UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 29, 2019
ENDOLOGIX, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware | 000-28440 | 68-0328265 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
2 Musick
Irvine, CA 92618
(Address of Principal Executive Office) (Zip Code)
Registrants telephone number, including area code: (949) 595-7200
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 | Entry into a Material Definitive Agreement. |
Equity Financing
Effective March 31, 2019, Endologix, Inc. (the Company) entered into a Purchase Agreement (the Purchase Agreement) with select institutional investors and certain other parties (Investors), whereby the Company agreed to issue and sell to the Investors, and the Investors agreed to purchase, an aggregate of 7,889,552 shares (the Equity Shares) of the Companys common stock (the Common Stock) at a price per share of $6.61 (the Equity Offering Price), for an aggregate cash purchase price of approximately $52.15 million (the Financing). For any Investor whose purchase of the Equity Shares would result in its beneficially owning in excess of 19.99% of the shares (the excess shares, the Blocked Shares) of the Common Stock outstanding immediately after giving effect to the issuance, in lieu of issuing the Blocked Shares which such Investor would have received, the Company will issue to such Investor a pre-paid warrant to purchase shares of Common Stock equal to the number of Blocked Shares that would have been received (the Pre-Paid Warrants) for the Equity Offering Price per share. Each Pre-Paid Warrant will be exercisable upon issuance, provided that such exercise does not result in the issuance of Blocked Shares, and will expire ten years from the date of issuance. The Company currently expects the conditions to closing contemplated by the Purchase Agreement to be satisfied, and the closing contemplated thereunder, to take place on April 3, 2019.
The description of the terms and conditions of the Purchase Agreement and the rights and obligations of the Company and the Investors in connection therewith are qualified by reference in their entirety to the definitive terms and conditions of the Purchase Agreement, the form of which is attached hereto as Exhibit 10.1 hereto and incorporated herein by reference.
The Purchase Agreement is being filed in order to provide investors and the Companys stockholders with information regarding its terms and in accordance with applicable rules and regulations of the Securities and Exchange Commission (the Commission). Pursuant to the Purchase Agreement, each of the Company and the Investors made customary representations, warranties and covenants and agreed to indemnify each other for certain losses arising out of breaches of such representations, warranties, covenants and other specified matters. The representations, warranties and covenants were made by the parties to and solely for the benefit of each other and any expressly intended third party beneficiaries in the context of all of the terms and conditions of the Purchase Agreement and in the context of the specific relationship between the parties. Accordingly, investors and stockholders should not rely on the representations, warranties and covenants. Furthermore, investors and stockholders should not rely on the representations, warranties and covenants as characterizations of the actual state of facts or continuing intentions of the parties, since they were only made as of the date of the Purchase Agreement. Information concerning the subject matter of such representations, warranties and covenants may change after the date of the Purchase agreement, which subsequent information may or may not be fully reflected in the Companys reports or other filings with the Commission.
The Financing is being made pursuant to the registration statement on Form S-3, declared effective by the Commission on August 3, 2018 (Registration No. 333-225320), a base prospectus dated August 3, 2018 and a prospectus supplement to be filed prior to closing. A copy of the opinion of DLA Piper LLP (US) relating to the legality of the shares of common stock to be issued in the Financing is attached as Exhibit 5.1 to this Current Report on Form 8-K
The foregoing descriptions of the terms of the Purchase Agreement and the Pre-Paid Warrant are qualified in their entirety by reference to the text of such documents, copies of which are filed as Exhibits 10.1 and 4.1 to this Current Report on Form 8-K.
Convertible Note Exchange
On March 31, 2019, the Company and two investors holding $73.355 million of the principal amount of the Companys 3.25% Convertible Senior Notes due 2020 (the Holders) entered into an Exchange Agreement (the Exchange Agreement) providing for the exchange of the Holders existing notes (the Existing Notes) for new 5.00% Voluntary Convertible Senior Notes due 2024 (the New Voluntary Notes) and new 5.00% Mandatory Convertible Senior Notes due 2024 (the New Mandatory Notes, and together with the New Voluntary Notes, the New Notes). The exchanging Holders will receive $900 principal amount of New Notes for every $1000 principal amount of Existing Notes plus accrued interest exchanged pursuant to the Exchange Agreement (the Exchange). The Company will issue $25.0 million of principal amount of the New Mandatory Notes and $42.02 million of principal amount of the New Voluntary Notes to the Holders. The New Notes are being issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act) by virtue of Section 4(a)(2) of the Securities Act. The Company currently expects the conditions to closing contemplated by the Exchange Agreement to be satisfied, and the closing contemplated thereunder to take place, on April 3, 2019.
The New Voluntary Notes and New Mandatory Notes will be governed by separate Indentures (respectively, the New Voluntary Notes Indenture and New Mandatory Notes Indenture, and collectively, the Indentures), each dated as of the closing of the Exchange (the Closing Date), by and between the Company and Wilmington Trust, National Association, as trustee (the Trustee). The New Notes will accrue interest at a rate of 5.00% per year, payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2019. The New Notes will mature on the anniversary of the Closing Date in 2024, unless earlier purchased, redeemed or converted in accordance with the terms of the Indenture. The Indentures governing the New Notes will contain customary terms and covenants and events of default.
The New Voluntary Notes will be convertible at the option of each Holder into shares of common stock at any time on or after July 1, 2020, but prior to the close of business on the business day immediately preceding January 1, 2024, provided that, except if the Company undergoes a fundamental change (as defined in the New Voluntary Notes Indenture) and for certain other customary circumstances of conversion, each Holder may not convert more than 30% the initial aggregate principal amount of his or her outstanding New Voluntary Notes per calendar quarter (a Voluntary Conversion). Thereafter, until the close of business on the business day immediately preceding the maturity date, the New Voluntary Notes will be convertible at the option of the holder at any time regardless of the conditions described in this paragraph. The initial conversion rate of the New Voluntary Notes in a Voluntary Conversion is 0.12103 shares of the Companys common stock per $1.00 principal amount of the New Notes, which is equivalent to an initial conversion price per share equal to 125% of the Equity Offering Price (the Voluntary Conversion Price). The conversion rate is subject to adjustment upon the occurrence of certain specified events. Except if the Company undergoes a fundamental change (as defined in the New Voluntary Notes Indenture) and for certain other customary circumstances of conversion, in no event prior to the close of business on the business day immediately preceding January 1, 2024 may the New Voluntary Notes be converted in a calendar quarter unless the closing sale price of the Companys common stock for at least twenty (20) trading days during the period of thirty (30) consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 110% of the Equity Offering (subject to adjustment upon the occurrence of certain specified events) (the Voluntary Conversion Threshold).
The New Mandatory Notes provide for the mandatory conversion (a Mandatory Conversion) of $1,666,666 of the aggregate principal amount each calendar month for fifteen (15) consecutive months beginning on the calendar month beginning with May 1, 2019, if and only if at the end of the prior calendar month the trailing average volume weighted average price (VWAP) of the last five (5) trading days of the prior calendar month is greater than 100% of the Equity Offering Price (the Mandatory Conversion Trigger). In the event of a Mandatory Conversion, $1,666,666 of the New Mandatory Notes would mandatorily convert at a conversion rate of 0.15129 shares of the Companys common stock per $1.00 principal amount of the New Notes, which is equivalent to a price per share equal to the Equity Offering Price. The New Mandatory Notes will be convertible at the option of each Holder into shares of common stock at the Voluntary Conversion Price at any time prior to the close of business on the business day immediately preceding January 1, 2024, provided that, except if the Company undergoes a fundamental change (as defined in the New Mandatory Notes Indenture) and for certain other customary circumstances of conversion, each Holder may not convert more than 30% of the initial aggregate principal amount of his or her outstanding New Mandatory Note per calendar quarter, and provided further, that (i) voluntary conversions may be effected only if the Voluntary Conversion Threshold has been achieved and (ii) a voluntary conversion may not take place in the same calendar quarter as a Mandatory Conversion. Thereafter, until the close of business on the business day immediately preceding the maturity date, the New Mandatory Notes will be convertible at the option of the holder at any time regardless of the conditions described in this paragraph.
The Indentures will provide that in no event may a Holder convert, whether in a Voluntarily Conversion or a Mandatory Conversion or otherwise, into shares of common stock if such conversion would result in the Holder beneficially owning more that 9.5% of the Companys outstanding common stock. The foregoing descriptions of the terms of the Exchange Agreement, the Indentures and the New Notes are qualified in their entirety by reference to the text of such documents, copies of which are filed as Exhibits 10.2, 4.5, 4.6, 4.7 and 4.8 to this Current Report on Form 8-K.
Second Amendment to Facility Agreement
On March 31, 2019, the Company entered into a Second Amendment to Amended and Restated Facility Agreement and First Amendment to Amended and Restated Guaranty and Security Agreement (the Facility Amendment) with Deerfield Private Design Fund IV, L.P. and certain of its related funds and affiliates (collectively, Deerfield), dated August 9, 2018, as amended by that certain First Amendment to Amended and Restated Facility Agreement, dated November 20, 2018 (as so amended, the Facility Agreement). The Facility Amendment provides for, among other things, the reduction in the global excess liquidity covenant from $22.5 million to $17.5 million and the reduction of the minimum net revenue financial covenants. In addition, the percentage of the $120.0 million of first out waterfall loans (the First Out Waterfall Loans) due on April 2, 2021 decreased from 33.33% to 16.67% of the First Out Waterfall Loans outstanding on such date, while the percentage of the remainder of the First Out Water Fall Loans due on April 2, 2022 remained at 50% of the First Out Waterfall Loans outstanding on such date.
The Facility Agreement provides for the exchange of the existing notes representing the First Out Waterfall Loans for amended notes (the First Out Waterfall Notes) that provide that in the event that, in any calendar month beginning April 1, 2019 and ending June 30, 2020 (the Mandatory Conversion Period), if (A)(i) the arithmetic mean of the volume weighted average prices of the Companys common stock (the VWAP) on the five (5) consecutive trading days ending on the 15th calendar day (or, if not a trading day, the first trading day thereafter) (the Mandatory Conversion Measurement Date) and (ii) the closing price for the Companys common stock on the Mandatory Conversion Measurement Date, both exceed $6.625 (as may be adjusted to reflect certain events) (the Fixed Conversion Price) and (B)(i) the VWAP on the five (5) consecutive trading days ending on (and including) the third (3rd) trading day immediately prior to the Mandatory Conversion Measurement Date (the Initial Mandatory Conversion Measurement Date) and (ii) the closing price for the Companys common stock on the Initial Mandatory Conversion Measurement Date both exceed the Fixed Conversion Price, Deerfield shall be obligated to convert $1,666,666 of the principal amount of the loan into shares of common stock at the Fixed Conversion Price, up to a maximum aggregate amount of $25.0 million over the Mandatory Conversion Period.
Deerfield also has the option to convert up to an additional $50.0 million of the Companys outstanding debt (the Voluntary Conversion Amount) at the greater of the Fixed Conversion Price and 85% of the arithmetic average of the volume weighted average price of the Companys common stock on each of the fifteen (15) consecutive trading days prior to the conversion date (the 15 Day VWAP). The Company has the option to require conversion of the Voluntary Conversion Amount (less the amount of prior voluntary conversions) if the Companys 15 Day VWAP is greater than 175% of the Fixed Conversion Price. The First Amendment Waterfall Notes also provide that in no event may Deerfield convert, whether voluntarily or mandatorily, into shares of common stock if such conversion would result in Deerfield beneficially owning more that 4.985% of the Companys outstanding common stock. The First Out Waterfall Notes also revises Deerfields existing right to convert a portion of the outstanding principal amount of the first-out waterfall loan into a maximum of 1,430,000 shares of the Companys common stock from the current conversion price of 96% of the arithmetic average of the volume weighted average price of the Companys common stock on each of the three (3) consecutive trading days prior to the conversion date (the 96% VWAP Price) to the greater of (i) $6.625 (subject to certain adjustments) or (ii) the 96% VWAP Price.
Further, the Facility Amendment also provides, upon the effectiveness, for an increase of $5,000,000 in the amounts payable to the holders of the First Out Waterfall Notes as a fee upon termination (or reduction, or required reduction, of the outstanding amounts under the First Out Waterfall Notes to less than $10,000,000) under the Facility Agreement and to reimburse Deerfield for all expenses incurred by Deerfield in connection with the negotiation and documentation of the Facility Amendment. Also, the existing right of the Company to satisfy interest payments on the First Out Waterfall Loans with up to 250,000 shares of its common stock has been removed.
The Facility Amendment is conditioned upon completion of the Financing with gross proceeds to the Company of at least $40.0 million and the closing of the transactions contemplated by the Exchange Agreement, amongst other conditions.
In connection with entry into the Facility Amendment, the Company is amending warrants (the Warrant Amendment) to purchase 647,001 shares of common stock previously issued to Deerfield pursuant to the Companys prior facility agreement with Deerfield dated, April 3, 2017 (as amended, the 2017 Warrants) and warrants to purchase 875,001 shares of common stock previously issued to Deerfield pursuant to the Facility Agreement (as amended, the 2018 Warrants and, together with the 2017 Warrants, the Warrants) in order to reduce the exercise price of the Warrants to the Equity Offering Price. All other material terms and conditions of the Warrants remain the same. Accordingly, the Facility Amendment is expected to become effective on or about April 3, 2019.
Second Amendment to Credit Agreement
On March 31, 2019, the Company entered into a Second Amendment to Credit Agreement and First Amendment to Guaranty and Security Agreement (the Credit Amendment) with Deerfield ELGX Revolver, LLC and certain of its affiliates (collectively, Deerfield), dated August 9, 2018, as amended by that certain First Amendment to Credit Agreement, dated November 20, 2018 (as so amended, the Credit Agreement). The Credit Amendment includes conforming revisions to reflect the changes in the Facility Amendment. In addition, the Credit Amendment extends the maturity date of the Credit Agreement to the earlier of (i) April 2, 2023 or (ii) the date the loans pursuant to the Facility Agreement have been repaid in full
The foregoing descriptions of the terms of the Facility Amendment, the form of Amended and Restated Initial (2017) Warrant, the form of Amended and Restated Additional (2018) Warrant, the First Out Waterfall Note, and the Credit Amendment are qualified in their entirety by reference to the text of such documents, copies of which are filed as Exhibits 10.4, 4.2, 4.3, 4.4 and 10.5 to this Current Report on Form 8-K
Item 1.02 | Termination of a Material Definitive Agreement. |
On March 29, 2019, the Company delivered written notice to Stifel, Nicolaus & Company, Incorporated (Stifel), effective as of such date, to terminate that certain At-The-Market Equity Offering Sales Agreement (the Sales Agreement), dated May 31, 2018, between the Company and Stifel, pursuant to Section 10 thereof. The Company is not subject to any termination penalties related to the termination of the Sales Agreement. Prior to termination, the Company sold $1,829,227.80 of shares of its common stock and $48,170,772.20 of shares remained unsold under the Sales Agreement.
A copy of the Sales Agreement was filed as Exhibit 1.2 to the Companys Registration Statement on Form S-3 declared effective by the Securities and Exchange Commission on August 3, 2018 (the S-3). The description of the Sales Agreement contained in this Current Report on Form 8-K does not purport to be complete and is qualified in its entirety by reference to the copy of the Sales Agreement filed as Exhibit 1.2 to the S-3.
Item 2.02 | Results of Operations and Financial Condition. |
The Company reaffirms its previously issued annual guidance and continues to expect 2019 revenue of at least $140 million. The Company anticipates revenue for the first quarter ending March 31, 2019 of approximately $35 million. The Company continues to expect 2019 operating expenses in the range of $130 million to $140 million.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 3.02 | Unregistered Sales of Equity Securities. |
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The securities discussed in Item 1.01 above other than in the Financing are being issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act) by virtue of Section 4(a)(2) of the Securities Act and Rule 506 thereunder and Section 3(a)(9) of the Securities Act and exempt from registration or qualification under applicable state securities (or blue sky) laws. The unregistered securities are being issued solely to accredited investors (as defined by Rule 501 under the Securities Act).
Item 8.01 | Other Events. |
On April 1, 2019, the Company issued a press release announcing the transactions described in this Current Report on Form 8-K. A copy of the press release is filed herewith as Exhibit 99.1 and is incorporated by reference herein.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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.
Endologix, Inc. | ||
By: |
/s/ Vaseem Mahboob | |
Vaseem Mahboob | ||
Chief Financial Officer |
April 1, 2019
Exhibit 4.1
PRE-PAID WARRANT
THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF THIS WARRANT.
ENDOLOGIX, INC.
PRE-PAID WARRANT TO PURCHASE COMMON STOCK
Warrant No.:
Date of Issuance: April 3, 2019 (Issuance Date)
Endologix, Inc., a Delaware corporation (the Company), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted assigns (the Holder), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the Warrant), at any time or times on or after April 3, 2019 (the Initial Exercisability Date), but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the Warrant Shares, and such number of Warrant Shares, the Warrant Number). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 17. This Warrant is one of the Warrants to Purchase Common Stock (the Registered Warrants) issued pursuant to (i) Section 1 of that certain Purchase Agreement, dated as of March 31, 2019 (the Subscription Date), by and among the Company and the investors (the Buyers) referred to therein, as amended from time to time (the Securities Purchase Agreement) and (ii) and (ii) the Companys Registration Statement on Form S-3 (File number 333-225320) (the Registration Statement). The Aggregate Exercise Price (as defined below) of this Warrant was pre-paid to the Company on or prior to the initial Issuance Date and, consequently, no additional consideration shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(e)), this Warrant may be exercised by the Holder on any day on or after the Initial Exercisability Date (an Exercise Date), in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the Exercise Notice), of the Holders election to exercise this Warrant. On or prior to the initial Issuance Date, the Holder pre-paid to the Company of an amount in cash equal to the Exercise Price then in effect multiplied by the number of Warrant Shares then issuable upon exercise of this Warrant (without regard to any limitations on exercise set forth herein) (the Aggregate Exercise Price). No additional consideration shall be required to be
paid by the Holder to any Person to effect any exercise of this Warrant. The Holder is not entitled to the return or refund of all or any portion of the pre-paid Aggregate Exercise Price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised on or prior to the Expiration Date. The Holder shall not be required to deliver an ink-original of this Warrant or an Exercise Notice in order to effect an exercise hereunder, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Notice form be required. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Companys transfer agent (the Transfer Agent), which confirmation shall constitute an instruction to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (DTC) Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holders or its designees balance account with DTC through its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holders DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than two (2) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
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and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
(b) Exercise Price. For purposes of this Warrant, Exercise Price means $6.61 and has been prepaid by the Holder to the Company on or prior to the initial Issuance Date.
(c) 144 Status. For purposes of Rule 144(d) promulgated under the 1933 Act, as in effect on the Subscription Date, since the Aggregate Exercise Price was paid in full on or prior to the initial Issuance Date, it is intended that the Warrant Shares issued hereunder upon exercise of this Warrant, from time to time, shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, as of the initial Issuance Date.
(d) Disputes. In the case of a dispute as to the arithmetic calculation of the number of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed and resolve such dispute in accordance with Section 13.
(e) Limitations on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution Parties collectively would beneficially own in excess of 19.99% (the Maximum Percentage) of the shares of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without limitation, any convertible notes or convertible preferred stock or warrants, including other Registered Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this Section 1(e)(i). For purposes of this Section 1(e)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the Companys most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the
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Reported Outstanding Share Number). Within five (5) days of each month-end, the Company shall provide the Holder with the Reported Outstanding Share Number, provided that, if the fifth day of such period is not a Business Day, then the Company shall provide the Holder with the Reported Outstanding Share Number no later than the next succeeding Business Day. If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holders beneficial ownership, as determined pursuant to this Section 1(e)(i), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the Reduction Shares). For any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holders and the other Attribution Parties aggregate beneficial ownership exceeds the Maximum Percentage (the Excess Shares) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 19.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of Registered Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(e)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(e)(i) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
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(f) Reservation of Shares. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall be necessary to satisfy the Companys obligation to issue shares of Common Stock under the Registered Warrants then outstanding (without regard to any limitations on exercise) (the Required Reserve Amount); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any exercise or redemption of Registered Warrants or such other event covered by Section 2(a) below. The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Registered Warrants based on number of shares of Common Stock issuable upon exercise of Registered Warrants held by each holder on the Closing Date (without regard to any limitations on exercise) or increase in the number of reserved shares, as the case may be (the Authorized Share Allocation). In the event that a holder shall sell or otherwise transfer any of such holders Registered Warrants, each transferee shall be allocated a pro rata portion of such holders Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Registered Warrants shall be allocated to the remaining holders of Registered Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the Registered Warrants then held by such holders (without regard to any limitations on exercise).
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a) Stock Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
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(b) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2(a), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(c) Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
3. RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a Distribution), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that to the extent that the Holders right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership) to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Common Stock (the Purchase Rights), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
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have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, that to the extent that the Holders right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to such extent) and such Purchase Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b), including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the Company shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to
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receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(e) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a Corporate Event), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(c) Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the seventy-five (75) calendar day anniversary of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(e) hereof), the Company shall use its best
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efforts to promptly remedy such failure, including, without limitation, obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.
6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the
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Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock shall be given.
(d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) promptly upon each adjustment of the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least ten Trading Days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder, and (iii) the existence of a proposed Fundamental Transaction at least ten (10) Trading Days prior to the consummation of such Fundamental Transaction. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(e)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
10. SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that
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would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. The Company 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Companys obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction Documents unless otherwise consented to in writing by the Holder.
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13. DISPUTE RESOLUTION.
(a) Submission to Dispute Resolution.
(i) In the case of a dispute relating to the Closing Sale Price or fair market value or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to such Closing Sale Price or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii) The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance with the first sentence of this Section 13 and (B) written documentation supporting its position with respect to such dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the Holder selected such investment bank (the Dispute Submission Deadline) (the documents referred to in the immediately preceding clauses (A) and (B) are collectively referred to herein as the Required Dispute Documentation) (it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses of such investment bank shall be borne solely by the Company, and such investment banks resolution of such dispute shall be final and binding upon all parties absent manifest error.
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(b) Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 13 constitutes an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New York Civil Practice Law and Rules (CPLR) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 13, (ii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 13 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in this Section 13 and (iii) nothing in this Section 13 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 13).
14. REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Companys compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
15. PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company or other proceedings affecting company creditors rights and involving a claim under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such
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bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys fees and disbursements.
16. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.
17. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) 1933 Act means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) 1934 Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c) Affiliate means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person, it being understood for purposes of this definition that control of a Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(d) Attribution Parties means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holders investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons whose beneficial ownership of the Companys Common Stock would or could be aggregated with the Holders and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(e) Bloomberg means Bloomberg, L.P.
(f) Business Day means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
(g) Closing Sale Price means, for any security as of any date, the last closing trade price for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the
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foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such security as reported in the pink sheets by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(h) Common Stock means (i) the Companys shares of common stock, $0.001 par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(i) Convertible Securities means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.
(j) Eligible Market means The New York Stock Exchange, the NYSE MKT, the Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(k) Expiration Date means the date that is the tenth (10th) anniversary of the Initial Exercisability Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a Holiday), the next date that is not a Holiday.
(l) Fundamental Transaction means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any of its significant subsidiaries (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or
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(iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the beneficial owner (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(m) Group means a group as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(n) Options means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(o) Parent Entity of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
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(p) Person means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(q) Principal Market means the Nasdaq Global Select Market,.
(r) SEC means the United States Securities and Exchange Commission or the successor thereto.
(s) Subject Entity means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(t) Successor Entity means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(u) Trading Day means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that Trading Day shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
[signature page follows]
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IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
ENDOLOGIX, INC. | ||
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Title: |
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
ENDOLOGIX, INC.
The undersigned holder hereby exercises the right to purchase of the shares of Common Stock (Warrant Shares) of Endologix, Inc., a Delaware corporation (the Company), evidenced by Warrant to Purchase Common Stock No. (the Warrant). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
The Company shall deliver to Holder, or its designee or agent as specified below, Warrant Shares in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
☐ Check here if requesting delivery as a certificate to the following name and to the following address:
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☐ Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC Participant: |
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DTC Number: |
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Account Number: |
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Date: , |
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Name of Registered Holder |
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Tax ID: |
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Facsimile: |
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EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated , 201 , from the Company and acknowledged and agreed to by .
ENDOLOGIX, INC. | ||
By: |
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Name: | ||
Title: |
Exhibit 4.2
EXHIBIT C-3
FORM OF AMENDED AND RESTATED INITIAL WARRANT
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE SECURITIES LAW. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, INCLUDING PURSUANT TO SECTION 4(A)(7) OF THE SECURITIES ACT OR RULE 144 UNDER THE SECURITIES ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED 4[(a)](1) AND A HALF SALE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.
Warrant to Purchase |
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[ ]1 shares |
Warrant Number: 2017-[ ] |
Warrant to Purchase Common Stock
of
Endologix, Inc.
THIS CERTIFIES that [ ] or any subsequent holder hereof (Holder) has the right to purchase from Endologix, Inc., a Delaware corporation (the Company), [ ( )] fully paid and nonassessable shares of the Companys common stock, $0.001 par value per share (Common Stock), subject to adjustment as provided herein, at a price equal to the Exercise Price (as defined in Section 3 below), at any time during the Term (as defined in Section 1 below).
Holder agrees with the Company that this Warrant to Purchase Common Stock of the Company (this Warrant or this Agreement) is issued and all rights hereunder shall be held subject to all of the conditions, limitations and provisions set forth herein.
1 | Total number of shares to equal 647,001, divided among the funds (1/3 each). |
1. Date of Issuance and Term.
This Warrant shall be deemed to be issued, and to have been in full force and effect commencing on, April 3, 2017 (Date of Issuance) and amended and restated on April __, 2019. The term of this Warrant begins on the Date of Issuance and ends at 5:00 p.m., New York City time, on April 3, 2024 (the Term). This Warrant was issued pursuant to the Prior Facility Agreement (as defined in that certain Amended and Restated Facility Agreement (as amended by the First Amendment thereto dated as of November 20, 2018 and the Second Amendment thereto dated as of March 31, 2019, and as may be otherwise amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the Facility Agreement) by and among the Company and Deerfield Private Design Fund III, L.P., Deerfield Private Design Fund IV, L.P., and Deerfield Partners, L.P., dated as of August 9, 2018, and Holder is entitled to the applicable rights under that certain Amended and Restated Registration Rights Agreement (as may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the Registration Rights Agreement) by and among the Company and Deerfield Private Design Fund III, L.P., Deerfield Private Design Fund IV, L.P., and Deerfield Partners, L.P., dated as of August 9, 2018.
Notwithstanding anything herein to the contrary, the Company shall not issue to Holder, and Holder may not acquire, a number of shares of Common Stock upon exercise of this Warrant to the extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by Holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with Holders for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act) (including shares held by any group of which Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein), would exceed 4.985% of the total number of shares of Common Stock then issued and outstanding (the 4.985% Cap); provided, however, that the 4.985% Cap shall only apply to the extent that the Common Stock is deemed to constitute an equity security pursuant to Rule 13d-1(i) promulgated under the Exchange Act. For purposes hereof, group has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission (the SEC), and the percentage held by Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Upon the written request of Holder, the Company shall, within two (2) Trading Days, confirm orally and in writing to Holder the number of shares of Common Stock then outstanding.
For purposes hereof:
Affiliate means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 (Rule 144) under the Securities Act of 1933, as amended (the Securities Act). With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder shall, for purposes hereof, be deemed to be an Affiliate of such Holder.
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Asset Sale means a transaction covered by the provisions of clause (B) of the definition of Major Transaction involving the sale or transfer of all or substantially all of the assets of the Company (including, for the avoidance of doubt, all or substantially all of the assets of the Company and its Subsidiaries (as defined in the Facility Agreement), taken as a whole) in connection with which the Company has announced its intention to liquidate and distribute its assets to stockholders.
Black-Scholes Value shall mean the Black-Scholes value of this Warrant, or applicable portion thereof, as determined by use of the Black-Scholes Option Pricing Model using the criteria set forth on Schedule 1 hereto.
Business Day means a day other than a Saturday or Sunday or any other day on which commercial banks are authorized or required by law to close in New York City.
Cashless Default Exercise shall mean an exercise of this Warrant as a Cashless Default Exercise in accordance with Sections 3(c) and 11(b) hereof.
Cashless Major Exercise shall mean an exercise of this Warrant or portion thereof as a Cashless Major Exercise in accordance with Sections 3(b) and 5(b)(i) hereof.
Cash Out Major Transaction means a Major Transaction in which the consideration payable to holders of Common Stock in connection with the Major Transaction consists solely of cash.
Eligible Market means the New York Stock Exchange, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the NYSE American or, in each case, any successor thereto.
Parent Entity of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of a Major Transaction.
Person means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
Standard Settlement Period means the standard settlement period for equity trades effected on securities exchanges in the United States, expressed in a number of Trading Days, as in effect on the applicable Date of Exercise (as defined in Section 2(b)).
Stock Event means a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares.
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Successor Entity means any Person purchasing the Companys assets or Common Stock, or any successor entity resulting from such Major Transaction, or if the Warrant is to be exercisable for shares of capital stock of a Parent Entity (as defined above), such Persons Parent Entity.
Successor Major Transaction means either a Takeout Major Transaction or an Asset Sale.
Successor Major Transaction Consideration means (i) in the case of a Takeout Major Transaction (other than a Cash Out Major Transaction), the amount of cash and other assets and the number of securities or other property of the Successor Entity or other entity that would be issuable in such Major Transaction, in respect of a number of shares equal to the Successor Major Transaction Conversion Share Amount and (ii) in the case of an Asset Sale or a Cash Out Major Transaction, an amount of cash equal to the Black-Scholes Value of the Warrant.
Successor Major Transaction Conversion Share Amount means an amount equal to the Black-Scholes Value of the Warrant (or such applicable portion subject to a Successor Major Transaction Conversion), divided by the closing price of the Common Stock on the principal securities exchange or other securities market on which the Common Stock is then traded on the Trading Day immediately preceding the date on which the applicable Major Transaction is consummated.
Takeout Major Transaction means a transaction covered by the provisions of clause (A) of the definition of Major Transaction in which the shares of Common Stock of the Company are converted into the right to receive cash, securities of another entity and/or other assets.
Trading Day shall mean any day on which the Common Stock is traded for any period on the NASDAQ Global Select Market (NasdaqGS) or, if the NasdaqGS is not the principal trading market for the Common Stock, on the principal securities exchange or other securities market on which the Common Stock is then being traded; provided, however, that during any period in which the Common Stock is not listed or quoted on the NasdaqGS or any other securities exchange or market, the term Trading Day shall mean a Business Day.
2. Exercise.
(a) Manner of Exercise. During the Term (or, in respect of a Cashless Major Exercise, the Cashless Major Exercise Period (as defined below)), this Warrant may be Exercised as to all or any lesser number of whole shares of Common Stock covered hereby (the Warrant Shares or the Shares) by sending to the Company the Exercise Form attached hereto as Exhibit A-1 (the Exercise Form) duly completed and executed, and, if applicable, the full Exercise Price (as defined below, which may be satisfied by a Cash Exercise, a Cashless Exercise or a Note Exchange Exercise, as each is defined below) for each share of Common Stock as to which this Warrant is Exercised, at the office of the Company, 2 Musick, Irvine, CA 92618, Attention: Chief Financial Officer; Phone: (949) 595-7200, Email: vmahboob@endologix.com, or at such other office or agency as the Company may designate in writing, by overnight mail or electronic mail (any such exercise of the Warrant being hereinafter called an Exercise of this Warrant).
(b) Date of Exercise. The Date of Exercise of the Warrant shall, in each case, be the date that the Exercise Form attached hereto as Exhibit A-1, completed and executed, is sent by electronic mail to the Company, provided that the Exercise Price is satisfied as soon as practicable
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thereafter but in no event later than two (2) Business Days following the date of such electronic mail. Alternatively, the Date of Exercise shall be defined as the date the original Exercise Form is received by the Company, if Holder has not previously sent the Exercise Form by electronic mail. Upon delivery of the Exercise Form to the Company by electronic mail or otherwise, Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been Exercised, irrespective of the date such Warrant Shares are credited to Holders or its designees Depository Trust Company (DTC) account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be; provided, however, that in the event an Exercise Form in respect of a Cashless Major Exercise is delivered prior to the occurrence of the applicable Major Transaction, Holder shall be deemed to have become the holder of record of the shares issuable upon such exercise immediately prior to the consummation of such Major Transaction and the Date of Exercise shall in such event be deemed to have occurred on the date of the occurrence of the Major Transaction. Holder shall not be required to physically surrender this Warrant to the Company until Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days following the date the final Exercise Form is delivered to the Company. Execution and delivery of an Exercise Form with respect to a partial Exercise shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.
(c) Delivery of Common Stock Upon Exercise. Within the earlier of (x) two (2) Trading Days and (y) the number of Trading Days comprising the Standard Settlement Period after any Date of Exercise (but, in the case of a Cash Exercise, within two (2) Business Days following the Companys receipt of the full Exercise Price, if later) or in the case of a Cashless Default Exercise (as defined in Section 5(b) below), within the period provided in Section 3(c), as applicable (the Delivery Period), the Company shall issue and deliver (or cause its transfer agent (the Transfer Agent) to issue and deliver) in accordance with the terms hereof to or upon the order of Holder that number of shares of Common Stock (Exercise Shares) for the portion of this Warrant exercised as shall be determined in accordance herewith. Upon the Exercise of this Warrant or any part hereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering an opinion of counsel, to assure that the Transfer Agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations as Holder shall specify at Exercise, representing the number of shares of Common Stock issuable upon such Exercise. The Company warrants that no instructions other than these instructions have been or will be given to the Transfer Agent and that, unless waived by Holder, this Warrant and the Exercise Shares will be free-trading, and freely transferable, and will not contain or be subject to a legend (or be subject to any stop transfer instruction) restricting the resale or transferability of the Exercise Shares if the Unrestricted Conditions (as defined below) are met.
The Company shall be responsible for paying all present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise from any payment or issuance made under, from the execution, delivery, performance or enforcement of, or otherwise with respect to, this Warrant.
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(d) Delivery Failure. In addition to any other remedies which may be available to Holder, in the event that the Company fails for any reason to effect delivery of the Exercise Shares by the end of the Delivery Period (a Delivery Failure), Holder will be entitled to revoke all or part of the relevant Exercise by delivery of a notice to such effect to the Company whereupon the Company and Holder shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation, except that the Failure Payments under Section 10(b) shall be payable through the date such notice of revocation is given to the Company.
(e) Legends.
(i) Restrictive Legend. Holder understands that until such time as this Warrant, the Exercise Shares and the Failure Payment Shares (as defined below) have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 or an exemption from registration under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant, the Exercise Shares and the Failure Payment Shares, as applicable, may bear a restrictive legend in substantially the following form (and a stop-transfer order consistent therewith may be placed against transfer of the certificates for such securities):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING PURSUANT TO SECTION 4(A)(7) OF THE SECURITIES ACT OR RULE 144 UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED 4[(a)](1) AND A HALF SALE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(ii) Removal of Restrictive Legends. This Warrant and the certificates (or electronic book entries, if applicable) evidencing the Exercise Shares and the Failure Payment Shares, as applicable, shall not contain or be subject to any legend restricting the transfer thereof (including the legend set forth above in subsection 2(e)(i)) or be subject to any stop-transfer instructions: (A) while a registration statement (including a Registration Statement, as defined in the Registration Rights Agreement) covering the sale or resale of such security is effective under the Securities Act, or (B) following any sale of such Warrant, Exercise Shares and/or Failure Payment Shares pursuant to Rule 144, or (C) if such Warrant, Exercise Shares and/or Failure Payment Shares are eligible for sale under Rule 144(b)(1), or (D) at any time on or after the date hereof on which Holders holding period for purposes of Rule 144 under the Securities Act and subsection (d)(3)(iii) thereof with respect to such Warrant, Exercise Shares and/or Failure Payment Shares is at least
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six (6) months and Holder certifies that it is not an Affiliate of the Company, or (E) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC) (collectively, the Unrestricted Conditions). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date, or at such other time as any of the Unrestricted Conditions have been met, if required by the Transfer Agent to effect the issuance of this Warrant, the Exercise Shares or the Failure Payment Shares, as applicable, without a restrictive legend or removal of the legend hereunder. If any of the Unrestricted Conditions are met at the time of issuance of this Warrant, the Exercise Shares or the Failure Payment Shares, then such Warrant, Exercise Shares or Failure Payment Shares, as applicable, shall be issued free of all legends and stop-transfer instructions. The Company agrees that following the Effective Date, or at such time as the Unrestricted Conditions are met or such legend is otherwise no longer required under this Section 2(e), it will, no later than the earlier of (x) two (2) Trading Days and (y) the number of Trading Days comprising the Standard Settlement Period following the delivery (the Unlegended Shares Delivery Deadline) by Holder to the Company or the Transfer Agent of this Warrant and a certificate representing Exercise Shares and/or Failure Payment Shares, as applicable, issued with a restrictive legend, deliver or cause to be delivered to Holder this Warrant and/or a certificate (or electronic transfer) representing such shares that is free from all restrictive and other legends (and stop transfer instructions). For purposes hereof, Effective Date shall mean the date that the first Registration Statement that the Company is required to file pursuant to the Registration Rights Agreement has been declared effective by the SEC.
(iii) Sale of Unlegended Shares. Holder agrees that the removal of the restrictive legend from this Warrant and any certificates representing securities as set forth in Section 2(e) above is predicated upon the Companys reliance that Holder will sell this Warrant or any Exercise Shares and/or any Failure Payment Shares, as applicable, pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if such securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein.
(f) Cancellation of Warrant. This Warrant shall be canceled upon the full Exercise of this Warrant, and, as soon as practical after the Date of Exercise, Holder shall be entitled to receive Common Stock for the number of shares purchased upon such Exercise of this Warrant, and if this Warrant is not Exercised in full, Holder shall be entitled to receive a new Warrant (containing terms identical to this Warrant) representing any unexercised portion of this Warrant in addition to such Common Stock; provided, however, as set forth in Section 2(b), Holder shall not be required to physically surrender this warrant if the Warrant is not Exercised in full.
(g) Holder of Record. Each person in whose name any Warrant for shares of Common Stock is issued shall, for all purposes, be deemed to be Holder of record of such shares on the Date of Exercise, irrespective of the date of delivery of the Common Stock purchased upon the Exercise of this Warrant. Prior to the exercise of this Warrant, nothing in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company.
(h) Delivery of Electronic Shares. In lieu of delivering physical certificates representing the Common Stock issuable upon Exercise or legend removal, or representing Failure Payment
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Shares, upon written request of Holder, the Company shall use its best efforts to cause the Transfer Agent to electronically transmit the Common Stock issuable upon Exercise to Holder by crediting the account of Holders prime broker with DTC through its Deposit/Withdrawal at Custodian (DWAC) system. The time periods for delivery and penalties described herein shall apply to the electronic transmittals described herein. Any delivery not effected by electronic transmission shall be effected by delivery of physical certificates.
(i) Buy-In. In addition to any other rights or remedies available to Holder hereunder or otherwise at law or in equity, if the Company fails to cause its Transfer Agent to deliver to Holder a certificate or certificates, or electronic shares through DWAC, representing the Exercise Shares pursuant to an Exercise on or before the last day of the Delivery Period (other than a failure caused by any incorrect or incomplete information provided by Holder to the Company hereunder), and if after such date Holder is required by its broker to purchase (in an open market transaction or otherwise) or Holder or Holders brokerage firm otherwise purchases shares of Common Stock to deliver in satisfaction of a sale by Holder of the Exercise Shares which Holder was entitled to receive upon such Exercise (a Buy-In), then the Company shall (1) pay in cash to Holder the amount by which (x) Holders total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Exercise Shares that the Company was required to deliver to Holder in connection with the Exercise at issue by (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of Holder, either reinstate the portion of the Warrant and equivalent number of Exercise Shares for which such Exercise was not honored (and refund the Exercise Price therefor, to the extent paid by Holder, and/or reinstate the principal amount of any indebtedness used to satisfy the applicable Exercise Price) or deliver to Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its Exercise and delivery obligations hereunder. For example, if Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted Exercise to cover the sale of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay Holder $1,000. Holder shall provide the Company written notice indicating the amounts payable to Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit Holders right to pursue any other remedies available to it hereunder, at law or in equity including a decree of specific performance and/or injunctive relief with respect to the Companys failure to timely deliver certificates representing shares of Common Stock upon Exercise of the Warrant as required pursuant to the terms hereof.
(j) HSR Submissions. If Holder determines that, in connection with the exercise of this Warrant, it and the Company are required to file Premerger Notification Reports with the Federal Trade Commission (the FTC) and the United States Department of Justice (DOJ) and observe the Waiting Period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and the related rules and regulations promulgated thereunder (collectively, the HSR Act), the Company agrees to (i) cooperate with Holder in Holders preparing and making such submission and any responses to inquiries of the FTC and DOJ; (ii) prepare and make any submission required to be filed by the Company under the HSR Act and respond to inquiries of the FTC and DOJ in connection therewith; and (iii) reimburse Holder for the cost of the required filing fee for Holders submission under the HSR Act. For the avoidance of doubt, Holder shall bear all of its
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other costs and expenses in connection with such submission, including any attorneys fees associated therewith.
3. Payment of Warrant Exercise Price for Cash Exercise or Cashless Exercise; Cashless Major Exercise and Cashless Default Exercise.
(a) Exercise Price. The exercise price shall initially equal $6.61 per share, subject to adjustment pursuant to the terms hereof (as so adjusted, the Exercise Price), including but not limited to Section 5 below.
Payment of the Exercise Price may be made by any of the following, or a combination thereof, at the election of Holder:
(i) Cash Exercise: Holder may exercise this Warrant in cash, bank or cashiers check or wire transfer (a Cash Exercise);
(ii) Cashless Exercise: In lieu of paying all or any portion of the Exercise Price in cash, Holder, at its option, may exercise this Warrant (in whole or in part) on a cashless basis by making appropriate notation on the applicable Exercise Form, in which event the Company shall issue Holder a number of shares of Common Stock computed using the following formula (a Cashless Exercise):
X = Y (A-B)/A
where: X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock for which this Warrant is being Exercised.
A = the Market Price of one (1) share of Common Stock (for purposes of this Section 3(a)(ii), where Market Price, as of any date, means the arithmetic average of the Volume Weighted Average Price (as defined below) of the Companys Common Stock on each of the ten (10) consecutive Trading Days immediately preceding the date in question.
B = the Exercise Price.
As used herein, the Volume Weighted Average Price for any security as of any date means the volume weighted average sale price on the NasdaqGS as reported by, or based upon data reported by, Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by the Holder and the Company (Bloomberg) or, if the NasdaqGS is not the principal trading market for such security, the volume weighted average sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg or, if no volume weighted average sale price is reported for such security, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security on the OTC Bulletin Board, the OTCQX Market, the OTCQB Market or the pink market of OTC Markets Group. If the Volume
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Weighted Average Price cannot be calculated for such security on such date in the manner provided above, the Volume Weighted Average Price shall be the fair market value as determined by the Company and the Holder. In the event that a Stock Event is consummated during any period for which the arithmetic average of the Volume Weighted Average Price is to be determined (under this Section or otherwise), the Volume Weighted Average Price for all Trading Days during such period prior to the effectiveness of the Stock Event shall be appropriately adjusted to reflect such Stock Event.
(iii) Note Exchange Exercise: In lieu of paying all or any portion of the Exercise Price in cash, Holder, at its option, may exercise this Warrant (in whole or in part) through a reduction of an amount of principal outstanding under any First Out Waterfall Notes in accordance with Section 2.3(b) of the Facility Agreement, then held by Holder (a Note Exchange Exercise)
For purposes of Rule 144 and subsection (d)(3)(ii) thereof, it is intended, understood and acknowledged that the shares of Common Stock issuable upon Exercise of this Warrant in a Cashless Exercise (including a Cashless Major Exercise or Cashless Default Exercise) transaction or a Note Exchange Exercise transaction shall be deemed to have been acquired on April 3, 2017. Accordingly, (A) upon any such Exercise, the Rule 144 holding period for the shares of Common Stock issued thereupon shall be in excess of one (1) year, and (B) provided that Holder is not an affiliate (as defined in Rule 144 under the Securities Act) of the Company on the date of such Exercise (which the Company shall assume unless advised otherwise in writing by Holder), an Unrestricted Condition shall be satisfied with respect to the shares of Common Stock issued thereupon and such shares will be freely transferable, without restriction or limitation (including any volume limitation or current public information requirement) under Federal or state securities laws, pursuant to Rule 144 under the Securities Act, and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof.
As provided in Section 2(b), Holder shall only be required to physically surrender this Warrant in the event that Holder is exercising this Warrant in full.
(b) Cashless Major Exercise. To the extent Holder shall exercise this Warrant as a Cashless Major Exercise pursuant to Section 5(b)(i) and 5(b)(iii) below, Holder shall send to the Company (in any manner permitted under Section 2(a)) the Exercise Form indicating that Holder is exercising this Warrant (or any portion thereof) pursuant to a Cashless Major Exercise, in which event the Company shall issue a number of shares of Common Stock equal to the Black-Scholes Value of the Warrant (or such applicable portion being exercised) divided by the closing price of the Common Stock on the principal securities exchange or other securities market on which the Common Stock is then traded on the Trading Day immediately preceding the date on which the applicable Major Transaction is consummated, or, if in respect of a Cashless Major Exercise made after the date of consummation of the applicable Major Transaction, on the Trading Day immediately preceding the date on which the exercise form in respect of such Cashless Major Exercise is delivered. As provided in Section 2(b), Holder shall only be required to physically surrender this Warrant in the event that Holder is exercising this Warrant in full. Holder shall be permitted to make successive Cashless Major Exercises and send successive Exercise Forms in
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respect of a Cashless Major Exercise from time to time at any time during the Cashless Major Exercise Period.
(c) Cashless Default Exercise. To the extent Holder exercises this Warrant as a Cashless Default Exercise pursuant to Section 11(b)(i) below, Holder shall send to the Company (in any manner permitted under Section 2(a)) the Exercise Form indicating that Holder is exercising this Warrant pursuant to a Cashless Default Exercise, in which event the Company shall issue to Holder, within five (5) Trading Days of the applicable Default Notice, a number of shares of Common Stock (which shares shall be valued at the closing price of the Common Stock on the principal securities exchange or other securities market on which the Common Stock is then traded on the Trading Day immediately preceding the date on which the Exercise Form in respect of such Cashless Default Exercise is delivered) equal to the Black-Scholes Value of the remaining unexercised portion of this Warrant (or such portion thereof subject to such exercise) as of the date of such Default Notice (or in the case of an Event of Default referred to in Section 11(a)(vi), on the Trading Day immediately preceding the date the dividend or distribution is declared or, if not first declared, is paid). As provided in Section 2(b), the Holder shall be permitted to make successive Cashless Default Exercises and send successive Exercise Forms in respect of a Cashless Default Exercise, from time to time at any time from and after the date of the applicable Default Notice through the Term of this Warrant.
(d) Dispute Resolution. In the case of a dispute as to the determination of the closing price or the Volume Weighted Average Price of the Companys Common Stock or the arithmetic calculation of the Exercise Price, Market Price or the Successor Major Transaction Consideration, or the number of shares issuable upon a Cashless Major Exercise, the Company shall submit the disputed determinations or arithmetic calculations via electronic mail within two (2) Business Days of receipt, or deemed receipt, of the Exercise Form or Major Transaction Early Termination Notice, or other event giving rise to such dispute, as the case may be, to Holder. If Holder and the Company are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation being submitted to Holder, then the Company shall, within two (2) Business Days submit via electronic mail (i) the disputed determination of the closing price or the Volume Weighted Average Price of the Companys Common Stock to an independent, reputable investment bank selected by the Company and approved by Holder, which approval shall not be unreasonably withheld, or (ii) the disputed arithmetic calculation of the Exercise Price, Market Price, any Successor Major Transaction Consideration or number of shares issuable upon a Cashless Major Exercise to the Companys independent, outside registered public accountants. The Company shall use its reasonable best efforts to cause the investment bank or the accountants, as the case may be, to perform the determinations or calculations and notify the Company and Holder of the results no later than five (5) Trading Days from the time it receives the disputed determinations or calculations. Such investment banks or accountants determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error, and the Company and Holder shall each pay one half of the fees and costs of such investment banker or accountant. Notwithstanding the existence of a dispute contemplated by this paragraph, if requested by Holder, the Company shall issue to Holder the Exercise Shares not in dispute in accordance with the terms hereof.
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4. Transfer and Registration.
(a) Transfer Rights. Subject to the provisions of Section 8 of this Warrant, this Warrant may be transferred on the books of the Company, in whole or in part, in person or by attorney, upon surrender of this Warrant properly completed and endorsed. This Warrant shall be canceled upon such surrender and, as soon as practicable thereafter, the person to whom such transfer is made shall be entitled to receive a new Warrant or Warrants as to the portion of this Warrant transferred, and Holder shall be entitled to receive a new Warrant as to the portion hereof retained.
(b) Registrable Securities. The Common Stock issuable upon the Exercise of this Warrant entitles Holder (and applicable assignees or transferees of such Common Stock) to registration and other rights pursuant to the Registration Rights Agreement.
5. Adjustments Upon Certain Events.
(a) Recapitalization or Reclassification. If the Company shall at any time effect a stock split, payment of stock dividend, recapitalization, reclassification or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or smaller number of shares, then upon the effective date thereof, the number of shares of Common Stock which Holder shall be entitled to purchase upon Exercise of this Warrant, shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of shares of Common Stock by reason of such stock split, payment of stock dividend, recapitalization, reclassification or similar transaction, and the Exercise Price shall be, in the case of an increase in the number of shares, proportionally decreased and, in the case of decrease in the number of shares, proportionally increased. The Company shall give Holder the same notice it provides to holders of Common Stock of any transaction described in this Section 5(a).
(b) Rights Upon Major Transaction.
