employees of the
Company exists or, to the knowledge of the Company, is
imminent.
(qq)
Intellectual
Property Rights
. The Company owns or possesses or has valid
rights to use all patents, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights,
licenses, trade secrets and similar rights (“
Intellectual Property Rights
”), if
any, necessary for the conduct of the business of the Company as
currently carried on and as described in the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum. To the knowledge of the Company, no action or use by
the Company necessary for the conduct of its business as currently
carried on and as described in the Preliminary Offering Memorandum
and the Offering Memorandum will involve or give rise to any
infringement of, or license or similar fees for, any Intellectual
Property Rights of others. Except as would not reasonably be
expected to result, individually or in the aggregate, in a Material
Adverse Change, the Company has not received any notice alleging
any such infringement, fee or conflict with asserted Intellectual
Property Rights of others. Except as would not reasonably be
expected to result, individually or in the aggregate, in a Material
Adverse Change (A) to the knowledge of the Company, there is no
infringement, misappropriation or violation by third parties of any
of the Intellectual Property Rights owned by the Company; (B) there
is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the rights
of the Company in or to any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim, that would, individually or in the
aggregate, together with any other claims in this
Section 3(qq)
, reasonably be
expected to result in a Material Adverse Change; (C) the
Intellectual Property Rights owned by the Company and, to the
knowledge of the Company, the Intellectual Property Rights licensed
to the Company have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims in this
Section 3(qq)
, reasonably be
expected to result in a Material Adverse Change; (D) there is no
pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, the Company has not
received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for
any such claim that would, individually or in the aggregate,
together with any other claims in this
Section 3 (rr)
, reasonably be
expected to result in a Material Adverse Change; and (E) to the
Company’s knowledge, no employee of the Company is in
violation in any material respect of any term of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company, or actions undertaken
by the employee while employed with the Company and could
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change. To the Company’s knowledge, all
material trade secrets developed by and belonging to the Company
which have not been patented have been kept confidential. The
Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any
other person or entity that are required to be set forth in the
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum and are not described therein. The
Preliminary Offering Memorandum, the Time of Sale Information and
the Offering Memorandum contain in all material respects the same
description of the matters set forth in the preceding sentence.
None of the technology employed by the Company has been obtained or
is being used by the Company in violation of any contractual
obligation binding on the Company or, to the Company’s
knowledge, any of its officers, directors or employees, or
otherwise in violation of the rights of any persons.
(rr)
Taxes
.
The Company has filed all returns (as hereinafter defined) required
to be filed with taxing authorities prior to the date hereof or has
duly obtained extensions of time for the filing thereof. The
Company has paid all taxes (as hereinafter defined) shown as due on
such returns that were filed and has paid all taxes imposed on or
assessed against the Company. The provisions for taxes payable, if
any, shown on the financial statements accompanying or incorporated
by reference into the Offering Memorandum are sufficient for all
accrued and unpaid taxes, whether or not disputed, and for all
periods to and including the dates of such financial statements.
Except as disclosed in writing to the Initial Purchaser, (i) no
issues have been raised (and are currently pending) by any taxing
authority in connection with any of the returns or taxes asserted
as due from the Company, and (ii) no waivers of statutes of
limitation with respect to the returns or collection of taxes have
been given by or requested from the Company. The term
“
taxes
” means
all federal, state, local, foreign and other net income, gross
income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties or
other taxes, fees, assessments or charges of any kind whatever,
together with any interest and any penalties, additions to tax or
additional amounts with respect thereto. The term
“
returns
” means
all returns, declarations, reports, statements and other documents
required to be filed in respect to taxes.
(ss)
ERISA
Compliance
. The Company and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “
ERISA
”)) established or maintained
by the Company or its “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA.
“
ERISA
Affiliate
” means, with respect to the Company, any
member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations
thereunder (the “
Code
”) of which the Company is a
member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company or any
of its ERISA Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined under ERISA).
Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
(tt)
Compliance
with Laws
. The Company: (A) is and at all times has been in
compliance with all statutes, rules or regulations applicable to
the conduct of the Company’s business (collectively, the
“
Applicable
Laws
”), except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Change; (B) has not received any warning letter, untitled letter or
other correspondence or notice from any other Governmental Entity
alleging or asserting noncompliance with any Applicable Laws or any
licenses, certificates, approvals, clearances, authorizations,
permits and supplements or amendments thereto required by any such
Applicable Laws (collectively, the “
Authorizations
”); (C) possesses
all material Authorizations and such Authorizations are valid and
in full force and effect and the Company is not in material
violation of any term of any such Authorizations; (D) has not
received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
Governmental Entity or third party alleging that any of the
Company’s activities is in violation of any Applicable Laws
or Authorizations and has no knowledge that any such Governmental
Entity or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (E) has not
received notice that any Governmental Entity has taken, is taking
or intends to take action to limit, suspend, modify or revoke any
Authorizations and has no knowledge that any such governmental
authority is considering such action; and (F) has filed, obtained,
maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were
complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission).
(uu)
Real
Property
. Except as described in the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum, the Company has good and marketable title in fee simple
to, or has valid rights to lease or otherwise use, all items of
real or personal property which are material to the business of the
Company, in each case free and clear of all liens, encumbrances,
security interests, claims and defects that could not, singly or in
the aggregate, materially affect the value of such property and do
not interfere with the use made and proposed to be made of such
property by the Company; and all of the leases and subleases
material to the business of the Company, and under which the
Company holds properties described in the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering
Memorandum, are in full force and effect, and the Company has not
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company under any
of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company to the continued possession
of the leased or subleased premises under any such lease or
sublease.
(vv)
Contracts
Affecting Capital
. There are no transactions, arrangements
or other relationships between and/or among the Company, any of its
affiliates (as such term is defined in Rule 405 of the Securities
Act Regulations) and any unconsolidated entity, including, but not
limited to, any structured finance, special purpose or limited
purpose entity, that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or
requirements for its capital resources required to be described or
incorporated by reference in the Preliminary Offering Memorandum,
the Time of Sale Information and the Offering Memorandum which have
not been described or incorporated by reference as
required.
(ww)
Loans
to Directors or Officers
. There are no outstanding loans,
advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the
Company to or for the benefit of any of the officers or directors
of the Company or any of their respective family members, except as
disclosed in the Preliminary Offering Memorandum, the Time of Sale
Information and the Offering Memorandum.
(xx)
Smaller
Reporting Company
. As of the Time of Sale, the Company was a
“smaller reporting company,” as defined in Rule 12b-2
of the Exchange Act Regulations.
(yy)
Industry
Data
. The statistical and market-related data included in
each of the Preliminary Offering Memorandum, the Time of Sale
Information and the Offering Memorandum are based on or derived
from sources that the Company reasonably and in good faith believes
are reliable and accurate or represent the Company’s good
faith estimates that are made on the basis of data derived from
such sources.
(zz)
Emerging
Growth Company
. From the Time of Sale through the date
hereof, the Company has been and is an “emerging growth
company,” as defined in Section 2(a) of the Securities Act
(an “
Emerging Growth
Company
”).
(aaa)
Margin
Securities
. The Company owns no “margin
securities” as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System (the
“
Federal Reserve
Board
”), and none of the proceeds of Offering will be
used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might
cause any of the shares of Class B Common Stock to be considered a
“purpose credit” within the meanings of Regulation T, U
or X of the Federal Reserve Board.
(bbb)
NASDAQ
Marketplace Rules
. The Company is, and after giving effect
to the Offering will be, in compliance in all material respects
with all applicable corporate governance requirements set forth in
the NASDAQ Marketplace Rules.
(ccc)
NASDAQ
Stockholder Approval Rules
. No approval of the stockholders
of the Company under the rules and regulations of NASDAQ (including
Rule 5635 of the NASDAQ Marketplace Rules) is required to issue and
deliver the Securities to the Initial Purchaser or the Underlying
Securities upon the conversion thereof.
4.
Further Agreements of the
Company
. The Company covenants and agrees with the Initial
Purchaser that:
(a)
Delivery of Copies.
The Company will
deliver to the Initial Purchaser as many copies of the Preliminary
Offering Memorandum, any other Time of Sale Information, any Issuer
Written Communication and the Offering Memorandum (including all
amendments and supplements thereto) as the Initial Purchaser may
reasonably request.
(b)
Offering Memorandum, Amendments or
Supplements
. Before finalizing the Offering Memorandum or
making or distributing any amendment or supplement to any of the
Time of Sale Information or the Offering Memorandum or filing with
the Commission any document that will be incorporated by reference
therein, the Company will furnish to the Initial Purchaser and
counsel for the Initial Purchaser a copy of the proposed Offering
Memorandum or such amendment or supplement or document to be
incorporated by reference therein for review, and will not
distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which
the Initial Purchaser reasonably objects.
(c)
Additional Written Communications.
Before making, preparing, using, authorizing, approving or
referring to any Issuer Written Communication, the Company will
furnish to the Initial Purchaser and counsel for the Initial
Purchaser a copy of such written communication for review and will
not make, prepare, use, authorize, approve or refer to any such
written communication to which the Initial Purchaser reasonably
objects.
(d)
Notice to the Initial Purchaser.
The
Company will advise the Initial Purchaser promptly, and confirm
such advice in writing, (i) of the issuance by any governmental or
regulatory authority of any order preventing or suspending the use
of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or the initiation or
threatening of any proceeding for that purpose; (ii) of the
occurrence or development of any event at any time prior to the
completion of the initial offering of the Securities as a result of
which any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum as then amended or
supplemented would include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing when
such Time of Sale Information, Issuer Written Communication or the
Offering Memorandum is delivered to a purchaser, not misleading;
and (iii) of the receipt by the Company of any notice with respect
to any suspension of the qualification of the Securities for offer
and sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order
preventing or suspending the use of any of the Time of Sale
Information, any Issuer Written Communication or the Offering
Memorandum or suspending any such qualification of the Securities
and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.
(e)
Ongoing Compliance of the Offering Memorandum
and Time of Sale Information
. (1) If at any time prior to
the completion of the initial offering of the Securities, (i) any
event or development shall occur or condition shall exist as a
result of which the Offering Memorandum as then amended or
supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing when
the Offering Memorandum is delivered to a purchaser, not misleading
or (ii) it is necessary to amend or supplement the Offering
Memorandum to comply with law, the Company will immediately notify
the Initial Purchaser thereof and forthwith prepare and, subject to
paragraph (b) above, furnish to the Initial Purchaser such
amendments or supplements to the Offering Memorandum (or any
document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in
the Offering Memorandum as so amended or supplemented (or including
such document to be incorporated by reference therein) will not, in
the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that
the Offering Memorandum will comply with law and (2) if at any time
prior to the Closing Date (i) any event or development shall occur
or condition shall exist as a result of which any of the Time of
Sale Information as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading or (ii) it is necessary to amend or supplement any of
the Time of Sale Information to comply with law, the Company will
immediately notify the Initial Purchaser thereof and forthwith
prepare and, subject to paragraph (b) above, furnish to the Initial
Purchaser such amendments or supplements to any of the Time of Sale
Information (or any document to be filed with the Commission and
incorporated by reference therein) as may be necessary so that the
statements in any of the Time of Sale Information as so amended or
supplemented will not, in light of the circumstances under which
they were made, be misleading.
(f)
Blue Sky Compliance.
The Company will
qualify the Securities for offer and sale under the securities or
“blue sky” laws of such jurisdictions as the Initial
Purchaser shall reasonably request and will continue such
qualifications in effect so long as required for the offering and
resale of the Securities;
provided
that the Company shall
not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where
it would not otherwise be required to so qualify, (ii) file any
general consent to service of process in any such jurisdiction or
(iii) subject itself to taxation in any such jurisdiction if it is
not otherwise so subject.
(g)
Clear Market.