(i) Major Transaction. In the event that a Major Transaction occurs, then (1) in the case of a Successor Major Transaction, Holder, at its option, may elect to cause the conversion of this Warrant (a Successor Major Transaction Conversion), in whole or in part, into the right to receive the Successor Major Transaction Consideration, upon consummation of the Major Transaction, and (2) in the case of all other Major Transactions, Holder shall have the right to exercise this Warrant (or any portion thereof), at any time and from time to time following the occurrence of such event, as a Cashless Major Exercise. In the event Holder shall not have exercised any of its rights under clauses (1) or (2) above within the applicable time periods set forth herein, then the Major Transaction shall be treated as an Assumption (as defined below) in accordance with Section 5(b)(ii) below unless Holder waives its rights under this Section 5(b) with respect to such Major Transaction. Each of the following events shall constitute a Major Transaction:
(A) a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or other similar event, (1) following which the holders of Common Stock immediately preceding such consolidation, merger, exchange, recapitalization,
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reorganization, combination or event either (a) no longer hold a majority of the shares of Common Stock or (b) no longer have the ability to elect a majority of the board of directors of the Company or (2) as a result of which shares of Common Stock shall be changed into (or the shares of Common Stock become entitled to receive) the same or a different number of shares of the same or another class or classes of stock or securities of the Company or another entity (collectively, a Change of Control Transaction);
(B) the sale or transfer, in one transaction or a series of related transactions, of (I) all or substantially all of the assets of the Company (including, for the avoidance of doubt, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole) to any Person other than a wholly-owned subsidiary of the Company or (II) assets of the Company (including, for the avoidance of doubt, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole) for a purchase price equal to more than 50% of the Equity Value (as defined below) of the Company. For purposes of this clause (B), Equity Value shall mean (I) the product of (x) the number of issued and outstanding shares of Common Stock on the date the Company delivers the Major Transaction Notice (defined below) multiplied by (y) the per share closing price of the Common Stock on such date on the NasdaqGS as reported by, or based upon data reported by, Bloomberg or, if the NasdaqGS is not the principal trading market for such security, the closing sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg;
(C) a purchase, tender or exchange offer made to the holders of outstanding shares of Common Stock, such that following such purchase, tender or exchange offer a Change of Control Transaction shall have occurred;
(D) the liquidation, bankruptcy, insolvency, dissolution or winding-up (or the occurrence of any analogous proceeding) affecting the Company;
(E) the shares of Common Stock cease to be listed, traded or publicly quoted on the NasdaqGS and are not promptly re-listed or requoted on the New York Stock Exchange, the NYSE American, the NASDAQ Global Market or the NASDAQ Capital Market; or
(F) the Common Stock ceases to be registered under Section 12 of the Exchange Act.
(ii) Assumption. Any assumption of Company obligations under this paragraph shall be referred to herein as an Assumption. Unless otherwise provided in writing by Holder, the Company shall not consummate a Major Transaction in which the Company is not the surviving entity or
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as a result of which the Company has a new Parent Entity, unless (A) each Person acquiring the Companys assets or Common Stock (or Parent Entity thereof, as applicable), or any other successor entity resulting from such Major Transaction (in each case, a Successor Entity), assumes in writing all of the obligations of the Company under this Warrant, the Facility Agreement (but, other than with respect to the Companys obligations pursuant to Section 5.1(e) and 5.1(p) of the Facility Agreement and the other provisions of the Facility Agreement that expressly survive the repayment of the Loans (which shall be assumed in any Assumption), only if there are outstanding Loans under the Facility Agreement immediately following the consummation of the Major Transaction) and the Registration Rights Agreement in accordance with the provisions of this Section 5(b)(ii) pursuant to written agreements in form and substance reasonably satisfactory to Holder and approved by Holder prior to the consummation of such Major Transaction (such approval not to be unreasonably withheld or delayed), including agreements to deliver to Holder in exchange for its Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Warrants, that, among other things, (1) is exercisable for the appropriate number of shares of the Successor Entitys capital stock (without regard to the 4.985% Cap or any other restriction or limitation on exercise, provided that such instrument shall contain a limitation on exercise comparable to that contained in the second paragraph of Section 1 of this Warrant); (2) has an exercise price similar to the then-effective Exercise Price (taking into account any conversion or exchange ratio applicable to the Common Stock in the Major Transaction) and exercise price adjustment provisions similar to those in the Warrants; (3) entitles Holder to such additional securities or other consideration as Holder would be entitled pursuant to Section 5(b)(i) in connection with the Major Transaction; and (4) provides for registration rights similar to those provided by the Registration Rights Agreement, in each case reasonably satisfactory to Holder, and (B) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. For the avoidance of doubt, Holders reasonable satisfaction referred to in the immediately preceding sentence shall be construed only to apply to confirmation that the warrant or other comparable security and registration rights agreement delivered to Holder upon an assumption hereunder shall conform to the requirements of this Section 5(b)(ii), and this Section 5(b)(ii) shall not be construed as granting consent or approval rights to Holder with respect to the terms of such Major Transaction or to permit Holder to demand any additional consideration in respect of this Warrant other than as provided herein. Upon the occurrence of any Major Transaction, any Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Major Transaction, the provisions of this Warrant and the Registration Rights Agreement referring to the Company shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Major Transaction, the Successor Entity shall deliver to Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Major Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of the Warrants prior to such Major Transaction, such shares of publicly traded common stock (or their equivalent) of the Successor Entity, as adjusted in accordance with the provisions of this Warrant. The provisions of this Section shall apply similarly and equally to successive Major Transactions and shall be
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applied without regard to any limitations on the exercise of this Warrant other than any applicable beneficial ownership limitations.
(iii) Major Transaction Notice; Major Transaction Early Termination Right; Notice of Cashless Major Exercise. At least thirty (30) days prior to the consummation of any Major Transaction, but, in any event, within five (5) Trading Days following the first to occur of (x) the date of the public announcement of such Major Transaction if such announcement is made before 4:00 p.m., New York City time, or (y) the day following the public announcement of such Major Transaction if such announcement is made on and after 4:00 p.m., New York City time, the Company shall deliver written notice thereof via electronic mail and overnight courier to Holder (a Major Transaction Notice). At any time during the period beginning after Holders receipt of a Major Transaction Notice in respect of a Successor Major Transaction and ending five (5) Trading Days prior to the consummation of such Major Transaction (the Early Termination Period), Holder may elect a Successor Major Transaction Conversion by delivering written notice thereof (Major Transaction Early Termination Notice) to the Company, which Major Transaction Early Termination Notice shall indicate the portion of the Warrant (with reference to the number of shares of Common Stock issuable upon a Cash Exercise of such portion, without regard to the 4.985% Cap) that Holder is electing to be treated as a Successor Major Transaction Conversion. The portion of this Warrant subject to early termination pursuant to this Section 5(b)(iii), shall be converted into the right to receive the Successor Major Transaction Consideration
To the extent Holder shall elect to effect a Cashless Major Exercise in respect of a Major Transaction, Holder shall deliver its Exercise Form in accordance with Section 3(b), at any time and from time to time following receipt by Holder of the Major Transaction Notice until the later of (x) the last day of the Term and (y) the one-year anniversary of the applicable Major Transaction (the Cashless Major Exercise Period). For the avoidance of doubt, Holder shall be permitted to make successive Cashless Major Exercises and send successive Exercise Forms in respect of a Cashless Major Exercise from time to time at any time during the Cashless Major Exercise Period.
(iv) Escrow; Payment of Successor Major Transaction Consideration. Following the receipt of a Major Transaction Early Termination Notice in respect of a Successor Major Transaction from Holder, the Company shall not effect a Successor Major Transaction with respect to which Holder has elected a Successor Major Transaction Conversion unless either (A) it obtains, as a condition precedent to such Major Transaction, the written agreement of the Successor Entity that payment of the Successor Major Transaction Consideration shall be made to Holder concurrently with consummation of such Successor Major Transaction, or (B) it shall place the Successor Major Transaction Consideration into an escrow account with an independent escrow agent, and shall instruct the escrow agent to deliver the Successor Major Transaction Consideration to Holder, concurrently with the consummation of the Major Transaction. Notwithstanding clauses (A) and (B) above, Holder shall be treated on a pari passu basis with, and shall not have priority to payments to, the holders of Common Stock in connection with a Major Transaction. For purposes of determining the amount required to be placed in escrow pursuant to the provisions of this subsection (iv) and without affecting the amount of the actual Successor Major Transaction Consideration, the calculation of the price referred to in clause (1) of the first column of Schedule 1 hereto with respect to Stock Price shall be determined based on
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the Closing Market Price (as defined on Schedule 1) of the Common Stock on the Trading Day immediately preceding the date that the Successor Major Transaction Consideration is deposited with the escrow agent.
(v) Injunction. Following the receipt of a Major Transaction Early Termination Notice from Holder, in the event that the Company attempts to consummate a Successor Major Transaction without either (1) placing the Successor Major Transaction Consideration in escrow in accordance with subsection (iv) above, or (2) obtaining the written agreement of the Successor Entity as described in subsection (iv) above, Holder shall have the right to apply for an injunction in any state or federal court sitting in the City of New York, borough of Manhattan to prevent the closing of such Major Transaction until the Successor Major Transaction Consideration is delivered to Holder.
An early termination required by this Section 5(b) shall be made in accordance with the provisions of Section 12. To the extent an early termination required by this Section 5(b) is deemed or determined by a court of competent jurisdiction to be prepayments of the Warrant by the Company, such early termination shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 5, until the Successor Major Transaction Consideration is paid in full, this Warrant may be exercised, in whole or in part, by Holder into shares of Common Stock, or in the event the date of any Exercise is after the consummation of the Major Transaction, shares of publicly traded common stock (or their equivalent) of the Successor Entity pursuant to Section 5(b). The parties hereto agree that in the event of the Companys early termination of any portion of the Warrant under this Section 5(b), Holders damages would be uncertain and difficult to estimate because of the parties inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for Holder. Accordingly, any premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a commercially reasonable estimate of Holders actual loss of its investment opportunity and not as a penalty.
(c) Exercise Price Adjusted. As used in this Warrant, the term Exercise Price shall mean the purchase price per share specified in Section 3(a) of this Warrant, until the occurrence of an event stated in this Section 5 or otherwise set forth in this Warrant, and thereafter shall mean said price as adjusted from time to time in accordance with the provisions of said subsection. No adjustment made pursuant to any provision of this Section 5 shall have the net effect of increasing the aggregate Exercise Price payable hereunder or, except as expressly provided in Section 5(a), otherwise increasing the Exercise Price.
(d) Adjustments: Additional Shares, Securities or Assets. In the event that at any time, as a result of an adjustment made pursuant to this Section 5 or otherwise, Holder shall, upon Exercise of this Warrant, become entitled to receive shares and/or other securities or assets (other than Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this Section 5.
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(e) Notice of Adjustments. Whenever the Exercise Price and/or number or type of securities issuable upon Exercise is adjusted pursuant to the terms of this Warrant, the Company shall promptly mail to Holder a notice (an Exercise Price Adjustment Notice) setting forth the Exercise Price and/or number or type of securities issuable upon Exercise after such adjustment and setting forth a statement of the facts requiring such adjustment. The Company shall, upon the written request at any time of Holder, furnish to Holder a like Warrant setting forth (i) such adjustment or readjustment, (ii) the Exercise Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon Exercise of the Warrant. For purposes of clarification, whether or not the Company provides an Exercise Price Adjustment Notice pursuant to this Section 5(e), upon the occurrence of any event that leads to an adjustment of the Exercise Price, Holder would be entitled to receive a number of Exercise Shares based upon the new Exercise Price, as adjusted, for exercises occurring on or after the date of such adjustment, regardless of whether Holder accurately refers to the adjusted Exercise Price in the Exercise Form.
6. Fractional Interests.
No fractional shares or scrip representing fractional shares shall be issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, Holder may purchase only a whole number of shares of Common Stock. If, on Exercise of this Warrant, Holder would be entitled to a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of shares of Common Stock issuable upon Exercise shall be the next higher whole number of shares.
7. Reservation of Shares.
From and after the date hereof, the Company shall at all times reserve for issuance such number of authorized and unissued shares of Common Stock (or other securities substituted therefor as herein above provided) as shall be sufficient for the Exercise of this Warrant and payment of the Exercise Price. If at any time the number of shares of Common Stock authorized and reserved for issuance is below the number of shares sufficient for the Exercise of this Warrant (a Share Authorization Failure) (based on the Exercise Price in effect from time to time), the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including calling a special meeting of stockholders to authorize additional shares to meet the Companys obligations under this Section 7, in the case of an insufficient number of authorized shares, and using its best efforts to obtain stockholder approval of an increase in such authorized number of shares. The Company covenants and agrees that upon the Exercise of this Warrant, all shares of Common Stock issuable upon such Exercise shall be duly and validly issued, fully paid and nonassessable and not subject to preemptive rights, rights of first refusal or similar rights of any Person. The Company covenants and agrees that all shares of Common Stock issuable upon Exercise of this Warrant shall be approved for listing on the NasdaqGS, or, if the NasdaqGS is not the principal trading market for the Common Stock, such principal market on which the Common Stock is traded or listed.
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8. Restrictions on Transfer.
(a) Registration or Exemption Required. This Warrant has been issued in a transaction exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and Rule 506 thereunder and exempt from registration or qualification under applicable state securities (or blue sky) laws. None of the Warrant, the Exercise Shares or Failure Payment Shares may be pledged, transferred, sold or assigned except pursuant to an effective registration statement or an exemption to the registration requirements of the Securities Act and applicable state laws, including Rule 144 under the Securities Act, Section 4(a)(7) of the Securities Act or a so-called 4[(a)](1) and a half transaction.
(b) Assignment. Subject to Section 8(a), Holder may sell, transfer, assign, pledge, or otherwise dispose of this Warrant, in whole or in part. Holder shall deliver a written notice to the Company, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the Person or Persons to whom the Warrant shall be assigned and the respective number of warrants to be assigned to each assignee. The Company shall effect the assignment within three (3) Business Days of its receipt of a completed and executed form of Assignment (the Transfer Delivery Period), and shall deliver to the assignee(s) designated by Holder a Warrant or Warrants of like tenor and terms entitling Holder to purchase the appropriate number of shares. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be enforceable by any such Holder. For avoidance of doubt, in the event Holder notifies the Company that such sale or transfer is a so called 4[(a)](1) and half transaction, the parties hereto agree that a legal opinion from outside counsel for Holder delivered to counsel for the Company substantially in the form attached hereto as Exhibit C shall be the only requirement to satisfy an exemption from registration under the Securities Act to effectuate such 4[(a)](1) and half transaction.
9. Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
10. Events of Failure; Definition of Black Scholes Value.
(a) Definition.
The occurrence of each of the following shall be considered to be an Event of Failure.
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(i) A Delivery Failure occurs, where a Delivery Failure shall be deemed to have occurred if the Company fails to use its best efforts to deliver Exercise Shares to Holder within any applicable Delivery Period (other than due to the limitation contained in the second paragraph of Section 1);
(ii) A Legend Removal Failure occurs, where a Legend Removal Failure shall be deemed to have occurred if the Company fails to use its best efforts to issue this Warrant and/or Exercise Shares without a restrictive legend, or fails to use it best efforts to remove a restrictive legend, when and as required under Section 2(e) hereof;
(iii) a Transfer Delivery Failure occurs, where a Transfer Delivery Failure shall be deemed to have occurred if the Company fails to use its best efforts to deliver a Warrant within any applicable Transfer Delivery Period; and
(iv) a Registration Failure (as defined below).
For purpose hereof, Registration Failure means that (A) the Company fails to file with the SEC on or before the Filing Deadline (as defined in the Registration Rights Agreement) any Registration Statement required to be filed pursuant to Section 2(a) of the Registration Rights Agreement, (B) the Company fails to use its reasonable best efforts to obtain effectiveness with the SEC, prior to the Registration Deadline (as defined in the Registration Rights Agreement), and if such Registration Statement does not become effective prior to the Registration Deadline, as soon as possible thereafter, of any Registration Statement (as defined in the Registration Rights Agreement) that is required to be filed pursuant to Section 2(a) of the Registration Rights Agreement, or fails to use its reasonable best efforts to keep such Registration Statement current and effective as required in Section 3 of the Registration Rights Agreement, (C) the Company fails to file any additional Registration Statement required to be filed pursuant to Section 2(a)(ii) of the Registration Rights Agreement on or before the Additional Filing Deadline (as defined in the Registration Rights Agreement) or fails to use its reasonable best efforts to cause such new Registration Statement to become effective on or before the Additional Registration Deadline (as defined in the Registration Rights Agreement), and if such effectiveness does not occur within such period, as soon as possible thereafter, (D) the Company fails to file any amendment to any Registration Statement, or any additional Registration Statement required to be filed pursuant to Section 3(b) of the Registration Rights Agreement within thirty (30) days of the applicable Registration Trigger Date (as defined in the Registration Rights Agreement), or fails to use its reasonable best efforts to cause such amendment and/or new Registration Statement to become effective within ninety (90) days of the applicable Registration Trigger Date, and, if such effectiveness does not occur within such period, as soon as possible thereafter, (E) any Registration Statement required to be filed under the Registration Rights Agreement, after its initial effectiveness and during the applicable Registration Period (as defined in the Registration Rights Agreement), lapses in effect or, other than on a day during an Allowable Grace Period (as defined in the Registration Rights Agreement), sales of all of the Registrable Securities (as defined in the Registration Rights Agreement) cannot otherwise be made thereunder (whether by reason of the Companys failure to amend or supplement the prospectus included therein in accordance with the Registration Rights Agreement, the Companys failure to file and use its reasonable best efforts to obtain effectiveness with the SEC of an additional Registration Statement or amended Registration Statement required pursuant to Section 2(a)(ii) or 3(b) of the Registration Rights Agreement, as applicable, or otherwise), or (F) the Company fails to provide
19
a commercially reasonable written response to any comments to any Registration Statement submitted by the SEC within twenty-five (25) days of the date that such SEC comments are received by the Company.
(b) Failure Payments; Black-Scholes Determination. The Company understands that any Event of Failure (as defined above) could result in economic loss to Holder. In the event that any Event of Failure occurs, as compensation to Holder for such economic loss, the Company agrees to pay to Holder an amount payable, at the Companys option, either (i) in cash or (ii) in shares of Common Stock that are valued for these purposes at the Volume Weighted Average Price on the date of such calculation (Failure Payments and such shares, Failure Payment Shares), in each case equal to the total economic loss of Holder determined on a commercially reasonable basis in connection with such Event of Failure for the relevant period (as recalculated on the first Business Day of each month thereafter for as long as Failure Payments shall continue to accrue) from the date of such Event of Failure until the Event of Failure is cured; provided, however, that in the event the Company elects to make Failure Payments in Failure Payment Shares, the Company shall issue, and Holder shall only receive, up to such number of shares of Common Stock in respect of Failure Payments such that Holder and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with Holders for purposes of Section 13(d) of the Exchange Act (including shares held by any group of which Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) shall not collectively beneficially own greater than 4.985% of the total number of shares of Common Stock of the Company then issued and outstanding, and the balance of such Failure Payments shall be paid in cash. For purposes of clarification, it is agreed and understood that Failure Payments shall continue to accrue following any Event of Default until the applicable Default Amount is paid in full. The Company shall satisfy any Failure Payments under this Section pursuant to Section 10(c) below. Failure Payments are in addition to any Shares that Holder is entitled to receive upon Exercise of this Warrant.
(c) Payment of Accrued Failure Payments. The Failure Payments and Failure Payment Shares representing accrued Failure Payments for each Event of Failure shall be paid or issued and delivered, as the case may be, on or before the fifth (5th) Business Day of each month following a month in which Failure Payments accrued. Nothing herein shall limit Holders right to pursue actual damages (to the extent in excess of the Failure Payments) for the Companys Event of Failure, and Holder shall have the right to pursue all remedies available at law or in equity (including a decree of specific performance and/or injunctive relief). Notwithstanding the above, if a particular Event of Failure results in an Event of Default pursuant to Section 11 hereof, then the Failure Payment, for that Event of Failure only, shall be considered to have been satisfied upon payment to Holder of an amount equal to the greater of (i) the Failure Payment, or (ii) the Default Amount, payable in accordance with Section 11.
(d) Maximum Interest Rate. Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to Holder and thereby refunded to the Company.
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11. Default.
(a) Events Of Default. Each of the following events shall be considered to be an Event of Default, unless waived by Holder:
(i) Failure To Effect Registration. With respect to all Registration Failures, a Registration Failure occurs and remains uncured for a period of more than forty-five (45) days (or sixty (60) days in the case where the Company (i) has, by the Filing Deadline (as defined the Registration Rights Agreement) filed a Registration Statement (as defined in the Registration Rights Agreement) covering this Warrant and the number of shares required by the Registration Rights Agreement, and (ii) has responded in writing to any comments to the Registration Statement that the Company has received from the SEC, within ten (10) Business Days of such receipt, and nevertheless the SEC has not declared effective a Registration Statement covering the this Warrant and the Shares by the Registration Deadline (as defined in the Registration Rights Agreement)), and such Registration Failure relates solely to the Companys failure to have the Registration Statement declared effective by the Registration Deadline (as defined in the Registration Rights Agreement) and with respect to a Registration Failure provided in clause (E) of the definition of Registration Failure, such Registration Failure occurs and remains uncured for a period of more than forty-five (45) days.
(ii) Failure To Deliver Common Stock. A Delivery Failure (as defined above) occurs and remains uncured for a period of more than twenty (20) days; or at any time, the Company announces or states in writing that it will not honor its obligations to issue shares of Common Stock to Holder upon Exercise by Holder of the Exercise rights of Holder in accordance with the terms of this Warrant.
(iii) Legend Removal Failure. A Legend Removal Failure (as defined above) occurs and remains uncured for a period of twenty (20) days;
(iv) Transfer Delivery Failure. A Transfer Delivery Failure (as defined above) occurs and remains uncured for a period of twenty (20) days;
(v) Corporate Existence; Major Transaction. (A) The Company has failed to (1) place the Successor Major Transaction Consideration into escrow and instruct the escrow agent to release the Successor Major Transaction Consideration to the Holder pursuant to Section 5(b)(iii), or (2) obtain the written agreement of the Successor Entity and cause the Successor Entity to make payment as described in Section 5(b)(iii), (B) the Successor Major Transaction Consideration is not paid contemporaneously with the consummation of the Successor Major Transaction, or (C) with respect to a Major Transaction that is to be treated as an Assumption under the terms hereof, the Company has failed to meet the Assumption requirements of Section 5(b)(i); or
(vi) Section 13 Breach. During the Dividend Restriction Period, the Company declares or pays any dividend or distribution of any kind to the holders of Common Stock of the Company.
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(b) Mandatory Early Termination.
(i) Mandatory Early Termination Amount; Cashless Default Exercise. The Company shall notify Holder in writing within two (2) Business Days of the occurrence of an Event of Default. If any Events of Default shall occur then, at the option of Holder, such option exercisable through the delivery of written notice to the Company by such Holder (the Default Notice), the Company shall have the right to terminate the outstanding amount of this Warrant and pay to Holder (a Mandatory Early Termination), in full satisfaction of its obligations hereunder by delivery of a notice to such effect to Holder within two (2) Business Days following receipt of the Default Notice, an amount payable in cash (the Mandatory Early Termination Amount or the Default Amount) equal to the Black-Scholes Value of the remaining unexercised portion of this Warrant on the date of such Default Notice (or in the case of an Event of Default referred to in Section 11(a)(vi), on the Trading Day immediately preceding the date the dividend or distribution is declared or, if not first declared, is paid). In the event the Company does not exercise its right to consummate a Mandatory Early Termination, then Holder shall have the right to exercise this Warrant, at any time and from time to time, pursuant to a Cashless Default Exercise in accordance with Section 3(c) above.
The Mandatory Early Termination Amount shall be payable within five (5) Business Days following the date of the applicable Default Notice.
(ii) Liquidated Damages. The parties hereto acknowledge and agree that the sums payable as Failure Payments or pursuant to a Mandatory Early Termination shall constitute partial liquidated damages and not penalties. The parties further acknowledge that (i) the amount of loss or damages likely to be incurred by Holder is incapable or is difficult to precisely estimate, (ii) the amounts specified bear a reasonable proportion and are not plainly or grossly disproportionate to the probable loss likely to be incurred by Holder, and (iii) the parties are sophisticated business parties and have been represented by sophisticated and able legal and financial counsel and negotiated this agreement at arms length.
Upon the occurrence of an Event of Default, the Default Amount, together with all other amounts payable hereunder, shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including legal fees and expenses, of collection, and Holder shall be entitled to exercise all other rights and remedies available at law or in equity.
(c) Posting Of Bond. In the event that any Event of Default occurs hereunder, the Company may not raise as a legal defense (in any Lawsuit, as defined below, or otherwise) or justification to such Event of Default any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, unless the Company has posted a surety bond (a Surety Bond) for the benefit of such Holder in the amount of 130% of the aggregate Surety Bond Value (as defined below) of all of Holders Warrants (the Bond Amount), which Surety Bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.
For purposes hereof, a Lawsuit shall mean any lawsuit, arbitration or other dispute resolution filed by either party herein pertaining to any of this Warrant, the Facility Agreement, the
22
Registration Rights Agreement or any other Loan Document (as defined in the Facility Agreement).
Surety Bond Value, for the Warrants shall mean 130% of the of the Black-Scholes Value of the remaining unexercised portion of this Warrant on the Trading Day immediately preceding the date that such bond goes into effect.
(d) Injunction And Posting Of Bond. In the event that the Event of Default referred to in subsection (a) of this Section 11 pertains to the Companys failure to deliver unlegended shares of Common Stock to Holder pursuant to a Warrant Exercise, legend removal request, or otherwise, the Company may not refuse such unlegended share delivery based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, unless an injunction from a court, on prior notice to Holder, restraining and or enjoining Exercise of all or part of said Warrant shall have been sought and obtained by the Company and the Company has posted a Surety Bond for the benefit of such Holder in the amount of the Bond Amount, which Surety Bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.
(e) Remedies, Other Obligations, Breaches And Injunctive Relief. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, the Facility Agreement, the Registration Rights Agreement and any other Loan Document, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach (including a breach or threatened breach of Section 13), the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
12. Holders Early Terminations.
(a) Mechanics of Holders Early Terminations. In the event that the Company does not deliver the applicable Successor Major Transaction Consideration or Default Amount or the Exercise Shares in respect of an election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default or Exercise, as the case may be, to Holder within the time period or as otherwise required pursuant to the terms hereof, at any time thereafter Holder shall have the option, upon notice to the Company, in lieu of an election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, to require the Company to promptly return to Holder all or any portion of this Warrant that was submitted for election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be. Upon the Companys receipt of such notice, (x) the applicable election of Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, shall be null and void with respect to such applicable portion of this Warrant, (y) the Company shall immediately return this
23
Warrant, or issue a new Warrant to Holder representing the portion of this Warrant that was submitted for election of Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, and (z) the Exercise Price of this Warrant or such new Warrant shall be adjusted to the Exercise Price as in effect on the date on which the applicable election of Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, is voided. Holders delivery of a notice voiding an election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, and exercise of its rights following such notice shall not affect the Companys obligations to make any Failure Payments which have accrued prior to the date of such notice with respect to the Warrant subject to such notice.
13. Dividend Restrictions.
Until the earlier of the expiration of the Term and the date all of the Warrants are exercised in full (the Dividend Restriction Period), the Company shall not declare or pay any dividend or distribution of any kind to the holders of Common Stock of the Company.
14. Benefits of this Warrant.
Nothing in this Warrant shall be construed to confer upon any person other than the Company and Holder any legal or equitable right, remedy or claim under this Warrant and this Warrant shall be for the sole and exclusive benefit of the Company and Holder.
15. Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement 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 (whether brought against a party hereto or its respective affiliates, directors, officers, stockholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, borough of Manhattan. 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, 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 suit, 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. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be
24
reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
16. Loss of Warrant.
Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver a new Warrant of like tenor and date.
17. Notice or Demands.
Except as otherwise provided herein, notices or demands pursuant to this Warrant to be given or made by Holder to or on the Company shall be sufficiently given or made if sent by overnight delivery with a nationally recognized overnight courier service, certified or registered mail, return receipt requested, postage prepaid, and addressed, until another address is designated in writing by the Company, to the address set forth in Section 2(a) above. To the extent any notice or demand pursuant to this Warrant can be made by electronic mail, such notice or demand given or made by Holder to or on the Company shall be sufficiently given or made if it is sent by electronic mail to the addresses that the Company shall designate in writing from time to time. Notices or demands pursuant to this Warrant to be given or made by the Company to or on Holder shall be sufficiently given or made if sent by overnight delivery with a nationally recognized overnight courier service or certified or registered mail, return receipt requested, postage prepaid, and addressed, to the address of Holder set forth in the Companys records, until another address is designated in writing by Holder.
18. Construction.
Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits are to Articles, Sections, Schedules or Exhibits contained in or attached to this Warrant, (b) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter and (c) the use of the word including in this Warrant shall be by way of example rather than limitation.
19. Signatures.
In the event that any signature to this Warrant or any amendment hereto is delivered by electronic 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 .pdf signature page were an original thereof. Notwithstanding the foregoing, the Company shall be obligated to deliver to Holder an original signature to this Warrant. At the request of any party, each other party shall promptly re-execute an original form of this Warrant or any amendment hereto and deliver the same to the other party. No party hereto shall raise the use of electronic mail delivery of a .pdf format data file to deliver a signature to this Warrant or any amendment hereto or the fact that such signature was transmitted or communicated through the use of electronic mail delivery of a .pdf format data
25
file as a defense to the formation or enforceability of a contract, and each party hereto forever waives any such defense.
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IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the day of April, 2019.
ENDOLOGIX, INC. | ||
By: |
| |
Print Name: | ||
Title: |
27
EXHIBIT A-1
EXERCISE FORM FOR WARRANT
TO: [ ]
CHECK THE APPLICABLE BOX:
☐ |
Cash Exercise, Cashless Exercise or Note Exchange Exercise
The undersigned hereby irrevocably exercises Warrant Number (the Warrant) with respect to [ ] shares of Common Stock (the Common Stock) of Endologix, Inc., a Delaware corporation (the Company). [IF APPLICABLE: The undersigned hereby encloses $ as payment of the Exercise Price.]
☐ The undersigned is exercising the Warrant with respect to [ ] shares of Common Stock pursuant to a Cashless Exercise, and hereby makes payment of the Exercise Price with respect to such shares in full, all in accordance with the conditions and provisions of the Warrant applicable to such Cashless Exercise.
☐ The undersigned is exercising the Warrant with respect to [ ] shares of Common Stock pursuant to a Note Exchange Exercise. The undersigned hereby agrees to cancel $ of principal outstanding under Notes of the Company held by Holder in satisfaction of the Exercise Price in accordance with the conditions and provisions of the Warrant applicable to such Note Exchange Exercise.
| |
☐ |
Cashless Major Exercise
The undersigned hereby irrevocably exercises the Warrant with respect to % of the Warrant currently outstanding pursuant to a Cashless Major Exercise in accordance with the terms of the Warrant.
| |
☐ |
Cashless Default Exercise
The undersigned hereby irrevocably exercises the Warrant pursuant to a Cashless Default Exercise, in accordance with the terms of the Warrant. |
1. The undersigned requests that any stock certificates for such shares be issued free of any restrictive legend, if appropriate, and, if requested by the undersigned, a warrant representing any unexercised portion hereof be issued, pursuant to the Warrant in the name of the undersigned and delivered to the undersigned at the address set forth below.
2. Capitalized terms used but not otherwise defined in this Exercise Form shall have the meaning ascribed thereto in the Warrant.
Dated:
|
|
||
Signature | ||
|
||
Print Name | ||
|
||
Address |
NOTICE
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The signature to the foregoing Exercise Form must correspond to the name as written upon the face of the attached Warrant.
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EXHIBIT B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the Warrant) hereby sells, assigns and transfers unto the person or persons below named the right to purchase __________ shares of the Common Stock of Endologix, Inc., a Delaware corporation, evidenced by the attached Warrant and does hereby irrevocably constitute and appoint __________ attorney to transfer the said Warrant on the books of the Company, with full power of substitution in the premises.
Dated: |
|
| ||||
Signature |
Fill in for new registration of Warrant:
|
||
|
||
Name | ||
|
||
Address | ||
|
||
Please print name and address of assignee |
||
(including zip code number) |
NOTICE
The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Warrant.
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EXHIBIT C
FORM OF OPINION
, 20
[ ]
Re: | Endologix, Inc. (the Company) |
Dear Sir:
[ ] ([ ]) intends to transfer Warrants (the Warrants) of the Company to ( ) without registration under the Securities Act of 1933, as amended (the Securities Act). In connection therewith, we have examined and relied upon the truth of representations contained in an Investor Representation Letter attached hereto and have examined such other documents and issues of law as we have deemed relevant.
Based on and subject to the foregoing, we are of the opinion that the transfer of the Warrants by to may be effected without registration under the Securities Act[, provided, however, that the Warrants to be transferred to contain a legend restricting its transferability pursuant to the Securities Act and that transfer of the Warrants is subject to a stop order]2.
The foregoing opinion is furnished only to and may not be used, circulated, quoted or otherwise referred to or relied upon by you for any purposes other than the purpose for which furnished or by any other person for any purpose, without our prior written consent.
Very truly yours,
2 | Only if applicable. |
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[FORM OF INVESTOR REPRESENTATION LETTER]
, 20
[ ]
Gentlemen:
( ) has agreed to purchase Warrants (the Warrants) of Endologix, Inc., a Delaware corporation (the Company) from [ ] ([ ]). We understand that the Warrants are restricted securities. We represent and warrant that is a sophisticated institutional investor that would qualify as an Accredited Investor as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the Securities Act).
represents and warrants as of the date hereof as follows:
1. That it is acquiring the Warrants and the shares of common stock, $0.001 par value per share underlying such Warrants (the Exercise Shares) solely for its account for investment and not with a view to or for sale or distribution of said Warrants or Exercise Shares or any part thereof in violation of the Securities Act. also represents that the entire legal and beneficial interests of the Warrants and Exercise Shares is acquiring is being acquired for, and will be held for, its account only;
2. That the Warrants and the Exercise Shares must be held indefinitely unless they are registered under the Securities Act or an exemption from such registration is available. recognizes that the Company has no obligation to register the Warrants, or to comply with any exemption from such registration;
3. That neither the Warrants nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met;
We acknowledge that the Company will place stop orders with respect to the Warrants and the Exercise Shares, and if none of the Unrestricted Conditions (as defined in the Warrants) is satisfied, the Exercise Shares shall bear the following restrictive legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING PURSUANT TO SECTION 4(A)(7) OF THE SECURITIES ACT OR RULE 144 UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED 4[(a)](1) AND A HALF SALE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 9, 2018, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY
32
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.
At any time and from time to time after the date hereof, shall, without further consideration, execute and deliver to [ ] or the Company such other instruments or documents and shall take such other actions as they may reasonably request to carry out the transactions contemplated hereby.
Very truly yours,
33
Schedule 1
Black-Scholes Value
Calculation Under Sections 3(b) and 5(b)(iii) |
Calculation Under Section 10(b) or 11(b) | |||
Remaining Term |
Number of calendar days from date of public announcement of the Major Transaction until the last date on which the Warrant may be exercised. | Number of calendar days from the date of the Event of Failure, or in the case of an Event of Default, the date of the Default Notice, until the last date on which the Warrant may be exercised. | ||
Interest Rate |
A risk-free interest rate corresponding to the US$ LIBOR/Swap rate for a period equal to the Remaining Term. | A risk-free interest rate corresponding to the US$ LIBOR/Swap rate for a period equal to the remaining Term. | ||
Cost to Borrow |
Zero | Zero | ||
Volatility |
If the first public announcement of the Major Transaction is made at or prior to 4:00 p.m., New York City time, the arithmetic mean of the
historical volatility for the 10, 30 and 50 Trading Day periods ending on the date of such first public announcement, obtained from the HVT or similar function on Bloomberg.
If the first public announcement of the Major Transaction is made after 4:00 p.m., New York City time, the arithmetic mean of the historical volatility for the 10, 30 and 50 Trading Day periods ending on the next succeeding Trading Day following the date of such first public announcement, obtained from the HVT or similar function on Bloomberg. |
The arithmetic mean of the historical volatility for the 10, 30 and 50 Trading Day periods ending on the date of such determination, obtained from the HVT or similar function on Bloomberg. | ||
Stock Price |
As selected by Holder in its commercially reasonable discretion in order to produce a commercially reasonable result, any of: (1) the closing price of the Common Stock on the NasdaqGS, or, if that is not the principal trading market for the Common Stock, such principal market on which the Common Stock is traded or listed (the Closing Market Price) on the Trading Day immediately preceding the date on which a Major Transaction is consummated, (2) the first Closing Market Price following the first public announcement of a Major Transaction, (3) the Closing Market Price as of the date immediately preceding the first public announcement of the Major Transaction or (4) the cash amount | The volume Weighted Average Price on the date of such determination. |
34
payable per share of Common Stock. The Company and Holder acknowledge and agree that any of the above will produce a commercially reasonable result. | ||||
Dividends |
Zero. | Zero. | ||
Strike Price |
Exercise Price as defined in section 3(a). | Exercise Price as defined in section 3(a). |
35
Exhibit 4.3
EXHIBIT C-4
FORM OF AMENDED AND RESTATED ADDITIONAL WARRANT
THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE SECURITIES LAW. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, INCLUDING PURSUANT TO SECTION 4(A)(7) OF THE SECURITIES ACT OR RULE 144 UNDER THE SECURITIES ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED 4[(a)](1) AND A HALF SALE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
AN INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK. HOLDERS MUST RELY ON THEIR OWN ANALYSIS OF THE INVESTMENT AND ASSESSMENT OF THE RISKS INVOLVED.
Warrant to Purchase
[ ]1 shares |
Warrant Number: |
2018-[ ] |
Warrant to Purchase Common Stock
of
Endologix, Inc.
THIS CERTIFIES that [ ] or any subsequent holder hereof (Holder) has the right to purchase from Endologix, Inc., a Delaware corporation (the Company), [ ] ([ ]) fully paid and nonassessable shares of the Companys common stock, $0.001 par value per share (Common Stock), subject to adjustment as provided herein, at a price equal to the Exercise Price (as defined in Section 3 below), at any time during the Exercise Period (as defined in Section 1 below).
Holder agrees with the Company that this Warrant to Purchase Common Stock of the Company (this Warrant or this Agreement) is issued and all rights hereunder shall be held subject to all of the conditions, limitations and provisions set forth herein.
1. Date of Issuance and Term.
This Warrant shall be deemed to be issued, and to have been in full force and effect commencing, on August 9, 2018 (Date of Issuance) and amended and restated on April , 2019. The exercise period of this Warrant begins on (and includes) February 9, 2019, and ends
1 | Total number of shares to equal 8,750,000, divided among the funds (1/3 each). |
at 5:00 p.m., New York City time, on August 9, 2025 (the Exercise Period). This Warrant was issued pursuant to that certain Amended and Restated Facility Agreement (as amended by the First Amendment thereto dated as of November 20, 2018 and the Second Amendment thereto dated as of March 31, 2019, and as may be otherwise amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the Facility Agreement) by and among the Company and Deerfield Private Design Fund III, L.P., Deerfield Private Design Fund IV, L.P., and Deerfield Partners, L.P., dated as of August 9, 2018, and Holder is entitled to the applicable rights under that certain Amended and Restated Registration Rights Agreement (as may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof, the Registration Rights Agreement) by and among the Company and Deerfield Private Design Fund III, L.P., Deerfield Private Design Fund IV, L.P., and Deerfield Partners, L.P., dated as of August 9, 2018.
Notwithstanding anything herein to the contrary, the Company shall not issue to Holder, and Holder may not acquire, a number of shares of Common Stock upon exercise of this Warrant to the extent that, upon such exercise, the number of shares of Common Stock then beneficially owned by Holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with Holders for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the Exchange Act) (including shares held by any group of which Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein), would exceed 4.985% of the total number of shares of Common Stock then issued and outstanding (the 4.985% Cap); provided, however, that the 4.985% Cap shall only apply to the extent that the Common Stock is deemed to constitute an equity security pursuant to Rule 13d-1(i) promulgated under the Exchange Act. For purposes hereof, group has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the Securities and Exchange Commission (the SEC), and the percentage held by Holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Upon the written request of Holder, the Company shall, within two (2) Trading Days, confirm orally and in writing to Holder the number of shares of Common Stock then outstanding.
For purposes hereof:
Affiliate means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 (Rule 144) under the Securities Act of 1933, as amended (the Securities Act). With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder shall, for purposes hereof, be deemed to be an Affiliate of such Holder.
Asset Sale means a transaction covered by the provisions of clause (B) of the definition of Major Transaction involving the sale or transfer of all or substantially all of the assets of the Company (including, for the avoidance of doubt, all or substantially all of the assets of the Company and its Subsidiaries (as defined in the Facility Agreement), taken as a whole) in connection with which the Company has announced its intention to liquidate and distribute its assets to stockholders.
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Black-Scholes Value shall mean the Black-Scholes value of this Warrant, or applicable portion thereof, as determined by use of the Black-Scholes Option Pricing Model using the criteria set forth on Schedule 1 hereto.
Business Day means a day other than a Saturday or Sunday or any other day on which commercial banks are authorized or required by law to close in New York City.
Cashless Default Exercise shall mean an exercise of this Warrant as a Cashless Default Exercise in accordance with Sections 3(c) and 11(b) hereof.
Cashless Major Exercise shall mean an exercise of this Warrant or portion thereof as a Cashless Major Exercise in accordance with Sections 3(b) and 5(b)(i) hereof.
Cash Out Major Transaction means a Major Transaction in which the consideration payable to holders of Common Stock in connection with the Major Transaction consists solely of cash.
Eligible Market means the New York Stock Exchange, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the NYSE American or, in each case, any successor thereto.
Parent Entity of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of a Major Transaction.
Person means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
Standard Settlement Period means the standard settlement period for equity trades effected on securities exchanges in the United States, expressed in a number of Trading Days, as in effect on the applicable Date of Exercise (as defined in Section 2(b)).
Stock Event means a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares.
Successor Entity means any Person purchasing the Companys assets or Common Stock, or any successor entity resulting from such Major Transaction, or if the Warrant is to be exercisable for shares of capital stock of a Parent Entity (as defined above), such Persons Parent Entity.
Successor Major Transaction means either a Takeout Major Transaction or an Asset Sale.
Successor Major Transaction Consideration means (i) in the case of a Takeout Major Transaction (other than a Cash Out Major Transaction), the amount of cash and other assets and the number of securities or other property of the Successor Entity or other entity that would be
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issuable in such Major Transaction, in respect of a number of shares equal to the Successor Major Transaction Conversion Share Amount and (ii) in the case of an Asset Sale or a Cash Out Major Transaction, an amount of cash equal to the Black-Scholes Value of the Warrant.
Successor Major Transaction Conversion Share Amount means an amount equal to the Black-Scholes Value of the Warrant (or such applicable portion subject to a Successor Major Transaction Conversion), divided by the closing price of the Common Stock on the principal securities exchange or other securities market on which the Common Stock is then traded on the Trading Day immediately preceding the date on which the applicable Major Transaction is consummated.
Takeout Major Transaction means a transaction covered by the provisions of clause (A) of the definition of Major Transaction in which the shares of Common Stock of the Company are converted into the right to receive cash, securities of another entity and/or other assets.
Trading Day shall mean any day on which the Common Stock is traded for any period on the NASDAQ Global Select Market (NasdaqGS) or, if the NasdaqGS is not the principal trading market for the Common Stock, on the principal securities exchange or other securities market on which the Common Stock is then being traded; provided, however, that during any period in which the Common Stock is not listed or quoted on the NasdaqGS or any other securities exchange or market, the term Trading Day shall mean a Business Day.
2. Exercise.
(a) Manner of Exercise. During the Exercise Period (or, in respect of a Cashless Major Exercise, the Cashless Major Exercise Period (as defined below)), this Warrant may be Exercised as to all or any lesser number of whole shares of Common Stock covered hereby (the Warrant Shares or the Shares) by sending to the Company the Exercise Form attached hereto as Exhibit A-1 (the Exercise Form) duly completed and executed, and, if applicable, the full Exercise Price (as defined below, which may be satisfied by a Cash Exercise, a Cashless Exercise or a Note Exchange Exercise, as each is defined below) for each share of Common Stock as to which this Warrant is Exercised, at the office of the Company, 2 Musick, Irvine, CA 92618, Attention: Chief Financial Officer; Phone: (949) 595-7200, Email: vmahboob@endologix.com, or at such other office or agency as the Company may designate in writing, by overnight mail or electronic mail (any such exercise of the Warrant being hereinafter called an Exercise of this Warrant).
(b) Date of Exercise. The Date of Exercise of the Warrant shall, in each case, be the date that the Exercise Form attached hereto as Exhibit A-1, completed and executed, is sent by electronic mail to the Company, provided that the Exercise Price is satisfied as soon as practicable thereafter but in no event later than two (2) Business Days following the date of such electronic mail. Alternatively, the Date of Exercise shall be defined as the date the original Exercise Form is received by the Company, if Holder has not previously sent the Exercise Form by electronic mail. Upon delivery of the Exercise Form to the Company by electronic mail or otherwise, Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been Exercised, irrespective of the date such Warrant Shares are credited to Holders or its designees Depository Trust Company (DTC) account or the date of delivery of the certificates evidencing such Warrant Shares, as the case may be; provided, however, that in the event an Exercise Form in respect of a Cashless
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Major Exercise is delivered prior to the occurrence of the applicable Major Transaction, Holder shall be deemed to have become the holder of record of the shares issuable upon such exercise immediately prior to the consummation of such Major Transaction and the Date of Exercise shall in such event be deemed to have occurred on the date of the occurrence of the Major Transaction. Holder shall not be required to physically surrender this Warrant to the Company until Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days following the date the final Exercise Form is delivered to the Company. Execution and delivery of an Exercise Form with respect to a partial Exercise shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares.
(c) Delivery of Common Stock Upon Exercise. Within the earlier of (x) two (2) Trading Days and (y) the number of Trading Days comprising the Standard Settlement Period after any Date of Exercise (but, in the case of a Cash Exercise, within two (2) Business Days following the Companys receipt of the full Exercise Price, if later) or in the case of a Cashless Default Exercise (as defined in Section 5(b) below), within the period provided in Section 3(c), as applicable (the Delivery Period), the Company shall issue and deliver (or cause its transfer agent (the Transfer Agent) to issue and deliver) in accordance with the terms hereof to or upon the order of Holder that number of shares of Common Stock (Exercise Shares) for the portion of this Warrant exercised as shall be determined in accordance herewith. Upon the Exercise of this Warrant or any part hereof, the Company shall, at its own cost and expense, take all necessary action, including obtaining and delivering an opinion of counsel, to assure that the Transfer Agent shall issue stock certificates in the name of Holder (or its nominee) or such other persons as designated by Holder and in such denominations as Holder shall specify at Exercise, representing the number of shares of Common Stock issuable upon such Exercise. The Company warrants that no instructions other than these instructions have been or will be given to the Transfer Agent and that, unless waived by Holder, this Warrant and the Exercise Shares will be free-trading, and freely transferable, and will not contain or be subject to a legend (or be subject to any stop transfer instruction) restricting the resale or transferability of the Exercise Shares if the Unrestricted Conditions (as defined below) are met.
The Company shall be responsible for paying all present or future stamp, court or documentary, intangible, recording, filing or similar taxes that arise from any payment or issuance made under, from the execution, delivery, performance or enforcement of, or otherwise with respect to, this Warrant.
(d) Delivery Failure. In addition to any other remedies which may be available to Holder, in the event that the Company fails for any reason to effect delivery of the Exercise Shares by the end of the Delivery Period (a Delivery Failure), Holder will be entitled to revoke all or part of the relevant Exercise by delivery of a notice to such effect to the Company whereupon the Company and Holder shall each be restored to their respective positions immediately prior to the delivery of such notice of revocation, except that the Failure Payments under Section 10(b) shall be payable through the date such notice of revocation is given to the Company.
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(e) Legends.
(i) Restrictive Legend. Holder understands that until such time as this Warrant, the Exercise Shares and the Failure Payment Shares (as defined below) have been registered under the Securities Act or otherwise may be sold pursuant to Rule 144 or an exemption from registration under the Securities Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant, the Exercise Shares and the Failure Payment Shares, as applicable, may bear a restrictive legend in substantially the following form (and a stop-transfer order consistent therewith may be placed against transfer of the certificates for such securities):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING PURSUANT TO SECTION 4(A)(7) OF THE SECURITIES ACT OR RULE 144 UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED 4[(a)](1) AND A HALF SALE. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(ii) Removal of Restrictive Legends. This Warrant and the certificates (or electronic book entries, if applicable) evidencing the Exercise Shares and the Failure Payment Shares, as applicable, shall not contain or be subject to any legend restricting the transfer thereof (including the legend set forth above in subsection 2(e)(i)) or be subject to any stop-transfer instructions: (A) while a registration statement (including a Registration Statement, as defined in the Registration Rights Agreement) covering the sale or resale of such security is effective under the Securities Act, or (B) following any sale of such Warrant, Exercise Shares and/or Failure Payment Shares pursuant to Rule 144, or (C) if such Warrant, Exercise Shares and/or Failure Payment Shares are eligible for sale under Rule 144(b)(1), or (D) at any time on or after the date hereof on which Holders holding period for purposes of Rule 144 under the Securities Act and subsection (d)(3)(iii) thereof with respect to such Warrant, Exercise Shares and/or Failure Payment Shares is at least six (6) months and Holder certifies that it is not an Affiliate of the Company, or (E) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the SEC) (collectively, the Unrestricted Conditions). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date, or at such other time as any of the Unrestricted Conditions have been met, if required by the Transfer Agent to effect the issuance of this Warrant, the Exercise Shares or the Failure Payment Shares, as applicable, without a restrictive legend or removal of the legend hereunder. If any of the Unrestricted Conditions are met at the
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time of issuance of this Warrant, the Exercise Shares or the Failure Payment Shares, then such Warrant, Exercise Shares or Failure Payment Shares, as applicable, shall be issued free of all legends and stop-transfer instructions. The Company agrees that following the Effective Date, or at such time as the Unrestricted Conditions are met or such legend is otherwise no longer required under this Section 2(e), it will, no later than the earlier of (x) two (2) Trading Days and (y) the number of Trading Days comprising the Standard Settlement Period following the delivery (the Unlegended Shares Delivery Deadline) by Holder to the Company or the Transfer Agent of this Warrant and a certificate representing Exercise Shares and/or Failure Payment Shares, as applicable, issued with a restrictive legend, deliver or cause to be delivered to Holder this Warrant and/or a certificate (or electronic transfer) representing such shares that is free from all restrictive and other legends (and stop transfer instructions). For purposes hereof, Effective Date shall mean the date that the first Registration Statement that the Company is required to file pursuant to the Registration Rights Agreement has been declared effective by the SEC.
(iii) Sale of Unlegended Shares. Holder agrees that the removal of the restrictive legend from this Warrant and any certificates representing securities as set forth in Section 2(e) above is predicated upon the Companys reliance that Holder will sell this Warrant or any Exercise Shares and/or any Failure Payment Shares, as applicable, pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if such securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein.
(f) Cancellation of Warrant. This Warrant shall be canceled upon the full Exercise of this Warrant, and, as soon as practical after the Date of Exercise, Holder shall be entitled to receive Common Stock for the number of shares purchased upon such Exercise of this Warrant, and if this Warrant is not Exercised in full, Holder shall be entitled to receive a new Warrant (containing terms identical to this Warrant) representing any unexercised portion of this Warrant in addition to such Common Stock; provided, however, as set forth in Section 2(b), Holder shall not be required to physically surrender this warrant if the Warrant is not Exercised in full.
(g) Holder of Record. Each person in whose name any Warrant for shares of Common Stock is issued shall, for all purposes, be deemed to be Holder of record of such shares on the Date of Exercise, irrespective of the date of delivery of the Common Stock purchased upon the Exercise of this Warrant. Prior to the exercise of this Warrant, nothing in this Warrant shall be construed as conferring upon Holder any rights as a stockholder of the Company.