For a period of 90 days
after the date of the offering of the Securities, the Company will
not (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, or file with, or
submit to, the Commission a registration statement under the
Securities Act relating to, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for
Common Stock (other than pursuant to the Registration Rights
Agreement), or publicly disclose the intention to make any offer,
sale, pledge, disposition, submission or filing (except for
registration statements on Form S-4 or Form S-8, the registration
statement required pursuant to the Registration Rights Agreement
and a registration statement on Form S-3 registering the sale by us
of shares of Common Stock or other securities,
provided
we are not permitted
to make any sales pursuant thereto until August 8, 2019, or a
registration statement on Form S-3 registering (y) the resale by
the purchasers of our Class B Common Stock in the Concurrent Common
Stock Offering as described in the Time of Sale Information and the
Offering Memorandum (the “
Concurrent Common Stock Offering
”)
and (z) the resale of 540,358 shares of Common Stock issued or to
be issued by the Company as consideration in connection with the
Company’s purchase of AutoSport, Inc., as described in the
Company’s Annual Report on Form 10-K filed with the SEC on
April 1, 2019), or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock or any such other securities, whether
any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in
cash or otherwise. The restrictions contained in this
Section 4(g)
shall not apply
(i) the Securities to be sold hereunder and any Underlying
Securities issued upon conversion thereof, (ii) the issuance by the
Company of shares of capital stock of the Company upon the exercise
of a stock option or warrant or the conversion or vesting of a
security outstanding on the date hereof, (iii) the issuance by the
Company of equity awards of the Company under any equity
compensation plan of the Company, (iv) the issuance by the Company
of shares of capital stock of the Company or securities convertible
into, exchangeable for or that represent the right to receive
shares of capital stock of the Company in connection with the
acquisition by the Company of the securities, business, technology,
property or other assets of another person or entity, (v) the entry
into the purchase agreement related to the Concurrent Common Stock
Offering, (vi) the sale of shares of capital stock of the Company
to cover the payment of exercise prices or the payment of taxes
associated with the exercise or vesting of equity awards under any
equity compensation plan of the Company, (vii) the filing of a
post-effective amendment to the Company’s registration
statements on Form S-3 (Reg. Nos. 333-223425, 333-226514 and
333-228483) and Form S-8 (Reg. Nos. 333-219203, 333-223428 and
333-226440) with the Commission to maintain effectiveness of such
registration statements and (viii) the filing of the registration
statement required pursuant to the Registration Rights Agreement,
provided
that in
each of (ii) and (iii) above, the underlying shares of capital
stock of the Company shall be restricted from sale during the
entire Lock-Up Period.
(h)
Use of Proceeds.
The Company will apply
the net proceeds from the sale of the Securities as described in
each of the Time of Sale Information and the Offering Memorandum
under the heading “Use of Proceeds”.
(i)
No Stabilization.
The Company will not
take, directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Securities and will not take any
action prohibited by Regulation M under the Exchange Act in
connection with the distribution of the Securities contemplated
hereby.
(j)
Underlying Securities
. The Company will
reserve and keep available at all times, free of pre-emptive
rights, shares of Common Stock for the purpose of enabling the
Company to satisfy all obligations to issue the Underlying
Securities upon conversion of the Securities (assuming physical
settlement and the maximum conversion rate under any
“make-whole” adjustment applies). The Company will use
its best efforts to cause the Underlying Securities to be listed on
NASDAQ.
(k)
Investment Company
. The Company is
familiar with the Investment Company Act and the rules and
regulations thereunder, and will in the future conduct its affairs,
in such a manner and will use its commercially reasonable best
efforts to ensure that the Company will not be an “investment
company” within the meaning of the Investment Company Act and
the rules and regulations thereunder.
(l)
Supplying Information
. While the
Securities remain outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which the
Company is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, furnish to holders of the Securities,
prospective purchasers of the Securities designated by such holders
and securities analysts, in each case upon request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(m)
DTC
. The Company will assist the
Initial Purchaser in arranging for the Securities to be eligible
for clearance and settlement through DTC.
(n)
No Resales by the Company
. During the
period from the Closing Date until one year after the Closing Date,
the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been acquired by any of them, except for
Securities purchased by the Company or any of its affiliates and
resold in a transaction registered under the Securities
Act.
(o)
No Integration
. Neither the Company nor
any of its affiliates (as defined in Rule 501(b) of Regulation D)
will, directly or through any agent, sell, offer for sale, solicit
offers to buy or otherwise negotiate in respect of, any security
(as defined in the Securities Act), that is or will be integrated
with the sale of the Securities in a manner that would require
registration of the Securities under the Securities
Act.
(p)
No General Solicitation or Directed Selling
Efforts
. None of the Company or any of its affiliates or any
other person acting on its or their behalf (other than the Initial
Purchaser, as to which no covenant is given) will (i) solicit
offers for, or offer or sell, the Securities by means of any form
of general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(a)(2) of the Securities
Act or (ii) engage in any directed selling efforts within the
meaning of Regulation S, and all such persons will comply with the
offering restrictions requirement of Regulation S.
(q)
Right of Participation
. The Company
grants the Initial Purchaser the right of first refusal
(“
Right of
Participation
”) for a period of time commencing on the
date of this Agreement and ending on February 8, 2021 to act as
sole (or lead, in the Initial Purchase’s sole discretion)
managing underwriter and bookrunner, placement agent and/or
distribution agent, as the case may be, in any direct or indirect
offer to sell, sale, contract to sell, grant of any option to sell
or other disposal of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company, in each case in any
“at-the-market” or continuous equity transaction to the
extent the Company is not contractually prohibited from undertaking
such equity transaction. The Company shall provide written notice
to the Initial Purchaser of the terms of such offering and if the
Initial Purchaser fails to accept in writing any such proposal
within ten (10) days after receipt of such written notice, then the
Initial Purchaser will have no claim or right with respect to any
such offering(s).
5.
Certain Agreements of the Initial
Purchaser
. The Initial Purchaser hereby represents and
agrees that it has not and will not use, authorize use of, refer
to, or participate in the planning for use of, any written
communication that constitutes an offer to sell or the solicitation
of an offer to buy the Securities other than (i) the Preliminary
Offering Memorandum and the Offering Memorandum, (ii) a written
communication that contains no “issuer information” (as
defined in Rule 433(h)(2) under the Securities Act) that was not
included (including through incorporation by reference) in the Time
of Sale Information or the Offering Memorandum, (iii) any written
communication listed on
Annex A
or prepared pursuant to
Section 4(c)
above
(including any electronic road show), (iv) any written
communication prepared by the Initial Purchaser and approved by the
Company in advance in writing or (v) any written communication
relating to or that contains the terms of the Securities and/or
other information that was included (including through
incorporation by reference) in the Time of Sale Information or the
Offering Memorandum.
6.
Conditions of Initial
Purchaser’s Obligations.
The obligation of the Initial
Purchaser to purchase the Securities on the Closing Date as
provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following
additional conditions:
(a)
Representations and Warranties.
The
representations and warranties of the Company contained herein
shall be true and correct on the date hereof and on and as of the
Closing Date; and the statements of the Company and its officers
made in any certificates delivered pursuant to this Agreement shall
be true and correct on and as of the Closing Date.
(b)
No Downgrade.
Subsequent to the earlier
of (A) the Time of Sale and (B) the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating
accorded any securities or preferred stock issued or guaranteed by
the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization”, as such term is
defined under Section 3(a)(62) under the Exchange Act and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, or has changed its outlook with respect to,
its rating of any such securities or preferred stock issued or
guaranteed by the Company or any of its subsidiaries (other than an
announcement with positive implications of a possible
upgrading).
(c)
No Material Adverse Change.
No event or
condition of a type described in
Section 3(p)
hereof shall have
occurred or shall exist, which event or condition is not described
in the Time of Sale Information (excluding any amendment or
supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) and the effect of which in the
judgment of the Initial Purchaser makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the
Securities on the Closing Date on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and
the Offering Memorandum.
(d)
Officer's Certificate.
The Initial
Purchaser shall have received on and as of the Closing Date, a
certificate of the chief financial officer or chief accounting
officer of the Company and one additional senior executive officer
of the Company who is satisfactory to the Initial Purchaser (i)
confirming that such officers have carefully reviewed the Time of
Sale Information and the Offering Memorandum and, to the knowledge
of such officers, the representations set forth in
Sections 3(b)
and
3(d)
hereof are true and
correct, (ii) confirming that the other representations and
warranties of the Company in this Agreement are true and correct
and that the Company has complied with all agreements and satisfied
all conditions on their part to be performed or satisfied hereunder
at or prior to such Closing Date and (iii) to the effect set forth
in paragraphs
(b)
and
(c)
above.
(e)
Comfort Letters.
(i) On the date of
this Agreement and on the Closing Date, Scharf Pera & Co., PLCC
shall have furnished to the Initial Purchaser, at the request of
the Company, a letter, dated the respective dates of delivery
thereof and addressed to the Initial Purchaser, in form and
substance reasonably satisfactory to the Initial Purchaser,
containing statements and information of the type customarily
included in accountants’ “comfort letters” to
Initial Purchaser with respect to the financial statements and
certain financial information contained or incorporated by
reference in each of the Time of Sale Information and the Offering
Memorandum;
provided
, that the letters
delivered on the Closing Date shall use a “cut-off”
date no more than three business days prior to such Closing
Date.
(f)
Opinion and 10b-5 Statement of Counsel for the
Company.
At the request of the Company, (i) Snell &
Wilmer L.L.P., Nevada counsel for the Company, shall have furnished
to the Initial Purchaser their written opinion, dated the Closing
Date, and addressed to the Initial Purchaser, in form and substance
reasonably satisfactory to the Initial Purchaser, and (ii) Akerman
LLP, counsel for the Company, shall have furnished to the Initial
Purchaser their written opinion (which written opinion shall
include a 10b-5 opinion), dated the Closing Date and addressed to
the Initial Purchaser, in form and substance reasonably
satisfactory to the Initial Purchaser.
(g)
Opinion and 10b-5 Statement of Counsel for the
Initial Purchaser.
The Initial Purchaser shall have received
on and as of the Closing Date, a 10b-5 statement of McGuireWoods
LLP, counsel for the Initial Purchaser, with respect to such
matters as the Initial Purchaser may reasonably request, and such
counsel shall have received such documents and information as they
may reasonably request to enable them to pass upon such
matters.
(h)
No Legal Impediment to Issuance.
No
action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal,
state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the
Securities; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing
Date, prevent the issuance or sale of the Securities.
(i)
Good Standing
. The Initial Purchaser
shall have received on and as of the Closing Date satisfactory
evidence of the good standing of the Company and its subsidiaries
in their respective jurisdictions of organization and their good
standing in such other jurisdictions as the Initial Purchaser may
reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of
such jurisdictions.
(j)
Exchange Listing.
An application for
the listing of the Underlying Securities shall have been submitted
to NASDAQ.
(k)
Lock-up Agreements
. The
“lock-up” agreements, each substantially in the form of
Exhibit A
hereto,
between you and the persons and entities listed on
Schedule 2
hereto relating to
sales and certain other dispositions of shares of Class A Common
Stock, Class B Common Stock or certain other securities, delivered
to you on or before the date hereof, shall be full force and effect
on the Closing Date.
(l)
Registration Rights Agreement
. The
Registration Rights Agreement, substantially in the form of
Exhibit B
hereto,
between the Company and the Initial Purchaser, shall have been duly
executed and delivered by the Company.
(m)
DTC
. The Securities shall be eligible
for clearance and settlement through DTC.
(n)
Additional Documents.
On or prior to
the Closing Date, the Company shall have furnished to the Initial
Purchaser such further certificates and documents as the Initial
Purchaser may reasonably request.
All
opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in form and substance
reasonably satisfactory to counsel for the Initial
Purchaser.
7.
Indemnification and
Contribution
.
(a)
Indemnification of the Initial
Purchaser.
The Company agrees to indemnify and hold harmless
the Initial Purchaser, its affiliates, directors and officers and
each person, if any, who controls the Initial Purchaser within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, legal fees and
other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are
incurred) that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained
in the Preliminary Offering Memorandum, any of the other Time of
Sale Information, any Issuer Written Communication, any road show
as defined in Rule 433(h) under the Securities Act (a
“
road show
”) or
the Offering Memorandum (or any amendment or supplement thereto) or
any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement
or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to
the Initial Purchaser furnished to the Company in writing by the
Initial Purchaser expressly for use therein, it being understood
and agreed that the only such information furnished by the Initial
Purchaser consists of the Initial Purchaser
Information.
(b)
Indemnification of the Company.
Initial
Purchaser agrees to indemnify and hold harmless the Company, its
directors, its officers, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity
set forth in
paragraph
(a)
above, but only with respect to any losses, claims,
damages or liabilities that arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with any
information relating to the Initial Purchaser furnished to the
Company in writing by the Initial Purchaser expressly for use in
the Preliminary Offering Memorandum, any of the other Time of Sale
Information (including any of the other Time of Sale Information
that has subsequently been amended), any Issuer Written
Communication, any road show or the Offering Memorandum (or any
amendment or supplement thereto), it being understood and agreed
that the only such information furnished by the Initial Purchaser
consists of the following information in the Offering Memorandum
furnished on behalf of the Initial Purchaser: the information
contained in the second paragraph and the third and fourth
sentences of the third paragraph in the subsection “New Issue
of Notes” and the first sentence of the first paragraph in
the subsection “Price Stabilization and Short Positions;
Purchase of Class B Common Stock” under the caption
“Plan of Distribution.”