(h) Delivery of Electronic Shares. In lieu of delivering physical certificates representing the Common Stock issuable upon Exercise or legend removal, or representing Failure Payment Shares, upon written request of Holder, the Company shall use its best efforts to cause the Transfer Agent to electronically transmit the Common Stock issuable upon Exercise to Holder by crediting the account of Holders prime broker with DTC through its Deposit/Withdrawal at Custodian (DWAC) system. The time periods for delivery and penalties described herein shall apply to the electronic transmittals described herein. Any delivery not effected by electronic transmission shall be effected by delivery of physical certificates.
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(i) Buy-In. In addition to any other rights or remedies available to Holder hereunder or otherwise at law or in equity, if the Company fails to cause its Transfer Agent to deliver to Holder a certificate or certificates, or electronic shares through DWAC, representing the Exercise Shares pursuant to an Exercise on or before the last day of the Delivery Period (other than a failure caused by any incorrect or incomplete information provided by Holder to the Company hereunder), and if after such date Holder is required by its broker to purchase (in an open market transaction or otherwise) or Holder or Holders brokerage firm otherwise purchases shares of Common Stock to deliver in satisfaction of a sale by Holder of the Exercise Shares which Holder was entitled to receive upon such Exercise (a Buy-In), then the Company shall (1) pay in cash to Holder the amount by which (x) Holders total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Exercise Shares that the Company was required to deliver to Holder in connection with the Exercise at issue by (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of Holder, either reinstate the portion of the Warrant and equivalent number of Exercise Shares for which such Exercise was not honored (and refund the Exercise Price therefor, to the extent paid by Holder, and/or reinstate the principal amount of any indebtedness used to satisfy the applicable Exercise Price) or deliver to Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its Exercise and delivery obligations hereunder. For example, if Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted Exercise to cover the sale of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of the immediately preceding sentence the Company shall be required to pay Holder $1,000. Holder shall provide the Company written notice indicating the amounts payable to Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit Holders right to pursue any other remedies available to it hereunder, at law or in equity including a decree of specific performance and/or injunctive relief with respect to the Companys failure to timely deliver certificates representing shares of Common Stock upon Exercise of the Warrant as required pursuant to the terms hereof.
(j) HSR Submissions. If Holder determines that, in connection with the exercise of this Warrant, it and the Company are required to file Premerger Notification Reports with the Federal Trade Commission (the FTC) and the United States Department of Justice (DOJ) and observe the Waiting Period under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and the related rules and regulations promulgated thereunder (collectively, the HSR Act), the Company agrees to (i) cooperate with Holder in Holders preparing and making such submission and any responses to inquiries of the FTC and DOJ; (ii) prepare and make any submission required to be filed by the Company under the HSR Act and respond to inquiries of the FTC and DOJ in connection therewith; and (iii) reimburse Holder for the cost of the required filing fee for Holders submission under the HSR Act. For the avoidance of doubt, Holder shall bear all of its other costs and expenses in connection with such submission, including any attorneys fees associated therewith.
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3. Payment of Warrant Exercise Price for Cash Exercise or Cashless Exercise; Cashless Major Exercise and Cashless Default Exercise.
(a) Exercise Price. The exercise price shall initially equal $6.61 per share, subject to adjustment pursuant to the terms hereof (as so adjusted, the Exercise Price), including but not limited to Section 5 below.
Payment of the Exercise Price may be made by any of the following, or a combination thereof, at the election of Holder:
(i) Cash Exercise: Holder may exercise this Warrant in cash, bank or cashiers check or wire transfer (a Cash Exercise);
(ii) Cashless Exercise: In lieu of paying all or any portion of the Exercise Price in cash, Holder, at its option, may exercise this Warrant (in whole or in part) on a cashless basis by making appropriate notation on the applicable Exercise Form, in which event the Company shall issue Holder a number of shares of Common Stock computed using the following formula (a Cashless Exercise):
X = Y (A-B)/A
where: X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock for which this Warrant is being Exercised.
A = the Market Price of one (1) share of Common Stock (for purposes of this Section 3(a)(ii), where Market Price, as of any date, means the arithmetic average of the Volume Weighted Average Price (as defined below) of the Companys Common Stock on each of the ten (10) consecutive Trading Days immediately preceding the date in question).
B = the Exercise Price.
As used herein, the Volume Weighted Average Price for any security as of any date means the volume weighted average sale price on the NasdaqGS as reported by, or based upon data reported by, Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by the Holder and the Company (Bloomberg), or, if the NasdaqGS is not the principal trading market for such security, the volume weighted average sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or, if no volume weighted average sale price is reported for such security, then the last closing trade price of such security as reported by Bloomberg, or, if no last closing trade price is reported for such security by Bloomberg, the average of the bid prices of any market makers for such security on the OTC Bulletin Board, the OTCQX Market, the OTCQB Market or the pink market of OTC Markets Group. If the Volume Weighted Average Price cannot be calculated for such security on such date in the manner provided above, the Volume Weighted Average Price shall be the fair market value as determined by the Company and the Holder. In the event that a Stock Event is
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consummated during any period for which the arithmetic average of the Volume Weighted Average Prices is to be determined (under this Section or otherwise), the Volume Weighted Average Price for all Trading Days during such period prior to the effectiveness of the Stock Event shall be appropriately adjusted to reflect such Stock Event.
(iii) Note Exchange Exercise: In lieu of paying all or any portion of the Exercise Price in cash, Holder, at its option, may exercise this Warrant (in whole or in part) through a reduction of an amount of principal outstanding under any First Out Waterfall Notes (as defined in the Facility Agreement) in accordance with Section 2.3(b) of the Facility Agreement, then held by Holder (a Note Exchange Exercise)
For purposes of Rule 144 and subsection (d)(3)(ii) thereof, it is intended, understood and acknowledged that (x) this Warrant shall be deemed to have been acquired on April 3, 2017 (the date the First Out Waterfall Notes were originally issued), and (y) the shares of Common Stock issuable upon Exercise of this Warrant in a Cashless Exercise (including a Cashless Major Exercise or Cashless Default Exercise) transaction or a Note Exchange Exercise transaction shall be deemed to have been acquired on April 3, 2017. Accordingly, (A) upon any such Exercise, the Rule 144 holding period for the shares of Common Stock issued thereupon shall be in excess of one (1) year, and (B) provided that Holder is not an affiliate (as defined in Rule 144 under the Securities Act) of the Company on the date of such Exercise (which the Company shall assume unless advised otherwise in writing by Holder), an Unrestricted Condition shall be satisfied with respect to the shares of Common Stock issued thereupon and such shares will be freely transferable, without restriction or limitation (including any volume limitation or current public information requirement) under Federal or state securities laws, pursuant to Rule 144 under the Securities Act, and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof.
As provided in Section 2(b), Holder shall only be required to physically surrender this Warrant in the event that Holder is exercising this Warrant in full.
(b) Cashless Major Exercise. To the extent Holder shall exercise this Warrant as a Cashless Major Exercise pursuant to Section 5(b)(i) and 5(b)(iii) below, Holder shall send to the Company (in any manner permitted under Section 2(a)) the Exercise Form indicating that Holder is exercising this Warrant (or any portion thereof) pursuant to a Cashless Major Exercise, in which event the Company shall issue a number of shares of Common Stock equal to the Black-Scholes Value of the Warrant (or such applicable portion being exercised) divided by the closing price of the Common Stock on the principal securities exchange or other securities market on which the Common Stock is then traded on the Trading Day immediately preceding the date on which the applicable Major Transaction is consummated, or, if in respect of a Cashless Major Exercise made after the date of consummation of the applicable Major Transaction, on the Trading Day immediately preceding the date on which the exercise form in respect of such Cashless Major Exercise is delivered. As provided in Section 2(b), Holder shall only be required to physically surrender this Warrant in the event that Holder is exercising this Warrant in full. Holder shall be permitted to make successive Cashless Major Exercises and send successive Exercise Forms in respect of a Cashless Major Exercise from time to time at any time during the Cashless Major Exercise Period.
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(c) Cashless Default Exercise. To the extent Holder exercises this Warrant as a Cashless Default Exercise pursuant to Section 11(b)(i) below, Holder shall send to the Company (in any manner permitted under Section 2(a)) the Exercise Form indicating that Holder is exercising this Warrant pursuant to a Cashless Default Exercise, in which event the Company shall issue to Holder, within five (5) Trading Days of the applicable Default Notice, a number of shares of Common Stock (which shares shall be valued at the closing price of the Common Stock on the principal securities exchange or other securities market on which the Common Stock is then traded on the Trading Day immediately preceding the date on which the Exercise Form in respect of such Cashless Default Exercise is delivered) equal to the Black-Scholes Value of the remaining unexercised portion of this Warrant (or such portion thereof subject to such exercise) as of the date of such Default Notice (or in the case of an Event of Default referred to in Section 11(a)(vi), on the Trading Day immediately preceding the date the dividend or distribution is declared or, if not first declared, is paid). As provided in Section 2(b), the Holder shall be permitted to make successive Cashless Default Exercises and send successive Exercise Forms in respect of a Cashless Default Exercise, from time to time at any time from and after the date of the applicable Default Notice through the Exercise Period of this Warrant.
(d) Dispute Resolution. In the case of a dispute as to the determination of the closing price or the Volume Weighted Average Price of the Companys Common Stock or the arithmetic calculation of the Exercise Price, Market Price or the Successor Major Transaction Consideration, or the number of shares issuable upon a Cashless Major Exercise, the Company shall submit the disputed determinations or arithmetic calculations via electronic mail within two (2) Business Days of receipt, or deemed receipt, of the Exercise Form or Major Transaction Early Termination Notice, or other event giving rise to such dispute, as the case may be, to Holder. If Holder and the Company are unable to agree upon such determination or calculation within two (2) Business Days of such disputed determination or arithmetic calculation being submitted to Holder, then the Company shall, within two (2) Business Days submit via electronic mail (i) the disputed determination of the closing price or the Volume Weighted Average Price of the Companys Common Stock to an independent, reputable investment bank selected by the Company and approved by Holder, which approval shall not be unreasonably withheld, or (ii) the disputed arithmetic calculation of the Exercise Price, Market Price, any Successor Major Transaction Consideration or number of shares issuable upon a Cashless Major Exercise to the Companys independent, outside registered public accountants. The Company shall use its reasonable best efforts to cause the investment bank or the accountants, as the case may be, to perform the determinations or calculations and notify the Company and Holder of the results no later than five (5) Trading Days from the time it receives the disputed determinations or calculations. Such investment banks or accountants determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error, and the Company and Holder shall each pay one half of the fees and costs of such investment banker or accountant. Notwithstanding the existence of a dispute contemplated by this paragraph, if requested by Holder, the Company shall issue to Holder the Exercise Shares not in dispute in accordance with the terms hereof.
4. Transfer and Registration.
(a) Transfer Rights. Subject to the provisions of Section 8 of this Warrant, this Warrant may be transferred on the books of the Company, in whole or in part, in person or by attorney, upon
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surrender of this Warrant properly completed and endorsed. This Warrant shall be canceled upon such surrender and, as soon as practicable thereafter, the person to whom such transfer is made shall be entitled to receive a new Warrant or Warrants as to the portion of this Warrant transferred, and Holder shall be entitled to receive a new Warrant as to the portion hereof retained.
(b) Registrable Securities. The Common Stock issuable upon the Exercise of this Warrant entitles Holder (and applicable assignees or transferees of such Common Stock) to registration and other rights pursuant to the Registration Rights Agreement.
5. Adjustments Upon Certain Events.
(a) Recapitalization or Reclassification. If the Company shall at any time effect a stock split, payment of stock dividend, recapitalization, reclassification or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or smaller number of shares, then upon the effective date thereof, the number of shares of Common Stock which Holder shall be entitled to purchase upon Exercise of this Warrant, shall be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of shares of Common Stock by reason of such stock split, payment of stock dividend, recapitalization, reclassification or similar transaction, and the Exercise Price shall be, in the case of an increase in the number of shares, proportionally decreased and, in the case of decrease in the number of shares, proportionally increased. The Company shall give Holder the same notice it provides to holders of Common Stock of any transaction described in this Section 5(a).
(b) Rights Upon Major Transaction.
(i) Major Transaction. In the event that a Major Transaction occurs, then (1) in the case of a Successor Major Transaction, Holder, at its option, may elect to cause the conversion of this Warrant (a Successor Major Transaction Conversion), in whole or in part, into the right to receive the Successor Major Transaction Consideration, upon consummation of the Major Transaction, and (2) in the case of all other Major Transactions, Holder shall have the right to exercise this Warrant (or any portion thereof), at any time and from time to time following the occurrence of such event, as a Cashless Major Exercise. In the event Holder shall not have exercised any of its rights under clauses (1) or (2) above within the applicable time periods set forth herein, then the Major Transaction shall be treated as an Assumption (as defined below) in accordance with Section 5(b)(ii) below unless Holder waives its rights under this Section 5(b) with respect to such Major Transaction. Each of the following events shall constitute a Major Transaction:
(A) a consolidation, merger, exchange of shares, recapitalization, reorganization, business combination or other similar event, (1) following which the holders of Common Stock immediately preceding such consolidation, merger, exchange, recapitalization, reorganization, combination or event either (a) no longer hold a majority of the shares of Common Stock or (b) no longer have the ability to elect a majority of the board of directors of the Company or (2) as a result of which shares of Common Stock shall be changed into (or the shares of Common Stock become entitled to receive) the same or a different
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number of shares of the same or another class or classes of stock or securities of the Company or another entity (collectively, a Change of Control Transaction);
(B) the sale or transfer, in one transaction or a series of related transactions, of (I) all or substantially all of the assets of the Company (including, for the avoidance of doubt, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole) to any Person other than a wholly-owned subsidiary of the Company or (II) assets of the Company (including, for the avoidance of doubt, all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole) for a purchase price equal to more than 50% of the Equity Value (as defined below) of the Company. For purposes of this clause (B), Equity Value shall mean (I) the product of (x) the number of issued and outstanding shares of Common Stock on the date the Company delivers the Major Transaction Notice (defined below) multiplied by (y) the per share closing price of the Common Stock on such date on the NasdaqGS as reported by, or based upon data reported by, Bloomberg or, if the NasdaqGS is not the principal trading market for such security, the closing sale price of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg;
(C) a purchase, tender or exchange offer made to the holders of outstanding shares of Common Stock, such that following such purchase, tender or exchange offer a Change of Control Transaction shall have occurred;
(D) the liquidation, bankruptcy, insolvency, dissolution or winding-up (or the occurrence of any analogous proceeding) affecting the Company;
(E) the shares of Common Stock cease to be listed, traded or publicly quoted on the NasdaqGS and are not promptly re-listed or requoted on the New York Stock Exchange, the NYSE American, the NASDAQ Global Market or the NASDAQ Capital Market; or
(F) the Common Stock ceases to be registered under Section 12 of the Exchange Act.
(ii) Assumption. Any assumption of Company obligations under this paragraph shall be referred to herein as an Assumption. Unless otherwise provided in writing by Holder, the Company shall not consummate a Major Transaction in which the Company is not the surviving entity or as a result of which the Company has a new Parent Entity, unless (A) each Person acquiring the Companys assets or Common Stock (or Parent Entity thereof, as applicable), or any other successor entity resulting from such Major Transaction (in each case, a Successor Entity), assumes in writing all of the obligations of the Company under this Warrant, the Facility Agreement (but, other than with respect to the Companys obligations pursuant to Section 5.1(e) and 5.1(p) of the Facility Agreement and the other provisions of the Facility Agreement that
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expressly survive the repayment of the Loans (which shall be assumed in any Assumption), only if there are outstanding Loans under the Facility Agreement immediately following the consummation of the Major Transaction) and the Registration Rights Agreement in accordance with the provisions of this Section 5(b)(ii) pursuant to written agreements in form and substance reasonably satisfactory to Holder and approved by Holder prior to the consummation of such Major Transaction (such approval not to be unreasonably withheld or delayed), including agreements to deliver to Holder in exchange for its Warrants a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Warrants, that, among other things, (1) is exercisable for the appropriate number of shares of the Successor Entitys capital stock (without regard to the 4.985% Cap or any other restriction or limitation on exercise, provided that such instrument shall contain a limitation on exercise comparable to that contained in the second paragraph of Section 1 of this Warrant); (2) has an exercise price similar to the then-effective Exercise Price (taking into account any conversion or exchange ratio applicable to the Common Stock in the Major Transaction) and exercise price adjustment provisions similar to those in the Warrants; (3) entitles Holder to such additional securities or other consideration as Holder would be entitled pursuant to Section 5(b)(i) in connection with the Major Transaction; and (4) provides for registration rights similar to those provided by the Registration Rights Agreement, in each case reasonably satisfactory to Holder, and (B) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. For the avoidance of doubt, Holders reasonable satisfaction referred to in the immediately preceding sentence shall be construed only to apply to confirmation that the warrant or other comparable security and registration rights agreement delivered to Holder upon an assumption hereunder shall conform to the requirements of this Section 5(b)(ii), and this Section 5(b)(ii) shall not be construed as granting consent or approval rights to Holder with respect to the terms of such Major Transaction or to permit Holder to demand any additional consideration in respect of this Warrant other than as provided herein. Upon the occurrence of any Major Transaction, any Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Major Transaction, the provisions of this Warrant and the Registration Rights Agreement referring to the Company shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of the Major Transaction, the Successor Entity shall deliver to Holder confirmation that there shall be issued upon exercise of this Warrant at any time after the consummation of the Major Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property) issuable upon the exercise of the Warrants prior to such Major Transaction, such shares of publicly traded common stock (or their equivalent) of the Successor Entity, as adjusted in accordance with the provisions of this Warrant. The provisions of this Section shall apply similarly and equally to successive Major Transactions and shall be applied without regard to any limitations on the exercise of this Warrant other than any applicable beneficial ownership limitations.
(iii) Major Transaction Notice; Major Transaction Early Termination Right; Notice of Cashless Major Exercise. At least thirty (30) days prior to the consummation of any Major Transaction, but, in any event, within five (5) Trading Days following the first to occur of (x) the date of the public announcement of such Major Transaction if such announcement is made before 4:00 p.m., New York City time, or (y) the day following the public announcement of such Major
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Transaction if such announcement is made on and after 4:00 p.m., New York City time, the Company shall deliver written notice thereof via electronic mail and overnight courier to Holder (a Major Transaction Notice). At any time during the period beginning after Holders receipt of a Major Transaction Notice in respect of a Successor Major Transaction and ending five (5) Trading Days prior to the consummation of such Major Transaction (the Early Termination Period), Holder may elect a Successor Major Transaction Conversion by delivering written notice thereof (Major Transaction Early Termination Notice) to the Company, which Major Transaction Early Termination Notice shall indicate the portion of the Warrant (with reference to the number of shares of Common Stock issuable upon a Cash Exercise of such portion, without regard to the 4.985% Cap) that Holder is electing to be treated as a Successor Major Transaction Conversion. The portion of this Warrant subject to early termination pursuant to this Section 5(b)(iii), shall be converted into the right to receive the Successor Major Transaction Consideration
To the extent Holder shall elect to effect a Cashless Major Exercise in respect of a Major Transaction, Holder shall deliver its Exercise Form in accordance with Section 3(b), at any time and from time to time following receipt by Holder of the Major Transaction Notice until the later of (x) the last day of the Exercise Period and (y) the one-year anniversary of the applicable Major Transaction (the Cashless Major Exercise Period). For the avoidance of doubt, Holder shall be permitted to make successive Cashless Major Exercises and send successive Exercise Forms in respect of a Cashless Major Exercise from time to time at any time during the Cashless Major Exercise Period.
(iv) Escrow; Payment of Successor Major Transaction Consideration. Following the receipt of a Major Transaction Early Termination Notice in respect of a Successor Major Transaction from Holder, the Company shall not effect a Successor Major Transaction with respect to which Holder has elected a Successor Major Transaction Conversion unless either (A) it obtains, as a condition precedent to such Major Transaction, the written agreement of the Successor Entity that payment of the Successor Major Transaction Consideration shall be made to Holder concurrently with consummation of such Successor Major Transaction, or (B) it shall place the Successor Major Transaction Consideration into an escrow account with an independent escrow agent, and shall instruct the escrow agent to deliver the Successor Major Transaction Consideration to Holder, concurrently with the consummation of the Major Transaction. Notwithstanding clauses (A) and (B) above, Holder shall be treated on a pari passu basis with, and shall not have priority to payments to, the holders of Common Stock in connection with a Major Transaction. For purposes of determining the amount required to be placed in escrow pursuant to the provisions of this subsection (iv) and without affecting the amount of the actual Successor Major Transaction Consideration, the calculation of the price referred to in clause (1) of the first column of Schedule 1 hereto with respect to Stock Price shall be determined based on the Closing Market Price (as defined on Schedule 1) of the Common Stock on the Trading Day immediately preceding the date that the Successor Major Transaction Consideration is deposited with the escrow agent.
(v) Injunction. Following the receipt of a Major Transaction Early Termination Notice from Holder, in the event that the Company attempts to consummate a Successor Major Transaction without either (1) placing the Successor Major Transaction Consideration in escrow in accordance with subsection (iv) above, or (2) obtaining the written agreement of the Successor
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Entity as described in subsection (iv) above, Holder shall have the right to apply for an injunction in any state or federal court sitting in the City of New York, borough of Manhattan to prevent the closing of such Major Transaction until the Successor Major Transaction Consideration is delivered to Holder.
An early termination required by this Section 5(b) shall be made in accordance with the provisions of Section 12. To the extent an early termination required by this Section 5(b) is deemed or determined by a court of competent jurisdiction to be prepayments of the Warrant by the Company, such early termination shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 5, until the Successor Major Transaction Consideration is paid in full, this Warrant may be exercised, in whole or in part, by Holder into shares of Common Stock, or in the event the date of any Exercise is after the consummation of the Major Transaction, shares of publicly traded common stock (or their equivalent) of the Successor Entity pursuant to Section 5(b). The parties hereto agree that in the event of the Companys early termination of any portion of the Warrant under this Section 5(b), Holders damages would be uncertain and difficult to estimate because of the parties inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for Holder. Accordingly, any premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a commercially reasonable estimate of Holders actual loss of its investment opportunity and not as a penalty.
(c) Exercise Price Adjusted. As used in this Warrant, the term Exercise Price shall mean the purchase price per share specified in Section 3(a) of this Warrant, until the occurrence of an event stated in this Section 5 or otherwise set forth in this Warrant, and thereafter shall mean said price as adjusted from time to time in accordance with the provisions of said subsection. No adjustment made pursuant to any provision of this Section 5 shall have the net effect of increasing the aggregate Exercise Price payable hereunder or, except as expressly provided in Section 5(a), otherwise increasing the Exercise Price.
(d) Adjustments: Additional Shares, Securities or Assets. In the event that at any time, as a result of an adjustment made pursuant to this Section 5 or otherwise, Holder shall, upon Exercise of this Warrant, become entitled to receive shares and/or other securities or assets (other than Common Stock) then, wherever appropriate, all references herein to shares of Common Stock shall be deemed to refer to and include such shares and/or other securities or assets; and thereafter the number of such shares and/or other securities or assets shall be subject to adjustment from time to time in a manner and upon terms as nearly equivalent as practicable to the provisions of this Section 5.
(e) Notice of Adjustments. Whenever the Exercise Price and/or number or type of securities issuable upon Exercise is adjusted pursuant to the terms of this Warrant, the Company shall promptly mail to Holder a notice (an Exercise Price Adjustment Notice) setting forth the Exercise Price and/or number or type of securities issuable upon Exercise after such adjustment and setting forth a statement of the facts requiring such adjustment. The Company shall, upon the written request at any time of Holder, furnish to Holder a like Warrant setting forth (i) such adjustment or readjustment, (ii) the Exercise Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon Exercise of the Warrant. For purposes of clarification, whether or not
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the Company provides an Exercise Price Adjustment Notice pursuant to this Section 5(e), upon the occurrence of any event that leads to an adjustment of the Exercise Price, Holder would be entitled to receive a number of Exercise Shares based upon the new Exercise Price, as adjusted, for exercises occurring on or after the date of such adjustment, regardless of whether Holder accurately refers to the adjusted Exercise Price in the Exercise Form.
6. Fractional Interests.
No fractional shares or scrip representing fractional shares shall be issuable upon the Exercise of this Warrant, but on Exercise of this Warrant, Holder may purchase only a whole number of shares of Common Stock. If, on Exercise of this Warrant, Holder would be entitled to a fractional share of Common Stock or a right to acquire a fractional share of Common Stock, such fractional share shall be disregarded and the number of shares of Common Stock issuable upon Exercise shall be the next higher whole number of shares.
7. Reservation of Shares.
From and after the date hereof, the Company shall at all times reserve for issuance such number of authorized and unissued shares of Common Stock (or other securities substituted therefor as herein above provided) as shall be sufficient for the Exercise of this Warrant and payment of the Exercise Price. If at any time the number of shares of Common Stock authorized and reserved for issuance is below the number of shares sufficient for the Exercise of this Warrant (a Share Authorization Failure) (based on the Exercise Price in effect from time to time), the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including calling a special meeting of stockholders to authorize additional shares to meet the Companys obligations under this Section 7, in the case of an insufficient number of authorized shares, and using its best efforts to obtain stockholder approval of an increase in such authorized number of shares. The Company covenants and agrees that upon the Exercise of this Warrant, all shares of Common Stock issuable upon such Exercise shall be duly and validly issued, fully paid and nonassessable and not subject to preemptive rights, rights of first refusal or similar rights of any Person. The Company covenants and agrees that all shares of Common Stock issuable upon Exercise of this Warrant shall be approved for listing on the NasdaqGS, or, if the NasdaqGS is not the principal trading market for the Common Stock, such principal market on which the Common Stock is traded or listed.
8. Restrictions on Transfer.
(a) Registration or Exemption Required. This Warrant has been issued in a transaction exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and Rule 506 thereunder and exempt from registration or qualification under applicable state securities (or blue sky) laws. None of the Warrant, the Exercise Shares or Failure Payment Shares may be pledged, transferred, sold or assigned except pursuant to an effective registration statement or an exemption to the registration requirements of the Securities Act and applicable state laws, including Rule 144 under the Securities Act, Section 4(a)(7) of the Securities Act or a so-called 4[(a)](1) and a half transaction.
(b) Assignment. Subject to Section 8(a), Holder may sell, transfer, assign, pledge, or otherwise dispose of this Warrant, in whole or in part. Holder shall deliver a written notice to the
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Company, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the Person or Persons to whom the Warrant shall be assigned and the respective number of warrants to be assigned to each assignee. The Company shall effect the assignment within three (3) Business Days of its receipt of a completed and executed form of Assignment (the Transfer Delivery Period), and shall deliver to the assignee(s) designated by Holder a Warrant or Warrants of like tenor and terms entitling Holder to purchase the appropriate number of shares. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be enforceable by any such Holder. For avoidance of doubt, in the event Holder notifies the Company that such sale or transfer is a so called 4[(a)](1) and half transaction, the parties hereto agree that a legal opinion from outside counsel for Holder delivered to counsel for the Company substantially in the form attached hereto as Exhibit C shall be the only requirement to satisfy an exemption from registration under the Securities Act to effectuate such 4[(a)](1) and half transaction.
9. Noncircumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.
10. Events of Failure; Definition of Black Scholes Value.
(a) Definition.
The occurrence of each of the following shall be considered to be an Event of Failure.
(i) A Delivery Failure occurs, where a Delivery Failure shall be deemed to have occurred if the Company fails to use its best efforts to deliver Exercise Shares to Holder within any applicable Delivery Period (other than due to the limitation contained in the second paragraph of Section 1);
(ii) A Legend Removal Failure occurs, where a Legend Removal Failure shall be deemed to have occurred if the Company fails to use its best efforts to issue this Warrant and/or Exercise Shares without a restrictive legend, or fails to use it best efforts to remove a restrictive legend, when and as required under Section 2(e) hereof;
(iii) a Transfer Delivery Failure occurs, where a Transfer Delivery Failure shall be deemed to have occurred if the Company fails to use its best efforts to deliver a Warrant within any applicable Transfer Delivery Period; and
(iv) a Registration Failure (as defined below).
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For purpose hereof, Registration Failure means that (A) the Company fails to file with the SEC on or before the Filing Deadline (as defined in the Registration Rights Agreement) any Registration Statement required to be filed pursuant to Section 2(a) of the Registration Rights Agreement, (B) the Company fails to use its reasonable best efforts to obtain effectiveness with the SEC, prior to the Registration Deadline (as defined in the Registration Rights Agreement), and if such Registration Statement does not become effective prior to the Registration Deadline, as soon as possible thereafter, of any Registration Statement (as defined in the Registration Rights Agreement) that is required to be filed pursuant to Section 2(a) of the Registration Rights Agreement, or fails to use its reasonable best efforts to keep such Registration Statement current and effective as required in Section 3 of the Registration Rights Agreement, (C) the Company fails to file any additional Registration Statement required to be filed pursuant to Section 2(a)(ii) of the Registration Rights Agreement on or before the Additional Filing Deadline (as defined in the Registration Rights Agreement) or fails to use its reasonable best efforts to cause such new Registration Statement to become effective on or before the Additional Registration Deadline (as defined in the Registration Rights Agreement), and if such effectiveness does not occur within such period, as soon as possible thereafter, (D) the Company fails to file any amendment to any Registration Statement, or any additional Registration Statement required to be filed pursuant to Section 3(b) of the Registration Rights Agreement within thirty (30) days of the applicable Registration Trigger Date (as defined in the Registration Rights Agreement), or fails to use its reasonable best efforts to cause such amendment and/or new Registration Statement to become effective within ninety (90) days of the applicable Registration Trigger Date, and, if such effectiveness does not occur within such period, as soon as possible thereafter, (E) any Registration Statement required to be filed under the Registration Rights Agreement, after its initial effectiveness and during the applicable Registration Period (as defined in the Registration Rights Agreement), lapses in effect or, other than on a day during an Allowable Grace Period (as defined in the Registration Rights Agreement), sales of all of the Registrable Securities (as defined in the Registration Rights Agreement) cannot otherwise be made thereunder (whether by reason of the Companys failure to amend or supplement the prospectus included therein in accordance with the Registration Rights Agreement, the Companys failure to file and use its reasonable best efforts to obtain effectiveness with the SEC of an additional Registration Statement or amended Registration Statement required pursuant to Section 2(a)(ii) or 3(b) of the Registration Rights Agreement, as applicable, or otherwise), or (F) the Company fails to provide a commercially reasonable written response to any comments to any Registration Statement submitted by the SEC within twenty-five (25) days of the date that such SEC comments are received by the Company.
(b) Failure Payments; Black-Scholes Determination. The Company understands that any Event of Failure (as defined above) could result in economic loss to Holder. In the event that any Event of Failure occurs, as compensation to Holder for such economic loss, the Company agrees to pay to Holder an amount payable, at the Companys option, either (i) in cash or (ii) in shares of Common Stock that are valued for these purposes at the Volume Weighted Average Price on the date of such calculation (Failure Payments and such shares, Failure Payment Shares), in each case equal to the total economic loss of Holder determined on a commercially reasonable basis in connection with such Event of Failure for the relevant period (as recalculated on the first Business Day of each month thereafter for as long as Failure Payments shall continue to accrue) from the date of such Event of Failure until the Event of Failure is cured; provided, however, that in the event the Company elects to make Failure Payments in Failure Payment Shares, the
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Company shall issue, and Holder shall only receive, up to such number of shares of Common Stock in respect of Failure Payments such that Holder and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with Holders for purposes of Section 13(d) of the Exchange Act (including shares held by any group of which Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) shall not collectively beneficially own greater than 4.985% of the total number of shares of Common Stock of the Company then issued and outstanding, and the balance of such Failure Payments shall be paid in cash. For purposes of clarification, it is agreed and understood that Failure Payments shall continue to accrue following any Event of Default until the applicable Default Amount is paid in full. The Company shall satisfy any Failure Payments under this Section pursuant to Section 10(c) below. Failure Payments are in addition to any Shares that Holder is entitled to receive upon Exercise of this Warrant.
(c) Payment of Accrued Failure Payments. The Failure Payments and Failure Payment Shares representing accrued Failure Payments for each Event of Failure shall be paid or issued and delivered, as the case may be, on or before the fifth (5th) Business Day of each month following a month in which Failure Payments accrued. Nothing herein shall limit Holders right to pursue actual damages (to the extent in excess of the Failure Payments) for the Companys Event of Failure, and Holder shall have the right to pursue all remedies available at law or in equity (including a decree of specific performance and/or injunctive relief). Notwithstanding the above, if a particular Event of Failure results in an Event of Default pursuant to Section 11 hereof, then the Failure Payment, for that Event of Failure only, shall be considered to have been satisfied upon payment to Holder of an amount equal to the greater of (i) the Failure Payment, or (ii) the Default Amount, payable in accordance with Section 11.
(d) Maximum Interest Rate. Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to Holder and thereby refunded to the Company.
11. Default.
(a) Events Of Default. Each of the following events shall be considered to be an Event of Default, unless waived by Holder:
(i) Failure To Effect Registration. With respect to all Registration Failures, a Registration Failure occurs and remains uncured for a period of more than forty-five (45) days (or sixty (60) days in the case where the Company (i) has, by the Filing Deadline (as defined the Registration Rights Agreement) filed a Registration Statement (as defined in the Registration Rights Agreement) covering this Warrant and the number of shares required by the Registration Rights Agreement, and (ii) has responded in writing to any comments to the Registration Statement that the Company has received from the SEC, within ten (10) Business Days of such receipt, and nevertheless the SEC has not declared effective a Registration Statement covering the this
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Warrant and the Shares by the Registration Deadline (as defined in the Registration Rights Agreement)), and such Registration Failure relates solely to the Companys failure to have the Registration Statement declared effective by the Registration Deadline (as defined in the Registration Rights Agreement) and with respect to a Registration Failure provided in clause (E) of the definition of Registration Failure, such Registration Failure occurs and remains uncured for a period of more than forty-five (45) days.
(ii) Failure To Deliver Common Stock. A Delivery Failure (as defined above) occurs and remains uncured for a period of more than twenty (20) days; or at any time, the Company announces or states in writing that it will not honor its obligations to issue shares of Common Stock to Holder upon Exercise by Holder of the Exercise rights of Holder in accordance with the terms of this Warrant.
(iii) Legend Removal Failure. A Legend Removal Failure (as defined above) occurs and remains uncured for a period of twenty (20) days;
(iv) Transfer Delivery Failure. A Transfer Delivery Failure (as defined above) occurs and remains uncured for a period of twenty (20) days;
(v) Corporate Existence; Major Transaction. (A) The Company has failed to (1) place the Successor Major Transaction Consideration into escrow and instruct the escrow agent to release the Successor Major Transaction Consideration to the Holder pursuant to Section 5(b)(iii), or (2) obtain the written agreement of the Successor Entity and cause the Successor Entity to make payment as described in Section 5(b)(iii), (B) the Successor Major Transaction Consideration is not paid contemporaneously with the consummation of the Successor Major Transaction, or (C) with respect to a Major Transaction that is to be treated as an Assumption under the terms hereof, the Company has failed to meet the Assumption requirements of Section 5(b)(i); or
(vi) Section 13 Breach. During the Dividend Restriction Period, the Company declares or pays any dividend or distribution of any kind to the holders of Common Stock of the Company.
(b) Mandatory Early Termination.
(i) Mandatory Early Termination Amount; Cashless Default Exercise. The Company shall notify Holder in writing within two (2) Business Days of the occurrence of an Event of Default. If any Events of Default shall occur then, at the option of Holder, such option exercisable through the delivery of written notice to the Company by such Holder (the Default Notice), the Company shall have the right to terminate the outstanding amount of this Warrant and pay to Holder (a Mandatory Early Termination), in full satisfaction of its obligations hereunder by delivery of a notice to such effect to Holder within two (2) Business Days following receipt of the Default Notice, an amount payable in cash (the Mandatory Early Termination Amount or the Default Amount) equal to the Black-Scholes Value of the remaining unexercised portion of this Warrant on the date of such Default Notice (or in the case of an Event of Default referred to in Section 11(a)(vi), on the Trading Day immediately preceding the date the dividend or distribution is declared or, if not first declared, is paid). In the event the Company does not exercise its right to consummate a Mandatory Early Termination, then Holder shall have the right to exercise this Warrant, at any time and from time to time, pursuant to a Cashless Default Exercise in accordance with Section 3(c) above.
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The Mandatory Early Termination Amount shall be payable within five (5) Business Days following the date of the applicable Default Notice.
(ii) Liquidated Damages. The parties hereto acknowledge and agree that the sums payable as Failure Payments or pursuant to a Mandatory Early Termination shall constitute partial liquidated damages and not penalties. The parties further acknowledge that (i) the amount of loss or damages likely to be incurred by Holder is incapable or is difficult to precisely estimate, (ii) the amounts specified bear a reasonable proportion and are not plainly or grossly disproportionate to the probable loss likely to be incurred by Holder, and (iii) the parties are sophisticated business parties and have been represented by sophisticated and able legal and financial counsel and negotiated this agreement at arms length.
Upon the occurrence of an Event of Default, the Default Amount, together with all other amounts payable hereunder, shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including legal fees and expenses, of collection, and Holder shall be entitled to exercise all other rights and remedies available at law or in equity.
(c) Posting Of Bond. In the event that any Event of Default occurs hereunder, the Company may not raise as a legal defense (in any Lawsuit, as defined below, or otherwise) or justification to such Event of Default any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, unless the Company has posted a surety bond (a Surety Bond) for the benefit of such Holder in the amount of 130% of the aggregate Surety Bond Value (as defined below) of all of Holders Warrants (the Bond Amount), which Surety Bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.
For purposes hereof, a Lawsuit shall mean any lawsuit, arbitration or other dispute resolution filed by either party herein pertaining to any of this Warrant, the Facility Agreement, the Registration Rights Agreement or any other Loan Document (as defined in the Facility Agreement).
Surety Bond Value, for the Warrants shall mean 130% of the of the Black-Scholes Value of the remaining unexercised portion of this Warrant on the Trading Day immediately preceding the date that such bond goes into effect.
(d) Injunction And Posting Of Bond. In the event that the Event of Default referred to in subsection (a) of this Section 11 pertains to the Companys failure to deliver unlegended shares of Common Stock to Holder pursuant to a Warrant Exercise, legend removal request, or otherwise, the Company may not refuse such unlegended share delivery based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, unless an injunction from a court, on prior notice to Holder, restraining and or enjoining Exercise of all or part of said Warrant shall have been sought and obtained by the Company and the Company has posted a Surety Bond for the benefit of such Holder in the amount of the Bond Amount, which Surety Bond shall remain in effect until the completion of litigation of the dispute and the proceeds of which shall be payable to such Holder to the extent Holder obtains judgment.
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(e) Remedies, Other Obligations, Breaches And Injunctive Relief. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant, the Facility Agreement, the Registration Rights Agreement and any other Loan Document, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach (including a breach or threatened breach of Section 13), the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
12. Holders Early Terminations.
(a) Mechanics of Holders Early Terminations. In the event that the Company does not deliver the applicable Successor Major Transaction Consideration or Default Amount or the Exercise Shares in respect of an election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default or Exercise, as the case may be, to Holder within the time period or as otherwise required pursuant to the terms hereof, at any time thereafter Holder shall have the option, upon notice to the Company, in lieu of an election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, to require the Company to promptly return to Holder all or any portion of this Warrant that was submitted for election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be. Upon the Companys receipt of such notice, (x) the applicable election of Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, shall be null and void with respect to such applicable portion of this Warrant, (y) the Company shall immediately return this Warrant, or issue a new Warrant to Holder representing the portion of this Warrant that was submitted for election of Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, and (z) the Exercise Price of this Warrant or such new Warrant shall be adjusted to the Exercise Price as in effect on the date on which the applicable election of Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, is voided. Holders delivery of a notice voiding an election of a Successor Major Transaction Conversion, Cashless Major Exercise, Cashless Default Exercise or Exercise, as the case may be, and exercise of its rights following such notice shall not affect the Companys obligations to make any Failure Payments which have accrued prior to the date of such notice with respect to the Warrant subject to such notice.
13. Dividend Restrictions.
Until the earlier of the expiration of the Exercise Period and the date all of the Warrants are exercised in full (the Dividend Restriction Period), the Company shall not declare or pay any dividend or distribution of any kind to the holders of Common Stock of the Company.
14. Benefits of this Warrant.
23
Nothing in this Warrant shall be construed to confer upon any person other than the Company and Holder any legal or equitable right, remedy or claim under this Warrant and this Warrant shall be for the sole and exclusive benefit of the Company and Holder.
15. Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement 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 (whether brought against a party hereto or its respective affiliates, directors, officers, stockholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, borough of Manhattan. 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, 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 suit, 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. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
16. Loss of Warrant.
Upon receipt by the Company of evidence of the loss, theft, destruction or mutilation of this Warrant, and (in the case of loss, theft or destruction) of indemnity or security reasonably satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver a new Warrant of like tenor and date.
17. Notice or Demands.
Except as otherwise provided herein, notices or demands pursuant to this Warrant to be given or made by Holder to or on the Company shall be sufficiently given or made if sent by overnight delivery with a nationally recognized overnight courier service, certified or registered mail, return receipt requested, postage prepaid, and addressed, until another address is designated in writing by the Company, to the address set forth in Section 2(a) above. To the extent any notice or demand pursuant to this Warrant can be made by electronic mail, such notice or demand given or made by Holder to or on the Company shall be sufficiently given or made if it is sent by electronic mail to the addresses that the Company shall designate in writing from time to time. Notices or demands pursuant to this Warrant to be given or made by the Company to or on
24
Holder shall be sufficiently given or made if sent by overnight delivery with a nationally recognized overnight courier service or certified or registered mail, return receipt requested, postage prepaid, and addressed, to the address of Holder set forth in the Companys records, until another address is designated in writing by Holder.
18. Construction.
Unless the context otherwise requires, (a) all references to Articles, Sections, Schedules or Exhibits are to Articles, Sections, Schedules or Exhibits contained in or attached to this Warrant, (b) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter and (c) the use of the word including in this Warrant shall be by way of example rather than limitation.
19. Signatures.
In the event that any signature to this Warrant or any amendment hereto is delivered by electronic 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 .pdf signature page were an original thereof. Notwithstanding the foregoing, the Company shall be obligated to deliver to Holder an original signature to this Warrant. At the request of any party, each other party shall promptly re-execute an original form of this Warrant or any amendment hereto and deliver the same to the other party. No party hereto shall raise the use of electronic mail delivery of a .pdf format data file to deliver a signature to this Warrant or any amendment hereto or the fact that such signature was transmitted or communicated through the use of electronic mail delivery of a .pdf format data file as a defense to the formation or enforceability of a contract, and each party hereto forever waives any such defense.
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IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the day of April, 2019.
ENDOLOGIX, INC. | ||
By: |
| |
Print Name: | ||
Title: |
26
EXHIBIT A-1
EXERCISE FORM FOR WARRANT
TO: [ ]
CHECK THE APPLICABLE BOX:
☐ |
Cash Exercise, Cashless Exercise or Note Exchange Exercise
The undersigned hereby irrevocably exercises Warrant Number (the Warrant) with respect to [ ] shares of Common Stock (the Common Stock) of Endologix, Inc., a Delaware corporation (the Company). [IF APPLICABLE: The undersigned hereby encloses $ as payment of the Exercise Price.]
☐ The undersigned is exercising the Warrant with respect to [ ] shares of Common Stock pursuant to a Cashless Exercise, and hereby makes payment of the Exercise Price with respect to such shares in full, all in accordance with the conditions and provisions of the Warrant applicable to such Cashless Exercise.
☐ The undersigned is exercising the Warrant with respect to [ ] shares of Common Stock pursuant to a Note Exchange Exercise. The undersigned hereby agrees to cancel $ of principal outstanding under Notes of the Company held by Holder in satisfaction of the Exercise Price in accordance with the conditions and provisions of the Warrant applicable to such Note Exchange Exercise. | |
☐ |
Cashless Major Exercise
The undersigned hereby irrevocably exercises the Warrant with respect to % of the Warrant currently outstanding pursuant to a Cashless Major Exercise in accordance with the terms of the Warrant. | |
☐ |
Cashless Default Exercise
The undersigned hereby irrevocably exercises the Warrant pursuant to a Cashless Default Exercise, in accordance with the terms of the Warrant.
|
1. The undersigned requests that any stock certificates for such shares be issued free of any restrictive legend, if appropriate, and, if requested by the undersigned, a warrant representing any unexercised portion hereof be issued, pursuant to the Warrant in the name of the undersigned and delivered to the undersigned at the address set forth below.
2. Capitalized terms used but not otherwise defined in this Exercise Form shall have the meaning ascribed thereto in the Warrant.
Dated:
Signature |
Print Name |
Address |
NOTICE
The signature to the foregoing Exercise Form must correspond to the name as written upon the face of the attached Warrant.
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EXHIBIT B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Warrant)
FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the Warrant) hereby sells, assigns and transfers unto the person or persons below named the right to purchase shares of the Common Stock of Endologix, Inc., a Delaware corporation, evidenced by the attached Warrant and does hereby irrevocably constitute and appoint attorney to transfer the said Warrant on the books of the Company, with full power of substitution in the premises.
Dated: |
||
Signature |
Fill in for new registration of Warrant: |
Name |
Address |
Please print name and address of assignee |
(including zip code number) |
NOTICE
The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Warrant.
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EXHIBIT C
FORM OF OPINION
, 20
[ ]
Re: Endologix, Inc. (the Company)
Dear Sir:
[ ] ([ ]) intends to transfer Warrants (the Warrants) of the Company to ( ) without registration under the Securities Act of 1933, as amended (the Securities Act). In connection therewith, we have examined and relied upon the truth of representations contained in an Investor Representation Letter attached hereto and have examined such other documents and issues of law as we have deemed relevant.
Based on and subject to the foregoing, we are of the opinion that the transfer of the Warrants by to may be effected without registration under the Securities Act[, provided, however, that the Warrants to be transferred to contain a legend restricting its transferability pursuant to the Securities Act and that transfer of the Warrants is subject to a stop order].2
The foregoing opinion is furnished only to and may not be used, circulated, quoted or otherwise referred to or relied upon by you for any purposes other than the purpose for which furnished or by any other person for any purpose, without our prior written consent.
Very truly yours, |
|
2 | Only if applicable. |
29
[FORM OF INVESTOR REPRESENTATION LETTER]
, 20
[ ]
Gentlemen:
( ) has agreed to purchase Warrants (the Warrants) of Endologix, Inc., a Delaware corporation (the Company), from [ ] ([ ]). We understand that the Warrants are restricted securities. We represent and warrant that is a sophisticated institutional investor that would qualify as an Accredited Investor as defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended (the Securities Act).
represents and warrants as of the date hereof as follows:
1. That it is acquiring the Warrants and the shares of common stock, $0.001 par value per share underlying such Warrants (the Exercise Shares) solely for its account for investment and not with a view to or for sale or distribution of said Warrants or Exercise Shares or any part thereof in violation of the Securities Act. also represents that the entire legal and beneficial interests of the Warrants and Exercise Shares is acquiring is being acquired for, and will be held for, its account only;
2. That the Warrants and the Exercise Shares must be held indefinitely unless they are registered under the Securities Act or an exemption from such registration is available. recognizes that the Company has no obligation to register the Warrants, or to comply with any exemption from such registration;
3. That neither the Warrants nor the Exercise Shares may be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met;
We acknowledge that the Company will place stop orders with respect to the Warrants and the Exercise Shares, and if none of the Unrestricted Conditions (as defined in the Warrants) is satisfied, the Exercise Shares shall bear the following restrictive legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT INCLUDING PURSUANT TO SECTION 4(A)(7) OF THE SECURITIES ACT OR RULE 144 UNDER SAID ACT OR PURSUANT TO A PRIVATE SALE EFFECTED UNDER APPLICABLE FORMAL OR INFORMAL SEC INTERPRETATION OR GUIDANCE, SUCH AS A SO-CALLED 4[(a)](1) AND A HALF SALE.
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NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
THE SALE, TRANSFER OR ASSIGNMENT OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT DATED AS OF AUGUST 9, 2018, AS AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND CERTAIN HOLDERS OF ITS OUTSTANDING SECURITIES. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY.
At any time and from time to time after the date hereof, shall, without further consideration, execute and deliver to [ ] or the Company such other instruments or documents and shall take such other actions as they may reasonably request to carry out the transactions contemplated hereby.
Very truly yours, |
|
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Schedule 1
Black-Scholes Value
Calculation Under Sections 3(b) and 5(b)(iii) |
Calculation Under Section 10(b) or 11(b) | |||
Remaining Term | Number of calendar days from date of public announcement of the Major Transaction until the last date on which the Warrant may be exercised. | Number of calendar days from the date of the Event of Failure, or in the case of an Event of Default, the date of the Default Notice, until the last date on which the Warrant may be exercised. | ||
Interest Rate | A risk-free interest rate corresponding to the US$ LIBOR/Swap rate for a period equal to the remaining Exercise Period. | A risk-free interest rate corresponding to the US$ LIBOR/Swap rate for a period equal to the remaining Exercise Period. | ||
Cost to Borrow | Zero | Zero | ||
Volatility | If the first public announcement of the Major Transaction is made at or prior to 4:00 p.m., New York City time, the arithmetic mean of the
historical volatility for the 10, 30 and 50 Trading Day periods ending on the date of such first public announcement, obtained from the HVT or similar function on Bloomberg.
If the first public announcement of the Major Transaction is made after 4:00 p.m., New York City time, the arithmetic mean of the historical volatility for the 10, 30 and 50 Trading Day periods ending on the next succeeding Trading Day following the date of such first public announcement, obtained from the HVT or similar function on Bloomberg. |
The arithmetic mean of the historical volatility for the 10, 30 and 50 Trading Day periods ending on the date of such determination, obtained from the HVT or similar function on Bloomberg. |
32
Stock Price | As selected by Holder in its commercially reasonable discretion in order to produce a commercially reasonable result, any of: (1) the closing price of the Common Stock on the NasdaqGS, or, if that is not the principal trading market for the Common Stock, such principal market on which the Common Stock is traded or listed (the Closing Market Price) on the Trading Day immediately preceding the date on which a Major Transaction is consummated, (2) the first Closing Market Price following the first public announcement of a Major Transaction, (3) the Closing Market Price as of the date immediately preceding the first public announcement of the Major Transaction or (4) the cash amount payable per share of Common Stock. The Company and Holder acknowledge and agree that any of the above will produce a commercially reasonable result. | The volume Weighted Average Price on the date of such determination. | ||
Dividends | Zero. | Zero. | ||
Strike Price | Exercise Price as defined in section 3(a). | Exercise Price as defined in section 3(a). |
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Exhibit 4.4
FORM OF FIRST OUT WATERFALL NOTE
THE SECURITIES REPRESENTED BY THIS NOTE (AS DEFINED BELOW) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN, FINANCING OR INDEBTEDNESS ARRANGEMENT SECURED BY THE SECURITIES.
THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO TREAS. REG. SECTION 1.1275-3: THE BORROWER (AS DEFINED BELOW) WILL MAKE AVAILABLE ON REQUEST TO HOLDER(S) OF THIS NOTE THE FOLLOWING INFORMATION: ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY.
THIS NOTE IS BEING AMENDED AND RESTATED AS PART OF AND PURSUANT TO A PLAN OR RECAPITALIZATION AND REORGANIZATION OF THE BORROWER DESCRIBED IN SECTION 368(a)(1)(E) OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED.