(c)
Notice and Procedures.
If any suit,
action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnification may be
sought pursuant to either
paragraph (a)
or
(b)
above, such person (the
“
Indemnified
Person
”) shall promptly notify the person against whom
such indemnification may be sought (the “
Indemnifying Person
”) in writing;
provided
that the
failure to notify the Indemnifying Person shall not relieve it from
any liability that it may have under
paragraph (a)
or
(b)
above except to the extent
that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and
provided
,
further
, that the failure to
notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than
under
paragraph (a)
or
(b)
above. If
any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying
Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not,
without the consent of the Indemnified Person, be counsel to the
Indemnifying Person) to represent the Indemnified Person and any
others entitled to indemnification pursuant to this Section that
the Indemnifying Person may designate in such proceeding and shall
pay the fees and expenses in such proceeding and shall pay the fees
and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall
have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Person; (iii) the Indemnified
Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to
those available to the Indemnifying Person; or (iv) the named
parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying
Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and
expenses shall be paid or reimbursed as they are incurred. Any such
separate firm for the Initial Purchaser, its affiliates, directors
and officers and any control persons of the Initial Purchaser shall
be designated in writing by the Initial Purchaser and any such
separate firm for the Company, its directors, its officers and any
control persons of the Company shall be designated in writing by
the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment
for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for
fees and expenses of counsel as contemplated by this paragraph, the
Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by the
Indemnifying Person of such request and (ii) the Indemnifying
Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement.
No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnification could have been
sought hereunder by such Indemnified Person, unless such settlement
(x) includes an unconditional release of such Indemnified Person,
in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of
such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf
of any Indemnified Person.
(d)
Contribution.
If the indemnification
provided for in paragraphs (a) or (b) above is unavailable to an
Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchaser, on the other,
from the offering of the Securities or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of
the Company, on the one hand, and the Initial Purchaser, on the
other, in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Initial
Purchaser, on the other, shall be deemed to be in the same
respective proportions as the net proceeds (before deducting
expenses) received by the Company from the sale of the Securities
and the total discounts and commissions received by the Initial
Purchaser in connection therewith, as provided in this Agreement,
bear to the aggregate offering price of the Securities. The
relative fault of the Company, on the one hand, and the Initial
Purchaser, on the other, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by
the Initial Purchaser and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
(e)
Limitation on Liability.
The Company
and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this
Section 7
were determined by
pro
rata
any method of allocation
that does not take account of the equitable considerations referred
to in paragraph (d) above. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection
with any such action or claim. Notwithstanding the provisions of
this
Section 7
, in
no event shall the Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and
commissions received by the Initial Purchaser with respect to the
offering of the Securities exceeds the amount of any damages that
the Initial Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f)
Non-Exclusive Remedies.
The remedies
provided for in this
Section 7
are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in
equity.
8.
Effectiveness of Agreement
.
This Agreement shall become effective as of the date first written
above.
9.
Termination
. This Agreement may
be terminated in the absolute discretion of the Initial Purchaser,
by notice to the Company, if after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by any of
NYSE or The NASDAQ Stock Market; (ii) trading of any securities
issued or guaranteed by the Company shall have been suspended on
any exchange or in any over-the-counter market; (iii) a general
moratorium on commercial banking activities shall have been
declared by federal or New York State authorities; or (iv) there
shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis, either
within or outside the United States, that, in the judgment of the
Initial Purchaser, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or
delivery of the Securities on the Closing Date on the terms and in
the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum.
10.
Payment of Expenses
.
(a)
Whether or not the
transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or cause to be paid
all costs and expenses incident to the performance of its
obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that
connection; (ii) the costs incident to the preparation and printing
of the Preliminary Offering Memorandum, any other Time of Sale
Information, any Issuer Written Communication and the Offering
Memorandum (including any amendments and supplements thereto) and
the distribution thereof; (iii) the costs of reproducing and
distributing each of the Transaction Documents; (iv) the fees and
expenses of the Company's counsel and independent accountants; (v)
the fees and expenses incurred in connection with the registration
or qualification and determination of eligibility for investment of
the Securities under the laws of such jurisdictions as the Initial
Purchaser may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees
and expenses of counsel for the Initial Purchaser); (vi) any fees
charged by rating agencies for rating the Securities; (vii) the
fees and expenses of the Trustee and any paying agent (including
related fees and expenses of any counsel to such parties); (viii)
all expenses and application fees incurred in connection with the
approval of the Securities for book-entry transfer by DTC; (ix) all
expenses incurred by the Company in connection with any “road
show” presentation to potential investors; (x) all expenses
and application fees related to the listing of the Underlying
Securities on Nasdaq; and (xi) up to a maximum of $150,000 for all
out-of-pocket costs and expenses (including the fees and expenses
of its counsel) reasonably incurred by the Initial Purchaser in
connection with this Agreement and the offering contemplated
hereby.
(b)
If (i) this
Agreement is terminated pursuant to
Section 9
, (ii) the Company for
any reason fails to tender the Securities for delivery to the
Initial Purchaser or (iii) the Initial Purchaser decline to
purchase the Securities for any reason permitted under this
Agreement, the Company shall reimburse the Initial Purchaser up to
a maximum of $150,000 for all out-of-pocket costs and expenses
(including the fees and expenses of its counsel) reasonably
incurred by the Initial Purchaser in connection with this Agreement
and the offering contemplated hereby.
11.
Persons Entitled to Benefit of
Agreement
. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors
and the officers and directors and any controlling persons referred
to herein, and the affiliates of the Initial Purchaser referred to
in
Section 7
hereof. Nothing in this Agreement is intended or shall be construed
to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision
contained herein. No purchaser of Securities from the Initial
Purchaser shall be deemed to be a successor merely by reason of
such purchase.
12.
Survival
. The respective
indemnities, rights of contribution, representations, warranties
and agreements of the Company and the Initial Purchaser contained
in this Agreement or made by or on behalf of the Company or the
Initial Purchaser pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment
for the Securities and shall remain in full force and effect,
regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Initial
Purchaser.
13.
Certain Defined Terms
. For
purposes of this Agreement, (a) except where otherwise expressly
provided, the term “
affiliate
” has the meaning set
forth in Rule 405 under the Securities Act; (b) the term
“
business day
”
means any day other than a day on which banks are permitted or
required to be closed in New York City; (c) the term
“
subsidiary
” has
the meaning set forth in Rule 405 under the Securities Act; and (d)
the term “
significant
subsidiary
” has the meaning set forth in Rule 1-02 of
Regulation S-X under the Exchange Act.
14.
Compliance with USA Patriot
Act
. In accordance with the requirements of the USA Patriot
Act, the Initial Purchaser is required to obtain, verify and record
information that identifies their clients, including the Company,
which information may include the name and address of its clients,
as well as other information that will allow the Initial Purchaser
to properly identify its clients.
15.
Miscellaneous
.
(a)
Notices.
All notices and other
communications hereunder shall be in writing and shall be deemed to
have been duly given if mailed or transmitted and confirmed by any
standard form of telecommunication.
If to
the Initial Purchaser:
JMP
Securities LLC
600
Montgomery Street, Suite 1100
San
Francisco, CA 94111
with a
copy (which shall not constitute notice) to:
McGuireWoods
LLP
1251
Avenue of the Americas, 20
th
Floor
New
York, New York 10020
Attention:
Stephen E. Older, Esq.
Email:
solder@mcguirewoods.com
Fax:
(212) 715-2307
If to
the Company:
RumbleOn,
Inc.
1350
Lakeshore Drive, Suite 160
Coppell,
Texas 75019
Attention:
Marshall Chesrown, Chairman and Chief Executive
Officer
Steven R. Berrard, Chief Financial Officer
Fax No:
704-980-0038
with a
copy (which shall not constitute notice) to:
Akerman
LLP
350
East Las Olas Boulevard, Suite 1600
Fort
Lauderdale, FL 33301
Attention:
Michael Francis, Esq. and Christina Russo, Esq.
Email:
michael.francis@akerman.com and
christina.russo@akerman.com
Fax No:
(954) 463-2224
(b)
Governing Law.
This Agreement and any
claim, controversy or dispute arising under or related to this
Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(c)
Waiver of Jury Trial
. Each of the
parties hereto hereby waives any right to trial by jury in any suit
or proceeding arising out of or relating to this
Agreement.
(d)
Counterparts.
This Agreement may be
signed in counterparts (which may include counterparts delivered by
any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the
same instrument.
(e)
Amendments or Waivers.
No amendment or
waiver of any provision of this Agreement, nor any consent or
approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
parties hereto.
(f)
Headings.
The headings herein are
included for convenience of reference only and are not intended to
be part of, or to affect the meaning or interpretation of, this
Agreement.
[Signature page
follows]
If
the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space
provided below.
Very
truly yours,
|
RUMBLEON,
INC.
|
|
|
|
|
|
|
By:
|
/s/
Steven R. Berrard
|
|
|
|
Steven R. Berrard
|
|
|
|
Chief Financial
Officer
|
|
Accepted
: As of the date first
written
above
:
|
JMP
SECURITIES LLC
|
|
|
|
|
|
|
By:
|
/s/
Forrest Koenig
|
|
|
|
Forrest Koenig
|
|
|
|
Managing
Director
|
|
Schedule
1
Initial
Purchaser
Aggregate Principal Amount
JMP Securities
LLC
$30,000,000
Schedule
2
Parties Signing Lock-Up Agreements
8.
Halcyon Consulting,
LLC
9.
Berrard Holdings
Limited Partnership
10.
Blue Flame Capital,
LLC
Annex
A
Time of Sale Information
Term
sheet containing the terms of the Securities, substantially in the
form of Annex B.
Annex
B
PRICING TERM SHEET
|
STRICTLY CONFIDENTIAL
|
DATED May 9, 2019
|
|
RUMBLEON,
INC.
$30,000,000
6.75%
CONVERTIBLE SENIOR NOTES DUE 2024
The information in this pricing term sheet supplements RumbleOn,
Inc.’s preliminary offering memorandum, dated May 9, 2019
(the “Preliminary Offering Memorandum”), and supersedes
the information in the Preliminary Offering Memorandum to the
extent inconsistent with the information in the Preliminary
Offering Memorandum. In all other respects, this term sheet is
qualified in its entirety by reference to the Preliminary Offering
Memorandum, including all documents incorporated by reference
therein. References to “we,” “our” and
“us” refer to RumbleOn, Inc. and not to its
subsidiaries. Terms used herein but not defined herein shall have
the respective meanings as set forth in the Preliminary Offering
Memorandum. All references to dollar amounts are references to U.S.
dollars.
Issuer:
|
RumbleOn,
Inc.
|
Ticker/Exchange
for Our Class B Common Stock:
|
“RMBL”/The
NASDAQ Capital Market (“Nasdaq”)
|
Securities:
|
6.75% Convertible
Senior Notes due 2024 (the “notes”)
|
Aggregate
Principal Amount of Notes Offered:
|
$30,000,000. The
initial purchaser will not have an option to purchase additional
notes.
|
Denominations:
|
$1,000 and integral
multiples of $1,000 in excess thereof
|
Ranking:
|
Senior
unsecured
|
Issue
Price
|
100% of principal,
plus accrued interest, if any, from May 14, 2019 if settlement
occurs after that date
|
Maturity:
|
May 1, 2024, unless
earlier converted, redeemed or repurchased
|
Interest
and Interest Payment Dates:
|
6.75% per
year
|
|
Interest will
accrue from May 14, 2019 and will be payable semiannually in
arrears on May 1 and November 1 of each year, beginning on November
1, 2019
|
Regular
Record Dates:
|
April 15 and
October 15 of each year, immediately preceding the May 1 and
November 1 interest payment date, as the case may be
|
Initial
Conversion Rate:
|
173.9130 shares of
Class B
Common Stock
per $1,000 principal amount of the notes, subject to
adjustment
|
Initial
Conversion Price:
|
Approximately $5.75
per share of Class B Common Stock, subject to
adjustment
|
Conversion
Premium:
|
15% above the sale
price of our Class B Common Stock in the concurrent Common Stock
Offering on May 9, 2019.
|
Optional
Redemption:
|
We may not redeem
the notes prior to May 6, 2022. We may redeem for cash all or any
portion of the notes, at our option, on or after May 6, 2022 if the
last reported sale price of our Class B Common Stock has been at
least 150% of the conversion price then in effect for at least 20
trading days (whether or not consecutive), including the trading
day immediately preceding the date on which we provide notice of
redemption, during any 30 consecutive trading day period ending on,
and including, the trading day immediately preceding the date on
which we provide notice of redemption at a redemption price equal
to 100% of the principal amount of the notes to be redeemed, plus
accrued and unpaid interest to, but excluding, the redemption
date.
|
Fundamental
Change:
|
If we undergo a
“fundamental change” (as defined in the Preliminary
Offering Memorandum under the heading “Description of
Notes—Fundamental Change Permits Holders to Require Us to
Repurchase Notes”), subject to certain conditions, holders
may require us to repurchase for cash all or any portion of their
notes in principal amounts of $1,000 or an integral multiple
thereof, at a repurchase price equal to 100% of the principal
amount of the notes to be repurchased, plus accrued and unpaid
interest to, but excluding, the fundamental change repurchase date.
See “Description of Notes—Fundamental Change Permits
Holders to Require Us to Repurchase Notes” in the Preliminary
Offering Memorandum.
|
Interest
Make-Whole Payment upon Certain Conversions:
|
On or after the
date that is one year after the last date of original issuance of
the notes offered by the Preliminary Offering Memorandum, we will
make an interest make-whole payment (an “interest make-whole
payment”) to a converting holder (other than a conversion in
connection with a make-whole fundamental change in which the
conversion rate is adjusted) equal to the sum of the present values
of the scheduled payments of interest that would have been made on
the notes to be converted had such notes remained outstanding from
the conversion date through the earlier of (i) the date that is two
years after the conversion date and (ii) June 15, 2022 if the notes
had not been so converted. The present values of the remaining
interest payments will be computed using a discount rate equal to
2.0%.
We may pay any
interest make-whole payment either in cash or in shares of our
Class B Common Stock, at our election. If we elect, or are deemed
to have elected, to pay any interest make-whole payment by
delivering shares of our Class B Common Stock, the number of shares
of Class B Common Stock a converting holder of notes will receive
will be equal to the amount of the interest make-whole payment due
divided by the greater of (A) the product of (x) 95.0% and (y) the
simple average of the daily VWAP of our Class B Common Stock for
the 10 trading days ending on and including the trading day
immediately preceding the conversion date and (B) the conversion
price (rounded to the nearest ten-thousandth) on the applicable
conversion date. If we elect to pay any interest make-whole payment
in cash we will pay cash in an amount equal to the interest
make-whole payment.
Notwithstanding the
foregoing, (x) if we elect or are deemed to have elected to pay any
interest make-whole payment in shares of our Class B Common Stock,
the number of shares of our Class B Common Stock we may deliver in
connection with a conversion of the notes, including those
delivered in connection with an interest make-whole payment, will
not exceed 197.0440 shares of Class B Common Stock per $1,000
principal amount of notes, subject to adjustment at the same time
and in the same manner as the conversion rate as set forth under
“Description of Notes—Conversion
Rights—Conversion Rate Adjustments” in the Preliminary
Offering Memorandum and (y) if we elect to pay any interest
make-whole payment in cash, the amount of cash we may deliver in
connection with an interest make-whole payment will not exceed
$117.39 per $1,000 principal amount of notes.
|
Concurrent
Common Stock Offering:
|
Concurrently with
the offering of notes, we are selling, in a private placement
exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), 1,900,000 shares of our
Class B Common Stock, at a price per share equal to $5.00, in the
Concurrent Common Stock Offering. The net proceeds of the
Concurrent Common Stock Offering, less commissions to the placement
agent and estimated expenses payable by us, are expected to be
approximately $8.8 million. The offering of notes is not contingent
upon the Concurrent Common Stock Offering and the Concurrent Common
Stock Offering is not contingent upon the offering of
notes.
|
Use
of Proceeds:
|
We estimate that
the net proceeds from this offering will be approximately $27.6
million, after deducting the initial purchaser’s discounts
and commissions and estimated offering expenses payable by us. We
intend to use approximately $11.1 million of the net proceeds from
this offering and the Concurrent Common Stock Offering to refinance
certain outstanding restrictive indebtedness and the remainder for
other general corporate purposes, which may include purchases of
additional inventory held for sale, increased spending on marketing
and advertising, and capital expenditures necessary to grow the
business. Pending these uses, we may invest the net proceeds in
short-term interest-bearing investment grade
instruments.
See “Use of
Proceeds” in the Preliminary Offering
Memorandum.
|
Sole
Book-Running Manager:
|
JMP Securities
LLC
|
Pricing
Date:
|
May 9,
2019
|
Trade
Date:
|
May 10,
2019
|
Expected
Settlement Date:
|
May 14,
2019
|
Listing:
|
None
|
CUSIP
Number (144A):
|
781386
AA5
|
ISIN
(144A):
|
US781386AA56
|
Increase
in Conversion Rate upon Conversion upon a Make-Whole Fundamental
Change or Notice of Redemption:
|
If the effective
date of a make-whole fundamental change occurs prior to the
maturity date of the notes or we give a notice of redemption with
respect to any or all of the notes and, in each case, a holder
elects to convert its notes in connection with such make-whole
fundamental change or redemption notice, as applicable, the
following table sets forth the number of additional shares of Class
B Common Stock by which the conversion rate will be increased per
$1,000 principal amount of notes for each stock price and effective
date set forth below:
|
Stock
Price
|
Effective
Date
|
$5.075
|
$5.75
|
$6.00
|
$7.00
|
$8.00
|
$9.00
|
$10.00
|
$11.00
|
$12.00
|
|
May 14,
2019
|
23.1310
|
20.0000
|
18.7500
|
15.8857
|
13.1250
|
8.8889
|
4.5000
|
2.1818
|
0.0000
|
|
May 1,
2020
|
23.1310
|
19.5000
|
18.2813
|
15.4886
|
12.7969
|
8.6667
|
4.3875
|
2.1273
|
0.0000
|
|
May 1,
2021
|
23.1310
|
18.8000
|
17.6250
|
14.9326
|
12.3375
|
8.3556
|
4.2300
|
2.0509
|
0.0000
|
|
May 1,
2022
|
23.1310
|
18.0000
|
16.8750
|
14.2971
|
11.8125
|
8.0000
|
4.0500
|
1.9636
|
0.0000
|
|
May 1,
2023
|
23.1310
|
17.5000
|
16.4063
|
13.9000
|
11.4844
|
7.7778
|
3.9375
|
1.9091
|
0.0000
|
|
May 1,
2024
|
23.1310
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
|
The exact stock
price and effective date may not be set forth in the table above,
in which case:
●
If the stock price
is between two stock prices in the table or the effective date is
between two effective dates in the table, the number of additional
shares by which the conversion rate will be increased will be
determined by a straight-line interpolation between the number of
additional shares set forth for the higher and lower stock prices
and the earlier and later effective dates, as applicable, based on
a 365-day year.
●
If the stock price
is greater than $12.00 per share (subject to adjustment in the same
manner as the stock prices set forth in the column headings of the
table above), no additional shares will be added to the conversion
rate.
●
If the stock price
is less than $5.075 per share (subject to adjustment in the same
manner as the stock prices set forth in the column headings of the
table above), no additional shares will be added to the conversion
rate.
Notwithstanding the
foregoing, in no event will the conversion rate per $1,000
principal amount of notes exceed 197.0440 shares of Class B Common
Stock, subject to adjustment in the same manner as the conversion
rate set forth in the Preliminary Offering Memorandum under the
caption “Description of Notes—Conversion
Rights—Conversion Rate Adjustments.”
This
communication is intended for the sole use of the person to whom it
is provided by the sender. This material is confidential and is for
your information only and is not intended to be used by anyone
other than you. This information does not purport to be a complete
description of the notes or the offering thereof. This
communication does not constitute an offer to sell or the
solicitation of an offer to buy any notes in any jurisdiction to
any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.
The
notes and any shares of Class B Common Stock issuable upon
conversion of the notes have not been and will not be registered
under the U.S. Securities Act, or any other securities laws, and
may not be offered or sold within the United States or any other
jurisdiction, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and any other applicable securities laws. The
initial purchaser is initially offering the notes only to qualified
institutional buyers as defined in, and in reliance on, Rule 144A
under the Securities Act.
The
notes and any shares of Class B Common Stock issuable upon
conversion of the notes are not transferable except in accordance
with the restrictions described under “Notice to
Investors” and “Transfer Restrictions” in the
Preliminary Offering Memorandum.
Any
legends, disclaimers or other notices that may appear below are not
applicable to this communication and should be disregarded. Such
legends, disclaimers or other notices have been automatically
generated as a result of this communication having been sent via
Bloomberg or another system.
Exhibit
A
Form of Lock-Up Agreement
JMP
Securities LLC
383
Madison Avenue
New
York, New York 10179
Ladies
and Gentlemen:
The
undersigned understands that JMP Securities LLC (hereinafter
referred to as the “
Initial
Purchaser
”) proposes to enter into a Purchase
Agreement (the “
Purchase
Agreement
”) with RumbleOn, Inc., a Nevada corporation
(the “
Company
”),
providing for the issuance and sale by the Company (the
“
Offering
”) to
the Initial Purchaser of up to $30,000,000 principal amount of the
Company’s 6.75% Convertible Senior Notes due 2024 (the
“
Securities
”).
To
induce the Initial Purchaser to continue its efforts in connection
with the Offering, the undersigned hereby agrees that, without the
prior written consent of the Initial Purchaser, the undersigned
will not, during the period commencing on the date hereof and
ending ninety (90) days after the date of the final offering
memorandum (the “
Offering
Memorandum
”) relating to the Offering (the
“
Lock-Up
Period
”), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of
capital stock of the Company, whether now owned or hereafter
acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition
(collectively, the “
Lock-Up
Securities
”); (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Lock-Up Securities,
whether any such transaction is to be settled by delivery of shares
of Lock-Up Securities, in cash or otherwise; (3) make any demand
for or exercise any right with respect to the registration of any
Lock-Up Securities; or (4) publicly disclose the intention to make
any offer, sale, pledge or disposition, or to enter into any
transaction, swap, hedge or other arrangement relating to any
Lock-Up Securities. Notwithstanding the foregoing, and subject to
the conditions below, the undersigned may transfer Lock-Up
Securities without the prior written consent of the Initial
Purchaser in connection with (a) transactions relating to Lock-Up
Securities acquired in open market transactions after the
completion of the Offering; provided that no filing under Section
16(a) of the Securities Exchange Act of 1934, as amended (the
“
Exchange Act
”),
shall be required or shall be voluntarily made in connection with
subsequent sales of Lock-Up Securities acquired in such open market
transactions; (b) transfers of Lock-Up Securities as a bona fide
gift, by will or intestacy or to a family member or trust for the
benefit of a family member (for purposes of this lock-up agreement,
“
family member
”
means any relationship by blood, marriage or adoption, not more
remote than first cousin); (c) transfers of Lock-Up Securities to a
charity or educational institution; (d) if the undersigned,
directly or indirectly, controls a corporation, partnership,
limited liability company or other business entity, any transfers
of Lock-Up Securities to any shareholder, partner or member of, or
owner of similar equity interests in, the undersigned, as the case
may be, or (e) the sales of shares of capital stock of the Company
to cover the payment of the exercise prices or the payment of taxes
associated with the exercise or vesting of equity awards under any
equity compensation plan of the Company;
provided
that in the case of
any transfer pursuant to the foregoing clauses (b), (c) or (d), (i)
any such transfer shall not involve a disposition for value, (ii)
each transferee shall sign and deliver to the Initial Purchaser a
lock-up agreement substantially in the form of this lock-up
agreement and (iii) no filing under Section 16(a) of the Exchange
Act shall be required or shall be voluntarily made, except for a
Form 5. The undersigned also agrees and consents to the entry of
stop transfer instructions with the Company’s transfer agent
and registrar against the transfer of the undersigned’s
Lock-Up Securities except in compliance with this lock-up
agreement.
If the
undersigned is an officer or director of the Company, (i) the
undersigned agrees that the foregoing restrictions shall be equally
applicable to any issuer-directed or “friends and
family” Securities that the undersigned may purchase in the
Offering; (ii) the Initial Purchaser agrees that, at least three
(3) Business Days (as that term is defined in the Purchaser
Agreement) before the effective date of any release or waiver of
the foregoing restrictions in connection with a transfer of Lock-Up
Securities, the Initial Purchaser will notify the Company of the
impending release or waiver; and (iii) the Company has agreed in
the Purchase Agreement to announce the impending release or waiver
by press release through a major news service at least two (2)
Business Days before the effective date of the release or waiver.