FIRST OUT WATERFALL NOTE
First Out Waterfall Lender: |
Original Issue Date: April 3, 2017 | |||
Principal Amount: $[ ] | [Re-Issuance Date: January 1, 2018]1 | |||
Amendment and Restatement Date: August 9, 2018 | ||||
Second Amendment and Restatement Date: April __, 2019 |
FOR VALUE RECEIVED, the undersigned, Endologix, Inc., a Delaware corporation (the Borrower), hereby unconditionally promises to pay to the First Out Waterfall Lender set forth above (the Lender) the Principal Amount set forth above, or, if less, the aggregate unpaid Principal (as defined below) amount of the First Out Waterfall Loan (as defined in the Facility Agreement referred to below) of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Facility Agreement.
1 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
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The Borrower promises to pay interest on the outstanding Principal amount of the First Out Waterfall Loan and any overdue interest from and after the Second Amendment and Restatement Date (as defined below) until such outstanding Principal amount of the First Out Waterfall Loan and any overdue interest are paid in full, payable at such times and at such interest rates as are specified in the Facility Agreement. The Borrower promises to pay any Non-Callable Make Whole Amount, any CoC Fee and the First Out Waterfall Restructuring Payment (each, as defined in the Facility Agreement) that is due on the First Out Waterfall Loan in accordance with the Facility Agreement.
This First Out Waterfall Note (this Note) was originally issued on April 3, 2017[, reissued on January 1, 2018],2 amended and restated on August 9, 2018, and again amended and restated on April , 2019 (the Second Amendment and Restatement Date) and is one of the First Out Waterfall Notes, Loan Notes and Notes referred to in, and is entitled to the benefits of, the Amended and Restated Facility Agreement, dated as of August 9, 2018 (as amended by the First Amendment thereto dated as of November 20, 2018, and the Second Amendment thereto dated as of March 31, 2019, and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the Facility Agreement), by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and Deerfield Private Design Fund IV, L.P., as agent for the Secured Parties, and the other Loan Documents.
The Facility Agreement, among other things, (a) provides for the making of a First Out Waterfall Loan by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such First Out Waterfall Loan being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid Principal amount of this Note upon the happening of certain stated events and also for prepayments pursuant to Section 2.3(c) or Section 5.3 of the Facility Agreement on account of the Principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
1. Definitions.
(a) Certain Defined Terms. Capitalized terms used herein without definition are used as defined in the Facility Agreement. For purposes of this Note, the following terms shall have the following meanings:
(i) Affiliate means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Lender, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Lender will be deemed to be an Affiliate of such Lender. As used in this definition of Affiliate, the term control means the possession, directly or indirectly, of the power to direct or cause the
2 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
A - 2
direction of the management and policies of a Person, whether through ownership of voting securities or partnership or other ownership interest, by contract, or otherwise.
(ii) Bloomberg means Bloomberg Financial Markets or an equivalent, reliable reporting service acceptable to, and hereinafter designated by, the Required Lenders and the Borrower.
(iii) Closing Price means, as of any Trading Day, the closing (last sale) price per share of the Common Stock on the Principal Market (at the end of regular trading hours), as reported by Bloomberg.
(iv) Common Stock means the fully paid and nonassessable shares of the Borrowers common stock, $0.001 par value per share.
(v) Conversion Amount means the Principal amount to be converted.
(vi) Conversion Date means, (A) in the case of any Voluntary Conversion (as defined in Section 2(a)), the date of Lenders delivery via facsimile or electronic mail of a Conversion Notice, (B) in the case of any Mandatory Conversion (as defined in Section 2(d)), the date of the Lenders delivery via facsimile or electronic mail of a Final Mandatory Conversion Notice (as defined in Section 2(d)), and (C) in the case of any Forced Conversion (as defined in Section 2(e)), the date of the Lenders delivery via facsimile or electronic mail of a Forced Conversion Notice (as defined in Section 2(e)).
(vii) Conversion Price means, as of any Conversion Date, (A) in the case of any Elective Conversion (as defined in Section 2(a)), the greater of (I) the Fixed Conversion Price and (II) ninety-six percent (96%) of the arithmetic average of the Volume Weighted Average Prices per share of Common Stock on each of the three (3) consecutive Trading Days immediately preceding the Conversion Date (an Elective Conversion Measurement Period), (B) in the case of any Mandatory Conversion, the Fixed Conversion Price, and (C) in the case of any Discretionary Conversion or Forced Conversion (each as defined in Section 2), the greater of (I) the Fixed Conversion Price and (II) eighty-five percent (85%) of the arithmetic average of the Volume Weighted Average Prices per share of Common Stock on each of the fifteen (15) consecutive Trading Days immediately preceding the Conversion Date (a Discretionary/Forced Conversion Measurement Period; each of an Elective Conversion Measurement Period and a Discretionary/Forced Conversion Measurement Period being referred to as a Measurement Period); provided, that in the event that a Stock Event is consummated during any Measurement Period, the Volume Weighted Average Price for all Trading Days during such Measurement Period prior to the effectiveness of such Stock Event shall be appropriately adjusted to reflect such Stock Event.
(viii) Conversion Shares means fully paid and nonassessable shares of Common Stock issued in connection with the conversion of a Note.
(ix) Delisting Event means any of the following: (A) the Common Stock is not listed on a Principal Market, (B) trading in the Common Stock on the Principal Market is suspended, or (C) the Borrower has received a notice of delisting due to
A - 3
noncompliance with any material rule or regulation applicable to the trading or listing of the Common Stock on the Principal Market and such noncompliance has not been cured as set forth in a notice from the Principal Market.
(x) Discretionary/Forced Conversion Cap means {INSERT: THE LENDERS FIRST OUT WATERFALL PRO RATA SHARE OF $50,000,000}.
(xi) Discretionary Conversion means a Voluntary Conversion designated by the Lender as a Discretionary Conversion in a Conversion Notice in accordance with Section 2(c)(i).
(xii) Elective Conversion means a Voluntary Conversion designated by the Lender as an Elective Conversion in a Conversion Notice in accordance with Section 2(c)(i).
(xiii) Elective Conversion Issuance Limit means {INSERT: THE LENDERS FIRST OUT WATERFALL PRO RATA SHARE OF 1,430,000} shares of Common Stock, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(xiv) Fixed Conversion Price means $6.625; provided, that the Fixed Conversion Price shall be appropriately adjusted to reflect any Stock Event occurring after the Second Amendment Effective Date; and provided, further, that, in the event of any adjustment of the Applicable Conversion Rate of any of the 5.00% Convertible Notes pursuant to Section 14.05 (or any other provision) of either of the Exchanged Senior Notes Indentures as a result of any event or circumstance that does not constitute a Stock Event, the Fixed Conversion Price shall be proportionately (and inversely) adjusted; and following any adjustment of the Fixed Conversion Price hereunder, the Fixed Conversion Price shall mean the Fixed Conversion Price as so adjusted.
(xv) Freely Tradeable Shares means shares of Common Stock which, at the time of issuance thereof, (A) are duly authorized, validly issued, fully paid and non-assessable; (B) are eligible for resale by the Lender, without limitation or restriction (including any volume limitation or current public information requirement) under state or Federal securities laws, pursuant to Rule 144 under the Securities Act; and (C) do not bear, and are not subject to, any restrictive legend, stop transfer or similar restriction.
(xvi) Major Transaction shall have the meaning given to such term in the Warrants.
(xvii) Major Transaction Notice shall have the meaning given to such term in the Warrants.
(xviii) Mandatory Conversion Notice means an Initial Mandatory Conversion Notice or a Final Mandatory Conversion Notice (each as defined in Section 2(d)).
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(xix) Market Disruption Event means, with respect to any Trading Day and any security of Borrower, (A) a failure by the Principal Market to open for trading during its entire regular trading session, (B) the occurrence or existence prior to 1:00 p.m., New York City time, on such day for such securities of Borrower 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 securities exchange or otherwise) in such securities or in any options, contracts or future contracts relating to such securities, or (C) to the extent Volume Weighted Average Price is determined in accordance with clause (B) of the definition thereof, the suspension of trading for the one-half hour period ending on the scheduled close of trading on such day (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in such securities of Borrower.
(xx) Principal means the outstanding principal amount of this Note as of any date of determination.
(xxi) Required Lenders means the Required First Out
Waterfall Lenders.
(xxii) Stock Event means a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares.
(xxiii) Trading Day means any day on which the Common Stock is traded for any period on the Principal Market; provided, that for purposes of the definition of Conversion Price (including the definitions of Elective Conversion Measurement Period, Discretionary/Forced Measurement Period and Measurement Period contained within such definition), the occurrence of the Initial Mandatory Conversion Trigger (as defined in Section 2(d)) or the satisfaction of the Mandatory Conversion Conditions (as defined in Section 2(d)) or the Forced Conversion Condition (as defined in Section 2(e)), Trading Day shall not include any Trading Day on which there is a Market Disruption Event.
(xxiv) Volume Weighted Average Price for any security as of any Trading Day means (A) the volume weighted average sale price of such security on the principal U.S. national or regional securities exchange on which such security is traded, as reported by Bloomberg, or (B) if no volume weighted average sale price is reported for such security, then the closing (last sale) price per share of such security, or, if no closing price per share is reported for such security by Bloomberg, the average of the last bid and last ask price (or if more than one in either case, the average of the average last bid and average last ask prices) on such Trading Day as reported in the composite transactions for the principal U.S. national or regional securities exchange on which such security is traded. If the security is not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, then the Volume Weighted Average Price will be the average of the mid-point of the last bid and last ask prices of the security in the over-the-counter market on the relevant Trading Day as reported by OTC Markets Group or similar organization. If the Volume Weighted
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Average Price cannot be calculated for such security on such date in the manner provided above, the Volume Weighted Average Price shall be the fair market value as mutually determined by the Borrower and the Lenders holding a majority of the aggregate outstanding Principal amount of the Notes being converted for which the calculation of the Volume Weighted Average Price is required in order to determine the Conversion Price of such Notes. Volume Weighted Average Price will be determine without regard to after-hours trading or any other trading outside of the regular trading hours. In the event that a Stock Event is consummated during any period for which the arithmetic average of the Volume Weighted Average Prices is to be determined (under any Section of this Note), the Volume Weighted Average Price for all Trading Days during such period prior to the effectiveness of the Stock Event shall be appropriately adjusted to reflect such Stock Event.
(xxv) Withholding Date means the first date on which the Borrower withholds or determines that it is required to withhold any Taxes as a result of any Mandatory Conversion or Forced Conversion or the issuance of any shares of Common Stock thereupon.
2. Conversion Rights. This Note may be converted into shares of Common Stock on the terms and conditions set forth in this Section 2, and any such conversion shall be applied against, and reduce, the Amortization Payments as provided in Section 2.3(f) of the Facility Agreement.
(a) Conversion at Option of the Lender. At any time during the period commencing on (and including) the Second Amendment Effective Date and ending on the close of business on the second Business Day immediately prior to the Maturity Date, the Lender shall be entitled to convert all or any part of the Principal into Conversion Shares in accordance with this Section 2 at the Conversion Rate (any such conversion at the election of the Borrower (whether an Elective Conversion or a Discretionary Conversion) being referred to as a Voluntary Conversion). The Borrower shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, then the Borrower shall round such fraction of a share of Common Stock up or down to the nearest whole share (with 0.5 rounded up).
(b) Conversion Rate. The number of Conversion Shares issuable upon a conversion of any portion of this Note pursuant to this Section 2, including a Mandatory Conversion or a Forced Conversion (each as defined below), shall be determined according to the following formula (the Conversion Rate):
Conversion Amount
Conversion Price (as applicable)
(c) Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:
(i) Lenders Delivery Requirements. To convert a Conversion Amount into Conversion Shares pursuant to Section 2(a) above on any date, the Lender shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to
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5:00 p.m. New York City time on such date, a copy of an executed conversion notice in the form attached hereto as Exhibit A (the Conversion Notice) to the Borrower (at 2 Musick, Irvine, CA 92618, Attention: Chief Financial Officer; Email: vmahboob@endologix.com, or at such other office or agency as the Borrower may designate in writing), and (B) if required by Section 2(c)(vi), surrender to a common carrier for delivery to the Borrower, no later than three (3) Business Days after the Conversion Date, of the original Note being converted (or an indemnification undertaking in customary form with respect to this Note in the case of its loss, theft or destruction). Subject to the limitations set forth in Section 2(f), the Conversion Notice shall designate the Voluntary Conversion as either an Elective Conversion or a Discretionary Conversion.
(ii) Borrowers Response. Upon receipt or deemed receipt by the Borrower of a copy of a Conversion Notice, or in the case of a Mandatory Conversion or a Forced Conversion, receipt by the Borrower of the Mandatory Conversion Lender Notice (as defined in Section 2(d)) or the Forced Conversion Lender Notice (as defined in Section 2(e)) (as applicable), the Borrower (A) shall immediately send, via facsimile or electronic mail, a confirmation of receipt of such Conversion Notice to the Lender and the Borrowers designated transfer agent (the Transfer Agent), which confirmation shall constitute an instruction to the Transfer Agent to process the Voluntary Conversion, Mandatory Conversion or Forced Conversion in accordance with the terms herein, and (B) (I) in the case of a Voluntary Conversion or Forced Conversion, on or before the second (2nd) Business Day (or, if earlier, the end of the standard settlement period for U.S. broker-dealer securities transactions) following (1) the date of receipt or deemed receipt by the Borrower of the Conversion Notice or (2) the date of delivery by the Borrower of the Forced Conversion Notice (as applicable), or (II) in the case of a Mandatory Conversion, on the Mandatory Conversion Date (as defined in Section 2(d)) (the applicable date set forth in this clause (II) or the immediately preceding clause (I) being referred to as the Share Delivery Date), shall credit such aggregate number of Conversion Shares to which the Lender shall be entitled to the Lenders or its designees balance account with The Depository Trust Company (DTC) through its Deposit/Withdrawal At Custodian (DWAC) system for the number of Conversion Shares to which the Lender shall be entitled. If notwithstanding the provisions of Section 2(c)(vi), the Lender elects to physically surrender this Note for conversion and the Principal represented by this Note is greater than the Principal being converted, then the Borrower shall, as soon as practicable and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Lender a new Note representing the Principal not converted and cancel this Note. For purposes of Rule 144 under the Securities Act, any Conversion Shares issued to Lender shall be deemed to have been acquired by such Lender on April 3, 2017 (the date this Note was originally issued). Accordingly, (A) upon any conversion of this Note, the Rule 144 holding period for the Conversion Shares acquired thereupon shall be in excess of one (1) year, and (B) provided the Lender is not an Affiliate of the Borrower on the Conversion Date and has not been an Affiliate of the Borrower within the three-month period immediately preceding the Conversion Date (the Unrestricted Condition), which the Borrower shall assume and Lender hereby represents unless the Lender advises the Borrower otherwise in writing, the Conversion Shares issued to Lender will be freely transferable, without restriction or limitation (including any volume limitation) under Federal or state securities laws, pursuant to
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Rule 144 under the Securities Act and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof.
(iii) Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price or the arithmetic calculation of the Conversion Rate, the Borrower shall instruct the Transfer Agent to issue to the Lender the number of Conversion Shares that is not disputed and shall transmit an explanation of the disputed determinations or arithmetic calculations to the Lender via facsimile within two (2) Business Days of receipt or deemed receipt of the Lenders Conversion Notice or other date of determination. If the Lender and the Borrower are unable to agree upon the determination of the Conversion Price or arithmetic calculation of the Conversion Rate within one (1) Business Day of such disputed determination or arithmetic calculation being transmitted to the Lender, then the Borrower shall promptly (and in any event within two (2) Business Days) submit via facsimile (A) the disputed determination of the Conversion Price to an independent, reputable investment banking firm agreed to by the Borrower and the Required Lenders, or (B) the disputed arithmetic calculation of the Conversion Rate to the Borrowers independent registered public accounting firm, as the case may be. The Borrower shall direct the investment bank or the accounting firm, as the case may be, to perform the determinations or calculations and notify the Borrower and the Lender of the results no later than two (2) Business Days from the time it receives the disputed determinations or calculations. Such investment banks or accounting firms determination or calculation, as the case may be, shall be binding upon all parties absent manifest error, and the fees and expenses of such investment bank or accountant shall be paid one-half by the Borrower and one-half by the Lender. Notwithstanding the existence of a dispute contemplated by this paragraph, if requested by the Lender, the Borrower shall issue to the Lender the Conversion Shares not in dispute in accordance with the terms hereof.
(iv) Record Holder. The Person or Persons entitled to receive the Conversion Shares issuable upon a conversion of this Note shall be treated for all purposes as the legal and record holder or holders of such shares of Common Stock, (A) in the case of a Voluntary Conversion, upon delivery by the Lender of the Conversion Notice, (B) in the case of a Mandatory Conversion, upon delivery by the Borrower to the Lender of the Final Mandatory Conversion Notice, (C) in the case of a Forced Conversion, upon delivery by the Lender to the Borrower the Forced Conversion Lender Notice, or (D) in the case of Conversion Shares the issuance of which (whether in connection with a Voluntary Conversion, a Mandatory Conversion or a Forced Conversion) is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute.
(v) Borrowers Failure to Timely Convert.
(A) Cash Damages. If by the Share Delivery Date, the Borrower shall fail to credit the Lenders or its designees balance account with DTC with the number of Conversion Shares (free of any restrictive legend in the case of a Mandatory Conversion or Forced Conversion or, provided the Unrestricted Condition is satisfied, in the case of a Voluntary Conversion), then, in addition to all other available remedies that the Lender may
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pursue hereunder and under the Facility Agreement, the Borrower shall pay additional damages to the Lender for each day after the Share Delivery Date such conversion is not timely effected in an amount equal to one and one-half percent (1.5%) of the product of (I) the number of Conversion Shares not issued to the Lender or its designee on or prior to the Share Delivery Date and to which the Lender is entitled and (II) the Volume Weighted Average Price of the Common Stock on the Share Delivery Date. Alternatively in lieu of the foregoing damages, subject to Section 2(c)(iii), at the written election of the Lender made in the Lenders sole discretion, if, on or after the applicable Conversion Date, the Lender purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Lender of Conversion Shares that such Lender anticipated receiving from the Borrower (such purchased shares, Buy-In Shares), the Borrower shall be obligated to promptly pay to the Lender (in addition to all other available remedies that the Lender may otherwise have), 110% of the amount by which (A) the Lenders total purchase price (including brokerage commissions, if any) for such Buy-In Shares exceeds (B) the net proceeds received by the Lender from the sale of a number of shares equal to up to the number of Conversion Shares such Lender was entitled to receive but had not received on the Share Delivery Date. If the Borrower fails to pay the additional damages set forth in this Section 2(c)(v)(A) within five (5) Business Days of the date incurred, then the Lender entitled to such payments shall have the right at any time, so long as the Borrower continues to fail to make such payments, to require the Borrower, upon written notice, to immediately issue, in lieu of such cash damages, the number of shares of Common Stock equal to the quotient of (X) the aggregate amount of the damages payments described herein divided by (Y) the Conversion Price applicable to the conversion to which the additional damages relate.
(B) Conversion Failure. If for any reason the Lender has not received all of the Conversion Shares it is entitled to prior to the tenth (10th) Business Day after the Share Delivery Date with respect to a conversion of this Note (a Conversion Failure), then the Lender, upon written notice to the Borrower (a Void Conversion Notice), may void its conversion (or, in the case of a Mandatory Conversion or a Forced Conversion, the Borrowers conversion) with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to the Lenders Conversion Notice (or, in the case of a Mandatory Conversion or a Forced Conversion, the Borrowers Mandatory Conversion Notice or Forced Conversion Notice); provided, that the voiding of the Lenders Conversion Notice (or the Borrowers Mandatory Conversion Notice or Forced Conversion Notice) shall not affect the Borrowers obligations to make any payments that have accrued prior to the date of such notice pursuant to Section 2(c)(v)(A) or otherwise. A Conversion Failure shall constitute an Event of Default under the Facility Agreement and entitle the Lenders to all payments and remedies provided under the Facility Agreement upon the occurrence of an Event of Default.
(vi) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion or repayment of this Note in accordance with the terms hereof, the Lender shall not be required to physically surrender this Note to the Borrower unless all of the Principal is being converted or repaid. The Lender and the Borrower shall maintain records showing the Principal converted or repaid and the dates of such conversions or repayments or shall use such other method, reasonably satisfactory to the Lender and the Borrower, so as not to require physical surrender of this Note upon any such partial conversion or repayment. Notwithstanding the foregoing, if this Note is converted or repaid as aforesaid, the Lender
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may not transfer this Note unless the Lender first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Lender a new Note of like tenor, registered as the Lender may request, representing in the aggregate the remaining Principal represented by this Note. The Lender and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion or repayment of any portion of this Note, the Principal of this Note may be less than the Principal Amount stated on the face hereof.
(vii) Taxes. Without limiting Section 10, the Borrower shall pay any and all taxes (excluding income taxes, franchise taxes or other taxes levied on gross earnings, profits or the like of the Lender) that may be payable with respect to the issuance and delivery of Conversion Shares upon the conversion of this Note.
(d) Mandatory Conversion.
(i) Subject to the terms and conditions of this Section 2, including the Mandatory/Forced Conversion Conditions (as defined below) and the limitations set forth in Section 2(f), in the event that, in any calendar month during the period commencing on April 1, 2019 and ending on June 30, 2020 (the Mandatory Conversion Period), (A) each of (I) the arithmetic average of the Volume Weighted Average Prices on the five (5) consecutive Trading Days ending on (and including) the fifteenth (15th) day of such calendar month (or if such day is not a Trading Day, the first Trading Day thereafter) (the Mandatory Conversion Measurement Date) and (II) the Closing Price on the Mandatory Conversion Measurement Date is greater than the Fixed Conversion Price, and (B) the Initial Mandatory Conversion Trigger shall have occurred in such calendar month (together, the Mandatory Conversion Conditions), the Borrower shall cause the conversion into Conversion Shares (a Mandatory Conversion) of the lesser of (X) {INSERT: THE LENDERS PRO RATA SHARE OF $1,666,666 and (Y) the then outstanding Principal. (ii) In the event that, in any calendar month during the Mandatory Conversion Period, each of (A) the arithmetic average of the Volume Weighted Average Prices on the five (5) consecutive Trading Days ending on (and including the third (3rd) Trading Day (the Initial Mandatory Conversion Measurement Date) immediately prior to the Mandatory Conversion Measurement Date in such calendar month and (B) the Closing Price on the Initial Conversion Measurement Date is greater than the Fixed Conversion Price (together, an Initial Mandatory Conversion Trigger), the Borrower shall send a written notice via electronic mail to the Lender (an Initial Mandatory Conversion Notice) at any time between 8:00 a.m. and 4:00 p.m., New York City time on the first Trading Day following the Initial Mandatory Conversion Measurement Date, certifying that an Initial Mandatory Conversion Trigger has occurred (with reasonable supporting information), stating the Principal amount hereunder to be converted on the Mandatory Conversion Date and stating the number of Conversion Shares to be issued to the Lender (subject to Section 2(d)(iii) and the other terms and conditions of this Section 2(d)). For the avoidance of doubt, (X) simultaneously with delivery of an Initial Mandatory Conversion Notice hereunder, the Borrower shall send an Initial Mandatory Conversion Notice under all other First Out Waterfall Notes. Notwithstanding the delivery of an Initial Mandatory Conversion Notice, a Mandatory Conversion shall not be effected unless all of the Mandatory Conversion
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Conditions and the other applicable conditions set forth in this Section 2 (including the Borrowers delivery of a Final Mandatory Conversion Notice) are satisfied.
(iii) By no later than 5:00 p.m., New York City time on the first Trading Day following the date of an Initial Mandatory Conversion Notice, the Lender shall confirm to the Borrower via electronic mail whether the 4.985% Cap (as hereinafter defined) will reduce the number of Shares that may be issued pursuant to such Mandatory Conversion (a Mandatory Conversion Lender Notice). If the 4.985% Cap will so reduce the number of Shares that may be issued pursuant to the Mandatory Conversion (subject to the terms and conditions of this Section 2(d)), such notice shall also set forth the maximum number of Conversion Shares that may be issued to the Lender (and the corresponding Principal amount hereunder that may be converted) without exceeding the maximum number of shares that such Lender may receive under the 4.985% Cap (the Mandatory Conversion Maximum Share Amount), which shall be conclusive and binding upon the Borrower and the Lender. The number of Conversion Shares issuable pursuant to the Mandatory Conversion shall equal the number of Conversion Shares set forth in the Initial Mandatory Conversion Notice; provided, however, that, if the issuance of the number of Conversion Shares set forth in the Initial Mandatory Conversion Notice would violate the 4.985% Cap, the number of Conversion Shares issuable pursuant to the Mandatory Conversion shall instead equal the Mandatory Conversion Maximum Share Amount (and the Principal amount hereunder to be converted on the Mandatory Conversion Date shall be correspondingly reduced).
(iv) In the event that all of the Mandatory Conversion Conditions have been satisfied as of the Mandatory Conversion Measurement Date, the Borrower shall send a written notice via electronic mail to the Lender (a Final Mandatory Conversion Notice) at any time between 4:00 p.m. and 5:00 p.m., New York City time on the Mandatory Conversion Date certifying that the Mandatory Conversion Conditions and the other applicable conditions set forth in this Section 2 have been satisfied (including reasonable supporting documentation) and specifying the number of Conversion Shares to be issued to the Lender. For the avoidance of doubt, simultaneously with delivery of a Final Mandatory Conversion Notice hereunder, the Borrower shall send a Final Mandatory Conversion Notice under all other Notes.
(v) The Conversion Shares issuable pursuant to a Mandatory Conversion shall be delivered on the Trading Day immediately following the Mandatory Conversion Measurement Date (such Trading Day, the Mandatory Conversion Date) and in accordance with Section 2(c)(ii) above.
(e) Forced Conversion.
(i) Subject to the terms and conditions of this Section 2, including the Mandatory/Forced Conversion Conditions (as defined below) and the limitations set forth in Section 2(f), in the event that the arithmetic average of the Volume Weighted Average Prices on any fifteen (15) consecutive Trading Days commencing on or after the first Trading Day after the Second Amendment Effective Date and ending on or prior to the second Business Day immediately prior to the Maturity Date, is greater than 175% of the Fixed Conversion Price (the Forced Conversion Condition), the Borrower may cause the conversion into Conversion Shares (a Forced Conversion) of the outstanding Principal amount of this Note
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set forth in the Forced Conversion Notice (as defined below); provided that such Principal amount (A) shall not exceed the result of (I) the Discretionary/Forced Conversion Cap, minus (II) the aggregate Principal of this Note converted into Conversion Shares pursuant to Discretionary Conversions after the Second Amendment Effective Date and prior to the Forced Conversion (the Maximum Forced Conversion Amount), and (B) shall not be less than the least of (1) the Maximum Forced Conversion Amount, (2) the then outstanding Principal, and (3) $1,000,000. The Borrower shall effect Forced Conversions under each of the First Out Waterfall Notes on a pro rata basis, based upon the respective outstanding Principal amounts thereof.
(ii) To effect a Forced Conversion, the Borrower shall send a written notice via electronic mail to the Lender (a Forced Conversion Notice) at any time between 4:00 p.m. and 5:00 p.m., New York City time on the Trading Day on which the Forced Conversion Condition is satisfied. The Forced Conversion Notice shall certify that the Forced Conversion Condition and the other applicable conditions set forth in this Section 2 have satisfied (including reasonable supporting information), shall state the Principal amount hereunder that the Borrower shall cause to be converted on the Forced Conversion Date and shall state the number of Conversion Shares to be issued to the Lender (subject to Section 2(e)(iii) and the other terms and conditions of this Section 2(e)). Simultaneously with delivery of a Forced Conversion Notice hereunder, the Borrower shall send a Forced Conversion Notice with respect to a pro rata portion of the Principal of each other First Out Waterfall Notes. Notwithstanding the foregoing, in no event shall the Borrower send any Forced Conversion Notice to the Lender within fourteen (14) days of any other Forced Conversion Notice sent by the Borrower to the Lender.
(iii) By no later than 5:00 p.m., New York City time on the first Trading Day following the date of the Forced Conversion Notice, the Lender shall confirm to Borrower via electronic mail whether the 4.985% Cap (as defined below) will reduce the number of Shares that may be issued pursuant to such Forced Conversion (the Forced Conversion Lender Notice). If the 4.985% Cap will so reduce the number of Shares that may be issued pursuant to the Forced Conversion (subject to the terms and conditions of this Section 2(d)), the Forced Conversion Lender Notice shall also set forth the maximum number of Conversion Shares that may be issued to the Lender (and the corresponding Principal amount hereunder that may be converted) without exceeding the maximum number of shares that such Lender may receive under the 4.985% Cap (the Forced Conversion Maximum Share Amount). The number of Conversion Shares issuable pursuant to the Forced Conversion shall equal the number of Conversion Shares set forth in the Forced Conversion Notice; provided, however, that, if the issuance of the number of Conversion Shares set forth in the Forced Conversion Notice would violate the 4.985% Cap, the number of Conversion Shares issuable pursuant to the Forced Conversion shall instead equal the Forced Conversion Maximum Share Amount (and the Principal amount hereunder to be converted on the applicable Conversion Date shall be correspondingly reduced).
(iv) The Conversion Shares issuable pursuant to a Forced Conversion shall be delivered within the timeframe and in accordance with Section 2(c)(ii) above.
(f) Limitations on Conversions.
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(i) Beneficial Ownership. Notwithstanding anything herein to the contrary, the Borrower shall not issue to the Lender, and the Lender may not acquire, a number of shares of Common Stock upon any conversion of this Note (whether a Voluntary Conversion, a Mandatory Conversion or a Forced Conversion) or otherwise issue any shares of Common Stock pursuant hereto or the Facility Agreement to the extent that, upon such conversion, the number of shares of Common Stock then beneficially owned by the Lender and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Lenders for purposes of Section 13(d) of the Exchange Act (including shares held by any group of which the Lender is a member, but excluding shares beneficially owned by virtue of the ownership of the Warrants or other securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed 4.985% of the total number of shares of common stock then issued and outstanding (the 4.985% Cap); provided, however, that the 4.985% Cap shall only apply to the extent that the Common Stock is deemed to constitute an equity security pursuant to Rule 13d-1(i) promulgated under the Exchange Act. For purposes hereof, group has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the SEC, and the percentage held by the Lender shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Upon the written request of the Lender, the Borrower shall, within two (2) Trading Days, confirm orally and in writing to the Lender the number of shares of Common Stock then outstanding. Without limiting the foregoing, in no event shall the number of shares issued to the Lender pursuant to a Mandatory Conversion exceed the Lenders Mandatory Conversion Maximum Share Amount (if any), as applicable to such Mandatory Conversion, and in no event shall the number of shares issued to the Lender pursuant to a Forced Conversion exceed the Lenders Forced Conversion Maximum Share Amount (if any), as applicable to the Forced Conversion
(ii) Elective Conversion Issuance Limit. Notwithstanding anything to the contrary contained herein, this Note shall not be convertible pursuant to an Elective Conversion, and the Borrower shall not issue Conversion Shares upon any Elective Conversion of this Note, to the extent that the issuance of shares of Common Stock upon such Elective Conversion, together with any issuances of shares of Common Stock under this Note pursuant to Elective Conversions after the Second Amendment Effective Date and prior to such Elective Conversion, would exceed the Elective Conversion Issuance Limit (provided, for the avoidance of doubt, that upon any Elective Conversion of this Note, the Borrower shall convert the maximum portion of Principal set forth in the applicable Conversion Notice that may be converted into shares of Common Stock without so exceeding the Elective Conversion Issuance Limit, subject to the 4.985% Cap). For the avoidance of doubt, the limitation set forth in this Section 2(f)(ii) shall not apply to any Discretionary Conversion, Mandatory Conversion or Forced Conversion.
(iii) Discretionary/Forced Conversion Issuance Cap. Notwithstanding anything to the contrary contained herein, this Note shall not be convertible pursuant to a Discretionary Conversion or a Forced Conversion, and the Borrower shall not issue Conversion Shares upon any Discretionary Conversion or Forced Conversion of this Note, to the extent that the aggregate Principal of this Note that would otherwise be converted pursuant to the applicable Discretionary Notice or Forced Conversion Notice, together with the aggregate Principal of this Note converted into Conversion Shares after the Second
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Amendment Effective Date and prior to such Discretionary Conversion or Forced Conversion, would exceed the Discretionary/Forced Conversion Cap (provided, for the avoidance of doubt, that upon any Discretionary Conversion of this Note, the Borrower shall convert the maximum portion of Principal set forth in the applicable Conversion Notice that may be converted into shares of Common Stock without so exceeding the Discretionary/Forced Conversion Cap, subject to the 4.985% Cap). For the avoidance of doubt, the limitation set forth in this Section 2(f)(iii) shall not apply to any Elective Conversion or Mandatory Conversion.
(iv) Other Applicable Restrictions on Conversion of the Note. Notwithstanding anything to the contrary contained herein, the Borrower shall not deliver a Mandatory Conversion Notice or a Forced Conversion Notice, and the Borrower shall not effect a Mandatory Conversion or a Forced Conversion, (A) during the occurrence of a Delisting Event, (b) at any time following such time as the Borrower has delivered (or is obligated to deliver) a Major Transaction Notice in respect of a Major Transaction, (c) at any time following the occurrence, and during the continuance, of an Event of Default or a Default, (d) from and after a Withholding Date, (e) unless all material information regarding the Borrower (including any material information that may be included in, or reflected by, the Mandatory Conversion Notice or Forced Conversion Notice, but excluding any material information relating to the Borrowers operating results for the fiscal quarter in which the Mandatory Conversion Notice or Forced Conversion Notice is delivered other than operating results that would trigger non-compliance with a covenant under the Facility Agreement or the ABL Credit Facility) has been publicly disclosed in a report filed pursuant to the Exchange Act or has been otherwise publicly disclosed in a manner calculated to reach the securities marketplace through one of the Borrowers recognized channels of distribution, (h) unless all shares of Common Stock issuable pursuant to the Mandatory Conversion or Forced Conversion will constitute Freely Tradeable Shares, (i) unless the Borrower is in compliance with the current public information requirement of Rule 144(c) under the Securities Act, (j) if the transfer agent for the Common Stock is not participating in DTCs Fast Automated Securities Transfer Program, or (k) if any Lender, after consultation with counsel of its choosing, advises the Borrower that the receipt or resale of Common Stock issued or issuable hereunder would result in such Lender being deemed an underwriter within the meaning of Section 2(11) under the Securities Act (collectively, the Mandatory/Forced Conversion Conditions), except to the extent the Lender has waived any such Mandatory/Forced Conversion Condition by written notice to the Borrower. If any of the Mandatory/Forced Conversion Conditions is not satisfied at any time following the delivery of a Mandatory Conversion Notice or Forced Conversion Notice and prior to the Share Issuance Date in respect of the Mandatory Conversion or Forced Conversion (as applicable), the Borrower shall immediately notify the Lender of such failure and, unless the Lender waives such Mandatory/Forced Conversion Condition by written notice to the Borrower, the Mandatory Conversion Notice or Forced Conversion Notice (as applicable) shall be voided and the Mandatory Conversion or Forced Conversion (as applicable) shall not be effected. For the avoidance of doubt, the Mandatory/Forced Conversion Conditions shall not apply to any Voluntary Conversion.
(g) Borrower Disclosure. Without limiting clause (e) of the Mandatory/Forced Conversion Conditions or Section 5.1(q) of the Facility Agreement, the
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Borrower hereby acknowledges and agrees that (i) no Mandatory Conversion Notice, Mandatory Conversion Lender Notice, Forced Conversion Notice or Forced Conversion Lender Notice shall constitute or contain any material non-public information with respect to the Borrower or its securities, and (ii) the Lender shall not have any duty of trust or confidence with respect to, nor any obligation not to trade in any securities on the basis of, any information contained in any Mandatory Conversion Notice, Mandatory Conversion Lender Notice, Forced Conversion Notice or Forced Conversion Lender Notice.
3. Reservation of Shares. The Borrower shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting conversions of this Note, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of the entire Principal convertible under this Note (without giving effect to the 4.985% Cap), assuming that any conversions will be at the Fixed Conversion Price; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire Principal convertible under this Note, the Borrower will use reasonable best efforts to take such corporate action as may, upon the advice of the Borrowers counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. The Company covenants and agrees that, upon any conversion of this Note, all shares of Common Stock issued upon such conversion shall be duly and validly issued, fully paid and nonassessable and not subject to preemptive rights, rights of first refusal or similar rights of any Person.
4. Voting Rights. Except as required by law, the Lender shall have no voting rights with respect to any of the Conversion Shares until the Conversion Date relating to the conversion of this Note upon which such Conversion Shares are issuable (or in the case of Conversion Shares the issuance of which is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute).
5. Amendment; Waiver. The provisions of this Note may only be waived or amended, restated, supplemented or otherwise modified in accordance with the Facility Agreement.
6. Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Borrower and all Lenders pursuant to the Facility Agreement and shall not be construed against any Person as the drafter hereof.
7. Failure or Indulgence Not Waiver. No delay or omission by the Lender in exercising any power or right hereunder shall impair such right or power or be construed to be a waiver of any default, nor shall any single or partial exercise of any power or right hereunder preclude the full exercise thereof or the exercise of any other power or right. No renewal or extension of this Note or the Facility Agreement, no delay in the enforcement of payment under this Note or the Facility Agreement, and no delay or omission in exercising any right or power under this Note or the Facility Agreement shall affect the liability of the Borrower or any endorser of this Note.
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8. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with Section 6.1 of the Facility Agreement.
9. Restrictions on Transfer.
(a) Registration or Exemption Required. This Note has been issued in a transaction exempt from the registration requirements of the Securities Act. None of the Note or the Conversion Shares issued hereunder may be transferred, sold, assigned, hypothecated or otherwise disposed of except pursuant to an effective registration statement or an exemption to the registration requirements of the Securities Act and applicable state laws, including Rule 144 under the Securities Act, Section 4(a)(7) of the Securities Act or a so-called 4[(a)](1) and a half transaction.
(b) Assignment. This Note is assignable or transferable, in whole or in part, only to the extent such assignment or transfer is permitted pursuant to the terms of the Facility Agreement; provided that (i) the Lender shall deliver a written notice to the Borrower, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the Person or Persons to whom the Note shall be assigned and the respective Principal amount of the Note to be assigned to each assignee. The Borrower shall effect the assignment within three (3) business days, and shall deliver to the assignee(s) designated by the Lender a Note or Notes of like tenor and terms for the appropriate Principal amount. This Note and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Lender. The provisions of this Note are intended to be for the benefit of all Lenders from time to time of this Note, and shall be enforceable by any such Lender. This Note is not (and any rights or obligations hereunder are not) not assignable or transferable by the Borrower under any circumstance, and any such prohibited assignment or transfer is absolutely void ab initio.
10. Payment of Collection, Enforcement and Other Costs. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (b) an attorney is retained to represent the Lender in any bankruptcy, reorganization, receivership of the Borrower or other proceedings affecting Borrower creditors rights and involving a claim under this Note, then the Borrower shall pay the costs incurred by the Lender for such collection, enforcement or action, including reasonable attorneys fees and disbursements. Subject to the terms of the Facility Agreement, all payments and issuances of shares of Common Stock hereunder will be free and clear of, and without deduction or withholding for, any present or future taxes. The Borrower shall pay all and any costs (administrative or otherwise) imposed by the Borrowers banks, clearing houses, or any other financial institution, in connection with making any payments and issuing any shares of Common Stock hereunder. The Borrower shall pay all costs and expenses (including attorneys fees) of the Lender incurred in connection with this Note in accordance with Section 6.3 of the Facility Agreement.
11. Waiver of Notice. Other than those notices required to be provided by the Lender to the Borrower under the terms of the Facility Agreement, the Borrower and every endorser of this Note, or the obligations represented hereby, expressly waives diligence, presentment, protest, demand, notice of dishonor, non-payment or default, and notice of any kind with respect
A - 16
to this Note and the Facility Agreement or the performance of the obligations under this Note and/or the Facility Agreement.
12. Miscellaneous. This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Facility Agreement, including Sections 1.2 (Interpretation) and 6.4 (Governing Law; Venue; Jurisdiction; Service of Process; Waiver of Jury Trial) thereof.
13. Additional Interpretative Matters. Unless the context otherwise requires, (a) all references to Sections or Exhibits are to Sections or Exhibits contained in or attached to this Note, (b) each accounting term not otherwise defined in this Note has the meaning assigned to it in accordance with GAAP, (c) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter and (d) the use of the word including in this Note shall be by way of example rather than limitation.
14. Signatures. In the event that any signature to this Note or any amendment hereto is delivered by electronic 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 .pdf signature page were an original thereof. Notwithstanding the foregoing, the Borrower shall be obligated to deliver to the Lender an original signature to this Note. At the request of any party, each other party shall promptly re-execute an original form of this Note or any amendment hereto and deliver the same to the other party. No party hereto shall raise the use of electronic mail delivery of a .pdf format data file to deliver a signature to this Note or any amendment hereto or the fact that such signature was transmitted or communicated through the use of electronic mail delivery of a .pdf format data file as a defense to the formation or enforceability of a contract, and each party hereto forever waives any such defense.
15. No Novation. This Note is an amendment and restatement of that certain Loan Note originally issued on April 3, 2017 [and re-issued on January 1, 2018],3 and first amended and restated on August 9 2018, in the principal amount of $[ ] (the Prior Note) and evidences an extension, continuation, and renewal of the indebtedness evidenced by the Prior Note, but this Note replaces the Prior Note with the indebtedness evidenced by the Prior Note now evidenced by this Note. Such Prior Note shall be of no further force and effect upon execution of this Note. The Borrower hereby acknowledges and agrees that the indebtedness under the Prior Note has not been repaid or extinguished and that the execution hereof does not constitute a novation of the Prior Note. Moreover, this Note shall be entitled to all security and collateral to which the Prior Note was entitled, without change or diminution in the priority of any lien or security interest granted to secure the Prior Note.
[Signature Page Follows]
3 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
A - 17
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year set forth above.
ENDOLOGIX, INC., | ||
a Delaware corporation |
By: |
| |
Name: |
| |
Title: |
|
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Exhibit A
CONVERSION NOTICE
Reference is made to the First Out Waterfall Note (the Note) of ENDOLOGIX, INC., a Delaware corporation (the Borrower), in the original principal amount of $[ ]. In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of common stock, par value $0.001 per share (the Common Stock), of the Borrower, as of the date specified below.
Date of Conversion:
Principal Amount to be converted at the Conversion Price (as defined in the Note):
Conversion is designated as (check one):
☐ | Elective Conversion |
☐ | Discretionary Conversion |
Please confirm the following information:
Conversion Price:
Number of shares of Common Stock to be issued:
Please issue the Common Stock into which the Note is being converted in the following name and to the following address:
Issue to:
Facsimile Number:
Authorization:
By:
Title:
Dated:
DTC Participant Number and Name:
A - 19
Account Number:
A - 20
Exhibit B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Note)
FOR VALUE RECEIVED, the undersigned holder of the attached First Out Waterfall Note (the Note) hereby sells, assigns and transfers unto the person or persons below named the right to receive the principal amount of $ from Endologix, Inc., a Delaware corporation (the Borrower), evidenced by the attached Note and does hereby irrevocably constitute and appoint attorney to transfer the said Note on the books of the Borrower, with full power of substitution in the premises.
Dated: | ||
Signature | ||
Fill in for new registration of Note: | ||
|
||
Name | ||
|
||
Address
|
||
Please print name and address of assignee (including zip code number) |
NOTICE
The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Note.
A - 21
Exhibit 4.5
Execution Version
ENDOLOGIX, INC.
AND
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of April 3, 2019
5.0% Mandatory Convertible Senior Notes due 2024
TABLE OF CONTENTS
PAGE | ||||||
ARTICLE 1 |
| |||||
DEFINITIONS |
| |||||
Section 1.01. | Definitions |
1 | ||||
Section 1.02. | References to Interest |
12 | ||||
ARTICLE 2 |
| |||||
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES |
| |||||
Section 2.01. | Designation and Amount |
13 | ||||
Section 2.02. | Form of Notes |
13 | ||||
Section 2.03. | Date and Denomination of Notes; Payments of Interest and Defaulted Amounts |
13 | ||||
Section 2.04. | Execution, Authentication and Delivery of Notes |
15 | ||||
Section 2.05. | Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary |
16 | ||||
Section 2.06. | Mutilated, Destroyed, Lost or Stolen Notes |
19 | ||||
Section 2.07. | Temporary Notes |
20 | ||||
Section 2.08. | Cancellation of Notes Paid, Converted, Etc |
20 | ||||
Section 2.09. | CUSIP Numbers |
21 | ||||
Section 2.10. | Additional Notes; Repurchases |
21 | ||||
Section 2.11. | Issuance of PIK Notes; Payment of PIK Interest |
21 | ||||
ARTICLE 3 |
| |||||
SATISFACTION AND DISCHARGE |
| |||||
Section 3.01. | Satisfaction and Discharge |
22 | ||||
ARTICLE 4 |
| |||||
PARTICULAR COVENANTS OF THE COMPANY |
| |||||
Section 4.01. | Payment of Principal and Interest |
23 | ||||
Section 4.02. | Maintenance of Office or Agency |
23 | ||||
Section 4.03. | Appointments to Fill Vacancies in Trustees Office |
23 | ||||
Section 4.04. | Provisions as to Paying Agent |
23 | ||||
Section 4.05. | Existence |
25 | ||||
Section 4.06. | Rule 144A Information Requirement and Annual Reports |
25 | ||||
Section 4.07. | Stay, Extension and Usury Laws |
26 | ||||
Section 4.08. | Compliance Certificate; Statements as to Defaults |
26 | ||||
Section 4.09. | Further Instruments and Acts |
27 |
i
ARTICLE 5 |
| |||||
LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
| |||||
Section 5.01. | Lists of Holders |
27 | ||||
Section 5.02. | Preservation and Disclosure of Lists |
27 | ||||
ARTICLE 6 |
| |||||
DEFAULTS AND REMEDIES |
| |||||
Section 6.01. | Events of Default |
27 | ||||
Section 6.02. | Acceleration; Rescission and Annulment |
29 | ||||
Section 6.03. | Additional Interest |
30 | ||||
Section 6.04. | Payments of Notes on Default; Suit Therefor |
30 | ||||
Section 6.05. | Application of Monies Collected by Trustee |
32 | ||||
Section 6.06. | Proceedings by Holders |
33 | ||||
Section 6.07. | Proceedings by Trustee |
34 | ||||
Section 6.08. | Remedies Cumulative and Continuing |
34 | ||||
Section 6.09. | Direction of Proceedings and Waiver of Defaults by Majority of Holders |
34 | ||||
Section 6.10. | Notice of Defaults |
35 | ||||
Section 6.11. | Undertaking to Pay Costs |
35 | ||||
ARTICLE 7 |
| |||||
CONCERNING THE TRUSTEE |
| |||||
Section 7.01. | Duties and Responsibilities of Trustee |
35 | ||||
Section 7.02. | Reliance on Documents, Opinions, Etc |
37 | ||||
Section 7.03. | No Responsibility for Recitals, Etc |
38 | ||||
Section 7.04. | Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes |
39 | ||||
Section 7.05. | Monies to Be Held in Trust |
39 | ||||
Section 7.06. | Compensation and Expenses of Trustee |
39 | ||||
Section 7.07. | Officers Certificate and Opinion of Counsel as Evidence |
40 | ||||
Section 7.08. | Eligibility of Trustee |
40 | ||||
Section 7.09. | Resignation or Removal of Trustee |
40 | ||||
Section 7.10. | Acceptance by Successor Trustee |
41 | ||||
Section 7.11. | Succession by Merger, Etc |
42 | ||||
Section 7.12. | Trustees Application for Instructions from the Company |
42 | ||||
ARTICLE 8 |
| |||||
CONCERNING THE HOLDERS |
| |||||
Section 8.01. | Action by Holders |
43 | ||||
Section 8.02. | Proof of Execution by Holders |
43 | ||||
Section 8.03. | Who Are Deemed Absolute Owners |
43 | ||||
Section 8.04. | Company-Owned Notes Disregarded |
44 | ||||
Section 8.05. | Revocation of Consents; Future Holders Bound |
44 |
ii
ARTICLE 9 |
| |||||
HOLDERS MEETINGS |
| |||||
Section 9.01. | Purpose of Meetings |
44 | ||||
Section 9.02. | Call of Meetings by Trustee |
45 | ||||
Section 9.03. | Call of Meetings by Company or Holders |
45 | ||||
Section 9.04. | Qualifications for Voting |
45 | ||||
Section 9.05. | Regulations |
45 | ||||
Section 9.06. | Voting |
46 | ||||
Section 9.07. | No Delay of Rights by Meeting |
46 | ||||
ARTICLE 10 |
| |||||
SUPPLEMENTAL INDENTURES |
| |||||
Section 10.01. | Supplemental Indentures Without Consent of Holders |
46 | ||||
Section 10.02. | Supplemental Indentures with Consent of Holders |
47 | ||||
Section 10.03. | Effect of Supplemental Indentures |
48 | ||||
Section 10.04. | Notation on Notes |
49 | ||||
Section 10.05. | Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee |
49 | ||||
ARTICLE 11 |
| |||||
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE |
| |||||
Section 11.01. | Company May Consolidate, Etc |
49 | ||||
Section 11.02. | Successor Corporation to Be Substituted |
50 | ||||
Section 11.03. | Opinion of Counsel to Be Given to Trustee |
50 | ||||
ARTICLE 12 |
| |||||
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
| |||||
Section 12.01. | Indenture and Notes Solely Corporate Obligations |
51 | ||||
ARTICLE 13 |
| |||||
[Intentionally Omitted] |
| |||||
ARTICLE 14 |
| |||||
CONVERSION OF NOTES |
| |||||
Section 14.01. | Voluntary Conversion |
51 | ||||
Section 14.02. | Mandatory Conversion |
55 | ||||
Section 14.03. | Conversion Procedure; Settlement Upon Conversion |
57 | ||||
Section 14.04. | Increased Applicable Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes |
61 | ||||
Section 14.05. | Adjustment of Indenture Conversion Rates |
63 | ||||
Section 14.06. | Adjustments of Prices |
72 | ||||
Section 14.07. | Shares to Be Fully Paid |
72 |
iii
Section 14.08. | Effect of Recapitalizations, Reclassifications and Changes of the Common Stock |
73 | ||||
Section 14.09. | Certain Covenants |
75 | ||||
Section 14.10. | Responsibility of Trustee |
75 | ||||
Section 14.11. | Notice to Holders Prior to Certain Actions |
75 | ||||
Section 14.12. | Stockholder Rights Plans |
76 | ||||
Section 14.13. | Ownership Limitation |
76 | ||||
ARTICLE 15 |
| |||||
REPURCHASE OF NOTES AT OPTION OF HOLDERS |
| |||||
Section 15.01. | [Intentionally Omitted] |
77 | ||||
Section 15.02. | Repurchase at Option of Holders Upon a Fundamental Change |
77 | ||||
Section 15.03. | Withdrawal of Fundamental Change Repurchase Notice |
80 | ||||
Section 15.04. | Deposit of Fundamental Change Repurchase Price |
80 | ||||
Section 15.05. | Covenant to Comply with Applicable Laws Upon Repurchase of Notes |
81 | ||||
ARTICLE 16 |
| |||||
[INTENTIONALLY OMITTED] |
| |||||
ARTICLE 17 |
| |||||
MISCELLANEOUS PROVISIONS |
| |||||
Section 17.01. | Provisions Binding on Companys Successors |
81 | ||||
Section 17.02. | Official Acts by Successor Corporation |
82 | ||||
Section 17.03. | Addresses for Notices, Etc |
82 | ||||
Section 17.04. | Governing Law; Jurisdiction |
82 | ||||
Section 17.05. | Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee |
83 | ||||
Section 17.06. | Legal Holidays |
83 | ||||
Section 17.07. | No Security Interest Created |
83 | ||||
Section 17.08. | Benefits of Indenture |
84 | ||||
Section 17.09. | Table of Contents, Headings, Etc |
84 | ||||
Section 17.10. | Authenticating Agent |
84 | ||||
Section 17.11. | Execution in Counterparts |
85 | ||||
Section 17.12. | Severability |
85 | ||||
Section 17.13. | Waiver of Jury Trial |
85 | ||||
Section 17.14. | Force Majeure |
85 | ||||
Section 17.15. | Calculations |
85 | ||||
Section 17.16. | Withholding Taxes |
86 | ||||
Section 17.17. | USA PATRIOT Act |
86 |
EXHIBIT
Exhibit A | Form of Note |
A-1 |
iv
INDENTURE dated as of April 3, 2019 between ENDOLOGIX, INC., a Delaware corporation, as issuer (the Company, as more fully set forth in Section 1.01) having its principal office at 11 Studebaker, Irvine, California 92618, 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 5.0% Mandatory Convertible Senior Notes due 2024 (the Notes), initially in an aggregate principal amount not to exceed $25,000,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and
WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and this Indenture a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Notes (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words herein, hereof, hereunder and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular.