Any release or waiver granted by the Initial Purchaser hereunder to
any such officer or director shall only be effective two (2)
Business Days after the publication date of such press release. The
provisions of this paragraph will not apply if (a) the release or
waiver is effected solely to permit a transfer of Lock-Up
Securities not for consideration and (b) the transferee has agreed
in writing to be bound by the same terms described in this lock-up
agreement to the extent and for the duration that such terms remain
in effect at the time of such transfer.
No
provision in this agreement shall be deemed to restrict or prohibit
the exercise, exchange or conversion by the undersigned of any
securities exercisable or exchangeable for or convertible into
shares of capital stock of the Company, as applicable;
provided
that the undersigned
does not transfer the shares acquired on such exercise, exchange or
conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no
provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at
any time (other than the entry into or modification of such a plan
in such a manner as to cause the sale of any Lock-Up Securities
within the Lock-Up Period).
The
undersigned understands that the Company and the Initial Purchaser
are relying upon this lock-up agreement in proceeding toward
consummation of the Offering. The undersigned further understands
that this lock-up agreement is irrevocable and shall be binding
upon the undersigned’s heirs, legal representative,
successors and assigns.
The
undersigned understands that, if the Purchase Agreement is not
executed by May 30, 2019, or if the Purchase Agreement (other than
the provisions thereof which survive termination) shall terminate
or be terminated prior to payment for and delivery of the
Securities to be sold thereunder, then this lock-up agreement shall
be void and of no further force or effect.
Whether
or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made
pursuant to the Purchase Agreement, the terms of which are subject
to negotiation between the Company and the Initial
Purchaser.
[Signature page follows]
Very
truly yours,
Very
truly yours,
__________________________________________
(Name -
Please Print)
__________________________________________
(Signature)
__________________________________________
(Name
of Signatory, in the case of entities - Please Print)
__________________________________________
(Title
of Signatory, in the case of entities - Please Print)
Address:
__________________________________________
__________________________________________
__________________________________________
Exhibit
B
Form of Registration Rights Agreement
(See
Exhibit 4.3)
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this
“
Agreement
”
)
is dated as of May 9, 2019, between RumbleOn, Inc., a Nevada
corporation (the
“
Company
”
),
and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a
“
Purchaser
”
and collectively the
“
Purchasers
”
).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an exemption from the registration requirements of Section 5 of
the Securities Act (as defined below) contained in Section 4(a)(2)
thereof and/or Regulation D thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement;
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and each Purchaser agree as follows:
ARTICLE I
DEFINITIONS
1.1
Definitions
. In
addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings
set forth in this
Section
1.1
:
“
Action
”
means any action, suit, inquiry, notice of violation, proceeding or
investigation pending or threatened before or by any court,
arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign).
“
Affiliate
”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.
“
Board of
Directors
”
means
the board of directors of the Company.
“
Business
Day
”
means any day
except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.
“
Closing
”
means the closing of the purchase and sale of the Shares pursuant
to
Section
2.1
.
“
Closing
Date
”
means the
Trading Day on which all of the Subscription Documents have been
executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers
’
obligations to pay the Subscription
Amount and (ii) the Company
’
s obligations to deliver the Shares,
in each case, have been satisfied or waived, but in no event later
than the third Trading Day following the date hereof.
“
Concurrent 144A Offering
”
means the offering and sale by the Company pursuant to Rule 144A
under the Securities Act of the Company’s Convertible Senior
Notes due 2024 under that certain Purchase Agreement by and between
the Company and JMP Securities LLC, as initial purchaser, in a
transaction exempt from the registration requirements of the
Securities Act.
“
Commission
”
means the United States Securities and Exchange
Commission.
“
Common
Stock
”
means the
Class B Common Stock of the Company, par value $0.001 per share,
and any other class of securities into which such securities may
hereafter be reclassified or changed.
“
Company
Counsel
”
means
Akerman LLP, with offices located at 350 East Las Olas Boulevard,
Fort Lauderdale, Florida 33301.
“
Disqualification Events
”
shall have the meaning ascribed to such term in
Section 3.1(o)
.
“
Effectiveness Period
”
shall have the meaning ascribed to such term in
Section 5.1(b)
.
“
Event
Date
” shall have the
meaning ascribed to such terms in
Section
5.1(c)
.
“
Exchange
Act
”
means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“
Initial Filing Date
”
shall have the meaning ascribed to such term in
Section 5.1(a)
.
“
Intellectual Property
Rights
” shall have the
meaning ascribed to such term in
Section
3.1(q)
.
“
Investor
Questionnaire
”
means the investor questionnaire attached hereto as
Exhibit A
.
“
GAAP
”
shall have the meaning ascribed to such term in
Section 3.1(h)
.
“
Liens
”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.
“
Lock-up Agreement
” shall
have the meaning ascribed to such term in
Section 4.10
.
“
Material Adverse
Effect
” means
(i)
a material adverse effect on the legality, validity or
enforceability of any Subscription Document, (ii) a material
adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company
’
s
ability to perform in any material respect on a timely basis its
obligations under any Subscription Document.
“
Per Share Purchase
Price
”
equals
$5.00, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement but
before the Closing Date.
“
Person
”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“
Proceeding
”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.
“
Registrable Securities
”
shall have the meaning ascribed to such term in
Section 5.1(a)
.
“
Registration Statement
”
shall have the meaning ascribed to such term in
Section 5.1(a)
.
“
Required
Approvals
”
shall
have the meaning ascribed to such term in
Section 3.1(e)
.
“
Risk
Factors
”
means the
risk factors attached hereto as
Exhibit B
.
“
Rule
144
”
means Rule
144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“
Rule
424
”
means Rule
424 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“
SEC
Reports
”
shall
have the meaning ascribed to such term in
Section 3.1(h)
.
“
Securities
Act
”
means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“
Shares
”
means the shares of Common Stock issued to each Purchaser pursuant
to this Agreement.
“
Short
Sales
”
means all
“
short sales
”
as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to
include the location and/or reservation of borrowable shares of
Common Stock).
“
Solicitor
”
shall have the meaning ascribed to such term in
Section
3.1(o)
.
“
Subscription
Amount
”
means, as
to each Purchaser, the amount to be paid for Shares purchased
hereunder as specified below such Purchaser
’
s name on the signature page of this
Agreement and next to the heading
“
Subscription Amount,
”
in United States dollars and in
immediately available funds.
“
Subscription
Documents
”
means
this Agreement, any other documents or agreements executed in
connection with the transactions contemplated
hereunder.
“
S-1 Registration
Statement
” shall have the meaning ascribed to such
term in
Section
5.1(a)
.
“
S-3 Registration
Statement
” shall have the meaning ascribed to such
term in
Section
5.1(a)
.
“
Subsidiary
”
means any subsidiary of the Company as set forth in the SEC
Reports, and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the
date hereof.
“
Trading
Day
”
means a day
on which the principal Trading Market is open for
trading.
“
Trading
Market
”
means any
of the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the NYSE MKT,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).
“
Transaction
Documents
”
means
the Company’s presentation dated May 2019.
“
Transfer
Agent
”
means West
Coast Stock Transfer, Inc., the current transfer agent of the
Company, with a mailing address of 721 N. Vulcan Avenue, Suite 205,
Encinitas, California 92024, and any successor transfer agent of
the Company.
“
Variable Rate
Transactions
” shall have the meaning ascribed to such
term in
Section
4.9
.
ARTICLE II
PURCHASE
AND SALE
2.1
Closing
. On the
Closing Date, upon the terms and subject to the conditions set
forth herein, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, up to an aggregate of
1,900,000 Shares (for a purchase price of $9,500,000) in increments
of $100,000, subject to lesser amounts being accepted at the
Company’s discretion;
provided
,
however
, that the number of Shares sold
pursuant to this Agreement shall not exceed 19.9% of the
Company’s issued and outstanding shares of Class A Common
Stock of the Company, par value $0.001 per share, and Common Stock
at the time of Closing, on a pre-transaction basis. On the Closing
Date, each Purchaser shall deliver to the Company such
Purchaser
’
s Subscription
Amount via wire transfer of immediately available funds and the
Company shall deliver to each Purchaser its respective Shares as
determined pursuant to
Section 2.2(a)
, and the Company
and each Purchaser shall deliver the other items set forth in
Section 2.2
. Upon
satisfaction of the covenants and conditions set forth in
Sections 2.2
and
2.3
, the Closing
shall occur at the offices of Company Counsel or such other
location as the parties shall mutually agree.
2.2
Deliveries
.
(a)
On or prior to the
Closing Date, the Company shall deliver or cause to be delivered to
each Purchaser the following:
(i)
this Agreement duly
executed by the Company; and
(ii)
a
copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to issuance in book entry form the
Shares equal to such Purchaser
’
s Subscription Amount divided by the
Per Share Purchase Price, registered in the name of such
Purchaser.
(b)
On or prior to the
Closing Date, each Purchaser shall deliver or cause to be delivered
the following:
(i)
to the Company, a
completed Investor Questionnaire;
(ii)
to
the Company, this Agreement duly executed by such Purchaser;
and
(iii)
to
the Company, such Purchaser’s Subscription Amount by wire
transfer of immediately available funds.
2.3
Closing
Conditions
.
(a)
The obligations of
the Company hereunder in connection with the Closing are subject to
the following conditions being met:
(i)
the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) on the Closing Date of the representations and warranties
of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such
date);
(ii)
all
obligations, covenants and agreements of each Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and
(iii)
the
delivery by each Purchaser of the items set forth in
Section 2.2(b)
of this
Agreement.
(b)
The respective
obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being
met:
(i)
the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations
and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of
such date);
(ii)
all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;
(iii)
the
delivery by the Company of the items set forth in
Section 2.2(a)
of this
Agreement;
(iv)
there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
(v)
from the date
hereof to the Closing Date, trading in the Common Stock shall not
have been suspended by the Commission or the Company
’
s principal Trading Market, and, at
any time prior to the Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any
financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase
the Shares at the Closing.
ARTICLE III
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and
Warranties of the Company
. Except as set forth in the SEC
Reports, which SEC Reports shall be deemed a part hereof and shall
qualify any representation or otherwise made herein to the extent
of the disclosure contained in the SEC Reports, the Company hereby
makes the following representations and warranties to each
Purchaser:
(a)
Organization and
Qualification
. The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on
its business as described in the SEC Reports. Neither the Company
nor any Subsidiary is in violation nor default of any of the
provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be
expected to result in a
Material
Adverse Effect
.
(b)
Authorization;
Enforcement
. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Subscription
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Subscription Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company
’
s stockholders in connection
herewith or therewith other than in connection with the Required
Approvals. This Agreement and each other Subscription Document to
which the Company is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors
’
rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.
(c)
No Conflicts
.
The execution, delivery and performance by the Company of this
Agreement and the other Subscription Documents to which it is a
party, the issuance and sale of the Shares and the consummation by
it of the transactions contemplated hereby and thereby do not and
will not (i) conflict with or violate any provision of the
Company
’
s or any
Subsidiary
’
s certificate
or articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses
(ii)
and
(iii)
, such as could not have
or reasonably be expected to result in a Material Adverse
Effect.
(d)
Conduct of Business
. Since
December 31, 2018, the Company has conducted its business in the
ordinary course materially consistent with past practice. Since
December 31, 2018, there has not been any Material Adverse Effect
with respect to the Company or any of its Subsidiaries nor has
there occurred any event that is reasonably likely to result in a
Material Adverse Effect with respect to the Company or any of its
Subsidiaries.
(e)
Filings, Consents and
Approvals
. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Subscription Documents, other than: (i) the filings
required pursuant to
Section 4.3
of this Agreement,
(ii) application(s) to each applicable Trading Market for the
listing of the Shares for trading thereon in the time and manner
required thereby, and (iii) such filings as are required to be made
under applicable state securities laws (collectively, the
“
Required
Approvals
”
).
(f)
Issuance of the
Shares
. The Shares are duly authorized and, when issued and
paid for in accordance with the applicable Subscription Documents,
will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company.
(g)
Capitalization
.
The capitalization of the Company is as set forth in the SEC
Reports, except to the extent affected by the Concurrent 144A
Offering. Except as provided for in the Transaction Documents, the
Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant
to the vesting and delivery of awards under the Company
’
s employee equity plans outstanding
as of the date of the most recently filed periodic report under the
Exchange Act. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Subscription
Documents.