Additional Interest means all amounts, if any, payable pursuant to Section 4.06(d), Section 4.06(e) and Section 6.03, as applicable. The Trustee shall have no obligation to monitor whether Additional Interest is payable or to calculate the amount of Additional Interest Payable.
Additional Shares shall have the meaning specified in Section 14.04.
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 Parties shall have the meaning specified in Section 14.13(a).
Applicable Conversion Rate shall have the meaning specified in Section 14.01.
Bid Solicitation Agent means the Person appointed, from time to time, by the Company to solicit bids for the Trading Price of the Notes in accordance with Section 14.01(b)(i). The Company initially appoints the Trustee to act as the Bid Solicitation Agent.
Board of Directors means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification, and delivered to the Trustee.
Business Day means, with respect to any Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
Capital Stock means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.
Cash Settlement shall have the meaning specified in Section 14.03(a).
Clause A Distribution shall have the meaning specified in Section 14.05(c).
Clause B Distribution shall have the meaning specified in Section 14.05(c).
Clause C Distribution shall have the meaning specified in Section 14.05(c).
2
close of business means 5:00 p.m. (New York City time).
Combination Settlement shall have the meaning specified in Section 14.03(a).
Commission means the U.S. Securities and Exchange Commission.
Common Equity of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
Common Stock means the common stock of the Company, par value $0.001 per share, at the date of this Indenture, subject to Section 14.08.
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 (a) the Companys 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 (b) any such other Officer designated in clause (a) of this definition or the Companys Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered to the Trustee.
Conversion Agent shall have the meaning specified in Section 4.02.
Conversion Date shall have the meaning specified in Section 14.03(c).
Conversion Obligation shall have the meaning specified in Section 14.01.
Conversion Price means as of any time, $1.00, divided by the Applicable Conversion Rate as of such time (carried out to six decimal places).
Corporate Trust Office means the office of the Trustee at which at any time this Indenture shall be administered, which office at the date hereof is located at 50 South Sixth Street, Suite 1290, Minneapolis MN 55402, Attention: Endologix, Inc., Account Manager, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).
Custodian means the Trustee, as custodian for The Depository Trust Company, with respect to the Global Notes, or any successor entity thereto.
Daily Conversion Value means, for each of the 25 consecutive Trading Days during the Observation Period, one-twenty-fifth (1/25th) of the product of (a) the Applicable Conversion Rate on such Trading Day and (b) the Daily VWAP for such Trading Day.
3
Daily Measurement Value means the Specified Dollar Amount (if any), divided by 25.
Daily Settlement Amount, for each of the 25 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 ELGX <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 Fundamental Change Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for, in each case, when due.
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 14.05(c).
Effective Date shall have the meaning specified in Section 14.04(c), except that, as used in Section 14.05 and Section 14.06, 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
4
of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Exchange Notes means any Notes issued hereunder other than additional Notes issued pursuant to Section 2.10.
Exchange Trigger Date shall have the meaning specified in Section 14.02.
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, as defined in Rule 13d-3 under the Exchange Act, of the Companys voting stock representing more than 50% of the voting power of all outstanding classes of the Companys voting stock entitled to vote generally in elections; 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, merger or similar transaction involving 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 Companys direct or indirect Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (B) in which the holders of all classes of the Companys Common Stock 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
5
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 Global Select Market or The NASDAQ Global Market (or any of their respective successors);
provided, however, that a transaction or transactions described in clause (b) above shall not constitute a Fundamental Change, if at least 90% of the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Notes become convertible into such consideration, excluding cash payments for fractional shares (subject to the provisions of Section 14.03(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.
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.
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.
Global Note shall have the meaning specified in Section 2.05(b).
Holder, as applied to any Note, or other similar terms (but excluding the term beneficial holder), means any Person in whose name at the time a particular Note is registered on the Note Register.
Indenture means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.
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Interest Payment Date means each April 1 and October 1 of each year, beginning on October 1, 2019.
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.
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 14.04.
Mandatory Conversion shall have the meaning specified in Section 14.02.
Mandatory Conversion Calendar Quarter shall have the meaning specified in Section 14.02.
Mandatory Conversion Date shall have the meaning specified in Section 14.02.
Mandatory Conversion Notice shall have the meaning specified in Section 14.02.
Mandatory Conversion Price means as of any time, $1.00, divided by the Mandatory Conversion Rate (carried out to six decimal places).
Mandatory Conversion Rate shall have the meaning specified in Section 14.02.
Market Disruption Event means, for the purposes of determining amounts due upon conversion (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.
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Maturity Date means April 3, 2024.
Measurement Period shall have the meaning specified in Section 14.01(b)(i).
New Voluntary Notes shall have the meaning specified in Section 14.02.
Note or Notes shall have the meaning specified in the first paragraph of the recitals of this Indenture, including any PIK Notes.
Note Register shall have the meaning specified in Section 2.05.
Note Registrar shall have the meaning specified in Section 2.05.
Notice of Conversion shall have the meaning specified in Section 14.03(b).
Observation Period with respect to any Note surrendered for conversion means: (i) subject to clause (ii) of this definition, if the relevant Conversion Date occurs prior to January 1, 2024, the 25 consecutive Trading Day period beginning on, and including, the second Trading Day immediately succeeding such Conversion Date; and (ii) if the relevant Conversion Date occurs on or after January 1, 2024, the 25 consecutive Trading Days beginning on, and including, the 27th Scheduled Trading Day immediately preceding the Maturity Date.
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 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.
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;
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(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; 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 14.13(a).
Paying Agent shall have the meaning specified in Section 4.02.
Person means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
Physical Notes means permanent certificated Notes in registered form issued in minimum denominations of $1.00 principal amount and integral multiples in excess thereof.
Physical Settlement shall have the meaning specified in Section 14.03(a).
PIK Interest means a portion of the interest on the Notes due on an Interest Payment Date, which is paid, at the Companys election, by increasing the amount of outstanding Notes or by issuing additional PIK Notes, as set forth in Section 2.11.
PIK Notes has the meaning set forth for such term in Section 2.11.
PIK Notice has the meaning set forth for such term in Section 2.11.
PIK Payment has the meaning set forth for such term in Section 2.11.
Predecessor Note of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.
Record Date means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to
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receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).
Reference Property shall have the meaning specified in Section 14.08(a).
Regular Record Date, with respect to any Interest Payment Date, means the March 15 or September 15 (whether or not such day is a Business Day) immediately preceding the applicable April 1 or October 1 Interest Payment Date, respectively.
Responsible Officer means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter relating to this Indenture is referred because of such persons knowledge of and familiarity with the particular subject and, in each case, who shall have direct responsibility for the administration of this Indenture.
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 14.03(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 14.03(a)(iii).
Share Exchange Event shall have the meaning specified in Section 14.08(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.
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Specified Dollar Amount means the maximum cash amount per $1.00 principal amount of Notes to be received upon conversion as specified in the Settlement Notice related to any converted Notes.
Spin-Off shall have the meaning specified in Section 14.05(c).
Stock Price shall have the meaning specified in Section 14.04(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).
Tender Agent shall have the meaning specified in Section 15.02(b)(i).
Trading Day means a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on The NASDAQ Global Select Market or, if the Common Stock (or such other security) is not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded and (ii) a Last Reported Sale Price for the Common Stock (or such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, Trading Day means a Business Day; and provided further that, for purposes of determining amounts due upon conversion only, Trading Day means a day on which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs on The NASDAQ Global Select Market or, if the Common Stock is not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, Trading Day means a Business Day.
Trading Price of the Notes on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of Notes 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 (and provides the Bid Solicitation Agent of the names and contact information for such dealers); provided that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the
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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.
Trading Price Condition shall have the meaning specified in Section 14.01(b)(i).
Trigger Event shall have the meaning specified in Section 14.05(c).
Trigger Price means $6.61, subject to appropriate adjustment for any stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares, that occurs after April 3, 2019.
Trust Indenture Act means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term Trust Indenture Act shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.
Trustee means the Person named as the Trustee in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee hereunder.
unit of Reference Property shall have the meaning specified in Section 14.08(a).
Valuation Period shall have the meaning specified in Section 14.05(c).
Voluntary Indenture means that certain Indenture between the Company and the Trustee, dated April 3, 2019, pursuant to which the Company has issued $43,000,000 in aggregate principal amount of 5.0% Voluntary Convertible Senior Notes due 2024 (CUSIP 29266S AC0).
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), Section 4.06(e) and Section 6.03. Unless the context otherwise requires, any express mention of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.
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ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Designation and Amount. The Notes shall be designated as the 5.0% Convertible Senior Notes due 2024. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $25,000,000, subject to Section 2.10 and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder.
Section 2.02. Form of Notes. The Notes and the Trustees 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 PIK Payments, repurchases, cancellations, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture. Payment of principal (including the 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
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minimum denominations of $1.00 principal amount and integral multiples in excess thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of such Note. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.
(b) The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date (the Interest Amount).
The Company shall, at the Companys option, either (i) pay the Interest Amount in cash, (ii) issue shares of Common Stock in satisfaction of such Interest Amount in accordance with the terms hereof, or (iii) pay PIK Interest as set forth in Section 2.11. Interest shall accrue from April 3, 2019, or from the most recent date to which interest had been paid or provided for to, but excluding the next scheduled Interest Payment Date until April 3, 2024.
If the Company elects to pay the Interest Amount in cash, such amount and any principal amounts 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 interest, if paid in cash (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal amount of $2,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $2,000,000 either by check mailed to each Holder or, upon application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holders account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.
If the Company elects to pay the Interest Amount in shares of Common Stock, the number of such shares to be issued shall be the number determined by dividing (x) the Interest Amount due or to be converted (as applicable), by (y) the Last Reported Sale Price as of the date on which the Interest Amount was calculated. Such shares shall be issued and delivered on the applicable Interest Payment Date. In order to pay the Interest Amount in shares of Common Stock, the Company shall deliver a notice (an Interest Payment Notice) to the Trustee no later than the 15th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, which notice shall state the total Interest Amount to be paid on the Interest Payment Date and the number of shares of Common Stock to be issued in satisfaction thereof. The Trustee, on behalf of the Company, shall promptly upon receipt of the Interest Payment Notice, and in no event later than the 10th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, deliver a corresponding notice prepared by the Company (which may be the same as the Interest Payment Notice) to the Holders.
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(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 then-applicable rate borne by the Notes plus one percent, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice, unless the Trustee shall agree to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Amounts as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Company shall promptly notify the Trustee in writing 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).
(ii) The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Section 2.04. Execution, Authentication and Delivery of Notes. The Notes shall initially be delivered in definitive, registered form to the Holders and 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.
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At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes (including PIK Notes issued in physical form) executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall manually authenticate and deliver such Notes, without any further action by the Company hereunder; provided that the Trustee shall be entitled to receive an Officers Certificate and Opinion of Counsel of the Company with respect to the issuance, authentication and delivery of such Notes.
Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the Form of Note attached as Exhibit A hereto, executed manually by an authorized signatory of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.
In case any Officer of the Company who shall have signed any of the Notes shall cease to be such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such Officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the Officers of the Company, although at the date of the execution of this Indenture any such person was not such an Officer.
Section 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 change or 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, upon receipt of a
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Company Order, 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 duly executed, by the Holder thereof or its attorney-in-fact duly authorized in writing.
No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent for any exchange or registration of transfer of Notes, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of new Notes issued upon such exchange or registration of transfer being different from the name of the Holder of the old Notes surrendered for exchange or registration of transfer.
None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion, or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15.
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) Notwithstanding any other provisions of this Indenture, 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 any Global Notes. Initially, each Global Note, if any, shall be issued to the Depositary,
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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 by the Company within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officers Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owners beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the 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 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. Members of, or participants in, the Depositary shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Note, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any
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written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Note.
(d) RESERVED.
(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 the resale is registered under the Securities Act or conducted 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) Notwithstanding anything contained herein to the contrary, neither the Trustee nor the Note Registrar shall be responsible for ascertaining whether any transfer complies with the registration provisions of or exemptions from the Securities Act, applicable state securities laws or other applicable federal or state laws.
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
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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, conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement, payment, conversion or repurchase of negotiable instruments or other securities without their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company. Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes. Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent 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, registration of transfer or exchange or conversion, if surrendered to any Person other than the Trustee (including any of the Companys agents, Subsidiaries or Affiliates), to be surrendered to the Trustee for cancellation. All Notes delivered to the Trustee shall be canceled promptly by it upon receipt of a Company Order, and no Notes shall be authenticated in exchange thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of cancelled Notes in accordance with its customary procedures. The Trustee shall deliver copies of such cancelled Notes to the Company, at the Companys written request in a Company Order.
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Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use CUSIP numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in all notices issued to Holders as a convenience to such Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee in writing of any change in the CUSIP numbers.
Section 2.10. Additional Notes; Repurchases. The Company may, without the consent of the Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes hereunder with the same terms as the Notes initially issued hereunder (other than differences in the issue date, the issue price and interest accrued prior to the issue date of such additional Notes) in an unlimited aggregate principal amount; provided that such additional Notes shall not reduce the amount of Exchange Notes subject to Mandatory Conversion in Section 14.02. If any such additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income tax purposes, such additional Notes shall have a separate CUSIP number. Prior to the issuance of any such additional Notes, the Company shall deliver to the Trustee a Company Order, an Officers Certificate and an Opinion of Counsel, such Officers Certificate and Opinion of Counsel to cover such matters, in addition to those required by Section 17.05, as the Trustee shall reasonably request. In addition, the Company may, to the extent permitted by law, and directly or indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or its Subsidiaries or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives. The Company shall cause any Notes so repurchased (other than Notes repurchased pursuant to cash-settled swaps or other derivatives) to be surrendered to the Trustee for cancellation in accordance with Section 2.08, and upon receipt of a Company Order, 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 surrender to the Trustee.
Section 2.11. Issuance of PIK Notes; Payment of PIK Interest. If the Company determines to pay PIK Interest in respect of the Notes, subject to any restrictions as set forth in the Form of Note in Exhibit A to this Indenture, the Company may elect to either increase the outstanding principal amount of the Notes or issue additional Notes (the PIK Notes) under this Indenture having the same terms as the Notes (in each case, a PIK Payment). The Company shall make a PIK Payment (x) with respect to Notes represented by one or more Global Notes, by increasing the principal amount of the outstanding Global Notes by an amount equal to the amount of PIK Interest due and payable (rounded up to the nearest whole U.S. dollar) and (y) with respect to Notes represented by Physical Notes, by issuing PIK Notes in physical form in an amount equal to the amount of PIK Interest due and payable (rounded up to the nearest whole U.S. dollar). In order to pay PIK Interest pursuant to this Section 2.11, the Company shall deliver a notice (a PIK Notice) to the Trustee no later than the 15th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, which notice shall state the total amount of interest to be paid on the Interest Payment Date and the amount of such interest to be paid as PIK Interest in accordance with the terms of the Notes. The Trustee, on behalf of the Company, shall promptly upon receipt of the PIK Notice, and in no event later than the 10th calendar day immediately prior to the Regular Record Date preceding such Interest Payment
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Date, deliver a corresponding notice prepared by the Company (which may be the same as the PIK Notice) to the Holders.
(b) Any PIK Notes issued in physical form will be issued with the designation PIK Notes on the face of such PIK Notes, and shall be in minimum denominations of $1.00 and integral multiples thereof. Any PIK Notes ranking pari passu with the Notes may be created and issued from time to time by the Company without notice to or consent of the Holders and shall be consolidated with and form a single class with the Notes and shall have the same terms as to status or otherwise as the Notes. All PIK Notes issued pursuant to a PIK Payment shall mature on the same Maturity Date as the originally issued Notes and shall be governed by, and subject to the terms, provisions and conditions of, this Indenture and shall have the same rights and benefits as the Notes. Trustee shall authenticate and deliver such PIK Notes in physical form for original issuance to the Holders thereof on the relevant Record Date, as shown by the records of the Note Register of such Holders.
(c) Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Payment, the Global Notes will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in physical form will be distributed to Holders, dated as of the applicable Interest Payment Date and will bear interest on the principal amount of such PIK Note from and after the Interest Payment Date in respect of which such PIK Payment was made.
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.01. Satisfaction and Discharge. This Indenture and the Notes shall upon request of the Company contained in an Officers Certificate cease to be of further effect, and the Trustee, at the expense of the Company, shall execute such instruments reasonably requested by the Company, acknowledging satisfaction and discharge of this Indenture and the Notes, when (i) all Notes theretofore authenticated and delivered (other than Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06) have been delivered to the Trustee for cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Fundamental Change Repurchase Date, upon conversion or otherwise, cash or cash, shares of Common Stock or a combination thereof, as applicable, solely to satisfy the Companys Conversion Obligation, sufficient to pay all of the outstanding Notes and all other sums due and payable under this Indenture by the Company; and 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 and the Notes have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive.
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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 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. PIK Interest shall be considered paid on the Interest Payment Date after any PIK Notice has been delivered to Holders. In respect of such Interest Payment Date and PIK Payment, the Trustee shall either receive (i) a Company Order, pursuant to Section 2.11, to increase the balance of any Global Note to reflect such PIK Interest or (ii) a PIK Note duly executed by the Company together with a Company Order, pursuant to Section 2.11, requesting the authentication of such PIK Note by the Trustee.
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, 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. The Corporate Trust Office shall not be a place for service of legal process on the Company.
Section 4.03. Appointments to Fill Vacancies in Trustees Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, 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 Fundamental Change Repurchase Price, if applicable) of, and
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accrued and unpaid interest on, the Notes in trust for the benefit of the Holders of the Notes;
(ii) that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and
(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) or accrued and unpaid interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) and accrued and unpaid interest so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable. 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(j) or Section 6.01(k), 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 deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company on request of the Company contained in an Officers Certificate, or
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(if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.
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 and the corporate existence of any Significant Subsidiary.
Section 4.06. Rule 144A Information Requirement and Annual Reports. (a) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and, upon written request, any Holder, beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A. 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 file with 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 Commissions EDGAR system shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system; provided, that the Trustee shall have no obligation to monitor whether such filings have been made or the content thereof.
(c) Delivery of the reports and documents described in subsection (b) above to the Trustee is for informational purposes only, and the Trustees receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Companys compliance with any of its covenants hereunder (as to which the 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 the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than reports on Form 8-K), or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates or Holders that were the Companys Affiliates at any time during the three months immediately preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on the Notes. Such Additional Interest shall accrue on the Notes at the rate of 0.50% per annum of the principal amount of the Notes outstanding for each day during such period for which the Companys failure to file has occurred and is
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continuing or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates (or Holders that were the Companys 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) If, and for so long as, the restrictive legend on the Notes specified in Section 2.05(c) has not been removed, the Notes are assigned a restricted CUSIP or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates or Holders that were the Companys Affiliates at any time during the three months immediately preceding (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the 365th day after the last date of original issuance of the Notes, the Company shall pay Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on the Notes has been removed in accordance with Section 2.05(c), the Notes are assigned an unrestricted CUSIP and the Notes are freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates (or Holders that were the Companys Affiliates at any time during the three months immediately preceding) without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes.
(f) Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes.
(g) The Additional Interest that is payable in accordance with Section 4.06(d) or Section 4.06(e) shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Companys election pursuant to Section 6.03.
(h) If Additional Interest is payable by the Company pursuant to Section 4.06(d) or Section 4.06(e), the Company shall deliver to the Trustee an Officers Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable.
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
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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 and, if so, specifying each such failure and the nature thereof.
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.
Section 4.09. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.
ARTICLE 5
LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 5.01. Lists of Holders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than 15 days after each March 15 and September 15 in each year beginning with September 15, 2019, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.
Section 5.02. Preservation and Disclosure of Lists. The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. Each of the following events shall be an Event of Default with respect to the Notes:
(a) default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 days;
(b) default in the payment of principal of any Note when due and payable on the Maturity Date, upon any required repurchase, upon declaration of acceleration or when otherwise due;
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(c) failure by the Company to comply with its obligation to convert the Notes in accordance with this Indenture upon Mandatory Conversion or upon exercise of a Holders voluntary conversion right;
(d) failure by the Company to pay or deliver, as the case may be, the Settlement Amount owing upon conversion of any Note (including any Additional Shares or cash in lieu thereof) within 5 calendar days;
(e) 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 14.04(b) or notice of a specified corporate event in accordance with Section 14.01(b)(ii) or 14.01(b)(iii), in each case, when due, if such failure continues for three Business Days;
(f) failure by the Company to comply with its obligations under Article 11;
(g) 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 covenants or agreements contained in the Notes or this Indenture;
(h) default by the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken together, would constitute a 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 $15,000,000 (or its foreign currency equivalent), individually or 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, and in the case of clause (i) and (ii), such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days of becoming due and payable;
(i) a final judgment or judgments for the payment of $15,000,000 (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 30 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;
(j) the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken together, would constitute a 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
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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;
(k) an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary) seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 90 consecutive days; or
(l) the occurrence of an Event of Default as such term is defined and as set forth in the Voluntary Indenture.
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(j) or Section 6.01(k) 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, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by notice in writing to the Company (and to the Trustee if given by Holders), may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything contained in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default specified in Section 6.01(j) or Section 6.01(k) with respect to the Company or any of its Significant Subsidiaries occurs, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall become and shall automatically be immediately due and payable without any declaration or other act of the Holders or any act on the part of the Trustee.
The immediately preceding paragraph, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest to the extent that payment of such interest is enforceable under applicable law, and on such principal at the rate borne by the Notes at such time, plus one percent) 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
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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 (including PIK Notes), by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon. Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes.
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 Companys failure to comply with its obligations as set forth in Section 4.06(b) 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) or Section 4.06(e). If the Company so elects, such Additional Interest shall be payable in the same manner and on the same dates as the stated interest payable on the Notes. On the 61st day after such Event of Default (if the Event of Default relating to the Companys failure to file 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 Companys failure to comply with its obligations as set forth in Section 4.06(b). In the event the Company does not elect to pay Additional Interest following an Event of Default in accordance with this Section 6.03 or the Company elected to make such payment but does not pay the Additional Interest when due, the Notes shall be immediately subject to acceleration as provided in Section 6.02.
In order to elect to pay Additional Interest as the sole remedy during the first 60 days after the occurrence of any Event of Default described in the immediately preceding paragraph, the Company must notify all Holders of the Notes, the Trustee and the Paying Agent in writing of such election prior to the beginning of such 60-day period. Upon the failure to timely give such 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, plus one percent, and, in addition thereto, such further amount as shall be sufficient to cover any amounts
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due to the Trustee under Section 7.06. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.
In the event there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.04, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued and unpaid interest, if any, in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees, and including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property that the Holders of the Notes may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.
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.
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All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Holders of the Notes parties to any such proceedings.
In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of 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, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:
First, to the payment of all amounts due the Trustee under this Indenture;
Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Trustee) upon such overdue payments at the rate borne by the Notes at such time, plus one percent, 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 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 plus one percent, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Fundamental Change Repurchase Price and the cash due upon conversion) and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the
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aggregate of such principal (including, if applicable, the Fundamental Change Repurchase Price and any cash due upon conversion) and accrued and unpaid interest; and
Fourth, to the payment of the remainder, if any, to the Company.
Section 6.06. Proceedings by Holders. Except to enforce the right to receive payment of principal (including, if applicable, the Fundamental Change Repurchase Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless:
(a) such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;
(b) Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder;
(c) such Holder(s) shall have offered to the Trustee such security or indemnity satisfactory to it in its reasonable discretion against any loss, liability or expense to be incurred therein or thereby;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of such security or indemnity, shall have failed to institute any such action, suit or proceeding; and
(e) no direction that 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, which is absolute and unconditional, to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or
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delivery, as the case may be, and such rights shall not be impaired without the consent of such Holders.
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 (including any PIK Notes) 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 that might be incurred by it in compliance with such request or direction; provided, however, that the Trustee may take any other action deemed necessary 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 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
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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 it obtains knowledge of the occurrence and continuance of a Default of which a Responsible Officer has actual knowledge, deliver to all Holders notice of all Defaults known to a Responsible Officer, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Fundamental Change Repurchase Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as 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 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
CONCERNING THE TRUSTEE
Section 7.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In the event an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders
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have offered to the Trustee indemnity or security satisfactory to it in its reasonable 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 and after the curing or waiving of all Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
(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;
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(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless a Responsible Officer of the Trustee had actual knowledge of such event;
(g) in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing trust account, and in no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity date or the failure of the party directing such investments prior to its maturity date or the failure of the party directing such investment to provide timely written investment direction, and the Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company; and
(h) in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent hereunder, the rights and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent and to each agent, custodian, and other Person employed to act hereunder.
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 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 to the Trustee security or indemnity satisfactory to it in its reasonable discretion against any loss, liability or expense.
Section 7.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 7.01:
(a) the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(d) 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
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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;
(e) 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;
(f) the permissive rights of the Trustee enumerated herein shall not be construed as duties;
(g) 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;
(h) the Trustee shall not be responsible for monitoring the performance of other persons or for the failure of others to perform their duties;
(i) 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;
(j) 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; and
(k) 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.
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. 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 contained herein and in the Notes (except in the Trustees 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
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Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.
Section 7.04. Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent, Bid Solicitation Agent 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 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, in respect of Interest Amounts, or in connection with any discharge of this Indenture pursuant to Article 3 hereof, but shall satisfy its obligation as Conversion Agent or Paying 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 from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable 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 as determined by a final non-appealable order of a court of competent jurisdiction 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 or other property, funds held in trust herewith for the benefit of the Holders of particular Notes. The Trustees right to receive
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payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company. The obligation of the Company under this Section 7.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.
Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(j) or Section 6.01(k) 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 and Opinion of Counsel as Evidence. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers Certificate and Opinion of Counsel delivered to the Trustee, and such Officers Certificate and Opinion of Counsel, in the absence of gross negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 7.08. Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (as if the Trust Indenture Act were applicable hereto) to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this 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
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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 (including any PIK Notes), 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.
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Any trustee ceasing to act shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.
Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at the written direction and at the expense of the Company shall deliver or cause to be delivered notice of the succession of such trustee hereunder to the Holders. If the Company fails to deliver such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be delivered at the expense of the Company.
Section 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. Trustees Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable to the Company for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has
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indicated to the Trustee should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.
ARTICLE 8
CONCERNING THE HOLDERS
Section 8.01. Action by Holders. Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article 9, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders. Whenever the Company or the Trustee solicits the taking of any action by the Holders 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 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
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consent, solicitation, proxy, authorization or any other action of the Depositary or any other Person, such holders right to exchange such beneficial interest for a Note in certificated form in accordance with the provisions of this Indenture.
Section 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 actually knows are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgees 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 such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.
ARTICLE 9
HOLDERS MEETINGS
Section 9.01. Purpose of Meetings. A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article 9 for any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any Default or Event of Default hereunder (in each case, as permitted under this Indenture) and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;
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(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. 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
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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.
Section 9.06. Voting. The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was 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
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent of Holders. The Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Companys
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expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:
(a) to cure any ambiguity, omission, defect or inconsistency as set forth in an Officers Certificate (provided that such cure does not affect the Holders adversely);
(b) to provide for the assumption by a Successor Company of the obligations of the Company under this Indenture and the Notes 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 14.03, and to make such related changes to the terms of the Notes to the extent expressly required by Section 14.08;
(h) to eliminate, in the aggregate, any one or two Settlement Methods or, in the case of Combination Settlement, irrevocably elect a Specified Dollar Amount; or
(i) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act.
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 Trustees 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 (including any PIK Notes, and 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 Companys 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
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rights of the Holders; provided, however, that, without the consent of each Holder of an outstanding Note affected, no such supplemental indenture shall:
(a) change the stated maturity of the principal of or any interest on the Notes;
(b) reduce the principal amount of or interest on the Notes;
(c) reduce the amount of principal payable upon acceleration of the maturity of the Notes;
(d) change the currency of payment of principal of or Interest on the Notes or change any Notes place of payment;
(e) impair the right of any Holder to receive payment of principal of and Interest on such Holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on, or with respect to, the Notes;
(f) modify the provisions with respect to the purchase rights of the Holders as provided in Article 15 in a manner adverse to Holders of Notes;
(g) change the ranking of the Notes;
(h) adversely affect the right of Holders to convert their Notes hereunder, or reduce the Applicable Conversion Rate (it being understood that the Trustee shall have no responsibility for making a determination as to whether such amendment adversely affects the rights of the Holders); or
(i) modify provisions with respect to modification, amendment or waiver (including waiver of Events of Default), except to increase the percentage required for modification, amendment or waiver or to provide for consent of each affected Holder of Notes.
Upon the written request of the Company, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustees own rights, duties, liabilities 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 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,
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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 Companys expense, bear a notation in form approved by the Company 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 Companys 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 properties and assets to another Person, unless:
(a) the resulting, surviving or transferee Person (the Successor Company), if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under the Notes and this Indenture;
(b) the Company delivers an Officers Certificate and Opinion of Counsel to the Trustee stating that such consolidation, merger or sale, conveyance, transfer or lease and any supplemental indenture comply with this Indenture and that all conditions precedent set forth in this Indenture have been complied with; and
(c) 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
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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 Companys 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.
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ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 12.01. Indenture and Notes Solely Corporate Obligations. No recourse for the payment of the principal of or accrued and unpaid interest on any Note, nor for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, nor because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, Officer or director or Subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes.
ARTICLE 13
[INTENTIONALLY OMITTED]
ARTICLE 14
CONVERSION OF NOTES
Section 14.01. Voluntary Conversion. (a) Subject to and upon compliance with the provisions of this Article 14, each Holder of a Note shall have the right, at such Holders option, to convert all or any portion 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 January 1, 2024 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 January 1, 2024 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 0.12103 (subject to adjustment as provided in this Article 14, the Applicable Conversion Rate) per $1.00 principal amount of Notes (subject to, and in accordance with, the settlement provisions of Section 14.03, the Conversion Obligation), equivalent to the Conversion Price.
(b) (i) Prior to the close of business on the Business Day immediately preceding January 1, 2024, 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 twenty 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 Applicable Conversion Rate on each such Trading Day (the Trading Price Condition). 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 (if other than the Company) of the three
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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 provided the Bid Solicitation Agent of the names and contact information for such dealers) 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 Applicable 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 Applicable Conversion Rate.
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 Applicable Conversion Rate on each Trading Day of such failure.
If on any date of determination of the Trading Price (i) the Bid Solicitation Agent cannot reasonably obtain at least one bid for $2,000,000 principal amount of Notes from an independent nationally recognized securities dealer, (ii) if the Company has failed to request the Bid Solicitation Agent to obtain bids when required or (iii) if the Company requested the Bid Solicitation Agent to obtain bids and the Bid Solicitation Agent has failed to obtain such bids, then, in each case, the Notes shall be convertible under the Trading Price Condition for the next 5 consecutive Business Days following such date of determination. The Company shall determine the Trading Price of the Notes and whether the Trading Price Condition has been met, and, if so, the Company shall so notify the Holders, the Trustee, the Conversion Agent and the Bid Solicitation Agent.
If, at any time after the Trading Price Condition has been met, the Trading Price per $1,000 principal amount of the Notes is greater than or equal to 98% of the product of the Closing Sale Price of the Common Stock and the applicable Applicable Conversion Rate for such date, the Company shall so notify the Holders, the Trustee, the Conversion Agent and the Bid Solicitation Agent.
If the Trading Price condition set forth above has been met, the Company shall so notify the Holders in writing, the Trustee and the Conversion Agent (if other than the Trustee). 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 Applicable Conversion
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Rate for such date, the Company shall so notify the Holders of the Notes in writing, the Trustee and the Conversion Agent (if other than the Trustee).
(ii) If, prior to the close of business on the Business Day immediately preceding January 1, 2024, 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 cash, debt securities (or other evidence of indebtedness) or other assets or securities (including, for the avoidance of doubt, any rights, options or warrants that are not described in clause (i) above, but excluding dividends or distributions described in Section 14.04(c), which distribution has a per share value exceeding 10% of the Closing Sale Price of Common Stock as of the Trading Day immediately preceding the declaration date for such distribution,
then, in either case, the Company shall notify in writing all Holders of the Notes, the Trustee and the Conversion Agent (if other than the Trustee) either (x) at least 35 Scheduled Trading Days prior to the Ex-Dividend Date for such distribution or (y) at least 10 Scheduled Trading Days prior to the Ex-Dividend Date for such distribution; provided that, if the Company provides such notice in accordance with this clause (y) but not in accordance with the immediately preceding clause (x), notwithstanding anything to the contrary in Section 14.02 or any other provision of this Indenture, the Company shall be required to settle all conversions of Notes with a Conversion Date occurring during the period from, and including, the date of such notice to, and including, the Ex-Dividend Date for such distribution using Physical Settlement and the Company shall so notify the Holders in such notice. Once the Company has given such notice, Holders may surrender their Notes for conversion at any time until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date and the Companys announcement that such issuance or distribution will not take place. A Holder may not convert any of its Notes under this subsection (b)(ii) if the Company provides that Holders of the Notes shall participate, at the same time and upon the same terms as holders of Common Stock and as a result of holding the Notes, in the relevant distribution described above without having to convert their Notes as if they held a number of shares of Common Stock equal to the Applicable Conversion Rate on the record date for the distribution multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.
(iii) If (A) a transaction or event that constitutes a Fundamental Change or a Make-Whole Fundamental Change occurs prior to the close of business on the Business
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Day immediately preceding January 1, 2024, regardless of whether a Holder has the right to require the Company to repurchase the Notes pursuant to Section 15.02, or (B) the Company is a party to a consolidation, merger, binding share exchange, or sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of its assets that occurs prior to the close of business on the Business Day immediately preceding January 1, 2024, in each case, pursuant to which the Common Stock would be converted into cash, securities or other assets, then all or any portion of a Holders Notes may be surrendered for conversion at any time from or after the date that is 35 Scheduled Trading Days prior to the anticipated effective date of the transaction (or, if later, the earlier of (x) the Business Day after the Company gives notice of such transaction and (y) the actual effective date of such transaction) until 35 Trading Days after the actual effective date of such transaction or, if such transaction also constitutes a Fundamental Change, until the close of business on the related Fundamental Change Repurchase Date. The Company shall give notice to Holders, the Trustee and the Conversion Agent (if other than the Trustee) (x) as promptly as practicable following the date the Company publicly announces such transaction but in no event less than 35 Scheduled Trading Days prior to the anticipated effective date of such transaction or (y) if the Company does not have knowledge of such transaction at least 35 Scheduled Trading Days prior to the anticipated effective date of such transaction, within one Business Day of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction, but in no event later than the actual effective date of such transaction; provided that, notwithstanding the foregoing, in no event shall the Company be required to provide such notice to the Holders before the earlier of such time as the Company or its affiliates (x) have publicly disclosed or acknowledged the circumstances giving rise to such transaction or event and (y) are required to publicly disclose under applicable law or the rules of any securities exchange on which the Common Stock is then listed or admitted for trading the circumstances giving rise to such transaction or event.
(iv) Notwithstanding anything to the contrary in this Section 14.01, prior to the close of business on the Business Day immediately preceding January 1, 2024, a Holder may surrender all or any portion of its Notes for conversion at the Applicable Conversion Rate, at any time during any calendar quarter commencing after the calendar quarter ending on June 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 110% of the Conversion Price on each applicable Trading Day. Provided that no Mandatory Conversions pursuant to Section 14.02 are occurring during a particular calendar quarter, the Company shall determine at the end of the immediately preceding calendar quarter whether the Notes may be surrendered for conversion in accordance with this clause Section 14.01(b)(iv) and shall notify the Holders, the Conversion Agent and the Trustee if the Notes become convertible in accordance with this clause (iv). Such notice shall be delivered no later than no later than the open of business on the sixth Business Day of the month immediately after the end of the immediately preceding calendar quarter.
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(v) Notwithstanding anything to the contrary in this Indenture: (a) the maximum amount a converting holder is entitled to convert within any one calendar quarter, pursuant to Section 14.01(b)(i) and Section 14.01(b)(iv), shall not exceed 30% of the original aggregate principal amount of the Note(s) held by such converting holder (Voluntary Conversion Limitation) and upon delivery of any Conversion Notice (including through the applicable procedures of the Depositary), such converting holder shall be deemed to represent and warrant that such limitation is not exceeded; and (b) conversions pursuant to this Section 14.01(b)(i) and Section 14.01(b)(iv) may not occur within the same calendar quarter as a Mandatory Conversion. The Trustee and the Conversion Agent shall have no obligation to monitor the Voluntary Conversion Limitation and shall have no liability for any conversions made by holders exceeding the Voluntary Conversion Limitation.
Section 14.02. Mandatory Conversion. For fifteen consecutive months, the first month beginning on April 3, 2019 and the last month ending on June 30, 2020 (each, a Mandatory Conversion Month), provided that, if the average Daily VWAP for the last 5 Trading Days ending on, and including, the last Trading Day of the applicable Mandatory Conversion Month is greater than or equal to the Trigger Price, the Company shall convert $1,666,666 of aggregate outstanding amount of the Notes, together with the payment of the accrued and unpaid interest (Mandatory Conversion), on a pro rata basis, to the Holders in whose name any Note is registered on the Note Register at the close of business on the date of the Mandatory Conversion Notice, into shares of Common Stock (plus cash in lieu of fractional shares of Common Stock in accordance with Section 14.03) at a conversion rate of 0.15129 (the Mandatory Conversion Rate, together with the Applicable Conversion Rate, the Indenture Conversion Rates) per $1.00 principal amount of Exchange Notes (including PIK Notes). The Company shall deliver to the Holders of the Exchange Notes, the Trustee and the Conversion Agent (if other than the Trustee) a notice of the conversion of the Exchange Notes no later than the open of business on the third Business Day of the month immediately after the end of the immediately preceding Mandatory Conversion Month (a Mandatory Conversion Notice), which notice shall specify that the Mandatory Conversion shall occur on a pro rata basis on the sixth Business Day following the date of such notice (the Mandatory Conversion Date); provided that, all Mandatory Conversions shall be suspended during the period beginning on the date a Change of Control Offer is made and continuing to, and including, the applicable Change of Control Settlement Date, and shall resume after the Change of Control Settlement Date. The Mandatory Conversion Notice shall state that the Mandatory Conversion is occurring, the Mandatory Conversion Rate, and the Mandatory Conversion Price in effect on the Mandatory Conversion Date, and any election by the Company to pay the interest in cash, shares of common stock or as a PIK Payment.
In case of a Physical Note subject to Mandatory Conversion, the Holder shall surrender its Note on the Conversion Date for payment, and 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. The Company shall have no obligation to pay shares of Common Stock or accrued and unpaid interest until the Holder has surrendered its Notes for payment.
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On the Mandatory Conversion Date, the Company shall deliver an Officers Certificate to the Trustee and the Conversion Agent (if other than the Trustee), stating that all of the conditions listed below (the Equity Conditions) are satisfied on each day during the period (x) commencing on, and including, the date of the Mandatory Conversion Notice and (y) ending on, and including, the Mandatory Conversion Date. The Equity Conditions are as follows:
(i) either (1) all shares of Common Stock issuable upon conversion of the Exchange Notes and held by a non-Affiliate of the Company shall be eligible for sale without the need for registration under any applicable federal or state securities laws or (2) a shelf registration statement registering the resale of the shares of Common Stock issuable upon conversion of the Exchange Notes has been filed by the Company and been declared effective by the SEC or is automatically effective and is available for use, and the Company expects such shelf registration statement to remain effective and available for use from the Mandatory Conversion Date until thirty days following the Mandatory Conversion Date;
(ii) the Common Stock to be delivered on such conversion is listed or traded on The New York Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market, or any of their respective successors (each, an Eligible Market) and shall not then be suspended from trading on such Eligible Market;
(iii) at or prior to the settlement date of the Mandatory Conversion, for any Exchange Notes validly surrendered for conversion prior to the Mandatory Conversion Date in accordance with the terms of this Indenture, the Company shall have delivered and paid the number of shares of Common Stock and the amount of cash due upon conversion of the Exchange Notes to the Holders of such Exchange Notes in accordance with Section 14.02;
(iv) shares of Common Stock to be issued upon conversion may be issued in full without violating the rules or regulations of The New York Stock Exchange or any other applicable Eligible Market on which the Common Stock delivered upon conversion is then listed or trading; and
(v) no Event of Default shall have occurred and be continuing.
For the avoidance of doubt, subject to the satisfaction of the conditions set forth in this Section 14.02, $1,666,666 aggregate principal amount of Exchange Notes (including PIK Notes) shall convert each month for fifteen consecutive months on a pro rata basis. Simultaneously with the execution of this Indenture, the Company has issued $43,000,000 in aggregate principal amount of 5.0% Voluntary Convertible Senior Notes due 2024 (CUSIP 29266S AC0) (the Voluntary Notes) pursuant to the Indenture between the Company and the Trustee, dated April 3, 2019 (the Voluntary Indenture). Upon the completion of (i) the last Mandatory Conversion on or about July 13, 2020, or (ii) on July 13, 2020, if the Company does not elect to make the last Mandatory Conversion on or before July 20, 2020 (such date, as applicable, the Exchange Trigger Date), the Company shall permit any Notes that remain outstanding to be exchanged into Voluntary Notes (the New Voluntary Notes). The Company shall use commercially reasonable efforts to assure that the exchange will be accomplished in a manner, such that the New Voluntary Notes will be DTC eligible and otherwise fungible (including with respect to transferability and the payment of interest) with the then outstanding Voluntary Notes
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so as to bear the same CUSIP number (CUSIP 29266S AC0) as the Voluntary Notes issued on the date hereof. Without limiting the foregoing, the Company will use commercially reasonable efforts to timely comply with all applicable laws, including without limitation, applicable securities laws, in order to ensure that any such exchange may take place on or after the Exchange Trigger Date.
Notwithstanding anything to the contrary in this Indenture, the total principal amount of the Exchange Notes (including PIK Notes) subject to Mandatory Conversion shall not exceed $25,000,000.
Section 14.03. Conversion Procedure; Settlement Upon Conversion.
(a) Subject to this Section 14.03, Section 14.04(b) and Section 14.08(a), upon conversion of any Note pursuant to Section 14.01, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1.00 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 14.03 (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 14.03 (Combination Settlement), at its election, as set forth in this Section 14.03.
(i) All conversions for which the relevant Conversion Date occurs on or after January 1, 2024 shall be settled using the same Settlement Method.
(ii) Except for any conversions for which the relevant Conversion Date occurs on or after January 1, 2024, 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 to converting Holders, the Trustee and the Conversion Agent (if other than the Trustee) no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions for which the relevant Conversion Date occurs on or after January 1, 2024, no later than January 1, 2024). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1.00 principal amount of Notes shall be equal to $1.00. 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 $1.00 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its
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Conversion Obligation but does not indicate a Specified Dollar Amount per $1.00 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1.00 principal amount of Notes shall be deemed to be $1.00.
(iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the Settlement Amount) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1.00 principal amount of Notes being converted a number of shares of Common Stock equal to the Applicable Conversion Rate in effect on the Conversion Date plus cash in lieu;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1.00 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 25 consecutive Trading Days during the related Observation Period; and
(C) if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, in respect of each $1.00 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 25 consecutive Trading Days during the related Observation Period plus cash in lieu.
(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 14.03(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 14.03(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a Notice of Conversion) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names
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(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 14.03(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. Notwithstanding anything to the contrary, no holder may deliver a Notice of Conversion (i) during the period of time commencing on the first day of a Mandatory Conversion Calendar Quarter and the open of business on the third Business Day of such Mandatory Conversion Calendar Quarter or (ii) during a Mandatory Conversion Calendar Quarter in which the Company has delivered a Mandatory Conversion Notice.
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 14.04(b) and Section 14.08(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 to the stock transfer agent or to such Holder, or such Holders 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 Companys 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.
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(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 Holders name, in which case the Holder shall pay that tax. The stock transfer agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holders 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 14.05, 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, except as set forth in Section 14.02, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any, except as set forth below. The Companys settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such conversion. Notwithstanding the foregoing, if Notes are converted after the close of business on a Regular Record Date, Holders of such Notes as of the close of business on such Regular Record Date will receive the full amount of interest payable on such Notes (including a PIK Payment, if applicable) 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, however, must be accompanied by funds equal to the amount of interest payable on the Notes so converted (regardless of whether a PIK Payment will be made or shares of common stock will be issued, and in the event of a PIK Payment or distribution of shares of common stock, the interest payable will be the cash equivalent of any PIK Payment); provided that no such payment shall be required (1) for conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; or (3) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect to such Note. Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date shall receive the full interest payment due on the Maturity 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
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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 14.04. Increased Applicable Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes. (a) If the Effective Date of a Make-Whole Fundamental Change occurs prior to the Maturity Date, and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change, the Company shall, under the circumstances described below, increase the Applicable Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the Additional Shares), as described below. A conversion of Notes shall be deemed for these purposes to be in connection with such Make-Whole Fundamental Change if the relevant Notice of Conversion is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Business Day immediately prior to the related Fundamental Change Repurchase Date (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for the proviso in clause (b) of the definition thereof, the 35th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change) (such period, the Make-Whole Fundamental Change Period).
(b) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change pursuant to Section 14.01(b)(iii), the Company shall, at its option, satisfy the related Conversion Obligation by Physical Settlement, Cash Settlement or Combination Settlement in accordance with Section 14.03; 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 $1.00 principal amount of converted Notes equal to the Applicable Conversion Rate (including any adjustment for Additional Shares), multiplied by such Stock Price. In such event, the Conversion Obligation shall be paid to Holders in cash on the third Business Day following the Conversion Date. The Company shall notify the Holders of Notes, the Trustee and the Conversion Agent 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.
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(c) The number of Additional Shares, if any, by which the Applicable 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 (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 (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 Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change. The Board of Directors shall make appropriate adjustments to the Stock Price, in its good faith determination, to account for any adjustment to the Applicable Conversion Rate that becomes effective, or any event requiring an adjustment to the Applicable Conversion Rate where the Ex-Dividend Date, Effective Date (as such term is used in Section 14.05) or expiration date of the event occurs during such five consecutive Trading Day period.
(d) The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Applicable Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Applicable Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Applicable 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 Applicable Conversion Rate as set forth in Section 14.05.
(e) The following table sets forth the number of Additional Shares of Common Stock by which the Applicable Conversion Rate shall be increased per $1.00 principal amount of Notes pursuant to this Section 14.04 for each Stock Price and Effective Date set forth below:
Stock Price | ||||||||||||||||||||||||||||||||||||||||
Effective Date |
$6.62 | $7.50 | $8.26 | $10.00 | $12.00 | $15.00 | $20.00 | $25.00 | $30.00 | $40.00 | ||||||||||||||||||||||||||||||
April 3, 2019 |
$ | 0.0302 | $ | 0.0302 | $ | 0.0257 | $ | 0.0180 | $ | 0.0127 | $ | 0.0081 | $ | 0.0043 | $ | 0.0024 | $ | 0.0014 | 0.0004 | |||||||||||||||||||||
April 3, 2020 |
$ | 0.0302 | $ | 0.0293 | $ | 0.0242 | $ | 0.0165 | $ | 0.0114 | $ | 0.0071 | $ | 0.0037 | $ | 0.0021 | $ | 0.0012 | 0.0003 | |||||||||||||||||||||
April 3, 2021 |
$ | 0.0302 | $ | 0.0274 | $ | 0.0222 | $ | 0.0145 | $ | 0.0096 | $ | 0.0058 | $ | 0.0030 | $ | 0.0017 | $ | 0.0010 | 0.0002 | |||||||||||||||||||||
April 3, 2022 |
$ | 0.0302 | $ | 0.0247 | $ | 0.0192 | $ | 0.0116 | $ | 0.0072 | $ | 0.0042 | $ | 0.0021 | $ | 0.0012 | $ | 0.0007 | 0.0002 | |||||||||||||||||||||
April 3, 2023 |
$ | 0.0302 | $ | 0.0205 | $ | 0.0146 | $ | 0.0072 | $ | 0.0039 | $ | 0.0021 | $ | 0.0012 | $ | 0.0007 | $ | 0.0004 | 0.0001 | |||||||||||||||||||||
April 3, 2024 |
$ | 0.0302 | $ | 0.0123 | $ | 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;
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(ii) if the Stock Price is greater than $40.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Applicable Conversion Rate; and
(iii) if the Stock Price is less than $6.61 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Applicable Conversion Rate.
Notwithstanding the foregoing, in no event shall the Applicable Conversion Rate per $1.00 principal amount of Notes exceed 0.1512 shares of Common Stock, subject to adjustment in the same manner as the Applicable Conversion Rate pursuant to Section 14.05.
(f) Nothing in this Section 14.04 shall prevent an adjustment to the Applicable Conversion Rate pursuant to Section 14.05 in respect of a Make-Whole Fundamental Change.
Section 14.05. Adjustment of Indenture Conversion Rates. The Indenture Conversion Rates 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 Indenture Conversion Rates 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 14.05, without having to convert their Notes, as if they held a number of shares of Common Stock equal to the Indenture Conversion Rates, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.