(h)
SEC Reports; Financial
Statements
. Since January 9, 2017, the Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively
referred to herein as the
“
SEC
Reports
”
), on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (
“
GAAP
”
),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(i)
Disclosure Controls
. The
Company maintains disclosure controls and procedures as required by
Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure
controls and procedures are effective to ensure that all
information required to be disclosed by the Company is recorded and
reported on a timely basis to the individuals responsible for the
preparation of the SEC Reports and other public disclosure
documents. The Company maintains internal control over financial
reporting (as defined in Rule 13a-15 or 15d-15, as applicable,
under the Exchange Act). Such internal control over financial
reporting is effective in providing reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP
and includes policies and procedures that (i) pertain to the
maintenance of records that are in reasonable detail and accurately
and fairly reflect the transactions and dispositions of the assets
of the Company, (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company, and
(iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on its
financial statements. No attorney representing the Company or any
of its Subsidiaries, whether or not employed by the Company or any
of its Subsidiaries, has reported evidence of a violation of
securities laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents
pursuant to the rules adopted pursuant to Section 307 of the
Sarbanes-Oxley Act.
(j)
Internal Controls
. The Company
has disclosed, based on the most recent evaluation by its chief
executive officer and its chief financial officer prior to the date
hereof, to the Company’s auditors and the Audit Committee of
Board of Directors (i) any significant deficiencies in the
design or operation of its internal controls over financial
reporting that are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report
financial information and has identified for the Company’s
auditors and Audit Committee of the Board of Directors any material
weaknesses in internal control over financial reporting and
(ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal control over financial reporting. The
Company has delivered to the Company prior to the date hereof
(A) a complete and correct summary of any such disclosure and
(B) any material communication made by management or the
Company’s auditors to the Audit Committee of the Board of
Directors required or contemplated by listing standards of Trading
Market, the Audit Committee’s charter or professional
standards of the Public Company Accounting Oversight Board. No
material complaints from any source regarding accounting, internal
accounting controls or auditing matters, and no concerns from the
Company’s employees regarding questionable accounting or
auditing matters, have been received by the Company or, to the
knowledge of the Company, the Company’s independent
registered public accounting firm.
(k)
Trading Market
. The Company is
in compliance in all material respects with the applicable listing
and corporate governance rules and regulations of Trading Market.
From January 1, 2017 through the date hereof, the Company has not
received any comment letter from the Commission or the staff
thereof or, except as disclosed in the SEC Reports, any
correspondence from the Trading Market or the staff thereof
relating to the delisting or maintenance of listing of Common Stock
on Trading Market, other than such disclosures or documents that
can be obtained on the Commission’s website at www.sec.gov.
The Company has not taken and will not take any action designed to
or that might reasonably be expected to cause or result in an
unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(l)
Certain Fees
.
Except with respect to the placement agency fees of $665,000
payable to JMP Securities and associated expense reimbursement, no
brokerage or finder
’
s
fees or commissions are or will be payable by the Company or any
Subsidiary to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Subscription
Documents. The Purchasers shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the
Subscription Documents.
(m)
Investment
Company
. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or
be an Affiliate of, an
“
investment company
”
within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“
investment
company
”
subject to
registration under the Investment Company Act of 1940, as
amended.
(n)
Registration
Rights
. Except (i) as set forth in the SEC Reports, the
Transaction Documents, and
Section 4.10
and
Section 5.1
of this
Agreement and (ii) in connection with the Concurrent 144A Offering,
no Person has any right to cause the Company or any Subsidiary to
effect the registration under the Securities Act of any securities
of the Company or any Subsidiary.
(o)
No “Bad Actor”
Disqualification
. The Company has exercised reasonable care,
in accordance with Commission rules and guidance, and has conducted
a factual inquiry, the nature and scope of which reflect reasonable
care under the relevant facts and circumstances, to determine
whether any Covered Person (as defined below) is subject to any of
the “bad actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act
(“
Disqualification
Events
”). To the Company’s knowledge, after
conducting such sufficiently diligent factual inquiries, no Covered
Person is subject to a Disqualification Event, except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3) under
the Securities Act. The Company has complied, to the extent
applicable, with any disclosure obligations under Rule 506(e) under
the Securities Act. “
Covered Persons
” are
those persons specified in Rule 506(d)(1) under the Securities Act,
including the Company; any predecessor or affiliate of the Company;
any director, executive officer, other officer participating in the
offering, general partner or managing member of the Company; any
beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power;
any promoter (as defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of the sale
of the Shares; and any person that has been or will be paid
(directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of the Shares (a
“
Solicitor
”), any general
partner or managing member of any Solicitor, and any director,
executive officer or other officer participating in the offering of
any Solicitor or general partner or managing member of any
Solicitor.
(p)
Information Provided
. The
Company confirms that, to its knowledge, with the exception of the
proposed sale of the Shares under this Agreement and the
Subscription Documents relating hereto, neither the Company nor any
other persons acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that
constitutes or might constitute material, nonpublic information.
The Company further confirms that until public disclosure of the
events described above, the Purchasers will be restricted by the
insider trading prohibitions under the Exchange Act from trading or
“tipping” on the basis of such
information.
(q)
Intellectual Property
. Except
as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, the Company owns or
possesses or has valid rights to use all patents, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, trade secrets and similar
rights (“
Intellectual Property
Rights
”), if any, necessary for the conduct of the
business of the Company as currently carried on and as described in
the Company’s SEC Reports. To the knowledge of the Company,
no action or use by the Company necessary for the conduct of its
business as currently carried on and as described in the
Company’s SEC Reports infringes any Intellectual Property
Rights of others. Except as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse
Effect, the Company has not received any notice alleging any such
infringement with asserted Intellectual Property Rights of others.
Except as would not reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect (A) to the
knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any of the
Intellectual Property Rights owned by the Company; (B) there is no
pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the rights of the
Company in or to any such Intellectual Property Rights, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim, that would, individually or in the aggregate,
together with any other claims in this
Section 3.1(q)
, reasonably be
expected to result in a Material Adverse Effect; (C) the
Intellectual Property Rights owned by the Company and, to the
knowledge of the Company, the Intellectual Property Rights licensed
to the Company, have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims in this
Section 3.1(q)
, reasonably be
expected to result in a Material Adverse Effect; (D) there is no
pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property
Rights or other proprietary rights of others, the Company has not
received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for
any such claim that would, individually or in the aggregate,
together with any other claims in this
Section 3.1(q)
, reasonably be
expected to result in a Material Adverse Effect; and (E) to the
Company’s knowledge, no employee of the Company is in
violation in any material respect of any term of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company, or actions undertaken
by the employee while employed with the Company and could
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Effect. To the Company’s knowledge, all
material trade secrets developed by and belonging to the Company
which have not been patented have been kept confidential. The
Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any
other person or entity that are required to be set forth in the
Company’s SEC Reports and are not described therein. To the
Company’s knowledge, none of the technology employed by the
Company has been obtained or is being used by the Company in
violation of any contractual obligation binding on the Company or
any of its officers, directors or employees, or otherwise in
violation of the rights of any persons.
3.2
Representations and
Warranties of the Purchasers
. Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows
(unless as of a specific date therein, in which case they shall be
accurate as of such date):
(a)
Organization;
Authority
. Each Purchaser is either an individual or an
entity duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and
to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and performance by
such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate, partnership,
limited liability company, investment management or similar action,
as applicable, on the part of such Purchaser. Each Subscription
Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting
enforcement of creditors
’
rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.
(b)
Investment
Purpose
. Each Purchaser is
acquiring the Shares for its own account for investment only and
not with a view towards, or for resale in connection with, the
public sale or distribution thereof. Each Purchaser acknowledges
that the Shares will be issued in book entry form with a notation
of restriction as set forth in
Section
4.1
.
(c)
Experience
of Such Purchaser
. Such Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in
the Shares, and has so evaluated the merits and risks of such
investment. Such Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to
afford a complete loss of such investment.
(d)
Accredited
Investor Status
. Each
Purchaser is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D, as promulgated
under the Securities Act
and has delivered to the Company a completed
Investor Questionnaire.
(e)
Reliance
on Exemptions
. Each
Purchaser understands that the Shares are being offered and sold to
it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of,
and each Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of each
Purchaser set forth herein in order to determine the availability
of such exemptions and the eligibility of each Purchaser to acquire
the Shares.
(f)
Information
.
Each Purchaser and its representatives, if any, have been furnished
with all materials relating to the business, finances and
operations of the Company and other information each Purchaser
deemed material to making an informed investment decision regarding
its purchase of the Shares, which have been requested by each
Purchaser. Purchaser acknowledges that it has reviewed a copy
of the Subscription Documents, including the Risk Factors, the
Transaction Documents and the SEC Reports. Each Purchaser and
its advisors, if any, have been afforded the opportunity to ask
questions of the Company and its management. Neither such
inquiries, nor any other due diligence investigations conducted by
any Purchaser or its advisors, if any, or its representatives,
shall modify, amend or affect each Purchaser’s right to rely
on the Company’s representations and warranties contained
in
Section
3.1
. Each Purchaser
understands that its investment in the Shares involves a high
degree of risk. Each Purchaser has sought such accounting,
legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Shares.
(g)
General
Solicitation
. Each
Purchaser is not purchasing the Shares as a result of any
advertisement, article, notice or other communication regarding the
Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or
any other general solicitation or general
advertisement.
(h)
Company Affiliated Investors
.
Each Purchaser acknowledges that certain officers and directors of
the Company may purchase Shares pursuant to this
Agreement.
(i)
No Governmental Review
. Each
Purchaser understands that no United States federal or state
governmental authority has passed on or made any recommendation or
endorsement of the Shares, or the fairness or suitability of the
investment in the Shares, nor have such governmental authorities
passed upon or endorsed the merits of the offering of the
Shares.
(j)
Certain Transactions
and Confidentiality
. Other than consummating the
transactions contemplated hereunder, each Purchaser has not, nor
has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales, of the securities of the Company
during the period commencing as of the time that such Purchaser
first received a term sheet (written or oral) from the Company or
any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and
ending immediately prior to the execution hereof. Other than to
other Persons party to this Agreement or to such
Purchaser
’
s
representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction
(including the existence and terms of this
transaction).
ARTICLE IV
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer and Restrictive
Legend
.
(a)
The Shares may only
be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement, the Company may require the
transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Shares
under the Securities Act.
(b)
The Purchasers
agree to a restrictive notation on the Shares to be issued in book
entry form as follows:
THESE
SHARES HAVE BEEN ACQUIRED FROM THE ISSUER WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) AND ARE RESTRICTED SHARES AS THAT TERM IS DEFINED UNDER
RULE 144, PROMULGATED UNDER THE SECURITIES ACT. THESE SHARES MAY
NOT BE SOLD, PLEDGED, TRANSFERRED, DISTRIBUTED, OR OTHERWISE
DISPOSED OF IN ANY MANNER UNLESS SUCH TRANSACTION IS (I) REGISTERED
UNDER THE SECURITIES ACT, (II) UNLESS SOLD PURSUANT TO RULE 144 OR
RULE 144A UNDER SAID ACT, OR (III) SOLD PURSUANT TO A VALID
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS AS EVIDENCED BY AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE ISSUER, STATING
THAT THE TRANSFER DOES NOT INVOLVE A TRANSACTION REQUIRING
REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT.
4.2
Integration
.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares in a manner that would require the
registration under the Securities Act of the sale of the Shares or
that would be integrated with the offer or sale of the Shares for
purposes of the rules and regulations of any Trading Market such
that it would require shareholder approval prior to the closing of
such other transaction unless shareholder approval is obtained
before the closing of such subsequent transaction.
4.3
Securities Laws
Disclosure; Publicity
. On the Trading Day immediately
following the Closing Date, the Company shall file a Current Report
on Form 8-K (the
“
Announcement
8-K
”
), including
the Subscription Documents and the Transaction Documents with the
Commission. From and after the filing of the Announcement 8-K, the
Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of
the Purchasers by the Company or any of its Subsidiaries, or any of
their respective officers, directors, employees or agents in
connection with the transactions contemplated by the Subscription
Documents and the Transaction Documents.
4.4
Use of
Proceeds
. The Company shall use the net proceeds from the
sale of the Shares hereunder as set forth in the Transaction
Documents and for working capital purposes.
4.5
Reservation of Common
Stock
. As of the date hereof, the Company has reserved and
the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of
Common Stock for the purpose of enabling the Company to issue
Shares pursuant to this Agreement.
4.6
Listing of Common
Stock
. The Company hereby agrees to use best efforts to
maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed, and concurrently
with the Closing, the Company shall apply to list or quote all of
the Shares on such Trading Market and promptly secure the listing
of all of the Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on
any other Trading Market, it will then include in such application
all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then take
all action reasonably necessary to continue the listing and trading
of its Common Stock on a Trading Market and will comply in all
respects with the Company
’
s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. The
Company agrees to maintain the eligibility of the Common Stock for
electronic transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.