(a) If the Company issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Company effects a share split or share combination, the Indenture Conversion Rates shall be adjusted based on the following formula:
where,
CR0 |
= |
the Indenture Conversion Rates 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 |
= |
the Indenture Conversion Rates in effect immediately after the open of business on such Ex-Dividend Date or Effective Date, as the case may be; | ||
OS0 |
= |
the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date, as the case may be; and |
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OS |
= | 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 14.05(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 14.05(a) is declared but not so paid or made, the Indenture Conversion Rates shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Indenture Conversion Rates 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 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 Indenture Conversion Rates shall be increased based on the following formula:
where,
CR0 |
= | the Indenture Conversion Rates in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance; | ||
CR |
= | the Indenture Conversion Rates in effect immediately after the open of business on such Ex-Dividend Date; | ||
OS0 |
= | the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date; | ||
X |
= | the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and | ||
Y |
= | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. |
Any increase made under this Section 14.05(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 Indenture
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Conversion Rates shall be decreased to the Indenture Conversion Rates 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 Indenture Conversion Rates shall be decreased to the Indenture Conversion Rates that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.
For purposes of this Section 14.05(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 in good faith 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 14.05(a) or Section 14.05(b), (ii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 14.05(d) shall apply, (iii) except as otherwise provided in Section 14.12, 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 14.05(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 Indenture Conversion Rates shall be increased based on the following formula:
where,
CR0 |
= |
the Indenture Conversion Rates in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution; | ||
CR |
= |
the Indenture Conversion Rates in effect immediately after the open of business on such Ex-Dividend Date; | ||
SP0 |
= |
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and |
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FMV |
= |
the fair market value (as determined in good faith 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 14.05(c) above shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. No adjustment pursuant to the above formula shall result in a decrease of the Conversion Rate; provided that if such distribution is not so paid or made, the Indenture Conversion Rates shall be decreased to the Indenture Conversion Rates 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 $1.00 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 Indenture Conversion Rates 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 14.05(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 14.05(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a Spin-Off), the Indenture Conversion Rates shall be increased based on the following formula:
where,
CR0 |
= |
the Indenture Conversion Rates in effect immediately prior to the end of the Valuation Period; | ||
CR |
= |
the Indenture Conversion Rates in effect immediately after the end of the Valuation Period; | ||
FMV0 |
= |
the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the Valuation Period); and |
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MP0 |
= |
the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. |
The adjustment to the Indenture Conversion Rates 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 Indenture Conversion Rates 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 Indenture Conversion Rates as of such Trading Day. If the Ex-Dividend Date of the Spin-Off is after the 10th Trading Day immediately preceding, and including, the end of any Observation Period in respect of a conversion of Notes, references to 10 or 10th in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for the Spin-Off to, and including, the last Trading Day of such Observation Period.
For purposes of this Section 14.05(c) (and subject in all respect to Section 14.12), rights, options or warrants distributed by the Company to all or substantially all holders of the Common Stock entitling them to subscribe for or purchase shares of the Companys 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 14.05(c) (and no adjustment to the Indenture Conversion Rates under this Section 14.05(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 Indenture Conversion Rates shall be made under this Section 14.05(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 Indenture Conversion Rates under this Section 14.05(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 purchase (x) the Indenture Conversion Rates shall be readjusted
67
as if such rights, options or warrants had not been issued and (y) the Indenture Conversion Rates 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 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 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 Indenture Conversion Rates shall be readjusted as if such rights, options and warrants had not been issued.
For purposes of Section 14.05(a), Section 14.05(b) and this Section 14.05(c), if any dividend or distribution to which this Section 14.05(c) is applicable also includes one or both of:
(A) a dividend or distribution of shares of Common Stock to which Section 14.05(a) is applicable (the Clause A Distribution); or
(B) a dividend or distribution of rights, options or warrants to which Section 14.05(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 14.05(c) is applicable (the Clause C Distribution) and any Indenture Conversion Rates adjustment required by this Section 14.05(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 Indenture Conversion Rates adjustment required by Section 14.05(a) and Section 14.05(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 14.05(a) or outstanding immediately prior to the open of business on such Ex-Dividend Date within the meaning of Section 14.05(b).
(d) If any cash dividend or distribution is made to all or substantially all holders of the Common Stock, the Indenture Conversion Rates shall be adjusted based on the following formula:
where,
CR0 |
= |
the Indenture Conversion Rates in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution; |
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CR |
= | the Indenture Conversion Rates in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; | ||
SP0 |
= | the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and | ||
C |
= | the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock. |
Any increase pursuant to this Section 14.05(d) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. No adjustment pursuant to the above formula shall result in a decrease of the Conversion Rate; provided that if such dividend or distribution is not so paid, the Indenture Conversion Rates 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 Indenture Conversion Rates 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 $1.00 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Indenture Conversion Rates 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 Indenture Conversion Rates shall be increased based on the following formula:
where,
CR0 |
= |
the Indenture Conversion Rates in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||
CR |
= |
the Indenture Conversion Rates 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 in good faith by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer; |
69
OS0 |
= |
the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); | ||
OS |
= |
the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and | ||
SP |
= |
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires. |
The increase to the Indenture Conversion Rates under this Section 14.05(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 Indenture Conversion Rates 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 Indenture Conversion Rates as of such Trading Day. In addition, if the Trading Day next succeeding the date such tender or exchange offer expires is after the 10th Trading Day immediately preceding, and including, the end of any Observation Period in respect of a conversion of Notes, references to 10 or 10th in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day of such Observation Period. No adjustment pursuant to the above formula shall result in a decrease of the Conversion Rate. If the Company or any of its Subsidiaries is obligated to purchase Common Stock pursuant to any such tender offer or exchange offer, but the Company or any of its Subsidiaries is ultimately prevented by applicable law from effecting all or any portion of such purchases or all or any portion of such purchases are rescinded, the Conversion Rate shall immediately be readjusted to be the Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made or had been made only in respect of the purchase of Common Stock that had been effected.
(f) Notwithstanding this Section 14.05 or any other provision of this Indenture or the Notes, if a Indenture Conversion Rates adjustment becomes effective on any Ex-Dividend Date,
70
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 14.03(i) based on an adjusted Indenture Conversion Rates for such Ex-Dividend Date, then, notwithstanding the Indenture Conversion Rates adjustment provisions in this Section 14.05, the Indenture Conversion Rates 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.
(g) Except as stated herein, the Company shall not adjust the Indenture Conversion Rates for the issuance of shares of the Common Stock or any securities convertible into or exchangeable for shares of the Common Stock or the right to purchase shares of the Common Stock or such convertible or exchangeable securities.
(h) In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 14.05, and to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Companys securities are then listed, the Company from time to time may increase the Indenture Conversion Rates by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Companys best interest. In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Companys securities are then listed, the Company may (but is not required to) increase the Indenture Conversion Rates 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 Indenture Conversion Rates is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least 15 days prior to the date the increased Indenture Conversion Rates takes effect, and such notice shall state the increased Indenture Conversion Rates and the period during which it will be in effect.
(i) Notwithstanding anything to the contrary in this Article 14, the Indenture Conversion Rates 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 Companys securities and the investment of additional optional amounts in shares of Common Stock under any plan;
(ii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Companys Subsidiaries;
(iii) upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes were first issued;
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(iv) solely for a change in the par value of the Common Stock; or
(v) for accrued and unpaid interest, if any.
(j) All calculations and other determinations under this Article 14 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share. The Company shall not be required to make an adjustment in the Conversion Rate unless the adjustment would require a change of at least 1% in the Conversion Rate; provided that the Company shall carry forward any adjustment that is less than 1% of the Conversion Rate, take such carried-forward adjustments into account in any subsequent adjustment, and make such carried forward adjustments, regardless of whether the aggregate adjustment is less than 1%, (i) on the Conversion Date for any Notes, (ii) on each Trading Day of the Conversion Period in respect of any Notes, and (iii) on any Fundamental Change effective date, unless such adjustment has already been made.
(k) Whenever the Indenture Conversion Rates is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officers Certificate setting forth the Indenture Conversion Rates 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 Indenture Conversion Rates and may assume without inquiry that the last Indenture Conversion Rates 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 Indenture Conversion Rates setting forth the adjusted Indenture Conversion Rates and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Indenture Conversion Rates to each Holder. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
(l) For purposes of this Section 14.05, 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 14.06. Adjustments of Prices. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts over a span of multiple days (including an Observation Period and the period for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the Board of Directors shall make appropriate adjustments to each to account for any adjustment to the Applicable Conversion Rate that becomes effective, or any event requiring an adjustment to the Applicable 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 14.07. 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
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are presented for conversion (assuming delivery of the maximum number of Additional Shares pursuant to Section 14.04 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 14.08. 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, assignment, conveyance, lease or other transfer to a third party of the consolidated assets of the Company and the Companys 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 and after the effective time of such Share Exchange Event, the right to convert each $1.00 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 Applicable 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 $1.00 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 14.03 and (B) (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.03 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 14.03 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
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part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be (x) the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (y) if no holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock. If the holders of the Common Stock receive only cash in such 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 $1.00 principal amount of Notes shall be solely cash in an amount equal to the Applicable Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 14.04), multiplied by the price paid per share of Common Stock in such Share Exchange Event and (B) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the third Business Day immediately following the relevant Conversion Date. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made.
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 purchasing 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 14.08, the Company shall promptly file with 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 14.08. 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, at the Companys election, as set forth in Section 14.01 and Section 14.03 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.
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Section 14.09. 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 14.10. 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 Applicable Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Applicable Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 14.08 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 14.08 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 (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 14.01(b) has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent the notices referred to in Section 14.01(b) with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent immediately after the occurrence of any such event or at such other times as shall be provided for in Section 14.01(b).
Section 14.11. Notice to Holders Prior to Certain Actions. In case of any:
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(a) action by the Company or one of its Subsidiaries that would require an adjustment in the Applicable Conversion Rate pursuant to Section 14.05 or Section 14.12;
(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 filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be delivered to each Holder, as promptly as possible but in any event at least 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 14.12. Stockholder Rights Plans. If the Company has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if, prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights plan, the Applicable 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 14.05(c), subject to readjustment in the event of the expiration or termination of such rights.
Section 14.13. Ownership Limitation.
(a) Notwithstanding the provisions of Section 14.01, during any period of time in which a Holders beneficial ownership (as determined in accordance with Rule 13d-3 of the Exchange Act) of Common Stock is less than 9.5%, the Holder shall not have the right to voluntarily convert, and the Company shall not effect a Mandatory Conversion, of all or any portion of the Notes, and shall not be entitled to receive shares of Common Stock in exchange therefore, if (but only to the extent that) upon and after giving effect to such conversion (and issuance of any shares of Common Stock in satisfaction of any Fundamental Change or Make-Whole Fundamental Change, as the case may be), and taking into account the method of settlement elected by (or deemed to have been elected by) the Company under Section 14.03, such Holder (together with such Holders Affiliated Parties (including shares held by any group of which the Holder or any of its Affiliates and any other persons or entities whose
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beneficial ownership of Common Stock would be aggregated with the Holders for purposes of Section 13(d) of the Exchange Act (the Affiliated Parties) (including shares held by any group of which the Holder or any of its Affiliated Parties is a member)) would have beneficial ownership of more than 9.5% of the total number of shares of Common Stock then issued and outstanding (the Ownership Limitation); provided, that, a Holder may, at its option and upon not less than sixty-one (61) days prior notice to the Company, elect to increase the Ownership Limitation up to 19.99% of the total number of shares of Common Stock then issued and outstanding. Any such increase will not be effective until the 61st day after such notice is delivered to the Company. The Company hereby covenants and agrees not to adopt any shareholder rights plan or take any other action which would have the effect of restricting or adversely affecting the Holders election to change such threshold percentage. When submitting any Conversion Notice through the applicable procedures of the Depositary, such holder shall be deemed to represent and warrant that such conversion will not result in a breach of the Ownership Limitation.
The Trustee and the Conversion Agent shall have no obligation to monitor a Holders beneficial ownership of Common Stock or the Ownership Limitation and shall have no liability for conversions made by beneficial owners exceeding the Ownership Limitation.
(b) For the avoidance of doubt, if a Holder, pursuant to Section 14.01(a), or the Company, pursuant to Section 14.02, purports to convert the Principal Amount of any Notes into shares of Common Stock hereunder and any delivery otherwise owed to such Holder hereunder is not made, in whole or in part, as a result of the Ownership Limitation or any other limitation set forth herein, then the Holders rights under the relevant Notes, or portion thereof, pursuant to which such delivery was not made will not be extinguished and, instead such Notes, or portion thereof, will be deemed to have never been converted.
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 Holders option, to require the Company to repurchase for cash all of such Holders Notes, or any portion thereof that is equal to $1.00 or an integral multiple of $1.00, 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 Fundamental Change Repurchase Date (the Fundamental Change Repurchase Price), unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full amount of accrued and unpaid interest to Holders of record as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes to be repurchased pursuant to this Article 15.
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(b) Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder thereof, upon:
(i) delivery to the Paying Agent or tender agent appointed by the Company to facilitate the repurchase (the Tender 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 Depositarys 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 or Tender Agent at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Paying Agent or the principal office of the Tender Agent located in the contiguous United States as notified by the Tender Agent to Holders and the Trustee, 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:
(i) in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;
(ii) the portion of the principal amount of Notes to be repurchased, which must be $1.00 or an integral multiple thereof; and
(iii) that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture;
provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice must comply with appropriate Depositary procedures.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent or Tender Agent, as the case may be, 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 or Tender Agent, as the case may be, in accordance with Section 15.03.
The Paying Agent or Tender Agent, as the case may be, shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.
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(c) On or before the fifth (5th) Business Day after the occurrence of the effective date of a Fundamental Change, the Company shall provide to all Holders of Notes and the Trustee, Conversion Agent (in the case of a Conversion Agent other than the Trustee) and the Paying Agent (in the case of a Paying Agent other than the Trustee) a 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 Companys 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 and whether such Fundamental Change is a Make-Whole Adjustment Event;
(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 or Tender Agent, as the case may be, and the Conversion Agent, if applicable;
(vii) if applicable, the Applicable Conversion Rate and any adjustments to the Applicable 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 Companys request, delivered at least two Business Days prior to the Fundamental Change Company Notice is to be sent, the Trustee shall give such notice in the Companys name and at the Companys expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company.
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(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 or Tender Agent, as the case may be, will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.
Section 15.03. Withdrawal of Fundamental Change Repurchase Notice. (a) A Fundamental Change Repurchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Corporate Trust Office of the Paying Agent or the principal office of the Tender Agent located in the contiguous United States as notified by the Tender Agent, as the case may be, 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,
(ii) if Physical Notes have been issued, the certificate number of the Note in respect of which such notice of withdrawal is being submitted, and
(iii) the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1.00 or an integral multiple of $1.00;
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 or Tender Agent, as the case may be, 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 or Tender Agent, as the case may be, 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 or Tender Agent, as the case may be, 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
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such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.
(b) If by 11:00 a.m. New York City time, on the Fundamental Change Repurchase Date, the Trustee (or other Paying Agent or Tender Agent, as the case may be, appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such Fundamental Change Repurchase Date, then, with respect to the Notes that have been properly surrendered for repurchase and have not been validly withdrawn, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent or Tender Agent, as the case may be,) 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
[INTENTIONALLY OMITTED]
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding on Companys Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.
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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 Endologix, Inc., 11 Studebaker, Irvine, California 92618, 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)) sent electronically in PDF format, 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
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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 in form reasonably satisfactory to the Trustee 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 in form reasonably satisfactory to the Trustee 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 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 Fundamental Change Repurchase Date or the Maturity Date is not a Business Day (which for purposes of this Section, shall include a day on which banking institutions in the place of payment are authorized or required by law to close), then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue in respect of the delay.
Section 17.07. No Security Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.
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Section 17.08. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.09. Table of Contents, Headings, Etc. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section 17.10. Authenticating Agent. The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 10.04 and Section 15.04 as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes. For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes by the Trustee and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustees 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 reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agents fees to be unreasonable.
The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section 17.10 shall be applicable to any authenticating agent.
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If an authenticating agent is appointed pursuant to this Section 17.10, the Notes may have endorsed thereon, in addition to the Trustees certificate of authentication, an alternative certificate of authentication in the following form:
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as Authenticating Agent, certifies that this is one of the Notes described in the within-named Indenture. |
By: |
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Authorized Officer |
Section 17.11. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 17.12. Severability. In the event any provision of this Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired.
Section 17.13. Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 17.14. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 17.15. Calculations. 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 and the Applicable Conversion Rate of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Companys calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Companys calculations without
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independent verification. The Trustee will forward the Companys calculations to any Holder of Notes upon the written request of that Holder at the sole cost and expense of the Company.
Section 17.16. Withholding Taxes. If the Company or one of its withholding agents is required by applicable law to withhold any taxes as a result of an adjustment to the Applicable Conversion Rate, the Company may, at its option, withhold or cause to be withheld such amount from any concurrent or subsequent payments of cash or shares of Common Stock on the Notes, and such withheld amounts will be treated as having been paid with respect to such Notes provided such amounts are timely paid over to the applicable governmental authority in accordance with applicable law. If the Company or one of its withholding agents is required by applicable law to withhold any taxes in connection with any payments of cash or shares of Common Stock on the Notes, the Company may, at its option, withhold or cause to be withheld such amount from such payments, and such withheld amounts will be treated as having been paid with respect to such Notes provided such amounts are timely paid over to the applicable governmental authority in accordance with applicable law. For purposes of any set off against shares of Common Stock paid on the Notes, each share of Common Stock will be deemed to have a value equal to the Daily VWAP of the Common Stock on the date such withholding is required to be performed by the Company or its withholding agent.
Section 17.17. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.
ENDOLOGIX, INC. | ||||
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WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||||
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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.]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM TIME TO TIME. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THE NOTES MAY BE OBTAINED BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS: [COMPANY ADDRESS], ATTENTION: [NAME].
A-1
Endologix, Inc.
5.0% Mandatory Convertible Senior Note due 2024
No. [ ] |
[Initially]1 $[ ] |
CUSIP No. [ ]
Endologix, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the Company, which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]2 [ ]3, or registered assigns, the principal sum [as set forth in the Schedule of Exchanges of Notes attached hereto]4 [of $[ ]]5, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[ ] in aggregate at any time, in accordance with the rules and procedures of the Depositary, on April 3, 2024, and interest thereon as set forth below.
This Note shall bear interest at the rate of 5.0% per year from April [ ], 2019, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until April 3, 2024. Interest is payable semi-annually in arrears on each April 1 and October 1, commencing on October 1, 2019, to Holders of record at the close of business on the preceding March 15 and September 15 (whether or not such day is a Business Day), respectively. Interest may be paid, at the Companys election, to the Holder in cash, shares of Common Stock, or the Company may elect to either increase the outstanding principal amount of the Notes or issue additional Notes under the Indenture having the same terms as the Notes (PIK Interest, and such payment of PIK Interest hereinafter referred as a PIK Payment), or a combination thereof, on the terms and subject to the limitations set forth in the Indenture. Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes plus one percent, 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.
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. |
A-2
The Company shall pay the principal of and interest on this Note, if in cash, and so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and the Corporate Trust Office as a place where Notes may be presented for payment or for registration of transfer and exchange.
Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, 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.
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A-3
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
ENDOLOGIX, INC. | ||
By: |
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Name: | ||
Title: |
Dated:
TRUSTEES CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By: |
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Authorized Officer |
A-4
[FORM OF REVERSE OF NOTE]
Endologix, Inc.
5.0% Mandatory Convertible Senior Note due 2024
This Note is one of a duly authorized issue of Notes of the Company, designated as its 5.0% Mandatory Convertible Senior Notes due 2024 (the Notes), limited to the aggregate principal amount of $[ ], all issued or to be issued under and pursuant to an Indenture dated as of April [ ], 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. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.
In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of conversions, the Fundamental Change Repurchase Price on the Fundamental Change Repurchase 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 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, or through an increase of the principal amount of the outstanding Notes or the issuance of paid-in-kind Notes, as the case may be, herein prescribed.
A-5
The Notes are issuable in registered form without coupons in minimum denominations of $1.00 principal amount and integral multiples in excess 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.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holders option, to require the Company to repurchase for cash all of such Holders Notes or any portion thereof (in principal amounts of $1.00 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1.00 or an integral multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, at the Applicable Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.
A-6
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST = Custodian
TEN ENT = as tenants by the entireties
JT TEN = joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-7
SCHEDULE A6
SCHEDULE OF EXCHANGES OF NOTES
Endologix, Inc.
5.0% Convertible Senior Notes due 2024
The initial principal amount of this Global Note is DOLLARS ($[ ]). 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 decrease or increase |
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A-8
ATTACHMENT 1
ENDOLOGIX, INC. (ISSUER)
5.0% MANDATORY CONVERTIBLE NOTES DUE 2024
CUSIP NO. 29266S AC0 (THE NOTES)
FORM OF IRREVOCABLE CONVERSION NOTICE
If you want to convert Notes into Common Stock of the Issuer, check the box: ☐
State the principal amount of Notes to be converted (which must be $1.00 or an integral multiple of $1.00 in excess thereof): $ .
Your contact information:
Noteholder Name: |
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Contact Name: |
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Contact Email: |
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Contact Telephone: |
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Capitalized terms have the meanings set forth in the indenture governing the Notes.
OWNERSHIP AND CONVERSION LIMITATION REPRESENTATIONS
In connection with your conversion, you confirm and certify as to the statements checked below:
FOR ALL CONVERSIONS:
☐ Holdings do not and will not exceed the threshold. Neither the Holder nor any of its Related Persons is or was a 9.50% Stockholder with respect to the Issuer at any time from April 3, 2019 ending on the Conversion Date applicable to the Notes being converted hereby. Furthermore, neither the Holder nor any of its Related Persons would, as a result of the acquisition of Common Stock in connection with the conversion of Notes contemplated hereby, become a 9.50% Stockholder with respect to the Issuer.
FOR CONVERSIONS PURSUANT TO SECTION 14.01(B)(i) OR SECTION 14.01(B)(iv):
☐ This principal amount being converted hereby does not exceed 30% of the initial aggregate principal amount of the Note being converted. The Holder hereby represents and confirms that the principal amount of the Note being converted does not exceed 30% of the initial aggregate principal amount of the Note being converted.
STOCK CERTIFICATE INFORMATION
The undersigned hereby requests that the stock certificate or certificates issued upon conversion be registered in the name(s) of the persons set forth below.
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The undersigned acknowledges that the Issuer is not required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares in any name other than that of the converting holder, and the converting holder is solely responsible for the payment of any such taxes. The undersigned acknowledges that if shares are to be issued in the name of a person other than the converting holder, the converting holder shall pay all transfer taxes payable with respect thereto.
You must check one, and only one, of the following two boxes:
☐ The undersigned is requesting registration in a name other than that of the converting holder. The converting holder acknowledges sole responsibility for the payment of any taxes that may be owing by reason thereof. If any taxes are payable upon transfer, they have already been paid.
☐ No transfer of beneficial ownership is occurring in connection with the conversion.
Registered Holder Information:
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Street Address: |
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City, State and Zip Code: |
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Delivery Instructions:
Unless you direct otherwise below, the above-referenced stock certificate(s) will be delivered to the registered holder at the address specified above. If you wish to provide separate delivery instructions, check the box and complete the information set forth below.
☐ The undersigned requests that the above-referenced stock certificate(s) be delivered to the person and address set forth below:
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Delivery via DTC:
If you would prefer to have the shares of common stock issued to you upon conversion to be delivered via the Depository Trust Company (DTC), please provide the information below:
☐ The undersigned requests that the above-referenced stock certificate(s) be delivered via the DTC, to the undersigned as set forth below:
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CASH PAYMENT INSTRUCTIONS
The undersigned directs that any cash payment owed for fractional shares (and, if applicable, for any accrued but unpaid interest which may be payable under certain limited circumstances) be wired in accordance with the wire instructions set forth below:
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To avoid the application of backup withholding under U.S. federal income tax law, each converting holder (or other payee) should complete, sign, and deliver an Internal Revenue Service (IRS) Form W-9 (in the case of a U.S. person or a resident alien) or an IRS Form W-8BEN or other appropriate IRS Form W-8 (in the case of a foreign holder). IRS Forms W-9 and W-8 are available on the IRSs website at http://www.irs.gov/. Failure to include a properly completed IRS Form W-9 or applicable IRS Form W-8 may result in the application of U.S. backup withholding.
In addition, Notes surrendered for conversion during the period from the Close of Business on any 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, except as specified below. THE INDENTURE REQUIRES THIS CASH PAYMENT EVEN IF THE INTEREST PAYABLE ON THE IMMEDIATELY FOLLOWING INTEREST PAYMENT DATE IS PAYABLE IN PIK NOTES OR SHARES OF COMMON STOCK. IN THIS EVENT, EVEN THOUGH THE HOLDER HAS REMITTED A CASH PAYMENT WITH THE CONVERSION NOTICE, THE HOLDER WILL NOT RECEIVE ANY CASH AS THE INTEREST PAYMENT BUT WILL RECEIVE ONLY PIK NOTES OR SHARES OF COMMON STOCK. However, such payment need not be made: (i) if the conversion follows the Record Date immediately preceding the Maturity Date; (ii) if the Issuer has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the first Business Day immediately following the corresponding Interest Payment Date; or (iii) to the extent of any Defaulted Amounts, if any Defaulted Amounts exist at the time of conversion with respect to such Note. Where payment is owed, no conversion will occur before this payment has been received by the Issuer. Wiring instructions for any such payment of funds may be obtained by contacting the Trustee at svilhauer@WilmingtonTrust.com.
SIGNATURE:
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The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program, pursuant to S.E.C. Rule 17Ad-15.
Signature Guarantee
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ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
To: | Wilmington Trust, National Association |
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: Endologix, Inc., Account Manager
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Endologix, 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 $1.00 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:
Dated:
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Social Security or Other Taxpayer |
Identification Number |
Principal amount to be repaid (if less than all): $ ,000 |
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. |
1
ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
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, the undersigned confirms that such Note is being transferred:
☐ To Endologix, Inc. or a subsidiary thereof; or
☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.
1
Dated:
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Signature(s) |
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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.
2
Exhibit 4.6
[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.]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM TIME TO TIME. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THE NOTES MAY BE OBTAINED BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS: [COMPANY ADDRESS], ATTENTION: [NAME].
A-1
Endologix, Inc.
5.0% Mandatory Convertible Senior Note due 2024
No. [ ] |
[Initially]1 $[ ] |
CUSIP No. [ ]
Endologix, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the Company, which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]2 [ ]3, or registered assigns, the principal sum [as set forth in the Schedule of Exchanges of Notes attached hereto]4 [of $[ ]]5, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[ ] in aggregate at any time, in accordance with the rules and procedures of the Depositary, on April 3, 2024, and interest thereon as set forth below.
This Note shall bear interest at the rate of 5.0% per year from April [ ], 2019, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until April 3, 2024. Interest is payable semi-annually in arrears on each April 1 and October 1, commencing on October 1, 2019, to Holders of record at the close of business on the preceding March 15 and September 15 (whether or not such day is a Business Day), respectively. Interest may be paid, at the Companys election, to the Holder in cash, shares of Common Stock, or the Company may elect to either increase the outstanding principal amount of the Notes or issue additional Notes under the Indenture having the same terms as the Notes (PIK Interest, and such payment of PIK Interest hereinafter referred as a PIK Payment), or a combination thereof, on the terms and subject to the limitations set forth in the Indenture. Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes plus one percent, 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.
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. |
A-2
The Company shall pay the principal of and interest on this Note, if in cash, and so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and the Corporate Trust Office as a place where Notes may be presented for payment or for registration of transfer and exchange.
Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, on the terms and subject to the limitations set forth in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Note, and any claim, controversy or dispute arising under or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York (without regard to the conflicts of laws provisions thereof).
In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.
This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually by the Trustee or a duly authorized authenticating agent under the Indenture.
[Remainder of page intentionally left blank]
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
ENDOLOGIX, INC. | ||
By: |
| |
Name: | ||
Title: |
Dated:
TRUSTEES CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By: |
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Authorized Officer |
A-4
[FORM OF REVERSE OF NOTE]
Endologix, Inc.
5.0% Mandatory Convertible Senior Note due 2024
This Note is one of a duly authorized issue of Notes of the Company, designated as its 5.0% Mandatory Convertible Senior Notes due 2024 (the Notes), limited to the aggregate principal amount of $[ ], all issued or to be issued under and pursuant to an Indenture dated as of April [ ], 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. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.
In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of conversions, the Fundamental Change Repurchase Price on the Fundamental Change Repurchase 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 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, or through an increase of the principal amount of the outstanding Notes or the issuance of paid-in-kind Notes, as the case may be, herein prescribed.
A-5
The Notes are issuable in registered form without coupons in minimum denominations of $1.00 principal amount and integral multiples in excess 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.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holders option, to require the Company to repurchase for cash all of such Holders Notes or any portion thereof (in principal amounts of $1.00 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1.00 or an integral multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, at the Applicable Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.
A-6
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST = Custodian
TEN ENT = as tenants by the entireties
JT TEN = joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-7
Exhibit 4.7
Execution Version
ENDOLOGIX, INC.
AND
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of April 3, 2019
5.0% Voluntary Convertible Senior Notes due 2024
TABLE OF CONTENTS
PAGE | ||||||
ARTICLE 1 |
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DEFINITIONS |
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Section 1.01. | Definitions |
1 | ||||
Section 1.02. | References to Interest |
12 | ||||
ARTICLE 2 |
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ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES |
| |||||
Section 2.01. | Designation and Amount |
12 | ||||
Section 2.02. | Form of Notes |
12 | ||||
Section 2.03. | Date and Denomination of Notes; Payments of Interest and Defaulted Amounts |
13 | ||||
Section 2.04. | Execution, Authentication and Delivery of Notes |
15 | ||||
Section 2.05. | Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary |
15 | ||||
Section 2.06. | Mutilated, Destroyed, Lost or Stolen Notes |
18 | ||||
Section 2.07. | Temporary Notes |
19 | ||||
Section 2.08. | Cancellation of Notes Paid, Converted, Etc |
20 | ||||
Section 2.09. | CUSIP Numbers |
20 | ||||
Section 2.10. | Additional Notes; Repurchases |
20 | ||||
Section 2.11. | Issuance of PIK Notes; Payment of PIK Interest |
20 | ||||
ARTICLE 3 |
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SATISFACTION AND DISCHARGE |
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Section 3.01. | Satisfaction and Discharge |
21 | ||||
ARTICLE 4 |
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PARTICULAR COVENANTS OF THE COMPANY |
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Section 4.01. | Payment of Principal and Interest |
22 | ||||
Section 4.02. | Maintenance of Office or Agency |
22 | ||||
Section 4.03. | Appointments to Fill Vacancies in Trustees Office |
23 | ||||
Section 4.04. | Provisions as to Paying Agent |
23 | ||||
Section 4.05. | Existence |
24 | ||||
Section 4.06. | Rule 144A Information Requirement and Annual Reports |
24 | ||||
Section 4.07. | Stay, Extension and Usury Laws |
25 | ||||
Section 4.08. | Compliance Certificate; Statements as to Defaults |
26 | ||||
Section 4.09. | Further Instruments and Acts |
26 |
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ARTICLE 5 |
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LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
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Section 5.01. | Lists of Holders |
26 | ||||
Section 5.02. | Preservation and Disclosure of Lists |
26 | ||||
ARTICLE 6 |
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DEFAULTS AND REMEDIES |
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Section 6.01. | Events of Default |
27 | ||||
Section 6.02. | Acceleration; Rescission and Annulment |
28 | ||||
Section 6.03. | Additional Interest |
29 | ||||
Section 6.04. | Payments of Notes on Default; Suit Therefor |
30 | ||||
Section 6.05. | Application of Monies Collected by Trustee |
31 | ||||
Section 6.06. | Proceedings by Holders |
32 | ||||
Section 6.07. | Proceedings by Trustee |
33 | ||||
Section 6.08. | Remedies Cumulative and Continuing |
33 | ||||
Section 6.09. | Direction of Proceedings and Waiver of Defaults by Majority of Holders |
33 | ||||
Section 6.10. | Notice of Defaults |
34 | ||||
Section 6.11. | Undertaking to Pay Costs |
34 | ||||
ARTICLE 7 |
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CONCERNING THE TRUSTEE |
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Section 7.01. | Duties and Responsibilities of Trustee |
35 | ||||
Section 7.02. | Reliance on Documents, Opinions, Etc |
36 | ||||
Section 7.03. | No Responsibility for Recitals, Etc |
38 | ||||
Section 7.04. | Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes |
38 | ||||
Section 7.05. | Monies to Be Held in Trust |
38 | ||||
Section 7.06. | Compensation and Expenses of Trustee |
38 | ||||
Section 7.07. | Officers Certificate and Opinion of Counsel as Evidence |
39 | ||||
Section 7.08. | Eligibility of Trustee |
39 | ||||
Section 7.09. | Resignation or Removal of Trustee |
40 | ||||
Section 7.10. | Acceptance by Successor Trustee |
41 | ||||
Section 7.11. | Succession by Merger, Etc |
41 | ||||
Section 7.12. | Trustees Application for Instructions from the Company |
42 | ||||
ARTICLE 8 |
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CONCERNING THE HOLDERS |
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Section 8.01. | Action by Holders |
42 | ||||
Section 8.02. | Proof of Execution by Holders |
42 | ||||
Section 8.03. | Who Are Deemed Absolute Owners |
42 | ||||
Section 8.04. | Company-Owned Notes Disregarded |
43 | ||||
Section 8.05. | Revocation of Consents; Future Holders Bound |
43 |
ii
ARTICLE 9 |
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HOLDERS MEETINGS |
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Section 9.01. | Purpose of Meetings |
44 | ||||
Section 9.02. | Call of Meetings by Trustee |
44 | ||||
Section 9.03. | Call of Meetings by Company or Holders |
44 | ||||
Section 9.04. | Qualifications for Voting |
44 | ||||
Section 9.05. | Regulations |
45 | ||||
Section 9.06. | Voting |
45 | ||||
Section 9.07. | No Delay of Rights by Meeting |
46 | ||||
ARTICLE 10 |
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SUPPLEMENTAL INDENTURES |
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Section 10.01. | Supplemental Indentures Without Consent of Holders |
46 | ||||
Section 10.02. | Supplemental Indentures with Consent of Holders |
47 | ||||
Section 10.03. | Effect of Supplemental Indentures |
48 | ||||
Section 10.04. | Notation on Notes |
48 | ||||
Section 10.05. | Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee |
48 | ||||
ARTICLE 11 |
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CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE |
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Section 11.01. | Company May Consolidate, Etc |
48 | ||||
Section 11.02. | Successor Corporation to Be Substituted |
49 | ||||
Section 11.03. | Opinion of Counsel to Be Given to Trustee |
49 | ||||
ARTICLE 12 |
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IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
| |||||
Section 12.01. | Indenture and Notes Solely Corporate Obligations |
50 | ||||
ARTICLE 13 |
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[INTENTIONALLY OMITTED] |
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ARTICLE 14 |
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CONVERSION OF NOTES |
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Section 14.01. | Voluntary Conversion |
50 | ||||
Section 14.02. | [Intentionally Omitted] |
54 | ||||
Section 14.03. | Conversion Procedure; Settlement Upon Conversion |
54 | ||||
Section 14.04. | Increased Applicable Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes |
58 | ||||
Section 14.05. | Adjustment of Applicable Conversion Rate |
60 | ||||
Section 14.06. | Adjustments of Prices |
69 | ||||
Section 14.07. | Shares to Be Fully Paid |
69 |
iii
Section 14.08. | Effect of Recapitalizations, Reclassifications and Changes of the Common Stock |
70 | ||||
Section 14.09. | Certain Covenants |
72 | ||||
Section 14.10. | Responsibility of Trustee |
72 | ||||
Section 14.11. | Notice to Holders Prior to Certain Actions |
72 | ||||
Section 14.12. | Stockholder Rights Plans |
73 | ||||
Section 14.13. | Ownership Limitation |
73 | ||||
ARTICLE 15 |
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REPURCHASE OF NOTES AT OPTION OF HOLDERS |
| |||||
Section 15.01. | [Intentionally Omitted] |
74 | ||||
Section 15.02. | Repurchase at Option of Holders Upon a Fundamental Change |
74 | ||||
Section 15.03. | Withdrawal of Fundamental Change Repurchase Notice |
77 | ||||
Section 15.04. | Deposit of Fundamental Change Repurchase Price |
77 | ||||
Section 15.05. | Covenant to Comply with Applicable Laws Upon Repurchase of Notes |
78 | ||||
ARTICLE 16 |
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[INTENTIONALLY OMITTED] |
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ARTICLE 17 |
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MISCELLANEOUS PROVISIONS |
| |||||
Section 17.01. | Provisions Binding on Companys Successors |
78 | ||||
Section 17.02. | Official Acts by Successor Corporation |
79 | ||||
Section 17.03. | Addresses for Notices, Etc |
79 | ||||
Section 17.04. | Governing Law; Jurisdiction |
79 | ||||
Section 17.05. | Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee |
80 | ||||
Section 17.06. | Legal Holidays |
80 | ||||
Section 17.07. | No Security Interest Created |
80 | ||||
Section 17.08. | Benefits of Indenture |
81 | ||||
Section 17.09. | Table of Contents, Headings, Etc |
81 | ||||
Section 17.10. | Authenticating Agent |
81 | ||||
Section 17.11. | Execution in Counterparts |
82 | ||||
Section 17.12. | Severability |
82 | ||||
Section 17.13. | Waiver of Jury Trial |
82 | ||||
Section 17.14. | Force Majeure |
82 | ||||
Section 17.15. | Calculations |
82 | ||||
Section 17.16. | Withholding Taxes |
83 | ||||
Section 17.17. | USA PATRIOT Act |
83 |
EXHIBIT
Exhibit A | Form of Note |
A-1 |
iv
INDENTURE dated as of April 3, 2019 between ENDOLOGIX, INC., a Delaware corporation, as issuer (the Company, as more fully set forth in Section 1.01) having its principal office at 11 Studebaker, Irvine, California 92618, 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 5.0% Voluntary Convertible Senior Notes due 2024 (the Notes), initially in an aggregate principal amount not to exceed $ , and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and
WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and this Indenture a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Notes (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words herein, hereof, hereunder and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular.
Additional Interest means all amounts, if any, payable pursuant to Section 4.06(d), Section 4.06(e) and Section 6.03, as applicable. The Trustee shall have no obligation to monitor whether Additional Interest is payable or to calculate the amount of Additional Interest Payable.
Additional Shares shall have the meaning specified in Section 14.04.
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 Parties shall have the meaning specified in Section 14.13(a).
Applicable Conversion Rate shall have the meaning specified in Section 14.01.
Bid Solicitation Agent means the Person appointed, from time to time, by the Company to solicit bids for the Trading Price of the Notes in accordance with Section 14.01(b)(i). The Company initially appoints the Trustee to act as the Bid Solicitation Agent.
Board of Directors means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.
Board Resolution means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification, and delivered to the Trustee.
Business Day means, with respect to any Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
Capital Stock means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.
Cash Settlement shall have the meaning specified in Section 14.03(a).
Clause A Distribution shall have the meaning specified in Section 14.05(c).
Clause B Distribution shall have the meaning specified in Section 14.05(c).
Clause C Distribution shall have the meaning specified in Section 14.05(c).
2
close of business means 5:00 p.m. (New York City time).
Combination Settlement shall have the meaning specified in Section 14.03(a).
Commission means the U.S. Securities and Exchange Commission.
Common Equity of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
Common Stock means the common stock of the Company, par value $0.001 per share, at the date of this Indenture, subject to Section 14.08.
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 (a) the Companys 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 (b) any such other Officer designated in clause (a) of this definition or the Companys Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered to the Trustee.
Conversion Agent shall have the meaning specified in Section 4.02.
Conversion Date shall have the meaning specified in Section 14.03(c).
Conversion Obligation shall have the meaning specified in Section 14.01.
Conversion Price means as of any time, $1.00, divided by the Applicable Conversion Rate as of such time (carried out to six decimal places).
Corporate Trust Office means the office of the Trustee at which at any time this Indenture shall be administered, which office at the date hereof is located at 50 South Sixth Street, Suite 1290, Minneapolis MN 55402, Attention: Endologix, Inc., Account Manager, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).
Custodian means the Trustee, as custodian for The Depository Trust Company, with respect to the Global Notes, or any successor entity thereto.
Daily Conversion Value means, for each of the 25 consecutive Trading Days during the Observation Period, one-twenty-fifth (1/25th) of the product of (a) the Applicable Conversion Rate on such Trading Day and (b) the Daily VWAP for such Trading Day.
3
Daily Measurement Value means the Specified Dollar Amount (if any), divided by 25.
Daily Settlement Amount, for each of the 25 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 ELGX <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 Fundamental Change Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for, in each case, when due.
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 14.05(c).
Effective Date shall have the meaning specified in Section 14.04(c), except that, as used in Section 14.05 and Section 14.06, 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
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of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Exchange Notes means any Notes issued hereunder other than additional Notes issued pursuant to Section 2.10.
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, as defined in Rule 13d-3 under the Exchange Act, of the Companys voting stock representing more than 50% of the voting power of all outstanding classes of the Companys voting stock entitled to vote generally in elections; 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, merger or similar transaction involving 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 Companys direct or indirect Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (B) in which the holders of all classes of the Companys Common Stock 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
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(c) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or
(d) the Common Stock (or other common stock underlying the Notes) ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);
provided, however, that a transaction or transactions described in clause (b) above shall not constitute a Fundamental Change, if at least 90% of the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Notes become convertible into such consideration, excluding cash payments for fractional shares (subject to the provisions of Section 14.03(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.
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.
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.
Global Note shall have the meaning specified in Section 2.05(b).
Holder, as applied to any Note, or other similar terms (but excluding the term beneficial holder), means any Person in whose name at the time a particular Note is registered on the Note Register.
Indenture means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.
Interest Payment Date means each April 1 and October 1 of each year, beginning on October 1, 2019.
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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.
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 14.04.
Mandatory Indenture means that certain Indenture between the Company and the Trustee, dated April 3, 2019, pursuant to which the Company has issued $25,000,000 in aggregate principal amount of 5.0% Mandatory Convertible Senior Notes due 2024 (CUSIP ).
Market Disruption Event means, for the purposes of determining amounts due upon conversion (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.
Maturity Date means April 3, 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, including any PIK Notes.
Note Register shall have the meaning specified in Section 2.05.
Note Registrar shall have the meaning specified in Section 2.05.
Notice of Conversion shall have the meaning specified in Section 14.03(b).
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Observation Period with respect to any Note surrendered for conversion means: (i) subject to clause (ii) of this definition, if the relevant Conversion Date occurs prior to January 1, 2024, the 25 consecutive Trading Day period beginning on, and including, the second Trading Day immediately succeeding such Conversion Date; and (ii) if the relevant Conversion Date occurs on or after January 1, 2024, the 25 consecutive Trading Days beginning on, and including, the 27th Scheduled Trading Day immediately preceding the Maturity Date.
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 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.
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; and
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(f) Notes repurchased by the Company pursuant to the penultimate sentence of Section 2.10.
Ownership Limitation shall have the meaning specified in Section 14.13(a).
Paying Agent shall have the meaning specified in Section 4.02.
Person means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
Physical Notes means permanent certificated Notes in registered form issued in minimum denominations of $1.00 principal amount and integral multiples in excess thereof.
Physical Settlement shall have the meaning specified in Section 14.03(a).
PIK Interest means a portion of the interest on the Notes due on an Interest Payment Date, which is paid, at the Companys election, by increasing the amount of outstanding Notes or by issuing additional PIK Notes, as set forth in Section 2.11.
PIK Notes has the meaning set forth for such term in Section 2.11.
PIK Notice has the meaning set forth for such term in Section 2.11.
PIK Payment has the meaning set forth for such term in Section 2.11.
Predecessor Note of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.
Record Date means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).
Reference Property shall have the meaning specified in Section 14.08(a).
Regular Record Date, with respect to any Interest Payment Date, means the March 15 or September 15 (whether or not such day is a Business Day) immediately preceding the applicable April 1 or October 1 Interest Payment Date, respectively.
Responsible Officer means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice
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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 persons knowledge of and familiarity with the particular subject and, in each case, who shall have direct responsibility for the administration of this Indenture.
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 14.03(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 14.03(a)(iii).
Share Exchange Event shall have the meaning specified in Section 14.08(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 $1.00 principal amount of Notes to be received upon conversion as specified in the Settlement Notice related to any converted Notes.
Spin-Off shall have the meaning specified in Section 14.05(c).
Stock Price shall have the meaning specified in Section 14.04(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.
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Successor Company shall have the meaning specified in Section 11.01(a).
Tender Agent shall have the meaning specified in Section 15.02(b)(i).
Trading Day means a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on The NASDAQ Global Select Market or, if the Common Stock (or such other security) is not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded and (ii) a Last Reported Sale Price for the Common Stock (or such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, Trading Day means a Business Day; and provided further that, for purposes of determining amounts due upon conversion only, Trading Day means a day on which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs on The NASDAQ Global Select Market or, if the Common Stock is not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, Trading Day means a Business Day.
Trading Price of the Notes on any date of determination means the average of the secondary market bid quotations per $1,000 principal amount of Notes 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 (and provides the Bid Solicitation Agent of the names and contact information for such dealers); 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.
Trading Price Condition shall have the meaning specified in Section 14.01(b)(i).
Trigger Event shall have the meaning specified in Section 14.05(c).
Trust Indenture Act means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term Trust Indenture Act shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.
Trustee means the Person named as the Trustee in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee hereunder.
unit of Reference Property shall have the meaning specified in Section 14.08(a).
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Valuation Period shall have the meaning specified in Section 14.05(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), Section 4.06(e) and Section 6.03. Unless the context otherwise requires, any express mention of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Designation and Amount. The Notes shall be designated as the 5.0% Convertible Senior Notes due 2024. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $[43,000,000], subject to Section 2.10 and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder.
Section 2.02. Form of Notes. The Notes and the Trustees 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.
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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 PIK Payments, repurchases, cancellations, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture. Payment of principal (including the 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 $1.00 principal amount and integral multiples in excess thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of such Note. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.
(b) The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date (the Interest Amount).
The Company shall, at the Companys option, either (i) pay the Interest Amount in cash, (ii) issue shares of Common Stock in satisfaction of such Interest Amount in accordance with the terms hereof, or (iii) pay PIK Interest as set forth in Section 2.11. Interest shall accrue from April 3, 2019, or from the most recent date to which interest had been paid or provided for to, but excluding the next scheduled Interest Payment Date, until April 3, 2024.
If the Company elects to pay the Interest Amount in cash, such amount and any principal amounts 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 interest, if paid in cash (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal amount of $2,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $2,000,000 either by check mailed to each Holder or, upon application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holders account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.
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If the Company elects to pay the Interest Amount in shares of Common Stock, the number of such shares to be issued shall be the number determined by dividing (x) the Interest Amount due or to be converted (as applicable), by (y) the Last Reported Sale Price as of the date on which the Interest Amount was calculated. Such shares shall be issued and delivered on the applicable Interest Payment Date. In order to pay the Interest Amount in shares of Common Stock, the Company shall deliver a notice (an Interest Payment Notice) to the Trustee no later than the 15th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, which notice shall state the total Interest Amount to be paid on the Interest Payment Date and the number of shares of Common Stock to be issued in satisfaction thereof. The Trustee, on behalf of the Company, shall promptly upon receipt of the Interest Payment Notice, and in no event later than the 10th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, deliver a corresponding notice prepared by the Company (which may be the same as the Interest Payment Notice) to the Holders.
(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 then-applicable rate borne by the Notes plus one percent, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice, unless the Trustee shall agree to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Amounts as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment, and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Company shall promptly notify the Trustee in writing 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).
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(ii) The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Section 2.04. Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature 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 (including PIK Notes issued in physical form) executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall manually authenticate and deliver such Notes, without any further action by the Company hereunder; provided that the Trustee shall be entitled to receive an Officers Certificate and Opinion of Counsel of the Company with respect to the issuance, authentication and delivery of such Notes.
Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the Form of Note attached as Exhibit A hereto, executed manually by an authorized signatory of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.
In case any Officer of the Company who shall have signed any of the Notes shall cease to be such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such Officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the Officers of the Company, although at the date of the execution of this Indenture any such person was not such an Officer.
Section 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.
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The Company may change or 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, upon receipt of a Company Order, 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 duly executed, by the Holder thereof or its attorney-in-fact duly authorized in writing.
No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent for any exchange or registration of transfer of Notes, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of new Notes issued upon such exchange or registration of transfer being different from the name of the Holder of the old Notes surrendered for exchange or registration of transfer.
None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion, or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15.
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
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accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.
(c) Notwithstanding any other provisions of this Indenture, 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 by the Company within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officers Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owners beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the 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
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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 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. Members of, or participants in, the Depositary shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Note, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and Participants, the operation of customary practices governing the exercise of the rights of a Holder of any Note.
(d) RESERVED.
(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 the resale is registered under the Securities Act or conducted 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) Notwithstanding anything contained herein to the contrary, neither the Trustee nor the Note Registrar shall be responsible for ascertaining whether any transfer complies with the registration provisions of or exemptions from the Securities Act, applicable state securities laws or other applicable federal or state laws.
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.
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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, conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement, payment, conversion or repurchase of negotiable instruments or other securities without their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company. Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes. Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent upon receipt of a Company Order shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal
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amount of Physical Notes. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Physical Notes authenticated and delivered hereunder.
Section 2.08. Cancellation of Notes Paid, Converted, Etc. The Company shall cause all Notes surrendered for the purpose of payment, repurchase, registration of transfer or exchange or conversion, if surrendered to any Person other than the Trustee (including any of the Companys agents, Subsidiaries or Affiliates), to be surrendered to the Trustee for cancellation. All Notes delivered to the Trustee shall be canceled promptly by it upon receipt of a Company Order, and no Notes shall be authenticated in exchange thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of cancelled Notes in accordance with its customary procedures. The Trustee shall deliver copies of such cancelled Notes to the Company, at the Companys 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. Additional Notes; Repurchases. The Company may, without the consent of the Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes hereunder with the same terms as the Notes initially issued hereunder (other than differences in the issue date, the issue price and interest accrued prior to the issue date of such additional Notes) in an unlimited aggregate principal amount. If any such additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income tax purposes, such additional Notes shall have a separate CUSIP number. Prior to the issuance of any such additional Notes, the Company shall deliver to the Trustee a Company Order, an Officers Certificate and an Opinion of Counsel, such Officers Certificate and Opinion of Counsel to cover such matters, in addition to those required by Section 17.05, as the Trustee shall reasonably request. In addition, the Company may, to the extent permitted by law, and directly or indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or its Subsidiaries or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives. The Company shall cause any Notes so repurchased (other than Notes repurchased pursuant to cash-settled swaps or other derivatives) to be surrendered to the Trustee for cancellation in accordance with Section 2.08, and upon receipt of a Company Order, 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 surrender to the Trustee.
Section 2.11. Issuance of PIK Notes; Payment of PIK Interest. If the Company determines to pay PIK Interest in respect of the Notes, subject to any restrictions as set forth in the Form of Note in Exhibit A to this Indenture, the Company may elect to either increase the outstanding principal amount of the Notes or issue additional Notes (the PIK Notes) under this Indenture having the same terms as the Notes (in each case, a PIK Payment). The Company
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shall make a PIK Payment (x) with respect to Notes represented by one or more Global Notes, by increasing the principal amount of the outstanding Global Notes by an amount equal to the amount of PIK Interest due and payable (rounded up to the nearest whole U.S. dollar) and (y) with respect to Notes represented by Physical Notes, by issuing PIK Notes in physical form in an amount equal to the amount of PIK Interest due and payable (rounded up to the nearest whole U.S. dollar). In order to pay PIK Interest pursuant to this Section 2.11, the Company shall deliver a notice (a PIK Notice) to the Trustee no later than the 15th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, which notice shall state the total amount of interest to be paid on the Interest Payment Date and the amount of such interest to be paid as PIK Interest in accordance with the terms of the Notes. The Trustee, on behalf of the Company, shall promptly upon receipt of the PIK Notice, and in no event later than the 10th calendar day immediately prior to the Regular Record Date preceding such Interest Payment Date, deliver a corresponding notice prepared by the Company (which may be the same as the PIK Notice) to the Holders.
(b) Any PIK Notes issued in physical form will be issued with the designation PIK Notes on the face of such PIK Notes, and shall be in minimum denominations of $1.00 and integral multiples thereof. Any PIK Notes ranking pari passu with the Notes may be created and issued from time to time by the Company without notice to or consent of the Holders and shall be consolidated with and form a single class with the Notes and shall have the same terms as to status or otherwise as the Notes. All PIK Notes issued pursuant to a PIK Payment shall mature on the same Maturity Date as the originally issued Notes and shall be governed by, and subject to the terms, provisions and conditions of, this Indenture and shall have the same rights and benefits as the Notes. Trustee shall authenticate and deliver such PIK Notes in physical form for original issuance to the Holders thereof on the relevant Record Date, as shown by the records of the Note Register of such Holders.
(c) Following an increase in the principal amount of the outstanding Global Notes as a result of a PIK Payment, the Global Notes will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in physical form will be distributed to Holders, dated as of the applicable Interest Payment Date and will bear interest on the principal amount of such PIK Note from and after the Interest Payment Date in respect of which such PIK Payment was made.
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.01. Satisfaction and Discharge. This Indenture and the Notes shall upon request of the Company contained in an Officers Certificate cease to be of further effect, and the Trustee, at the expense of the Company, shall execute such instruments reasonably requested by the Company, acknowledging satisfaction and discharge of this Indenture and the Notes, when (i) all Notes theretofore authenticated and delivered (other than Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06) have been delivered to the Trustee for cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Fundamental Change Repurchase Date, upon conversion or otherwise,
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cash or cash, shares of Common Stock or a combination thereof, as applicable, solely to satisfy the Companys Conversion Obligation, sufficient to pay all of the outstanding Notes and all other sums due and payable under this Indenture by the Company; and 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 and the Notes have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive.
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
Section 4.01. Payment of Principal and Interest. The Company covenants and agrees that it will cause to be paid the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes. PIK Interest shall be considered paid on the Interest Payment Date after any PIK Notice has been delivered to Holders. In respect of such Interest Payment Date and PIK Payment, the Trustee shall either receive (i) a Company Order, pursuant to Section 2.11, to increase the balance of any Global Note to reflect such PIK Interest or (ii) a PIK Note duly executed by the Company together with a Company Order, pursuant to Section 2.11, requesting the authentication of such PIK Note by the Trustee.
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, 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. The Corporate Trust Office shall not be a place for service of legal process on the Company.
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Section 4.03. Appointments to Fill Vacancies in Trustees Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, 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 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 notice of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and
(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) or accrued and unpaid interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) and accrued and unpaid interest so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable. 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(j) or Section 6.01(k), 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
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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 deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company on request of the Company contained in an Officers Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease.
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 and the corporate existence of any Significant Subsidiary.
Section 4.06. Rule 144A Information Requirement and Annual Reports. (a) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and, upon written request, any Holder, beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A. 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 file with 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 Commissions EDGAR system shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system; provided, that the Trustee shall have no obligation to monitor whether such filings have been made or the content thereof.
(c) Delivery of the reports and documents described in subsection (b) above to the Trustee is for informational purposes only, and the Trustees receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Companys compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officers Certificate).
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(d) If, at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than reports on Form 8-K), or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates or Holders that were the Companys Affiliates at any time during the three months immediately preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on the Notes. Such Additional Interest shall accrue on the Notes at the rate of 0.50% per annum of the principal amount of the Notes outstanding for each day during such period for which the Companys failure to file has occurred and is continuing or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates (or Holders that were the Companys 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) If, and for so long as, the restrictive legend on the Notes specified in Section 2.05(c) has not been removed, the Notes are assigned a restricted CUSIP or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates or Holders that were the Companys Affiliates at any time during the three months immediately preceding (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the 365th day after the last date of original issuance of the Notes, the Company shall pay Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on the Notes has been removed in accordance with Section 2.05(c), the Notes are assigned an unrestricted CUSIP and the Notes are freely tradable pursuant to Rule 144 by Holders other than the Companys Affiliates (or Holders that were the Companys Affiliates at any time during the three months immediately preceding) without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes.
(f) Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes.
(g) The Additional Interest that is payable in accordance with Section 4.06(d) or Section 4.06(e) shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Companys election pursuant to Section 6.03.
(h) If Additional Interest is payable by the Company pursuant to Section 4.06(d) or Section 4.06(e), the Company shall deliver to the Trustee an Officers Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable.
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
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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 and, if so, specifying each such failure and the nature thereof.
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.
Section 4.09. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.
ARTICLE 5
LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 5.01. Lists of Holders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than 15 days after each March 15 and September 15 in each year beginning with September 15, 2019, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.
Section 5.02. Preservation and Disclosure of Lists. The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. Each of the following events shall be an Event of Default with respect to the Notes:
(a) default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 days;
(b) default in the payment of principal of any Note when due and payable on the Maturity Date, upon any required repurchase, upon declaration of acceleration or when otherwise due;
(c) failure by the Company to comply with its obligation to convert the Notes in accordance with this Indenture upon exercise of a Holders voluntary conversion right;
(d) failure by the Company to pay or deliver, as the case may be, the Settlement Amount owing upon conversion of any Note (including any Additional Shares or cash in lieu thereof) within 5 calendar days;
(e) 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 14.04(b) or notice of a specified corporate event in accordance with Section 14.01(b)(ii) or 14.01(b)(iii), in each case, when due, if such failure continues for three Business Days;
(f) failure by the Company to comply with its obligations under Article 11;
(g) 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 covenants or agreements contained in the Notes or this Indenture;
(h) default by the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken together, would constitute a 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 $15,000,000 (or its foreign currency equivalent), individually or 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, and in the case of clause (i) and (ii), such acceleration shall not have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days of becoming due and payable;
(i) a final judgment or judgments for the payment of $15,000,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate
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rendered against the Company or any Subsidiary of the Company, which judgment is not discharged, bonded, paid, waived or stayed within 30 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;
(j) the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken together, would constitute a 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;
(k) an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary (or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary) seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 90 consecutive days; or
(l) the occurrence of an Event of Default as such term is defined and as set forth in the Mandatory Indenture.
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(j) or Section 6.01(k) 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, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by notice in writing to the Company (and to the Trustee if given by Holders), may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything contained in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default specified in Section 6.01(j) or Section 6.01(k) with respect to the Company or any of its Significant Subsidiaries occurs, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall become and shall automatically be immediately due and payable without any declaration or other act of the Holders or any act on the part of the Trustee.
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
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judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest to the extent that payment of such interest is enforceable under applicable law, and on such principal at the rate borne by the Notes at such time, plus one percent) 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 (including PIK Notes), by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon. Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes.
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 Companys failure to comply with its obligations as set forth in Section 4.06(b) 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) or Section 4.06(e). If the Company so elects, such Additional Interest shall be payable in the same manner and on the same dates as the stated interest payable on the Notes. On the 61st day after such Event of Default (if the Event of Default relating to the Companys failure to file 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 Companys failure to comply with its obligations as set forth in Section 4.06(b). In the event the Company does not elect to pay Additional Interest following an Event of Default in accordance with this Section 6.03 or the Company elected to make such payment but does not pay the Additional Interest when due, the Notes shall be immediately subject to acceleration as provided in Section 6.02.
In order to elect to pay Additional Interest as the sole remedy during the first 60 days after the occurrence of any Event of Default described in the immediately preceding paragraph,
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the Company must notify 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 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, plus one percent, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 7.06. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.
In the event there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.04, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued and unpaid interest, if any, in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees, and including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies,
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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, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:
First, to the payment of all amounts due the Trustee under this Indenture;
Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Trustee) upon such overdue payments at the rate borne by the Notes at such time, plus one percent, 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
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applicable, the payment of the Fundamental Change Repurchase Price and any cash due upon conversion) then owing and unpaid upon the Notes for principal and interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Trustee, upon overdue installments of interest at the rate borne by the Notes at such time plus one percent, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Fundamental Change Repurchase Price and the cash due upon conversion) and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal (including, if applicable, the Fundamental Change Repurchase Price and any cash due upon conversion) and accrued and unpaid interest; and
Fourth, to the payment of the remainder, if any, to the Company.
Section 6.06. Proceedings by Holders. Except to enforce the right to receive payment of principal (including, if applicable, the Fundamental Change Repurchase Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless:
(a) such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;
(b) Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder;
(c) such Holder(s) shall have offered to the Trustee such security or indemnity satisfactory to it in its reasonable discretion against any loss, liability or expense to be incurred therein or thereby;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of such security or indemnity, shall have failed to institute any such action, suit or proceeding; and
(e) no direction that 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
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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, which is absolute and unconditional, to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, and such rights shall not be impaired without the consent of such Holders.
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 (including any PIK Notes) 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 that might be incurred by it in compliance with such request or direction; provided, however, that the Trustee may take any other action deemed necessary by the Trustee that is not inconsistent with such direction. The Holders of a majority in aggregate principal amount of the Notes at the
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time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and its consequences except (i) a default in the payment of accrued and unpaid interest, if any, on, or the principal (including any Fundamental Change Repurchase Price) of, the Notes when due that has not been cured pursuant to the provisions of Section 6.01, (ii) a failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iii) a default in respect of a covenant or provision hereof which under Article 10 cannot be modified or amended without the consent of each Holder of an outstanding Note affected. Upon any such waiver the Company, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 6.09, said Default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.
Section 6.10. Notice of Defaults. The Trustee shall, within 90 days after it obtains knowledge of the occurrence and continuance of a Default of which a Responsible Officer has actual knowledge, deliver to all Holders notice of all Defaults known to a Responsible Officer, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Fundamental Change Repurchase Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as 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 Fundamental Change Repurchase Price, if applicable) on or after the due date expressed or provided for in such Note or to any suit for the enforcement of the right to convert any Note, or receive the consideration due upon conversion, in accordance with the provisions of Article 14.
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ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In the event an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it in its reasonable 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 and after the curing or waiving of all Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
(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
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any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the Notes;
(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless a Responsible Officer of the Trustee had actual knowledge of such event;
(g) in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing trust account, and in no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity date or the failure of the party directing such investments prior to its maturity date or the failure of the party directing such investment to provide timely written investment direction, and the Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company; and
(h) in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent hereunder, the rights and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent and to each agent, custodian, and other Person employed to act hereunder.
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 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 to the Trustee security or indemnity satisfactory to it in its reasonable discretion against any loss, liability or expense.
Section 7.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 7.01:
(a) the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
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(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(d) 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;
(e) 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;
(f) the permissive rights of the Trustee enumerated herein shall not be construed as duties;
(g) 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;
(h) the Trustee shall not be responsible for monitoring the performance of other persons or for the failure of others to perform their duties;
(i) 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;
(j) 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; and
(k) 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.
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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. 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 contained herein and in the Notes (except in the Trustees certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.
Section 7.04. Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent, Bid Solicitation Agent 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 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 in respect of Interest Amounts or in connection with any discharge of this Indenture pursuant to Article 3 hereof, but shall satisfy its obligation as Conversion Agent or Paying 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 from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable 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
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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 as determined by a final non-appealable order of a court of competent jurisdiction 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 or other property, funds held in trust herewith for the benefit of the Holders of particular Notes. The Trustees right to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company. The obligation of the Company under this Section 7.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.
Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(j) or Section 6.01(k) 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 and Opinion of Counsel as Evidence. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers Certificate and Opinion of Counsel delivered to the Trustee, and such Officers Certificate and Opinion of Counsel, in the absence of gross negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 7.08. Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (as if the Trust Indenture Act were applicable hereto) to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this 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.
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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 (including any PIK Notes), 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.
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Section 7.10. Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 7.09 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 7.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.
Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at the written direction and at the expense of the Company shall deliver or cause to be delivered notice of the succession of such trustee hereunder to the Holders. If the Company fails to deliver such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be delivered at the expense of the Company.
Section 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
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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. Trustees Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable to the Company for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has indicated to the Trustee should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.
ARTICLE 8
CONCERNING THE HOLDERS
Section 8.01. Action by Holders. Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article 9, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders. Whenever the Company or the Trustee solicits the taking of any action by the Holders 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
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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 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 holders 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 actually knows are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgees 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 such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.
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ARTICLE 9
HOLDERS MEETINGS
Section 9.01. Purpose of Meetings. A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article 9 for any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any Default or Event of Default hereunder (in each case, as permitted under this Indenture) and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;
(b) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 7;
(c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or
(d) to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law.
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. 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
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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.
Section 9.06. Voting. The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was 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.
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Section 9.07. No Delay of Rights by Meeting. Nothing contained in this Article 9 shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Notes.
ARTICLE 10
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures Without Consent of Holders. The Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Companys expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:
(a) to cure any ambiguity, omission, defect or inconsistency as set forth in an Officers Certificate (provided that such cure does not affect the Holders adversely);
(b) to provide for the assumption by a Successor Company of the obligations of the Company under this Indenture and the Notes 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 14.03, and to make such related changes to the terms of the Notes to the extent expressly required by Section 14.08;
(h) to eliminate, in the aggregate, any one or two Settlement Methods or, in the case of Combination Settlement, irrevocably elect a Specified Dollar Amount; or
(i) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act.
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 Trustees 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.
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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 (including any PIK Notes, and 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 Companys 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) change the stated maturity of the principal of or any interest on the Notes;
(b) reduce the principal amount of or interest on the Notes;
(c) reduce the amount of principal payable upon acceleration of the maturity of the Notes;
(d) change the currency of payment of principal of or Interest on the Notes or change any Notes place of payment;
(e) impair the right of any Holder to receive payment of principal of and Interest on such Holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on, or with respect to, the Notes;
(f) modify the provisions with respect to the purchase rights of the Holders as provided in Article 15 in a manner adverse to Holders of Notes;
(g) change the ranking of the Notes;
(h) adversely affect the right of Holders to convert their Notes hereunder, or reduce the Applicable Conversion Rate (it being understood that the Trustee shall have no responsibility for making a determination as to whether such amendment adversely affects the rights of the Holders); or
(i) modify provisions with respect to modification, amendment or waiver (including waiver of Events of Default), except to increase the percentage required for modification, amendment or waiver or to provide for consent of each affected Holder of Notes.
Upon the written request of the Company, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustees own rights, duties, liabilities 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.
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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 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 Companys expense, bear a notation in form approved by the Company 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 Companys 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 properties and assets to another Person, unless:
(a) the resulting, surviving or transferee Person (the Successor Company), if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture all of the obligations of the Company under the Notes and this Indenture;
(b) the Company delivers an Officers Certificate and Opinion of Counsel to the Trustee stating that such consolidation, merger or sale, conveyance, transfer or lease and any
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supplemental indenture comply with this Indenture and that all conditions precedent set forth in this Indenture have been complied with; and
(c) 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 Companys 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
49
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
[INTENTIONALLY OMITTED]
ARTICLE 14
CONVERSION OF NOTES
Section 14.01. Voluntary Conversion. (a) Subject to and upon compliance with the provisions of this Article 14, each Holder of a Note shall have the right, at such Holders option, to convert all or any portion 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 January 1, 2024 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 January 1, 2024 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 0.12103 (subject to adjustment as provided in this Article 14, the Applicable Conversion Rate) per $1.00 principal amount of Notes (subject to, and in accordance with, the settlement provisions of Section 14.03, the Conversion Obligation), equivalent to the Conversion Price.
(b) (i) On and after July 1, 2020, but prior to the close of business on the Business Day immediately preceding January 1, 2024, 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 twenty 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
50
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 Applicable Conversion Rate on each such Trading Day (the Trading Price Condition). 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 (if other than the Company) of the three independent nationally recognized securities dealers selected by the Company pursuant to the definition of Trading Price, along with appropriate contact information for each. The Bid Solicitation Agent 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 provided the Bid Solicitation Agent of the names and contact information for such dealers) 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 Applicable 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 Applicable Conversion Rate.
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 Applicable Conversion Rate on each Trading Day of such failure.
If on any date of determination of the Trading Price (i) the Bid Solicitation Agent cannot reasonably obtain at least one bid for $2,000,000 principal amount of Notes from an independent nationally recognized securities dealer, (ii) if the Company has failed to request the Bid Solicitation Agent to obtain bids when required or (iii) if the Company requested the Bid Solicitation Agent to obtain bids and the Bid Solicitation Agent has failed to obtain such bids, then, in each case, the Notes shall be convertible under the Trading Price Condition for the next 5 consecutive Business Days following such date of determination. The Company shall determine the Trading Price of the Notes and whether the Trading Price Condition has been met, and, if so, the Company shall so notify the Holders, the Trustee, the Conversion Agent and the Bid Solicitation Agent.
If, at any time after the Trading Price Condition has been met, the Trading Price per $1,000 principal amount of the Notes is greater than or equal to 98% of the product of the Closing Sale Price of the Common Stock and the applicable Applicable Conversion Rate for such date, the Company shall so notify the Holders, the Trustee, the Conversion Agent and the Bid Solicitation Agent.
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If the Trading Price condition set forth above has been met, the Company shall so notify the Holders in writing, the Trustee and the Conversion Agent (if other than the Trustee). 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 Applicable Conversion Rate for such date, the Company shall so notify the Holders of the Notes in writing, the Trustee and the Conversion Agent (if other than the Trustee).
(ii) If, prior to the close of business on the Business Day immediately preceding January 1, 2024, 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 cash, debt securities (or other evidence of indebtedness) or other assets or securities (including, for the avoidance of doubt, any rights, options or warrants that are not described in clause (i) above, but excluding dividends or distributions described in Section 14.04(c), which distribution has a per share value exceeding 10% of the Closing Sale Price of Common Stock as of the Trading Day immediately preceding the declaration date for such distribution,
then, in either case, the Company shall notify in writing all Holders of the Notes, the Trustee and the Conversion Agent (if other than the Trustee) either (x) at least 35 Scheduled Trading Days prior to the Ex-Dividend Date for such distribution or (y) at least 10 Scheduled Trading Days prior to the Ex-Dividend Date for such distribution; provided that, if the Company provides such notice in accordance with this clause (y) but not in accordance with the immediately preceding clause (x), notwithstanding anything to the contrary in this Indenture, the Company shall be required to settle all conversions of Notes with a Conversion Date occurring during the period from, and including, the date of such notice to, and including, the Ex-Dividend Date for such distribution using Physical Settlement and the Company shall so notify the Holders in such notice. Once the Company has given such notice, Holders may surrender their Notes for conversion at any time until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date and the Companys announcement that such issuance or distribution will not take place. A Holder may not convert any of its Notes under this subsection (b)(ii) if the Company provides that Holders of the Notes shall participate, at the same time and upon the same terms as holders of Common Stock and as a result of holding the Notes, in the relevant distribution described above without having to convert their Notes as if they held a number of shares of Common Stock equal to the Applicable
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Conversion Rate on the record date for the distribution multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.
(iii) If (A) a transaction or event that constitutes a Fundamental Change or a Make-Whole Fundamental Change occurs prior to the close of business on the Business Day immediately preceding January 1, 2024, regardless of whether a Holder has the right to require the Company to repurchase the Notes pursuant to Section 15.02, or (B) the Company is a party to a consolidation, merger, binding share exchange, or sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of its assets that occurs prior to the close of business on the Business Day immediately preceding January 1, 2024, in each case, pursuant to which the Common Stock would be converted into cash, securities or other assets, then all or any portion of a Holders Notes may be surrendered for conversion at any time from or after the date that is 35 Scheduled Trading Days prior to the anticipated effective date of the transaction (or, if later, the earlier of (x) the Business Day after the Company gives notice of such transaction and (y) the actual effective date of such transaction) until 35 Trading Days after the actual effective date of such transaction or, if such transaction also constitutes a Fundamental Change, until the close of business on the related Fundamental Change Repurchase Date. The Company shall give notice to Holders, the Trustee and the Conversion Agent (if other than the Trustee) (x) as promptly as practicable following the date the Company publicly announces such transaction but in no event less than 35 Scheduled Trading Days prior to the anticipated effective date of such transaction or (y) if the Company does not have knowledge of such transaction at least 35 Scheduled Trading Days prior to the anticipated effective date of such transaction, within one Business Day of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction, but in no event later than the actual effective date of such transaction; provided that, notwithstanding the foregoing, in no event shall the Company be required to provide such notice to the Holders before the earlier of such time as the Company or its affiliates (x) have publicly disclosed or acknowledged the circumstances giving rise to such transaction or event and (y) are required to publicly disclose under applicable law or the rules of any securities exchange on which the Common Stock is then listed or admitted for trading the circumstances giving rise to such transaction or event.
(iv) Notwithstanding anything to the contrary in this Section 14.01, on and after July 1, 2020, but prior to the close of business on the Business Day immediately preceding January 1, 2024, a Holder may surrender all or any portion of its Notes for conversion at the Applicable Conversion Rate, at any time during a calendar quarter, but only during that 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 110% of the Conversion Price on each applicable Trading Day. The Company shall determine at the end of the immediately preceding calendar quarter whether the Notes may be surrendered for conversion in accordance with this clause Section 14.01(b)(iv) and shall notify the Holders, the Conversion Agent and the Trustee if the Notes become convertible in accordance with this clause (iv). Such notice shall be delivered no later than no later than
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the open of business on the sixth Business Day of the month immediately after the end of the immediately preceding calendar quarter.
(v) Notwithstanding anything to the contrary in this Indenture: (a) the maximum amount a converting holder is entitled to convert within any one calendar quarter, pursuant to Section 14.01(b)(i) and Section 14.01(b)(iv), shall not exceed 30% of the original aggregate principal amount of the Note(s) held by such converting holder (Voluntary Conversion Limitation) and upon delivery of any Conversion Notice (including through the applicable procedures of the Depositary), such converting holder shall be deemed to represent and warrant that such limitation is not exceeded. The Trustee and the Conversion Agent shall have no obligation to monitor the Voluntary Conversion Limitation and shall have no liability for any conversions made by holders exceeding the Voluntary Conversion Limitation.
Section 14.02. [Intentionally Omitted].
Section 14.03. Conversion Procedure; Settlement Upon Conversion.
(a) Subject to this Section 14.03, Section 14.04(b) and Section 14.08(a), upon conversion of any Note pursuant to Section 14.01, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1.00 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 14.03 (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 14.03 (Combination Settlement), at its election, as set forth in this Section 14.03.
(i) All conversions for which the relevant Conversion Date occurs on or after January 1, 2024 shall be settled using the same Settlement Method.
(ii) Except for any conversions for which the relevant Conversion Date occurs on or after January 1, 2024, 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 to converting Holders, the Trustee and the Conversion Agent (if other than the Trustee) no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions for which the relevant Conversion Date occurs on or after January 1, 2024, no later than January 1, 2024). If the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement and the Company shall be
54
deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1.00 principal amount of Notes shall be equal to $1.00. 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 $1.00 principal amount of Notes. If the Company delivers a Settlement Notice electing Combination Settlement in respect of its Conversion Obligation but does not indicate a Specified Dollar Amount per $1.00 principal amount of Notes in such Settlement Notice, the Specified Dollar Amount per $1.00 principal amount of Notes shall be deemed to be $1.00.
(iv) The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the Settlement Amount) shall be computed as follows:
(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1.00 principal amount of Notes being converted a number of shares of Common Stock equal to the Applicable Conversion Rate in effect on the Conversion Date plus cash in lieu;
(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1.00 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 25 consecutive Trading Days during the related Observation Period; and
(C) if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, in respect of each $1.00 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 25 consecutive Trading Days during the related Observation Period plus cash in lieu.
(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 14.03(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
55
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 14.03(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a Notice of Conversion) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents 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 14.03(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 14.04(b) and Section 14.08(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 to the stock transfer agent or to such Holder, or such Holders 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 Companys 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.
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(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 Holders name, in which case the Holder shall pay that tax. The stock transfer agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holders 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 14.05, 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. The Companys settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of Notes into a combination of cash and shares of Common Stock, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such conversion. Notwithstanding the foregoing, if Notes are converted after the close of business on a Regular Record Date, Holders of such Notes as of the close of business on such Regular Record Date will receive the full amount of interest payable on such Notes (including a PIK Payment, if applicable) 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, however, must be accompanied by funds equal to the amount of interest payable on the Notes so converted (regardless of whether a PIK Payment will be made or shares of common stock will be issued, and in the event of a PIK Payment or distribution of shares of common stock, the interest payable will be the cash equivalent of any PIK Payment); provided that no such payment shall be required (1) for conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; or (3) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect to such Note. Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date shall receive the full interest payment due on the Maturity 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
57
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 14.04. Increased Applicable Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes. (a) If the Effective Date of a Make-Whole Fundamental Change occurs prior to the Maturity Date, and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change, the Company shall, under the circumstances described below, increase the Applicable Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the Additional Shares), as described below. A conversion of Notes shall be deemed for these purposes to be in connection with such Make-Whole Fundamental Change if the relevant Notice of Conversion is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Business Day immediately prior to the related Fundamental Change Repurchase Date (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for the proviso in clause (b) of the definition thereof, the 35th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change) (such period, the Make-Whole Fundamental Change Period).
(b) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change pursuant to Section 14.01(b)(iii), the Company shall, at its option, satisfy the related Conversion Obligation by Physical Settlement, Cash Settlement or Combination Settlement in accordance with Section 14.03; 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 $1.00 principal amount of converted Notes equal to the Applicable Conversion Rate (including any adjustment for Additional Shares), multiplied by such Stock Price. In such event, the Conversion Obligation shall be paid to Holders in cash on the third Business Day following the Conversion Date. The Company shall notify the Holders of Notes, the Trustee and the Conversion Agent 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.
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(c) The number of Additional Shares, if any, by which the Applicable 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 (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 (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 Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change. The Board of Directors shall make appropriate adjustments to the Stock Price, in its good faith determination, to account for any adjustment to the Applicable Conversion Rate that becomes effective, or any event requiring an adjustment to the Applicable Conversion Rate where the Ex-Dividend Date, Effective Date (as such term is used in Section 14.05) or expiration date of the event occurs during such five consecutive Trading Day period.
(d) The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Applicable Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Applicable Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Applicable 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 Applicable Conversion Rate as set forth in Section 14.05.
(e) The following table sets forth the number of Additional Shares of Common Stock by which the Applicable Conversion Rate shall be increased per $1.00 principal amount of Notes pursuant to this Section 14.04 for each Stock Price and Effective Date set forth below:
Stock Price | ||||||||||||||||||||||||||||||||||||||||
Effective Date |
$6.62 | $7.50 | $8.26 | $10.00 | $12.00 | $15.00 | $20.00 | $25.00 | $30.00 | $40.00 | ||||||||||||||||||||||||||||||
April 3, 2019 |
$ | 0.0302 | $ | 0.0302 | $ | 0.0257 | $ | 0.0180 | $ | 0.0127 | $ | 0.0081 | $ | 0.0043 | $ | 0.0024 | $ | 0.0014 | 0.0004 | |||||||||||||||||||||
April 3, 2020 |
$ | 0.0302 | $ | 0.0293 | $ | 0.0242 | $ | 0.0165 | $ | 0.0114 | $ | 0.0071 | $ | 0.0037 | $ | 0.0021 | $ | 0.0012 | 0.0003 | |||||||||||||||||||||
April 3, 2021 |
$ | 0.0302 | $ | 0.0274 | $ | 0.0222 | $ | 0.0145 | $ | 0.0096 | $ | 0.0058 | $ | 0.0030 | $ | 0.0017 | $ | 0.0010 | 0.0002 | |||||||||||||||||||||
April 3, 2022 |
$ | 0.0302 | $ | 0.0247 | $ | 0.0192 | $ | 0.0116 | $ | 0.0072 | $ | 0.0042 | $ | 0.0021 | $ | 0.0012 | $ | 0.0007 | 0.0002 | |||||||||||||||||||||
April 3, 2023 |
$ | 0.0302 | $ | 0.0205 | $ | 0.0146 | $ | 0.0072 | $ | 0.0039 | $ | 0.0021 | $ | 0.0012 | $ | 0.0007 | $ | 0.0004 | 0.0001 | |||||||||||||||||||||
April 3, 2024 |
$ | 0.0302 | $ | 0.0123 | $ | 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;
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(ii) if the Stock Price is greater than $40.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Applicable Conversion Rate; and
(iii) if the Stock Price is less than $6.61 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Applicable Conversion Rate.
Notwithstanding the foregoing, in no event shall the Applicable Conversion Rate per $1.00 principal amount of Notes exceed 0.1512 shares of Common Stock, subject to adjustment in the same manner as the Applicable Conversion Rate pursuant to Section 14.05.
(f) Nothing in this Section 14.04 shall prevent an adjustment to the Applicable Conversion Rate pursuant to Section 14.05 in respect of a Make-Whole Fundamental Change.
Section 14.05. Adjustment of Applicable Conversion Rate. The Applicable 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 Applicable 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 14.05, without having to convert their Notes, as if they held a number of shares of Common Stock equal to the Applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.
(a) If the Company issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Company effects a share split or share combination, the Applicable Conversion Rate shall be adjusted based on the following formula:
where,
CR0 |
= |
the Applicable 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 |
= |
the Applicable Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or Effective Date, as the case may be; | ||
OS0 |
= |
the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date, as the case may be; and |
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OS |
= |
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 14.05(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 14.05(a) is declared but not so paid or made, the Applicable 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 Applicable 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 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 Applicable Conversion Rate shall be increased based on the following formula:
where,
CR0 |
= |
the Applicable Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance; | ||
CR |
= |
the Applicable Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||
OS0 |
= |
the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date; | ||
X |
= |
the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and | ||
Y |
= |
the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. |
Any increase made under this Section 14.05(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 Applicable
61
Conversion Rate shall be decreased to the Applicable 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 Applicable Conversion Rate shall be decreased to the Applicable Conversion Rate that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.
For purposes of this Section 14.05(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 in good faith 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 14.05(a) or Section 14.05(b), (ii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 14.05(d) shall apply, (iii) except as otherwise provided in Section 14.12, 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 14.05(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 Applicable Conversion Rate shall be increased based on the following formula:
where,
CR0 |
= |
the Applicable Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution; | ||
CR |
= |
the Applicable Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||
SP0 |
= |
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and |
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FMV |
= |
the fair market value (as determined in good faith 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 14.05(c) above shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. No adjustment pursuant to the above formula shall result in a decrease of the Conversion Rate; provided that if such distribution is not so paid or made, the Applicable Conversion Rate shall be decreased to the Applicable 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 $1.00 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 Applicable 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 14.05(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 14.05(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a Spin-Off), the Applicable Conversion Rate shall be increased based on the following formula:
where,
CR0 |
= |
the Applicable Conversion Rate in effect immediately prior to the end of the Valuation Period; | ||
CR |
= |
the Applicable Conversion Rate in effect immediately after the end of the Valuation Period; | ||
FMV0 |
= |
the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the Valuation Period); and |
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MP0 |
= |
the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. |
The adjustment to the Applicable 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 Applicable 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 Applicable Conversion Rate as of such Trading Day. If the Ex-Dividend Date of the Spin-Off is after the 10th Trading Day immediately preceding, and including, the end of any Observation Period in respect of a conversion of Notes, references to 10 or 10th in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for the Spin-Off to, and including, the last Trading Day of such Observation Period.
For purposes of this Section 14.05(c) (and subject in all respect to Section 14.12), rights, options or warrants distributed by the Company to all or substantially all holders of the Common Stock entitling them to subscribe for or purchase shares of the Companys 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 14.05(c) (and no adjustment to the Applicable Conversion Rate under this Section 14.05(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 Applicable Conversion Rate shall be made under this Section 14.05(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 Applicable Conversion Rate under this Section 14.05(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 purchase (x) the Applicable Conversion Rate shall be readjusted as if
64
such rights, options or warrants had not been issued and (y) the Applicable 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 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 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 Applicable Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.
For purposes of Section 14.05(a), Section 14.05(b) and this Section 14.05(c), if any dividend or distribution to which this Section 14.05(c) is applicable also includes one or both of:
(A) a dividend or distribution of shares of Common Stock to which Section 14.05(a) is applicable (the Clause A Distribution); or
(B) a dividend or distribution of rights, options or warrants to which Section 14.05(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 14.05(c) is applicable (the Clause C Distribution) and any Applicable Conversion Rate adjustment required by this Section 14.05(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 Applicable Conversion Rate adjustment required by Section 14.05(a) and Section 14.05(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 14.05(a) or outstanding immediately prior to the open of business on such Ex-Dividend Date within the meaning of Section 14.05(b).
(d) If any cash dividend or distribution is made to all or substantially all holders of the Common Stock, the Applicable Conversion Rate shall be adjusted based on the following formula:
where,
CR0 |
= |
the Applicable Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution; |
65
CR |
= |
the Applicable Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; | ||
SP0 |
= |
the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and | ||
C |
= |
the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock. |
Any increase pursuant to this Section 14.05(d) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. No adjustment pursuant to the above formula shall result in a decrease of the Conversion Rate; provided that if such dividend or distribution is not so paid, the Applicable 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 Applicable 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 $1.00 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Applicable Conversion Rate on the Ex-Dividend Date for such cash dividend or distribution.
(e) If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Applicable Conversion Rate shall be increased based on the following formula:
where,
CR0 |
= |
the Applicable Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||
CR |
= |
the Applicable 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 in good faith by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer; |
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OS0 |
= |
the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); | ||
OS |
= |
the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and | ||
SP |
= |
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires. |
The increase to the Applicable Conversion Rate under this Section 14.05(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 Applicable 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 Applicable Conversion Rate as of such Trading Day. In addition, if the Trading Day next succeeding the date such tender or exchange offer expires is after the 10th Trading Day immediately preceding, and including, the end of any Observation Period in respect of a conversion of Notes, references to 10 or 10th in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day of such Observation Period. No adjustment pursuant to the above formula shall result in a decrease of the Conversion Rate. If the Company or any of its Subsidiaries is obligated to purchase Common Stock pursuant to any such tender offer or exchange offer, but the Company or any of its Subsidiaries is ultimately prevented by applicable law from effecting all or any portion of such purchases or all or any portion of such purchases are rescinded, the Conversion Rate shall immediately be readjusted to be the Conversion Rate that would then be in effect if such tender offer or exchange offer had not been made or had been made only in respect of the purchase of Common Stock that had been effected.
(f) Notwithstanding this Section 14.05 or any other provision of this Indenture or the Notes, if a Applicable Conversion Rate adjustment becomes effective on any Ex-Dividend Date,
67
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 14.03(i) based on an adjusted Applicable Conversion Rate for such Ex-Dividend Date, then, notwithstanding the Applicable Conversion Rate adjustment provisions in this Section 14.05, the Applicable 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.
(g) Except as stated herein, the Company shall not adjust the Applicable Conversion Rate for the issuance of shares of the Common Stock or any securities convertible into or exchangeable for shares of the Common Stock or the right to purchase shares of the Common Stock or such convertible or exchangeable securities.
(h) In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 14.05, and to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Companys securities are then listed, the Company from time to time may increase the Applicable 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 Companys best interest. In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Companys securities are then listed, the Company may (but is not required to) increase the Applicable 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 Applicable Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least 15 days prior to the date the increased Applicable Conversion Rate takes effect, and such notice shall state the increased Applicable Conversion Rate and the period during which it will be in effect.
(i) Notwithstanding anything to the contrary in this Article 14, the Applicable 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 Companys securities and the investment of additional optional amounts in shares of Common Stock under any plan;
(ii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Companys Subsidiaries;
(iii) upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes were first issued;
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(iv) solely for a change in the par value of the Common Stock; or
(v) for accrued and unpaid interest, if any.
(j) All calculations and other determinations under this Article 14 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share. The Company shall not be required to make an adjustment in the Conversion Rate unless the adjustment would require a change of at least 1% in the Conversion Rate; provided that the Company shall carry forward any adjustment that is less than 1% of the Conversion Rate, take such carried-forward adjustments into account in any subsequent adjustment, and make such carried forward adjustments, regardless of whether the aggregate adjustment is less than 1%, (i) on the Conversion Date for any Notes, (ii) on each Trading Day of the Conversion Period in respect of any Notes, and (iii) on any Fundamental Change effective date, unless such adjustment has already been made.
(k) Whenever the Applicable Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officers Certificate setting forth the Applicable 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 Applicable Conversion Rate and may assume without inquiry that the last Applicable 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 Applicable Conversion Rate setting forth the adjusted Applicable Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Applicable Conversion Rate to each Holder. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
(l) For purposes of this Section 14.05, 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 14.06. Adjustments of Prices. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts over a span of multiple days (including an Observation Period and the period for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the Board of Directors shall make appropriate adjustments to each to account for any adjustment to the Applicable Conversion Rate that becomes effective, or any event requiring an adjustment to the Applicable 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 14.07. 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
69
are presented for conversion (assuming delivery of the maximum number of Additional Shares pursuant to Section 14.04 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 14.08. 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, assignment, conveyance, lease or other transfer to a third party of the consolidated assets of the Company and the Companys 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 and after the effective time of such Share Exchange Event, the right to convert each $1.00 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 Applicable 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 $1.00 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 14.03 and (B) (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.03 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 14.03 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
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part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be (x) the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (y) if no holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock. If the holders of the Common Stock receive only cash in such 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 $1.00 principal amount of Notes shall be solely cash in an amount equal to the Applicable Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 14.04), multiplied by the price paid per share of Common Stock in such Share Exchange Event and (B) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the third Business Day immediately following the relevant Conversion Date. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made.
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 purchasing 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 14.08, the Company shall promptly file with 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 14.08. 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, at the Companys election, as set forth in Section 14.01 and Section 14.03 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.
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Section 14.09. 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 14.10. 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 Applicable Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Applicable Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 14.08 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 14.08 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 (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 14.01(b) has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent the notices referred to in Section 14.01(b) with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent immediately after the occurrence of any such event or at such other times as shall be provided for in Section 14.01(b).
Section 14.11. Notice to Holders Prior to Certain Actions. In case of any:
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(a) action by the Company or one of its Subsidiaries that would require an adjustment in the Applicable Conversion Rate pursuant to Section 14.05 or Section 14.12;
(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 filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be delivered to each Holder, as promptly as possible but in any event at least 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 14.12. Stockholder Rights Plans. If the Company has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if, prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights plan, the Applicable 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 14.05(c), subject to readjustment in the event of the expiration or termination of such rights.
Section 14.13. Ownership Limitation.
(a) Notwithstanding the provisions of Section 14.01, during any period of time in which a Holders beneficial ownership (as determined in accordance with Rule 13d-3 of the Exchange Act) of Common Stock is less than 9.5%, the Holder shall not have the right to voluntarily convert all or any portion of the Notes, and shall not be entitled to receive shares of Common Stock in exchange therefore, if (but only to the extent that) upon and after giving effect to such conversion (and issuance of any shares of Common Stock in satisfaction of any Fundamental Change or Make-Whole Fundamental Change, as the case may be), and taking into account the method of settlement elected by (or deemed to have been elected by) the Company under Section 14.03, such Holder (together with such Holders Affiliated Parties (including shares held by any group of which the Holder or any of its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holders
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for purposes of Section 13(d) of the Exchange Act (the Affiliated Parties) (including shares held by any group of which the Holder or any of its Affiliated Parties is a member)) would have beneficial ownership of more than 9.5% of the total number of shares of Common Stock then issued and outstanding (the Ownership Limitation); provided, that, a Holder may, at its option and upon not less than sixty-one (61) days prior notice to the Company, elect to increase the Ownership Limitation up to 19.99% of the total number of shares of Common Stock then issued and outstanding. Any such increase will not be effective until the 61st day after such notice is delivered to the Company. The Company hereby covenants and agrees not to adopt any shareholder rights plan or take any other action which would have the effect of restricting or adversely affecting the Holders election to change such threshold percentage. When submitting any Conversion Notice through the applicable procedures of the Depositary, such holder shall be deemed to represent and warrant that such conversion will not result in a breach of the Ownership Limitation.
The Trustee and the Conversion Agent shall have no obligation to monitor a Holders beneficial ownership of Common Stock or the Ownership Limitation and shall have no liability for conversions made by beneficial owners exceeding the Ownership Limitation.
(b) For the avoidance of doubt, if a Holder, pursuant to Section 14.01(a), purports to convert the Principal Amount of any Notes into shares of Common Stock hereunder and any delivery otherwise owed to such Holder hereunder is not made, in whole or in part, as a result of the Ownership Limitation or any other limitation set forth herein, then the Holders rights under the relevant Notes, or portion thereof, pursuant to which such delivery was not made will not be extinguished and, instead such Notes, or portion thereof, will be deemed to have never been converted.
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 Holders option, to require the Company to repurchase for cash all of such Holders Notes, or any portion thereof that is equal to $1.00 or an integral multiple of $1.00, 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 Fundamental Change Repurchase Date (the Fundamental Change Repurchase Price), unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full amount of accrued and unpaid interest to Holders of record as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes to be repurchased pursuant to this Article 15.
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(b) Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder thereof, upon:
(i) delivery to the Paying Agent or tender agent appointed by the Company to facilitate the repurchase (the Tender 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 Depositarys 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 or Tender Agent at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Paying Agent or the principal office of the Tender Agent located in the contiguous United States as notified by the Tender Agent to Holders and the Trustee, 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:
(i) in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;
(ii) the portion of the principal amount of Notes to be repurchased, which must be $1.00 or an integral multiple thereof; and
(iii) that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture;
provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice must comply with appropriate Depositary procedures.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent or Tender Agent, as the case may be, 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 or Tender Agent, as the case may be, in accordance with Section 15.03.
The Paying Agent or Tender Agent, as the case may be, shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.
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(c) On or before the fifth (5th) Business Day after the occurrence of the effective date of a Fundamental Change, the Company shall provide to all Holders of Notes and the Trustee, Conversion Agent (in the case of a Conversion Agent other than the Trustee) and the Paying Agent (in the case of a Paying Agent other than the Trustee) a 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 Companys 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 and whether such Fundamental Change is a Make-Whole Adjustment Event;
(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 or Tender Agent, as the case may be, and the Conversion Agent, if applicable;
(vii) if applicable, the Applicable Conversion Rate and any adjustments to the Applicable 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 Companys request, delivered at least two Business Days prior to the Fundamental Change Company Notice is to be sent, the Trustee shall give such notice in the Companys name and at the Companys expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company.
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(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 or Tender Agent, as the case may be, will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.
Section 15.03. Withdrawal of Fundamental Change Repurchase Notice. (a) A Fundamental Change Repurchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Corporate Trust Office of the Paying Agent or the principal office of the Tender Agent located in the contiguous United States as notified by the Tender Agent, as the case may be, 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,
(ii) if Physical Notes have been issued, the certificate number of the Note in respect of which such notice of withdrawal is being submitted, and
(iii) the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1.00 or an integral multiple of $1.00;
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 or Tender Agent, as the case may be, 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 or Tender Agent, as the case may be, 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 or Tender Agent, as the case may be, 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
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such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.
(b) If by 11:00 a.m. New York City time, on the Fundamental Change Repurchase Date, the Trustee (or other Paying Agent or Tender Agent, as the case may be, appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such Fundamental Change Repurchase Date, then, with respect to the Notes that have been properly surrendered for repurchase and have not been validly withdrawn, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent or Tender Agent, as the case may be,) 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
[INTENTIONALLY OMITTED]
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding on Companys Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.
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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 Endologix, Inc., 11 Studebaker, Irvine, California 92618, 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)) sent electronically in PDF format, 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
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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 in form reasonably satisfactory to the Trustee 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 in form reasonably satisfactory to the Trustee 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 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 Fundamental Change Repurchase Date or the Maturity Date is not a Business Day (which for purposes of this Section, shall include a day on which banking institutions in the place of payment are authorized or required by law to close), then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue in respect of the delay.
Section 17.07. No Security Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.
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Section 17.08. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.09. Table of Contents, Headings, Etc. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section 17.10. Authenticating Agent. The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 10.04 and Section 15.04 as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes. For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes by the Trustee and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustees 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 reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agents fees to be unreasonable.
The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section 17.10 shall be applicable to any authenticating agent.
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If an authenticating agent is appointed pursuant to this Section 17.10, the Notes may have endorsed thereon, in addition to the Trustees certificate of authentication, an alternative certificate of authentication in the following form:
__________________________,
as Authenticating Agent, certifies that this is one of the Notes described
in the within-named Indenture.
By: |
| |
| ||
Authorized Officer |
Section 17.11. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.
Section 17.12. Severability. In the event any provision of this Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired.
Section 17.13. Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 17.14. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 17.15. Calculations. 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 and the Applicable Conversion Rate of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Companys calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Companys calculations without
82
independent verification. The Trustee will forward the Companys calculations to any Holder of Notes upon the written request of that Holder at the sole cost and expense of the Company.
Section 17.16. Withholding Taxes. If the Company or one of its withholding agents is required by applicable law to withhold any taxes as a result of an adjustment to the Applicable Conversion Rate, the Company may, at its option, withhold or cause to be withheld such amount from any concurrent or subsequent payments of cash or shares of Common Stock on the Notes, and such withheld amounts will be treated as having been paid with respect to such Notes provided such amounts are timely paid over to the applicable governmental authority in accordance with applicable law. If the Company or one of its withholding agents is required by applicable law to withhold any taxes in connection with any payments of cash or shares of Common Stock on the Notes, the Company may, at its option, withhold or cause to be withheld such amount from such payments, and such withheld amounts will be treated as having been paid with respect to such Notes provided such amounts are timely paid over to the applicable governmental authority in accordance with applicable law. For purposes of any set off against shares of Common Stock paid on the Notes, each share of Common Stock will be deemed to have a value equal to the Daily VWAP of the Common Stock on the date such withholding is required to be performed by the Company or its withholding agent.
Section 17.17. 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]
83
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the date first written above.
ENDOLOGIX, INC. | ||||
By: |
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Name: |
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Title: |
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WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||||
By: |
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Name: |
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Title: |
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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.]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM TIME TO TIME. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THE NOTES MAY BE OBTAINED BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS: [COMPANY ADDRESS], ATTENTION: [NAME].
A-1
Endologix, Inc.
5.0% Voluntary Convertible Senior Note due 2024
No. [ ] |
[Initially]1 $[ ] |
CUSIP No. [ ]
Endologix, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the Company, which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]2 [ ]3, or registered assigns, the principal sum [as set forth in the Schedule of Exchanges of Notes attached hereto]4 [of $[ ]]5, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[ ] in aggregate at any time, in accordance with the rules and procedures of the Depositary, on April 3, 2024, and interest thereon as set forth below.
This Note shall bear interest at the rate of 5.0% per year from April [ ], 2019, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until April 3, 2024. Interest is payable semi-annually in arrears on each April 1 and October 1, commencing on October 1, 2019, to Holders of record at the close of business on the preceding March 15 and September 15 (whether or not such day is a Business Day), respectively. Interest may be paid, at the Companys election, to the Holder in cash, shares of Common Stock, or the Company may elect to either increase the outstanding principal amount of the Notes or issue additional Notes under the Indenture having the same terms as the Notes (PIK Interest, and such payment of PIK Interest hereinafter referred as a PIK Payment), or a combination thereof, on the terms and subject to the limitations set forth in the Indenture. Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes plus one percent, 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.
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. |
A-2
The Company shall pay the principal of and interest on this Note, if in cash, and so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and the Corporate Trust Office as a place where Notes may be presented for payment or for registration of transfer and exchange.
Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, on the terms and subject to the limitations set forth in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.
This Note, and any claim, controversy or dispute arising under or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York (without regard to the conflicts of laws provisions thereof).
In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.
This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually by the Trustee or a duly authorized authenticating agent under the Indenture.
[Remainder of page intentionally left blank]
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
ENDOLOGIX, INC. | ||
By: |
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Name: | ||
Title: |
Dated:
TRUSTEES CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By: |
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Authorized Officer |
A-4
[FORM OF REVERSE OF NOTE]
Endologix, Inc.
5.0% Voluntary Convertible Senior Note due 2024
This Note is one of a duly authorized issue of Notes of the Company, designated as its 5.0% Voluntary Convertible Senior Notes due 2024 (the Notes), limited to the aggregate principal amount of $[ ], all issued or to be issued under and pursuant to an Indenture dated as of April [ ], 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. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.
In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of conversions, the Fundamental Change Repurchase Price on the Fundamental Change Repurchase 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 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, or through an increase of the principal amount of the outstanding Notes or the issuance of paid-in-kind Notes, as the case may be, herein prescribed.
A-5
The Notes are issuable in registered form without coupons in minimum denominations of $1.00 principal amount and integral multiples in excess 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.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holders option, to require the Company to repurchase for cash all of such Holders Notes or any portion thereof (in principal amounts of $1.00 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1.00 or an integral multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, at the Applicable Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.
A-6
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST = Custodian
TEN ENT = as tenants by the entireties
JT TEN = joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-7
SCHEDULE A6
SCHEDULE OF EXCHANGES OF NOTES
Endologix, Inc.
5.0% Convertible Senior Notes due 2024
The initial principal amount of this Global Note is DOLLARS ($[ ]). 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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6 | Include if a global note. |
A-8
ATTACHMENT 1
ENDOLOGIX, INC. (ISSUER)
5.0% VOLUNTARY CONVERTIBLE NOTES DUE 2024
CUSIP NO. 29266S AC0 (THE NOTES)
FORM OF IRREVOCABLE CONVERSION NOTICE
If you want to convert Notes into Common Stock of the Issuer, check the box: ☐
State the principal amount of Notes to be converted (which must be $1.00 or an integral multiple of $1.00 in excess thereof): $ .
Your contact information:
Participant Name: |
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Participant Number: |
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Contact Name: |
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Contact Email: |
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Contact Telephone: |
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Capitalized terms have the meanings set forth in the indenture governing the Notes.
OWNERSHIP AND CONVERSION LIMITATION REPRESENTATIONS
In connection with your conversion, you confirm and certify as to the statements checked below:
FOR ALL CONVERSIONS:
☐ Holdings do not and will not exceed the threshold. Neither the Holder nor any of its Related Persons is or was a 9.50% Stockholder with respect to the Issuer at any time from April 3, 2019 ending on the Conversion Date applicable to the Notes being converted hereby. Furthermore, neither the Holder nor any of its Related Persons would, as a result of the acquisition of Common Stock in connection with the conversion of Notes contemplated hereby, become a 9.50% Stockholder with respect to the Issuer.