4.7
Certain Transactions
and Confidentiality
. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding
with it will execute any purchases, sales or effect any other
transactions, including Short Sales of any of the
Company
’
s securities
during the period commencing with the execution of this Agreement
and ending at such time that the transactions contemplated by the
Subscription Documents and Transaction Documents are first publicly
announced pursuant to the filing of the Announcement 8-K as
described in
Section
4.3
. Each Purchaser, severally and not jointly with the
other Purchasers, covenants that until such time as the
transactions contemplated by the Subscription Documents and
Transaction Documents are publicly disclosed by the Company
pursuant to the filing of the Announcement 8-K as described in
Section 4.3
, such
Purchaser will maintain the confidentiality of the existence and
terms of this transaction and the information included in the
Subscription Documents and Transaction Documents.
4.8
Form D; Blue Sky
Filings
. The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D and to provide
a copy thereof, promptly upon request of any Purchaser. The Company
shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the
Shares for, sale to the Purchasers at the Closing under applicable
securities or
“
Blue
Sky
”
laws of the states
of the United States, and shall provide evidence of such actions
promptly upon request of any Purchaser.
4.9
Restriction on Variable Rate
Transactions
. From the date hereof until the one-year
anniversary of the Closing Date, the Company shall be prohibited
from effecting or entering into an agreement to effect any issuance
by the Company or any of its subsidiaries of Common Stock or any
outstanding convertible instruments, options or warrants or similar
securities (or a combination of units thereof) involving a Variable
Rate Transaction. “
Variable Rate
Transaction
” means a transaction in which the Company
issues or sells any debt or equity securities that are convertible
into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock. For the avoidance
of doubt, the issuance of a security which is subject to customary
anti-dilution protections, including where the conversion, exercise
or exchange price is subject to adjustment as a result of stock
splits, reverse stock splits and other similar recapitalization or
reclassification events, shall not be deemed to be a
“Variable Rate Transaction.” Any Purchaser shall be
entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to
any right to collect damages.
4.10
Restriction
on Future Issuances
. The Company agrees that, without the
prior written consent of JMP Securities LLC, it will not, for a
period of ninety (90) days after the date of the Closing Date, (a)
offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company, (b) file
or cause to be filed any registration statement with the Commission
relating to the offering of any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company (except for
registration statements on Form S-4 or Form S-8, a resale
registration statement on Form S-3 for the shares of capital stock
of the Company issued hereunder, a resale registration statement on
Form S-3 (or Form S-1, if the Company is unable to use Form S-3)
for the notes and shares of Common Stock underlying the notes
issued in the Concurrent 144A Offering, and a resale registration
statement on Form S-3 for the 540,358 shares of Common Stock issued
or to be issued by the Company as consideration in connection with
the Company’s purchase of AutoSport USA, Inc., as described
in the Company’s Annual Report on Form 10-K filed with the
SEC on April 1, 2019) or (c) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of capital stock of the
Company, whether any such transaction described in clause
(a)
,
(b)
or
(c)
above is to be settled by
delivery of shares of capital stock of the Company or such other
securities, in cash or otherwise. The restrictions contained in
this
Section 4.10
shall not apply to (i) the Shares to be sold hereunder, (ii) the
issuance by the Company of shares of capital stock of the Company
upon the exercise of a stock option or warrant or the conversion or
vesting of a security outstanding on the date hereof, (iii) the
issuance by the Company of equity awards of the Company under any
equity compensation plan of the Company, (iv) the issuance by the
Company of shares of capital stock of the Company or securities
convertible into, exchangeable for or that represent the right to
receive shares of capital stock of the Company in connection with
the acquisition by the Company of the securities, business,
technology, property or other assets of another person or entity,
(v) the entry into the purchase agreement governing the Concurrent
Rule 144A Offering or the issuance of shares of Common Stock upon
the conversion of the securities issued in the Concurrent Rule 144A
Offering, (vi) the sale of shares of capital stock of the Company
to cover the payment of exercise prices or the payment of taxes
associated with the exercise or vesting of equity awards under any
equity compensation plan of the Company, or (vii) the filing of a
post-effective amendment to the Company’s registration
statements on Forms S-3 (Reg. Nos. 333-223425, 333-225217 and
333-226514) and Forms S-8 (Reg. No. 333-219203, 333-223428 and
333-226440) with the Commission to maintain effectiveness of such
registration statements, provided that in each of
(ii)
and
(iii)
above, the underlying
shares of capital stock of the Company held by the Company’s
directors and officers shall be restricted from sale pursuant to
the Lock-up Agreement (defined below). In connection with the
Concurrent Rule 144A Offering, the Company has caused to be
delivered to JMP Securities LLC prior to the date of this Agreement
a letter from each of the Company’s directors and executive
officers restricting certain acquisitions and dispositions of
Company securities (each, a “
Lock-Up Agreement
”). The
Company will enforce the terms of each Lock-Up Agreement and issue
stop-transfer instructions to the transfer agent for the Common
Stock with respect to any transaction or contemplated transaction
that would constitute a breach of or default under the applicable
Lock-Up Agreement.
ARTICLE V
REGISTRATION
RIGHTS
5.1
Registration Procedures and Expenses;
Liquidated Damages for Certain Events
.
(a)
The Company shall
prepare and file with the Commission, as promptly as reasonably
practicable following Closing, but in no event later than 30 days
following the date hereof (the “
Initial Filing Date
”), a
registration statement on Form S-3 (or any successor to Form S-3),
covering the resale of the Registrable Securities (as defined
below) (the “
S-3
Registration Statement
”) and as soon as reasonably
practicable thereafter but in no event later than 90 days following
the date hereof (180 days in the event of a review of the S-3
Registration Statement by the SEC), to effect such registration and
any related qualification or compliance with respect to all
Registrable Securities held by the Purchasers. For purposes of this
Agreement, the term “
Registrable Securities
”
shall mean (i) the Shares; and (iii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in
replacement of, any Shares. In the event that Form S-3 (or any
successor form) is or becomes unavailable to register the resale of
the Registrable Securities at any time prior to the expiration of
the Purchasers’ registration rights pursuant to
Article V
, the Company shall
prepare and file with the SEC, as promptly as reasonably
practicable following the Closing but in no event later than the
Initial Filing Date, a registration statement on Form S-1 (or any
successor to Form S-1), covering the resale of the Registrable
Securities (the “
S-1
Registration Statement
” and collectively the S-3
Registration Statement, the “
Registration Statement
”)
and as soon as reasonably practicable thereafter but in no event
later than 60 days following the date hereof (120 days in the event
of a review of the S-1 Registration Statement by the SEC), to
effect such registration and any related qualification or
compliance with respect to all Registrable Securities held by the
Purchasers. If the Company is not eligible to use Form S-3 at
Initial Filing Date, and the Company subsequently becomes eligible
to use Form S-3 during the Effectiveness Period (as defined below),
the Company shall file, as promptly as reasonably practicable, a
new S-3 Registration Statement covering the resale of the
Registrable Securities and replace the S-1 Registration Statement
with the new S-3 Registration Statement upon the effectiveness of
the new S-3 Registration Statement.
(b)
The Company shall,
during the Effectiveness Period, use its reasonable best efforts
to:
(i)
prepare and file
with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection
therewith as may be necessary or advisable to keep the Registration
Statement current and effective for the resale of the Registrable
Securities held by a Purchaser for a period ending on the earlier
of (i) the second anniversary of the Closing Date, (ii) the date on
which all Registrable Securities may be sold pursuant to Rule 144
during any three-month period without the requirement for the
Company to be in compliance with the current public information
required under Rule 144(c)(1) or (iii) such time as all Registrable
Securities have been sold pursuant to a registration statement or
Rule 144 (collectively, the “
Effectiveness Period
”).
The Company shall notify each Purchaser promptly upon the
Registration Statement and each post-effective amendment thereto
being declared effective by the Commission and advise each
Purchaser that the form of Prospectus contained in the Registration
Statement or post-effective amendment thereto, as the case may be,
at the time of effectiveness meets the requirements of Section
10(a) of the Securities Act or that it intends to file a Prospectus
pursuant to Rule 424(b) under the Securities Act that meets the
requirements of Section 10(a) of the Securities Act;
(ii)
furnish
to each Purchaser with respect to the Registrable Securities
registered under the Registration Statement such number of copies
of the Registration Statement and the Prospectus (including
supplemental prospectuses) filed with the Commission in conformance
with the requirements of the Securities Act and other such
documents as such Purchaser may reasonably request, in order to
facilitate the public sale or other disposition of all or any of
the Registrable Securities by such Purchaser;
(iii)
make
any necessary blue sky filings;
(iv)
pay
the expenses incurred by the Company and the Purchasers in
complying with
Article
V
, including, all registration and filing fees, FINRA fees,
exchange listing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses and the expense
of any special audits incident to or required by any such
registration (but excluding attorneys’ fees of any Purchaser
and any and all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities by the
Purchasers);
(v)
advise the
Purchasers, promptly after it shall receive notice or obtain
knowledge of the issuance of any stop order by the Commission
delaying or suspending the effectiveness of the Registration
Statement or of the initiation of any proceeding for that purpose;
and it will promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued;
and
(vi)
with
a view to making available to the Purchaser the benefits of Rule
144 and any other rule or regulation of the Commission that may at
any time permit the Purchasers to sell Registrable Securities to
the public without registration, the Company covenants and agrees
to: (i) make and keep public information available, as such term is
understood and defined in Rule 144, until the earlier of (A) such
date as all of the Registrable Securities qualify to be resold
immediately pursuant to Rule 144 or any other rule of similar
effect during any three-month period without the requirement for
the Company to be in compliance with the current public information
required under Rule 144(c)(1) or (B) such date as all of the
Registrable Securities shall have been resold pursuant to Rule 144
(and may be further resold without restriction); (ii) file with the
Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and under the
Exchange Act; and (iii) furnish to any Purchaser upon request, as
long as such Purchaser owns any Registrable Securities, (A) a
written statement by the Company as to whether it has complied with
the reporting requirements of the Securities Act and the Exchange
Act, (B) a copy of the Company’s most recent Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the
Purchaser of any rule or regulation of the Commission that permits
the selling of any such Registrable Securities without
registration.
The
Company understands that the Purchasers disclaim being an
underwriter, but acknowledges that a determination by the
Commission that a Purchaser is deemed an underwriter shall not
relieve the Company of any obligations it has hereunder. The
Company will not name any Purchaser as an underwriter in a
Registration Statement or Prospectus.
(c)
If (i) the
Registration Statement is not filed on or prior to the Initial
Filing Date, or (ii) the Company fails to file with the Commission
a request for acceleration of the Registration Statement in
accordance with Rule 461 under the Securities Act, within five
Trading Days after the date the Company is first notified (orally
or in writing) by the Commission that the Registration Statement
will not be “reviewed” or will not be subject to
further review or comment, or (iii) prior to the effective date of
the Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration
Statement within 21 days after the receipt of comments by or notice
from the Commission that such amendment or resolution of such
comments is required in order for such Registration Statement to be
declared effective, or (iv) there occurs the issuance of by the
Commission or any other federal or state governmental authority of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or
(v) at any time during the period commencing from the six-month
anniversary of the date hereof and ending at such time that all of
the Registrable Securities may be resold during any three-month
period without the requirement for the Company to be in compliance
with the current public information required under Rule 144(c)(1),
the Company shall fail to satisfy the current public information
requirement under Rule 144(c) (any of the foregoing being referred
to as an “
Event
”, and for purposes
of clauses (i) and (v), the date on which such Event occurs, and
for purpose of clause (ii) the date on which such five Trading Day
period is exceeded, and for purpose of clause (iii) the date which
such 21-day period is exceeded, being the “
Event Date
”), then except
during any period of time during which the Registrable Securities
may be resold pursuant to Rule 144 without volume limitations, in
addition to any other rights the Purchasers may have hereunder or
under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall
not have been cured by such date) until the applicable Event is
cured, the Company shall pay to each Purchaser an amount in cash,
as liquidated damages and not as a penalty, equal to the product of
1.0% multiplied by the Purchase Price paid by such Purchaser with
respect to the Registrable Securities affected by such Event and
held by such Purchaser on such Event Date or monthly anniversary
thereof, up to a maximum of 10.0% of the Purchase Price for such
Registrable Securities provided that such maximum shall not apply
if the applicable Event is the Event described in clause (v). If
the Company fails to pay any liquidated damages pursuant to this
Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 12% per annum (or
such lesser maximum amount that is permitted to be paid by
applicable law) to the Purchasers, accruing daily from the date
such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The liquidated damages pursuant
to the terms hereof shall apply on a daily pro rata basis for any
portion of a month prior to the cure of an Event.
ARTICLE VI
MISCELLANEOUS
6.1
Termination
.
This Agreement may be terminated by any Purchaser, as to such
Purchaser
’
s obligations
hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or
before May 30, 2019;
provided
,
however
, that
no such termination will affect the right of any party to sue for
any breach by any other party (or parties).
6.2
Fees and
Expenses
. Except as expressly set forth in the Subscription
Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and
any exercise notice delivered by a Purchaser), stamp taxes and
other taxes and duties levied in connection with the delivery of
any Shares to the Purchasers.
6.3
Entire
Agreement
. The Subscription Documents, together with the
exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
6.4
Notices
. Any
and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the
facsimile number or email address as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2
nd
)
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto. To the extent that
any notice provided pursuant to any Subscription Document
constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.
6.5
Amendments;
Waivers
. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the
Purchasers. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any proposed amendment or waiver that
disproportionately, materially and adversely affects the rights and
obligations of any Purchaser relative to the comparable rights and
obligations of the other Purchasers shall require the prior written
consent of such adversely affected Purchaser. Any amendment
effected in accordance with accordance with this
Section 6.5
shall be binding
upon each Purchaser and holder of Shares and the
Company.
6.6
Headings
. The
headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof.
6.7
Successors and
Assigns
. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each
Purchaser (other than by merger). Any Purchaser may assign any or
all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Shares, provided that such
transferee agrees in writing to be bound, with respect to the
transferred Shares, by the provisions of the Subscription Documents
that apply to the
“
Purchasers.
”
6.8
No Third-Party
Beneficiaries
. JMP Securities LLC shall be the third party
beneficiary of the representations and warranties of the Company in
Section 3.1
and the
representations and warranties of the Purchasers in
Section 3.2
. This Agreement is
intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except
as otherwise set forth in this
Section 6.8
.
6.9
Governing Law
.
All questions concerning the construction, validity, enforcement
and interpretation of the Subscription Documents shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Subscription Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Subscription Documents), and hereby
irrevocably waives, and agrees not to assert in any Action or
Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is
improper or is an inconvenient venue for such Proceeding. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding
by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If any party shall commence an Action or
Proceeding to enforce any provisions of the Subscription Documents,
then the prevailing party in such Action or Proceeding shall be
reimbursed by the non-prevailing party for its reasonable
attorneys
’
fees and other
costs and expenses incurred with the investigation, preparation and
prosecution of such Action or Proceeding.
6.10
Survival
.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares.
6.11
Execution
.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a
“
.pdf
”
format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or
“
.pdf
”
signature page were an original
thereof.
6.12
Severability
.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
6.13
Rescission
and Withdrawal Right
. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions
of) any of the other Subscription Documents, whenever any Purchaser
exercises a right, election, demand or option under a Subscription
Document and the Company does not timely perform its related
obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time
to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its
future actions and rights.
6.14
Saturdays,
Sundays, Holidays, etc.
If the last or appointed day for the
taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be
taken or such right may be exercised on the next succeeding
Business Day.
6.15
Construction
.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Subscription
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Subscription Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Subscription Document shall be subject to adjustment for
reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock
that occur after the date of this Agreement but before the Closing
Date.
6.16
WAIVER
OF JURY TRIAL.
EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES.
ACCORDINGLY, IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.
(Signature Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
RUMBLEON, INC.
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Address for
Notice:
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By:
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1350 Lakeshore
Drive
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Name: Steven R. Berrard
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Suite 160
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Title: Chief Financial
Officer
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Coppell, Texas
75019
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With a
copy to (which shall not constitute notice):
Akerman
LLP
Attn: Michael
Francis
Christina Russo
350 E. Las Olas
Boulevard
Fort
Lauderdale, FL 33301
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO RUMBLEON SECURITIES PURCHASE
AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
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Name of
Purchaser:
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Signature of Authorized Signatory of Purchaser
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Name of
Authorized Signatory:
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Title
of Authorized Signatory:
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Email
Address of Authorized Signatory:
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Facsimile
Number of Authorized Signatory:
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Address
for Notice to Purchaser:
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Address
for Delivery of Shares to Purchaser (if not same as address
for
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notice):
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Social Security
Number or Taxpayer ID of
Purchaser:
Subscription
Amount:
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$
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Shares:
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☐
Notwithstanding anything contained in this Agreement
to the contrary, by checking this box (i) the obligations of the
above-signed to purchase the securities set forth in this Agreement
to be purchased from the Company by the above-signed, and the
obligations of the Company to sell such securities to the
above-signed, shall be unconditional and all conditions to Closing
shall be disregarded, (ii) the Closing shall occur on the third
(3
rd
)
Trading Day following the date of this Agreement and (iii) any
condition to Closing contemplated by this Agreement (but prior to
being disregarded by clause (i) above) that required delivery by
the Company or the above-signed of any agreement, instrument,
certificate or the like or purchase price (as applicable) shall no
longer be a condition and shall instead be an unconditional
obligation of the Company or the above-signed (as applicable) to
deliver such agreement, instrument, certificate or the like or
purchase price (as applicable) to such other party on the Closing
Date.
EXHIBIT A
INVESTOR QUESTIONNAIRE
IN
CONNECTION WITH RUMBLEON, INC.'S PROPOSED SALE OF CLASS B COMMON
STOCK (THE “SHARES”) , PLEASE INDICATE IF YOU QUALIFY
AS AN "ACCREDITED INVESTOR" UNDER
ONE OR MORE
OF THE FOLLOWING
(
please check
all
that apply
):
Any
individual whose net worth, or joint net worth with that
person’s spouse, at the time of his or her purchase of the
Shares, exceeds US$1,000,000. For purposes of calculating net worth
under this section, (i) the person's primary residence shall not be
included as an asset; (ii) indebtedness that is secured by the
person's primary residence, up to the estimated fair market value
of the primary residence at the time of the sale of the Shares,
shall not be included as a liability (except that if the amount of
such indebtedness outstanding at the time of sale of securities
exceeds the amount outstanding 60 days before such time, other than
as a result of the acquisition of the primary residence, the amount
of such excess shall be included as a liability); and (iii)
indebtedness that is secured by the person's primary residence in
excess of the estimated fair market value of the primary residence
at the time of the sale of the Shares shall be included as a
liability.
Any
individual who had an individual income in excess of US$200,000 in
each of the two most recent years or joint income with that
person’s spouse in excess of US$300,000 in each of those
years and reasonably expects to reach the same income level in the
current year.
Any
director or executive officer of RumbleOn, Inc. For purposes of
this section, “executive officer” means the president;
any vice president in charge of a principal business unit, division
or function, such as sales, administration or finance; or any other
person or persons who perform(s) similar policymaking functions for
RumbleOn, Inc..
Any
organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or
partnership not formed for the specific purpose of acquiring the
Shares, with total assets in excess of $5,000,000.
Any
trust, with total assets in excess of US$5,000,000, not formed for
the specific purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Securities Act of 1933, as
amended.
Any
bank, as defined in Section 3(a)(2) of the Securities Act of 1933,
or a savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act of 1933, whether acting
in its individual or fiduciary capacity
Any
broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended.
Any
insurance company as defined in Section 2(a)(13) of the Securities
Act of 1933.
Any
investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section
2(a)(48) of such Act.
Any
Small Business Investment Company licensed by the U. S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
Any
plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000.
Any
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974 (“ERISA”), and either the
decision to acquire the Shares has been made by a plan fiduciary,
as defined in Section 3(21) of ERISA, which is either a bank,
savings and loan association, insurance company or registered
investment advisor, or the employee benefit plan has total assets
in excess of $5,000,000, or if a self-directed plan, investment
decisions are made solely by persons who are accredited
investors.
Any
private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.
Any
entity in which all of the equity owners are Accredited Investors,
as described above. Type of entity:
Names
of Equity Owners:
1. __________________________________
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2. __________________________________
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3. __________________________________
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4. __________________________________
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By
signing below, the Investor confirms that the information in this
Investor Questionnaire is true, correct and complete.
____________________________________
Name of
Investor
By:
_______________________________
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Signature
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Title:_______________________________
|
(if any)
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Date:
______________________________,2019
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RumbleOn, Inc. Announces Closing of $30 Million
Convertible Notes Private Offering
DALLAS, TX, May 14, 2019 (GLOBE NEWSWIRE) – RumbleOn, Inc.
(NASDAQ: RMBL) today announced the closing of its previously
announced offering of $30 million aggregate principal amount of
6.75% convertible senior notes due 2024 (the “notes”)
in a private placement to qualified institutional buyers pursuant
to Rule 144A under the Securities Act of 1933, as amended (the
“Act”) (the "note offering").
JMP Securities LLC acted as sole book-running manager for the note
offering.
National Securities Corporation, a wholly-owned
subsidiary of National Holdings Corporation (NasdaqCM: NHLD), and
Craig-Hallum Capital Group LLC acted as the Company’s
financial advisors for the note offering.
The aggregate net proceeds from the note offering were
approximately $27.3 million, after deducting the initial
purchaser’s discounts and commissions and estimated offering
expenses.
The notes are senior unsecured obligations of RumbleOn, and
interest of 6.75% per year will be payable semi-annually in arrears
on May 1 and November 1 of each year, beginning on November 1,
2019. The notes will mature on May 1, 2024 unless repurchased,
redeemed or converted in accordance with their terms prior to such
date.
RumbleOn intends to use approximately $11.1 million of the net
proceeds from the note offering to refinance certain outstanding
restrictive indebtedness and the remainder for other general
corporate purposes, which may include increased spending on
marketing and advertising, and expenditures necessary to grow the
business. Pending these uses, RumbleOn may invest the net proceeds
in short-term interest-bearing investment grade
instruments.
RumbleOn also announced that its previously announced private
placement, pursuant to Regulation D under the Act, of 1,900,000
shares of its Class B Common Stock (the “Class B Common
Stock”) at a price of $5.00 per share (the "PIPE
offering”) is expected to close on May 15, 2019, subject to
customary closing conditions, and is expected to result in
aggregate net proceeds of approximately $8.8 million, after
deducting placement agent fees and estimated offering
expenses.
Akerman LLP acted as legal counsel to RumbleOn, and McGuireWoods
LLP and Goodwin Procter LLP each acted as legal counsel to JMP
Securities LLC.
This announcement is neither an offer to sell nor a solicitation of
an offer to buy any securities and shall not constitute an offer,
solicitation or sale in any jurisdiction in which such offer,
solicitation or sale is unlawful.
About RumbleOn, Inc.
RumbleOn (NASDAQ: RMBL) is an innovative e-commerce company whose
mission is to simplify how dealers and customers buy, sell, trade,
or finance pre-owned vehicles through one online location.
Leveraging its capital-light network of 17 regional partnerships
and innovative technological solutions, RumbleOn is disrupting the
old-school pre-owned vehicle supply chain by providing users with
the most efficient, timely and transparent transaction experience.
For additional information, please visit RumbleOn’s website
at www.RumbleOn.com. Also visit the Company on Facebook, LinkedIn,
Twitter, Instagram, YouTube and Pinterest.
Forward-Looking
Statements
This press release includes forward-looking statements within the
meaning of Section 27A of the Act and Section 21E of the Securities
Exchange Act of 1934. These statements involve risks and
uncertainties that could cause actual results to differ materially,
including, but not limited to, whether RumbleOn will be able to
consummate the PIPE offering, the satisfaction of customary closing
conditions with respect to the PIPE offering, and the anticipated
use of net proceeds of the note offering and PIPE offering, which
could change as a result of market conditions or for other reasons.
Forward-looking statements may be identified by the use of the
words “may,” “will,” “expect,”
“intend,” and other similar expressions. These
forward-looking statements are based on estimates and assumptions
by RumbleOn’s management that, although believed to be
reasonable, are inherently uncertain and subject to a number of
risks. Actual results may differ materially from those anticipated
or predicted by RumbleOn’s forward-looking statements. All
forward-looking statements are subject to other risks detailed in
RumbleOn’s Annual Report on Form 10-K for the year ended
December 31, 2018 and the risks discussed in RumbleOn’s other
filings with the Securities and Exchange Commission. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. All
forward-looking statements are qualified in their entirety by this
cautionary statement, and RumbleOn undertakes no obligation to
revise or update this press release to reflect events or
circumstances after the date hereof, except as required by
applicable law.
Investor Relations:
The Blueshirt Group
Whitney Kukulka
investors@rumbleon.com
Press Contact
RumbleOn
Martin McBride
Martin@rumbleon.com
Source: RumbleOn, Inc.