FOR CONVERSIONS PURSUANT TO SECTION 14.01(B)(i) OR SECTION 14.01(B)(iv):
☐ This principal amount being converted hereby does not exceed 30% of the initial aggregate principal amount of the Note being converted. The Holder hereby represents and confirms that the principal amount of the Note being converted does not exceed 30% of the initial aggregate principal amount of the Note being converted.
STOCK CERTIFICATE INFORMATION
The undersigned hereby requests that the stock certificate or certificates issued upon conversion be registered in the name(s) of the persons set forth below.
1
The undersigned acknowledges that the Issuer is not required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares in any name other than that of the converting holder, and the converting holder is solely responsible for the payment of any such taxes. The undersigned acknowledges that if shares are to be issued in the name of a person other than the converting holder, the converting holder shall pay all transfer taxes payable with respect thereto.
You must check one, and only one, of the following two boxes:
☐ The undersigned is requesting registration in a name other than that of the converting holder. The converting holder acknowledges sole responsibility for the payment of any taxes that may be owing by reason thereof. If any taxes are payable upon transfer, they have already been paid.
☐ No transfer of beneficial ownership is occurring in connection with the conversion.
Registered Holder Information:
Name: |
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SSN or Tax ID No.: |
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Street Address: |
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City, State and Zip Code: |
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Delivery Instructions:
Unless you direct otherwise below, the above-referenced stock certificate(s) will be delivered to the registered holder at the address specified above. If you wish to provide separate delivery instructions, check the box and complete the information set forth below.
☐ The undersigned requests that the above-referenced stock certificate(s) be delivered to the person and address set forth below:
Name: |
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Street Address: |
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City, State and Zip Code: |
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Delivery via DTC:
If you would prefer to have the shares of common stock issued to you upon conversion to be delivered via the Depository Trust Company (DTC), please provide the information below:
☐ The undersigned requests that the above-referenced stock certificate(s) be delivered via the DTC, to the undersigned as set forth below:
Participant Name: |
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2
Participant Number: |
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Name: |
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Street Address: |
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City, State and Zip Code: |
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CASH PAYMENT INSTRUCTIONS
The undersigned directs that any cash payment owed for fractional shares (and, if applicable, for any accrued but unpaid interest which may be payable under certain limited circumstances) be wired in accordance with the wire instructions set forth below:
Bank: |
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Address: |
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Name of Account: |
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ABA No.: |
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Account No.: |
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To avoid the application of backup withholding under U.S. federal income tax law, each converting holder (or other payee) should complete, sign, and deliver an Internal Revenue Service (IRS) Form W-9 (in the case of a U.S. person or a resident alien) or an IRS Form W-8BEN or other appropriate IRS Form W-8 (in the case of a foreign holder). IRS Forms W-9 and W-8 are available on the IRSs website at http://www.irs.gov/. Failure to include a properly completed IRS Form W-9 or applicable IRS Form W-8 may result in the application of U.S. backup withholding.
In addition, Notes surrendered for conversion during the period from the Close of Business on any 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, except as specified below. THE INDENTURE REQUIRES THIS CASH PAYMENT EVEN IF THE INTEREST PAYABLE ON THE IMMEDIATELY FOLLOWING INTEREST PAYMENT DATE IS PAYABLE IN PIK NOTES OR SHARES OF COMMON STOCK. IN THIS EVENT, EVEN THOUGH THE HOLDER HAS REMITTED A CASH PAYMENT WITH THE CONVERSION NOTICE, THE HOLDER WILL NOT RECEIVE ANY CASH AS THE INTEREST PAYMENT BUT WILL RECEIVE ONLY PIK NOTES OR SHARES OF COMMON STOCK. However, such payment need not be made: (i) if the conversion follows the Record Date immediately preceding the Maturity Date; (ii) if the Issuer has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the first Business Day immediately following the corresponding Interest Payment Date; or (iii) to the extent of any Defaulted Amounts, if any Defaulted Amounts exist at the time of conversion with respect to such Note. Where payment is owed, no conversion will occur before this payment has been received by the Issuer. Wiring instructions for any such payment of funds may be obtained by contacting the Trustee at svilhauer@WilmingtonTrust.com.
SIGNATURE:
3
Date: |
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Signature: |
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Name: |
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Title: |
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The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program, pursuant to S.E.C. Rule 17Ad-15.
Signature Guarantee
4
ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
To: | Wilmington Trust, National Association |
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: Endologix, Inc., Account Manager
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Endologix, 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 $1.00 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:
Dated:
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Signature(s) |
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Social Security or Other Taxpayer |
Identification Number |
Principal amount to be repaid (if less than all): $ ,000 |
NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. |
1
ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
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, the undersigned confirms that such Note is being transferred:
☐ To Endologix, Inc. or a subsidiary thereof; or
☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.
1
Dated: ________________________
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Signature(s) |
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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.
2
Exhibit 4.8
[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.]
THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED FROM TIME TO TIME. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THE NOTES MAY BE OBTAINED BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO THE COMPANY AT THE FOLLOWING ADDRESS: [COMPANY ADDRESS], ATTENTION: [NAME].
A-1
Endologix, Inc.
5.0% Voluntary Convertible Senior Note due 2024
No. [ ] |
[Initially]1 $[ ] |
CUSIP No. [ ]
Endologix, Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (the Company, which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]2 [ ]3, or registered assigns, the principal sum [as set forth in the Schedule of Exchanges of Notes attached hereto]4 [of $[ ]]5, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[ ] in aggregate at any time, in accordance with the rules and procedures of the Depositary, on April 3, 2024, and interest thereon as set forth below.
This Note shall bear interest at the rate of 5.0% per year from April [ ], 2019, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until April 3, 2024. Interest is payable semi-annually in arrears on each April 1 and October 1, commencing on October 1, 2019, to Holders of record at the close of business on the preceding March 15 and September 15 (whether or not such day is a Business Day), respectively. Interest may be paid, at the Companys election, to the Holder in cash, shares of Common Stock, or the Company may elect to either increase the outstanding principal amount of the Notes or issue additional Notes under the Indenture having the same terms as the Notes (PIK Interest, and such payment of PIK Interest hereinafter referred as a PIK Payment), or a combination thereof, on the terms and subject to the limitations set forth in the Indenture. Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes plus one percent, 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.
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. |
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The Company shall pay the principal of and interest on this Note, if in cash, and so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and the Corporate Trust Office as a place where Notes may be presented for payment or for registration of transfer and exchange.
Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, 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.
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
ENDOLOGIX, INC. | ||
By: |
| |
Name: | ||
Title: |
Dated:
TRUSTEES 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 Officer |
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[FORM OF REVERSE OF NOTE]
Endologix, Inc.
5.0% Voluntary Convertible Senior Note due 2024
This Note is one of a duly authorized issue of Notes of the Company, designated as its 5.0% Voluntary Convertible Senior Notes due 2024 (the Notes), limited to the aggregate principal amount of $[ ], all issued or to be issued under and pursuant to an Indenture dated as of April [ ], 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. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.
In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of conversions, the Fundamental Change Repurchase Price on the Fundamental Change Repurchase 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 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, or through an increase of the principal amount of the outstanding Notes or the issuance of paid-in-kind Notes, as the case may be, herein prescribed.
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The Notes are issuable in registered form without coupons in minimum denominations of $1.00 principal amount and integral multiples in excess 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.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holders option, to require the Company to repurchase for cash all of such Holders Notes or any portion thereof (in principal amounts of $1.00 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1.00 or an integral multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Companys election, at the Applicable Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST = Custodian
TEN ENT = as tenants by the entireties
JT TEN = joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
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Exhibit 5.1
DLA Piper LLP (US) 4365 Executive Drive San Diego, California 92121-2133 T 858.677.1400 F 858.677.1401 |
March 31, 2019
Endologix, Inc.
2 Musick
Irvine, California 92618
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection with the sale and issuance by Endologix, Inc., a Delaware corporation (the Company), of up to an aggregate amount of 7,889,552 shares (the Shares) of the Companys common stock, par value $0.0001 per share (the Common Stock), pursuant to a Registration Statement on Form S-3 (File 333-225320) (the Registration Statement) filed with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Act), the related prospectus dated August 3, 2018 (the Base Prospectus), as supplemented by the prospectus supplements each dated March 31, 2019, filed with the Commission pursuant to Rule 424(b) promulgated under the Act (together the Prospectus Supplements). The Shares include 1,467,494 shares of Common Stock (the Warrant Shares) issuable to certain investors upon exercise of exercise of pre-paid warrants (the Warrants).
In connection with this opinion, we have examined and relied upon the Registration Statement and the related Base Prospectus and Prospectus Supplements, the Companys Certificate of Incorporation and Amended and Restated Bylaws, as currently in effect, and the originals or copies certified to our satisfaction of such other documents, records, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below.
In rendering this opinion, we have assumed the genuineness and authenticity of all signatures on original documents; the genuineness and authenticity of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as copies; the accuracy, completeness and authenticity of certificates of public officials; and the due authorization, execution and delivery of all documents where due authorization, execution and delivery are prerequisites to the effectiveness of such documents (other than with respect to the Company).
On the basis of the foregoing, and in reliance thereon, we are of the opinion that:
1. The Shares (other than the Warrant Shares) have been duly and validly authorized and, when issued and sold pursuant to that certain Purchase Agreement by and among the Company and the investors identified therein, dated March 30, 2019, in accordance with the Registration Statement and the related Base Prospectus and Prospectus Supplements, will be validly issued, fully paid and nonassessable.
2. The Warrant Shares, when issued in accordance with the terms of their respective Warrant, will be validly issued, fully paid and non-assessable.
The opinions above are limited in all respects to the General Corporation Law of the State of Delaware. We do not express any opinion as to the laws of any other jurisdiction.
The foregoing opinions are qualified to the extent that the enforceability of any document, instrument or the Securities may be limited by or subject to bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors rights generally, and general equitable or public policy principles, including principles that may limit
enforceability of indemnification, contribution or similar provisions, concepts of materiality, reasonableness, good faith and fair dealing, the possible unavailability of specific performance or injunctive relief, regardless of whether such enforceability is considered in a proceeding in equity or at law.
With respect to our opinion in paragraph 2, we have assumed that at the time of the issuance of any Warrant Shares, (a) the Company will validly exist and be duly qualified and in good standing under the laws of its jurisdiction of formation, (b) the Company will have the necessary organizational power and authority to issue the Warrant Shares, and (c) the Company will have made available for issuance such number of Warrant Shares. To the extent that the obligations of the Company pursuant to the Warrants, with respect to the Warrant Shares, may depend upon such matters, we have assumed that each of the parties thereto (other than the Company) will be duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and will be duly qualified to engage in the activities contemplated by the Warrant; that such Warrant has been duly authorized, executed and delivered by such party and constitutes the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms; that such party is in compliance, generally and with respect to acting as a party with respect to its obligations under the Warrant, with all applicable laws and regulations; and that such party has the requisite organizational and legal power and authority to perform its obligations under such Warrant.
We consent to the reference to our firm under the caption Legal Matters in the Prospectus Supplements and to the filing of this opinion as an exhibit to a Current Report of the Company on Form 8-K. In giving our consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours, |
/s/ DLA PIPER LLP (US) DLA PIPER LLP (US) |
Exhibit 10.1
PURCHASE AGREEMENT
PURCHASE AGREEMENT (the Agreement), dated as of March 31, 2019, by and among ENDOLOGIX, INC., a Delaware corporation (the Company), and the investors identified on Schedule I hereto (each, an Investor and collectively, the Investors).
WHEREAS:
Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Investors, and the Investors wish to buy from the Company, the shares listed on Schedule I hereto (the Purchase Shares) of the Companys common stock, $0.001 par value per share (the Common Stock), at a price of $6.61 per Purchase Share (the Purchase Price). If the issuance of Purchase Shares at the Closing (as defined below) would result in such Investor beneficially owning in excess of 19.99% (the Maximum Percentage) of the shares of Common Stock outstanding immediately after giving effect to the Closing (a Blocker Conflict, and such excess number of Purchase Shares to be issued to such Investor at the Closing resulting in such Blocker Conflict, the Blocked Shares), in lieu of the Company issuing the Blocked Shares to such Investor at the Closing, the Company shall issue to such Investor at the Closing a pre-paid warrant in the form of Exhibit D hereto (collectively, the Pre-Paid Warrants, as exercised, the Pre-Paid Warrant Shares) to receive such Blocked Shares, in form and substance reasonably satisfactory to the Company and such Investor (including, without limitation, exercisability at the option of such Investor (without the payment of any additional consideration other than the portion of the Purchase Price attributable to such Blocked Shares) and a limitation on exercise in the form of Section 1(e) of the Pre-Paid Warrant). The Purchase Shares, Pre-Paid Warrants and Pre-Paid Warrant Shares are collectively referred to herein as the Securities.
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 the Investors hereby agree as follows:
1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms shall have the following meanings:
(a) Bankruptcy Law means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.
(b) Base Prospectus means the Companys final base prospectus, dated August 3, 2018, a preliminary form of which is included in the Registration Statement, including the documents incorporated by reference therein.
(c) Business Day means any day on which the Principal Market is open for trading, including any day on which the Principal Market is open for trading for a period of time less than the customary time.
(d) Confidential Information means any information disclosed by either party to the other party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents, prototypes, samples, plant and equipment), which is designated as Confidential, Proprietary or some similar designation. Information communicated orally shall be considered Confidential Information if such information is confirmed in writing as being Confidential Information within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to a disclosing party by third parties. Confidential Information shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party without confidential restriction at the time of disclosure by the disclosing party as shown by the receiving partys files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third partys obligations of confidentiality; (v) is independently developed by the receiving party without use of or reference to the disclosing partys Confidential Information, as shown by documents and other competent evidence in the receiving partys possession; or (vi) is required by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.
(e) Custodian means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
(f) DTC means The Depository Trust Company, or any successor performing substantially the same function for the Company.
(g) DWAC Shares means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and without restriction on resale and (iii) timely credited by the Company to the Investor or its designees specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program or any similar program hereafter adopted by DTC performing substantially the same function.
(h) Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(i) Facility Restructuring means the transactions contemplated by that certain Second Amendment to Amended and Restated Facility Agreement and First Amendment to Amended and Restated Guaranty and Security Agreement, dated as of the date hereof, by and among Endologix, Inc. and Deerfield Private Design Fund IV, L.P. and certain of its affiliates.
(j) General Disclosure Package means (i) the SEC Reports and (ii) the disclosure schedules to this Agreement provided to the Investors by the Company.
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(k) Material Adverse Effect means any material adverse change in the results of operations, assets, business, prospects or financial condition of the Company and its Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business.
(l) Note Refinancing means the transactions contemplated by that certain Exchange Agreement, by and among the Company and the noteholders listed therein, dated as of the date hereof.
(m) Person means an individual or entity including but not limited to any limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.
(n) Principal Market means The Nasdaq Global Select Market (or any nationally recognized successor thereto); provided, however, that in the event the Companys Common Stock is ever listed or traded on The Nasdaq Capital Market, The Nasdaq Global Market, the New York Stock Exchange, the NYSE American, the NYSE Arca, the OTC Bulletin Board, or the OTCQX or the OTCQB operated by the OTC Markets Group, Inc. (or any nationally recognized successor to any of the foregoing), then the Principal Market shall mean such other market or exchange on which the Companys Common Stock is then listed or traded.
(o) Prospectus Supplement means any prospectus supplement to the Base Prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act in connection with the transactions contemplated by this Agreement, including the documents and information incorporated by reference therein.
(p) Registration Statement means the effective registration statement on Form S-3 (Commission File No. 333-225320) filed by the Company with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including the Securities, and certain other securities, as such Registration Statement has been or may be amended and supplemented from time to time, including all documents filed as part thereof or incorporated by reference therein, and including all information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430B of the Securities Act, including any comparable successor registration statement filed by the Company with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including the Securities.
(q) Restructuring Transactions means, collectively, the Note Refinancing and the Facility Restructuring.
(r) SEC means the U.S. Securities and Exchange Commission.
(s) Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(t) Securities Act Regulations means the regulations promulgated under the Securities Act.
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(u) Subsidiary means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under the Securities Act.
(v) Transaction Documents means, collectively, this Agreement and the schedules and exhibits hereto, and each of the other agreements, documents, certificates and instruments entered into or furnished by the parties hereto in connection with the transactions contemplated hereby and thereby.
(w) Transfer Agent means American Stock Transfer & Trust Company, LLC, or such other Person who is then serving as the transfer agent for the Company in respect of the Common Stock.
2. PURCHASE OF SECURITIES.
Subject to the terms and conditions set forth in this Agreement, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, the Securities as follows:
(a) Purchase of Common Stock. Upon the satisfaction of the conditions set forth in Sections 7 and 8 hereof (the Closing and the date of satisfaction of such conditions the Closing Date), the Investors shall purchase the number of Securities set forth opposite their respective names on Schedule I hereto, at a price of $6.61 per Security.
(b) Payment of Purchase Price. Each of the Investors shall pay the amount of cash for the number of Securities it is purchasing hereunder set forth opposite its name on Schedule I hereto to the Company as full payment for all of the Securities to be purchased by it hereunder by wire transfer of immediately available funds on the same Business Day that such Investor receives verbal or written confirmation of delivery by the Company of an instruction letter to the Transfer Agent to deliver of all of the Purchase Shares being purchased by such Investor as DWAC Shares or in book-entry form as indicated by such Investor and reserve for issuance the Pre-Paid Warrant Shares. All payments made under this Agreement shall be made in lawful money of the United States of America or wire transfer of immediately available funds to the account designated by the Company by written notice to each of the Investors prior to the date of this Agreement.
(c) Beneficial Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue or sell, and none of the Investors shall purchase or acquire, any shares of Common Stock under this Agreement which, when aggregated with all other shares of Common Stock then beneficially owned by such Investor and its respective affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) would result in the beneficial ownership by such Investor and its respective affiliates of more than 19.99% of the then issued and outstanding shares of Common Stock (the Beneficial Ownership Limitation).
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3. INVESTORS REPRESENTATIONS AND WARRANTIES.
Each Investor, severally and only with respect to himself, herself, or itself, as applicable, and not jointly, represents and warrants to the Company that as of the date hereof and as of the Closing Date:
(a) Organization, Authority. Such Investor, to the extent not a natural person, is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, with the requisite 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.
(b) Accredited Investor Status. Such Investor is an accredited investor as that term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
(c) Information. Such Investor understands that its investment in the Securities involves a high degree of risk. Such Investor (i) is able to bear the economic risk of an investment in the Securities including a total loss thereof, (ii) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial condition and business of the Company and others matters related to an investment in the Securities. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its representatives shall modify, amend or affect such Investors right to rely on the Companys representations and warranties contained in Section 4 below. Such Investor has sought such accounting, legal and tax advice from its own independent advisors as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.
(d) No Governmental Review. Such Investor understands that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of an investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(e) Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Investor and is a valid and binding agreement of such Investor enforceable against the Investor in accordance with its terms, subject as to enforceability to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors rights and remedies.
(f) Residency. Such Investor is a resident of the state set forth opposite such Investors name on Schedule I hereto.
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(g) No Short Selling. Such Investor represents and warrants to the Company that (i) at no time since the time such Investor was first contacted by the Company regarding the transactions contemplated hereby has such Investor or any of its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (A) short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (B) hedging transaction, which establishes a net short position with respect to the Common Stock, and (ii) neither such Investor nor any of its agents, representatives or affiliates shall engage in any of the aforementioned transactions in clause (i) hereof during the period beginning on the date of this Agreement and ending on the Closing Date.
(h) Ownership. Following the purchase of the Securities contemplated by this Agreement, none of the Investors will beneficially own more than 19.99% of the Companys outstanding common stock.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Investors that, except as set forth in the General Disclosure Package, which exceptions shall be deemed to be a part of the representations and warranties made hereunder, as of the date hereof:
(a) Compliance with Registration Requirements. The Company has prepared and filed with the SEC the Registration Statement, and such amendments to the Registration Statement as may have been required to the date of this Agreement. The Registration Statement has been declared effective by the SEC.
Promptly after execution and delivery of this Agreement, the Company will prepare and file with the SEC a prospectus supplement to the Base Prospectus relating to the Securities and the offering thereof in accordance with the provisions Rule 430B and Rule 424(b) of the Rules and Regulations. Such final supplemental form of prospectus (including the Base Prospectus as so supplemented), in the form filed with the SEC pursuant to Rule 424(b) is herein called the Prospectus. Any reference herein to the Base Prospectus or the Prospectus shall be deemed to include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date of such prospectus.
The Company has complied in all material respects with requirements to file all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company was required by law to file such material) (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.
(b) Incorporation of Documents by Reference. The documents incorporated or deemed to be incorporated by reference in the Registration Statement when it was filed with the SEC and when it became effective, and in the Prospectus when it was filed with the SEC,
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complied in all material respects with the requirements of the Exchange Act and the regulations promulgated thereunder, and, when read together with the other information in the Prospectus, (i) at the time the Registration Statement became effective, (ii) at the time the Prospectus was issued and (iii) on the date of this Agreement, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(c) Independent Accountants. The accountants who certified the financial statements and supporting schedules included in the Registration Statement are independent public accountants as required by the Securities Act and the Securities Act Regulations.
(d) Financial Statements. The financial statements included or incorporated by reference in the Registration Statement, the General Disclosure Package and the Prospectus, together with the related schedules and notes, present fairly, in all material respects, the financial position of the Company and its consolidated Subsidiaries (as defined below) at the dates indicated and the statement of operations, stockholders equity and cash flows of the Company and its consolidated Subsidiaries for the periods specified; such financial statements have been prepared in conformity with generally accepted accounting principles in the United States (GAAP) applied on a consistent basis throughout the periods involved. The supporting schedules, if any, present fairly, in all material respects, in accordance with GAAP, the information required to be stated therein. The selected financial information and the summary financial information (if any) included in the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement. All disclosures contained in the Registration Statement, the General Disclosure Package or the Prospectus, or incorporated by reference therein, regarding non-GAAP financial measures (as such term is defined by the rules and regulations of the SEC) comply in all material respects with Regulation G of the Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent applicable.
(e) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, and except as otherwise stated therein (i) there has been no Material Adverse Effective, (ii) there have been no transactions entered into by the Company or any of its Subsidiaries, other than those entered into in the ordinary course of business, which are material with respect to the Company and its Subsidiaries considered as one enterprise, and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.
(f) Good Standing of the Company. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its organization and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, and to enter into and perform its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business,
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except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect.
(g) Good Standing of Subsidiaries. Each Subsidiary has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect; except as otherwise disclosed in the Registration Statement, all of the issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(h) Capitalization. The issued and outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and non-assessable; none of the outstanding shares of Common Stock were issued in violation of the preemptive or other similar rights of any securityholder of the Company. The Common Stock has been registered pursuant to Section 12(b) of the Exchange Act and is listed for trading on the Principal Market, and the Company has taken no action designed to terminate the registration or listing of the Common Stock on Principal Market, nor has the Company received any written notification that the SEC or Principal Market is contemplating terminating such registration or listing.
(i) Authorization of Agreements. This Agreement has been (and any applicable Terms Agreement will be) duly authorized by the Company. This Agreement has been (and any applicable Terms Agreement will be) executed and delivered by the Company.
(j) Authorization and Description of Securities. The Purchase Shares have been duly authorized and reserved for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement (and any applicable Terms Agreement) against payment of the consideration set forth herein (or therein), will be validly issued, fully paid and non-assessable; the Common Stock conforms in all material respects to the description thereof contained in the Prospectus and such description conforms to the rights set forth in the instruments defining the same; and the issuance of the Purchase Shares is not subject to the preemptive or other similar rights of any securityholder of the Company. The shares of Common Stock underlying the Pre-Paid Warrants have been duly authorized and reserved for issuance upon exercise of the Pre-Paid Warrants in a number sufficient to meet the current exercise requirements. Upon exercise of the Pre-Paid Warrants in accordance with their terms, the shares of Common Stock issuable thereupon will be duly and validly issued and fully paid and non-assessable, and free of any preemptive or similar rights and will conform to the descriptions thereof in the Registration Statement, the General Disclosure Package and the Prospectus.
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(k) Absence of Defaults and Conflicts. (i) Neither the Company nor any of its Subsidiaries is in violation of its charter or by-laws, or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument that is individually material to the Company and to which the Company or any of its Subsidiaries is a party or by which it or any of them may be bound, or to which any of the material properties or assets of the Company or any Subsidiary are subject (collectively, Material Agreements and Instruments), and (iii) the execution, delivery and performance of this Agreement (or any applicable Terms Agreement) and the consummation of the transactions contemplated herein (or therein) and in the Registration Statement (including the issuance and sale of the Securities, and the use of the proceeds from the sale of the Securities as described in the Prospectus) and compliance by the Company with its obligations hereunder (1) have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to, the Material Agreements and Instruments, (2) will not result in any violation of the provisions of the charter or by-laws of the Company, and (3) will not result in any violation of any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign (including the U.S. Food and Drug Administration (the FDA)), having jurisdiction over the Company or any Subsidiary or any of their assets, properties or operations (each, a Governmental Entity), except in the case of clauses (ii) and (iii), such violation or default as would not reasonably be expected to result in a Material Adverse Effect.
As used herein, a Repayment Event means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holders behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any Subsidiary.
(l) Absence of Labor Dispute. No labor dispute with the employees of the Company or any Subsidiary exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing labor disturbance by the employees of any of its principal suppliers, manufacturers, customers or contractors.
(m) Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Entity now pending, or, threatened in writing, against or affecting the Company or any Subsidiary, which is required to be disclosed in the Registration Statement or the Prospectus (other than as disclosed therein), or which would reasonably be expected to result in a Material Adverse Effect, or materially and adversely affect the properties or assets thereof or the consummation of the transactions contemplated in this Agreement (or any applicable Terms Agreement) or the performance by the Company of its obligations hereunder (or thereunder); the aggregate of all pending legal or governmental proceedings to which the Company or any Subsidiary is a party or of which any of their respective property or assets is the subject which are not described in the Prospectus, including
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ordinary routine litigation incidental to the business, would not reasonably be expected to result in a Material Adverse Effect.
(n) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statement or the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required.
(o) Possession of Intellectual Property. Except as would not reasonably be expected to result in a Material Adverse Effect, (i) the Company and its Subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, Intellectual Property) necessary to carry on the business now operated by them, and (ii) neither the Company nor any of its Subsidiaries has received any written notice of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property.
(p) Compliance with Health Care Laws. Except as described in the Prospectus, the Company: (i) is and for the past three (3) years has been in compliance with applicable Health Care Laws, except for such noncompliance as would not, singly or in the aggregate, reasonably be expected to result in a Material Adverse Effect; (ii) has not received any unresolved FDA Form 483, notice of adverse finding, warning letter, untitled letter or other written correspondence or notice from any Governmental Entity alleging or asserting noncompliance with any Health Care Laws which has not been remedied by the Company, except for such noncompliance as would not, singly or in the aggregate, be reasonably expected to result in a Material Adverse Effect; (iii) possesses all material licenses, certificates, approvals, clearances, authorizations, registrations, permits (and supplements or amendments thereto) required by any Health Care Laws (Authorizations), such Authorizations are valid and in full force and effect, and the Company is not in violation of any term of any such Authorizations, except for such failure, invalidity or violation as would not reasonably be expected to result in a Material Adverse Effect; (iv) has not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any Governmental Entity or third party alleging that any product, operation or activity is in violation of any Health Care Laws or Authorizations, and does not have knowledge that any such Governmental Entity or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding, except for such violations as would not reasonably be expected to result in a Material Adverse Effect; (v) has not received written notice that any Governmental Entity has taken, is taking or intends to take action to limit, suspend, modify or revoke any Authorizations and the Company has no knowledge that any such Governmental Entity is considering such action, except for such notices, limitations, suspensions, modifications or revocations as would not reasonably be expected to result in a Material Adverse Effect; and (vi) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions (and supplements or amendments thereto) as required by any Health Care Laws or Authorizations, and all such reports, documents, forms, notices, applications, records, claims, submissions (and supplements or amendments thereto) were
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complete and correct in all material respects on the date filed (or were corrected or supplemented by a subsequent submission), except where the failure to be correct, file, obtain, maintain or submit such documents would not reasonably be expected to result in a Material Adverse Effect.
As used herein, Health Care Laws means: (i) the Federal Food, Drug and Cosmetic Act and the regulations promulgated thereunder; (ii) all applicable federal, state, local and all applicable foreign health care related fraud and abuse law, including the U.S. Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the Physician Self-Referral Law (commonly known as the Stark law) (42 U.S.C. Section 1395nn), the civil False Claims Act (31 U.S.C. Section 3729 et seq.), the administrative False Claims Law (42 U.S.C. Section 1320a-7b(a)), the Civil Monetary Penalties Law (42 U.S.C. Section 1320a-7a), the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (collectively, HIPAA), the exclusion laws (42 U.S.C. Section 1320a-7), and the Physician Payments Sunshine Act (42 U.S.C. Section 1320a-7h); (iii) all criminal laws relating to health care fraud and abuse, including 18 U.S.C. Sections 286 and 287, and the health care fraud criminal provisions under HIPAA, Medicare (Title XVIII of the Social Security Act), and Medicaid (Title XIX of the Social Security Act); and (iv) the regulations promulgated pursuant to such laws, and comparable state laws.
(q) Clinical Studies. The studies, tests and preclinical and clinical trials conducted by or on behalf of the Company as described in the Prospectus (the Clinical Studies), were, and if still pending are, in all material respects, being conducted in accordance with experimental protocols, procedures and controls pursuant to accepted professional and scientific standards and all applicable Health Care Laws and Authorizations; the descriptions of the results of such studies, tests and trials contained in the Registration Statement, the General Disclosure Package and the Prospectus are accurate and complete in all material respects and fairly present the data derived from such studies, tests and trials; except to the extent disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has no knowledge of any studies, tests or trials the results of which the Company believes reasonably call into question the study, test, or trial results described or referred to in the Registration Statement, the General Disclosure Package and the Prospectus when viewed in the context in which such results are described and the clinical state of development; and the Company has not received any written notices or correspondence from any Governmental Entity requiring the termination, suspension or material modification of any Clinical Studies, except where any such termination, suspension or modification would not reasonably be expected to result in a Material Adverse Effect.
(r) Manufacturing Practices. All manufacturing operations performed by or on behalf of the Company are being conducted in compliance with the Quality System regulation of the FDA and, to the extent applicable, counterpart regulations in the European Union and all other countries where compliance is required, except to the extent that the failure to be in compliance would not reasonably be expected to result in a Material Adverse Effect. The Company and its subsidiaries are in compliance with all reporting requirements under Health Care Laws, including, but not limited to, medical device reports (as defined by 21 C.F.R. Part 803), reports of corrections and removals (as defined by 21 C.F.R. Part 806), and the reporting
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and recordkeeping requirements under the Quality System regulation of the FDA, and counterpart regulations in other countries where compliance is required, except to the extent that the failure to be in compliance would not reasonably be expected to result in a Material Adverse Effect.
(s) Absence of Further Requirements. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations hereunder, in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement (or any applicable Terms Agreement), except such as have been already obtained or as may be required under the Securities Act or the Securities Act Regulations or state securities laws.
(t) Absence of Manipulation. Neither the Company nor any affiliate of the Company has taken, nor will the Company take, directly or indirectly, any action which is designed to or which has constituted or which would be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(u) Possession of Licenses and Permits. (i) The Company and its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them (collectively, Governmental Licenses); (ii) the Company and its Subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses; (iii) the Governmental Licenses are valid and in full force and effect; and (iv) neither the Company nor any of its Subsidiaries has received any written notice of proceedings relating to the revocation or material modification of any such Governmental Licenses, except in the case of clauses (i) through (iii), such failures, noncompliance or invalidity as would not reasonably be expected to result in a Material Adverse Effect.
(v) Title to Property. The Company and its Subsidiaries have good and marketable title to all real property owned by the Company and its Subsidiaries free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (i) are described in the Prospectus, or (ii) do 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 or any of its Subsidiaries; and all of the leases and subleases material to the business of the Company and its Subsidiaries, considered as one enterprise, and under which the Company or any of its Subsidiaries holds properties described in the Prospectus, are in full force and effect, and neither the Company nor any Subsidiary has any received any written notice of any material claim that has been asserted by anyone adverse to the rights of the Company or any Subsidiary under any of such leases or subleases, or affecting or questioning the rights of the Company or such Subsidiary to the continued possession of the property covered by any such lease or sublease.
(w) Investment Company Act. The Company is not required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds
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therefrom as described in the Prospectus will not be required, to register as an investment company within the meaning of the Investment Company Act of 1940, as amended (the 1940 Act).
(x) Environmental Laws. Except as described in the Prospectus, (i) neither the Company nor any of its Subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products, asbestos-containing materials or mold (collectively, Hazardous Materials) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, Environmental Laws), except for such violations as would not reasonably be expected to result in a Material Adverse Effect, (ii) the Company and its Subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in material compliance with their requirements, except where the failure to possess such permits, authorizations or approvals, or the failure of such compliance, would not reasonably be expected to result in a Material Adverse Effect, and (iii) to the knowledge of the Company, there are no material pending or threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its Subsidiaries.
(y) Registration Rights. Except as disclosed in the Prospectus, there are no persons with registration rights or other similar rights to have any securities registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act.
(z) Accounting Controls and Disclosure Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with managements general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with managements general or specific authorization; 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 described in the Prospectus, since the end of the Companys most recent audited fiscal year, there has been (1) no material weakness in the Companys internal control over financial reporting (whether or not remediated) and (2) no change in the Companys internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.
The Company and its consolidated Subsidiaries employ disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized
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and reported, within the time periods specified in the SECs rules and forms, and is accumulated and communicated to the Companys management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure.
(aa) S-3 Eligibility. (i) At the time of filing the Registration Statement, the Company will meet the applicable requirements for use of Form S-3 under the Securities Act, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), the Company met the then applicable requirements for use of Form S-3 under the Securities Act and (iii) at the earliest time after the filing of the Registration Statement that the Company makes a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Securities, the Company will not be an ineligible issuer as defined in Rule 405 under the Securities Act.
(bb) Compliance with the Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or any of the Companys directors or officers, in their capacities as such, to comply in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the Sarbanes-Oxley Act), including Section 402 related to loans and Sections 302 and 906 related to certifications.
(cc) Payment of Taxes. Subject to any permitted extensions, all United States federal income tax returns of the Company and its Subsidiaries required by law to be filed have been filed and all taxes shown by such returns or otherwise assessed, which are due and payable, have been paid, except assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. No assessment in connection with the United States federal income tax returns of the Company through the fiscal year ended December 31, 2018 has been made against the Company. The Company and its Subsidiaries have filed all other material tax returns that are required to have been filed by them pursuant to applicable foreign, state, local or other law and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company and its Subsidiaries, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of the Company in respect of any income tax liability for any years not finally determined are adequate to meet any assessments or re-assessments for additional income tax for any years not finally determined.
(dd) Insurance. The Company and its Subsidiaries carry or are entitled to the benefits of insurance, with insurers believed to be financially sound and reputable, in such amounts and covering such risks as is generally maintained by companies of established repute engaged in the same or similar business, and all such insurance is in full force and effect. The Company has no reason to believe that it or any Subsidiary 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 Effect. Neither of the
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Company nor any Subsidiary has been denied any insurance coverage which it has sought or for which it has applied.
(ee) Statistical and Market-Related Data. Any statistical and market-related data included in the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and, where required, the Company has obtained the written consent to the use of such data from such sources.
(ff) Foreign Corrupt Practices Act. Neither the Company nor, to the knowledge of the Company, any director, officer, employee or other person acting on behalf of the Company, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the FCPA), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(gg) Money Laundering Laws. The operations of the Company are and have been conducted at all times in material 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 agency (collectively, the Money Laundering Laws) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(hh) OFAC. Neither the Company nor, to the knowledge of the Company, any director, officer, employee or 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. Treasury Department (OFAC); and the Company will not directly or indirectly use the proceeds of the offering, 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.
(ii) Listing and Maintenance Requirements. The issuance and sale of the Securities as contemplated in this Agreement does not contravene the rules and regulations of the Principal Market. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is
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contemplating terminating such registration. Except as disclosed in the Registration Statement, the Base Prospectus or any Prospectus Supplement, the Company has not, in the 12 months preceding the date hereof, received notice from any Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market.
(jj) Application of Takeover Protections. Except as set forth in the Registration Statement, the Base Prospectus or any Prospectus Supplement, the Company and its Board have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Companys Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the purchasers of the Securities.
(kk) Solvency. Based on the financial condition of the Company as of the Closing Date and giving effect to the transactions contemplated by the Restructuring Transactions, (i) the Companys fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Companys existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Companys assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. Within one year of the Closing Date, the Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, Indebtedness shall mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than accrued liabilities and trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Companys balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
5. COVENANTS.
(a) [Reserved.]
(b) Blue Sky. The Company shall take all such action, if any, as is reasonably necessary in order to obtain an exemption for or to register or qualify (i) the offer and sale of the
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Securities to the Investors under this Agreement and (ii) any subsequent resale of all Securities by the Investor, in each case, under applicable securities or Blue Sky laws of the states of the United States in such states as is reasonably requested by any of the Investors from time to time, and shall provide evidence of any such action so taken to each of the Investors.
(c) Listing/DTC. The Company shall promptly secure the listing of all of the Purchase Shares and Warrant Shares to be issued to the Investor hereunder on the Principal Market (subject to official notice of issuance) and upon each other national securities exchange or automated quotation system, if any, upon which the Common Stock is then listed, and shall use commercially reasonable efforts to maintain, so long as any shares of Common Stock shall be so listed, such listing of all such Purchase Shares and Warrant Shares. The Company shall use commercially reasonable efforts to maintain the listing of the Common Stock on the Principal Market and shall comply in all respects with the Companys reporting, filing and other obligations under the bylaws or rules and regulations of the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action that would reasonably be expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall promptly, and in no event later than the following Business Day, provide to each of the Investors copies of any notices it receives from any Person regarding the continued eligibility of the Common Stock for listing on the Principal Market; provided, however, that the Company shall not be required to provide the Investors copies of any such notice that the Company reasonably believes constitutes material non-public information and the Company would not be required to publicly disclose such notice in any report or statement filed with the SEC and under the Exchange Act or the Securities Act. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 5(c). The Company shall take all action necessary to ensure that its Common Stock can be transferred electronically as DWAC Shares.
(d) Prohibition of Short Sales and Hedging Transactions. During the period specified in Section 3(h), neither the Investors nor any of their respective agents, representatives or affiliates shall in any manner whatsoever enter into or effect, directly or indirectly, any (i) short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.
(e) Subsequent Equity Issuances. From and after the date of this Agreement until thirty (30) days following the Closing Date (the Lock-Up Period), irrespective of any earlier termination of this Agreement, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents (or a combination of units thereof), other than in connection with an Exempt Issuance. Common Stock Equivalents means any securities of the Company or its Subsidiaries which entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. Exempt Issuance means the issuance of (i) Securities to the Investors pursuant to this Agreement, including issuance of shares of Common Stock upon exercise of the Pre-Paid Warrants (ii) shares of Common Stock, Common
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Stock Equivalents or other securities to any of the Investors pursuant to any other existing or future contract, agreement or arrangement between the Company and such Investor, (iii) shares of Common Stock pursuant to the Companys employee stock purchase plan or upon the exercise or conversion of options, warrants or convertible securities disclosed as outstanding in the Registration Statement, the General Disclosure Package and the Prospectus, (iv) the issuance of employee stock options or other equity compensation or awards not exercisable during the Lock-Up Period or exchange of outstanding equity awards pursuant to the Companys stock option, stock bonus and other stock plans or arrangements, in effect on the date hereof, in the ordinary course of business consistent with past practice, or (v) shares of Common Stock, Common Stock Equivalents or other securities issued in connection with the Restructuring Transactions.
(f) Taxes. The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and delivery of any shares of Common Stock to the Investor made under this Agreement.
(g) Securities Law Compliance. Until the date on which the Investors shall have sold all the Securities, the Company shall (a) take all action necessary to cause the Common Stock to continue to be registered as a class of securities under Sections 12(g) or 12(b) of the Exchange Act, shall comply with its reporting and filing obligations under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Exchange Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act. The Company shall comply with all applicable federal, state and foreign securities laws in connection with the offer, issuance and sale by the Company of the Securities contemplated by the Transaction Documents. Without limiting the generality of the foregoing, neither the Company nor any of its officers, directors or affiliates will take, directly or indirectly, any action designed or intended to stabilize or manipulate the price of any security of the Company, or which would reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company.
(h) Stop Orders. The Company shall advise each of the Investors promptly (but in no event later than 24 hours) and shall confirm such advice in writing: (i) of the Companys receipt of notice of any request by the SEC for amendment of or a supplement to the Registration Statement, the Prospectus, any Prospectus Supplement or for any additional information; (ii) of the Companys receipt of notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, or of the Companys receipt of any notification of the suspension of qualification of the Securities for offering or sale in any jurisdiction or the initiation or contemplated initiation of any proceeding for such purpose; and (iii) of the Company becoming aware of the happening of any event, which makes any statement of a material fact made in the Registration Statement, the Prospectus or any Prospectus Supplement untrue or which requires the making of any additions to or changes to the statements then made in the Registration Statement, the Prospectus or any Prospectus Supplement in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or of the necessity to amend the Registration Statement or supplement the Prospectus or any Prospectus Supplement to
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comply with the Securities Act or any other law. The Company shall not be required to disclose to the Investors the substance or specific reasons of any of the events set forth in clauses (i) through (iii) of the immediately preceding sentence, but rather, shall only be required to disclose that the event has occurred. If at any time the SEC shall issue any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, the Company shall use its reasonable best efforts to obtain the withdrawal of such order at the earliest possible time. The Company shall furnish to each of the Investors, without charge, a copy of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement or the Prospectus, as the case may be.
(i) Amendments to Registration Statement; Prospectus Supplements. Except as provided in this Agreement and other than periodic and current reports required to be filed pursuant to the Exchange Act, the Company shall not file with the SEC any amendment to the Registration Statement or any supplement to the Base Prospectus that refers to any of the Investors, the Securities, the Transaction Documents or the transactions contemplated thereby (including, without limitation, any Prospectus Supplement filed in connection with the transactions contemplated by the Transaction Documents), in each case with respect to which (a) such Investor shall not previously have been advised and afforded the opportunity to review and comment thereon at least 24 hours prior to filing with the SEC, as the case may be, (b) the Company shall not have given due consideration to any comments thereon received from such Investor or its counsel, or (c) such Investor shall reasonably object, unless the Company reasonably has determined that it is necessary to amend the Registration Statement or make any supplement to the Prospectus to comply with the Securities Act or any other applicable law or regulation, in which case the Company shall promptly (but in no event later than 24 hours) so inform such Investor, such Investors shall be provided with a reasonable opportunity to review and comment upon any disclosure referring to such Investor, the Transaction Documents or the transactions contemplated thereby, as applicable, and the Company shall expeditiously furnish to such Investor a copy thereof. In addition, for so long as, in the reasonable opinion of counsel for any of the Investors, a Prospectus is required to be delivered in connection with any acquisition or sale of Securities by such Investor, the Company shall not file any Prospectus Supplement with respect to the Securities without furnishing to such Investor as many copies of such Prospectus Supplement, together with the Prospectus, as such Investor may reasonably request.
(j) Prospectus Delivery. The Company consents to the use of the Prospectus (and of each Prospectus Supplement thereto) in accordance with the provisions of the Securities Act and with the securities or blue sky laws of the jurisdictions in which the Securities may be sold by the Investors, in connection with the offering and sale of the Securities and for such period of time thereafter as a Prospectus is required by the Securities Act to be delivered in connection with sales of the Securities. The Company will make available to each of the Investors upon request, and thereafter from time to time will furnish to each of the Investors, as many copies of the Prospectus (and each Prospectus Supplement thereto) as such Investor may reasonably request for the purposes contemplated by the Securities Act within the time during which the Prospectus is required by the Securities Act to be delivered in connection with sales of the Securities. If during such period of time any event shall occur that in the reasonable judgment of the Company and its counsel, or in the reasonable judgment of any Investor and its counsel, is
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required to be set forth in the Registration Statement, the Prospectus or any Prospectus Supplement or should be set forth therein in order to make the statements made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or if in the reasonable judgment of the Company and its counsel, or in the reasonable judgment of any of the Investors and its counsel, it is otherwise necessary to amend the Registration Statement or supplement the Prospectus or any Prospectus Supplement to comply with the Securities Act or any other applicable law or regulation, the Company shall forthwith prepare and, subject to Section 5(k) above, file with the SEC an appropriate amendment to the Registration Statement or an appropriate Prospectus Supplement and in each case shall expeditiously furnish to each of the Investors, at the Companys expense, such amendment to the Registration Statement or such Prospectus Supplement, as applicable, as may be necessary to reflect any such change or to effect such compliance. The Company shall have no obligation to separately advise the Investors of, or deliver copies to the Investors of, the SEC Documents, all of which the Investors shall be deemed to have notice of.
(k) Use of Proceeds. The Company will use the net proceeds from the offering of the Securities as described in the Prospectus.
(l) Rescission Right. If the transactions contemplated by the Restructuring Transactions have not been consummated with three (3) business days of the Closing Date, the Company will offer to the Investors, in rescission thereof, the purchase price for the Securities in exchange for their conveyance, without any representations other than ownership, of such Securities to the Company.
6. TRANSFER AGENT INSTRUCTIONS.
On the Closing Date, the Company shall issue to the Transfer Agent (and any subsequent transfer agent) irrevocable instructions, in the form heretofore furnished to the Company, to issue the Securities in accordance with the terms of this Agreement (the Irrevocable Transfer Agent Instructions). All Purchase Shares to be issued to or for the benefit of the Investors pursuant to this Agreement shall be issued as DWAC Shares or credited in book-entry form to the Investors, as indicated by each Investor. The Company represents and warrants to each of the Investors that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 6 will be given by the Company to the Transfer Agent with respect to the Purchase Shares, and the Purchase Shares shall otherwise be freely transferable on the books and records of the Company. Certificates and any other instruments evidencing the Purchase Shares shall not bear any restrictive or other legend. If any Investor effects a sale, assignment or transfer of the Purchase Shares, the Company shall permit the transfer and shall promptly instruct the Transfer Agent (and any subsequent transfer agent) to issue DWAC Shares in such name and in such denominations as specified by such Investor to effect such sale, transfer or assignment. On the Closing Date, the Company shall deliver to each Investor the Pre-Paid Warrants, if any, to be issued to such Investor duly executed on behalf of the Company and registered in the name of such Investor or its designee. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Investors. Accordingly, the Company acknowledges
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that the remedy at law for a breach of its obligations under this Section 6 will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 6, that each of the Investors shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer Agent (and any subsequent transfer agent) to the extent required or requested by the Transfer Agent (or any subsequent transfer agent). Any fees (with respect to the Transfer Agent, counsel to the Company or otherwise) associated with the issuance of such opinion shall be borne by the Company.
7. CONDITIONS TO THE COMPANYS OBLIGATION TO ISSUE AND SELL THE SECURITIES.
The obligation of the Company hereunder to issue and sell the Securities to the Investors on the Closing Date is subject to the satisfaction or, where legally permissible, the waiver of each of the following conditions:
(a) Each of the Investors shall have executed this Agreement and delivered the same to the Company;
(b) No stop order with respect to the Registration Statement shall be pending or threatened by the SEC; and
(c) The representations and warranties of the Investors shall be true and correct in all material respects as of the date hereof and as of the Closing Date as though made at that time.
8. CONDITIONS TO THE INVESTORS SEVERAL AND NOT JOINT OBLIGATION TO PURCHASE THE SECURITIES.
The several and not joint obligation of each Investor under this Agreement to purchase the number of Securities set forth opposite its name on Schedule I hereto is subject to the satisfaction or, where legally permissible, the waiver of each of the following conditions:
(a) The Company shall have executed each of the Transaction Documents to which it is a party and delivered the same to each of the Investors;
(b) The Common Stock shall be listed or quoted on the Principal Market, trading in the Common Stock shall not have been within the last 365 days suspended by the SEC or the Principal Market, and all Securities to be issued by the Company to the Investors pursuant to this Agreement shall have been, if applicable, approved for listing or quotation on the Principal Market in accordance with the applicable rules and regulations of the Principal Market, subject only to official notice of issuance;
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(c) Each of the Investors shall have received the opinion of the Companys legal counsel dated as of the Closing Date in form and substance reasonably acceptable to the Investors;
(d) The representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such representations and warranties is already qualified as to materiality in Section 4 above, in which case, the portion of such representations and warranties so qualified shall be true and correct without further qualification) as of the date hereof and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Investors shall have received a certificate, executed by the CEO, President or CFO of the Company, dated as of the Closing Date, to the foregoing effect in the form attached hereto as Exhibit A;
(e) The Board of Directors of the Company shall have adopted resolutions in substantially the form previously provided to the Investors, which shall be in full force and effect without any amendment or supplement thereto as of the Closing Date;
(f) The Irrevocable Transfer Agent Instructions shall have been delivered to and acknowledged in writing by the Company and the Companys Transfer Agent;
(g) The Company shall have delivered to the Investors a secretarys certificate executed by the Secretary of the Company, dated as of the Closing Date, in the form attached hereto as Exhibit B;
(h) The Registration Statement shall be effective and no stop order with respect to the Registration Statement shall be pending or threatened by the SEC. The Company shall have a maximum dollar amount certain of securities, including the Securities, registered under the Registration Statement which is sufficient to issue to the Investors not less than all of the Securities to be purchased under the Purchase Agreement. The Prospectus shall be current and available for the issuance and sale of all of the Securities by the Company to the Investors, and for the resale of all of the Securities by the Investors. Any other Prospectus Supplements required to have been filed by the Company with the SEC under the Securities Act at or prior to the Closing Date shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Securities Act. All reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC at or during the 12-month period immediately preceding the Closing Date pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC within the applicable time periods prescribed for such filings under the Exchange Act, including any applicable extension periods contemplated by the Exchange Act;
(i) The Company shall be eligible to transfer its Common Stock, including the Purchase Shares, electronically as DWAC Shares;
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(j) All federal, state and local governmental laws, rules and regulations applicable to the transactions contemplated by the Transaction Documents and necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been complied with, and all consents, authorizations and orders of, and all filings and registrations with, all federal, state and local courts or governmental agencies and all federal, state and local regulatory or self-regulatory agencies necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been obtained or made, including, without limitation, in each case those required under the Securities Act, the Exchange Act, applicable state securities or Blue Sky laws or applicable rules and regulations of the Principal Market, or otherwise required by the SEC, the Principal Market or any state securities regulators;
(k) No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed by any federal, state, local or foreign court or governmental authority of competent jurisdiction which prohibits the consummation of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents;
(l) No action, suit or proceeding before any federal, state, local or foreign arbitrator or any court or governmental authority of competent jurisdiction shall have been commenced or threatened, and no inquiry or investigation by any federal, state, local or foreign governmental authority of competent jurisdiction shall have been commenced or threatened, against the Company, or any of the officers, directors or affiliates of the Company, seeking to restrain, prevent or change the transactions contemplated by the Transaction Documents, or seeking material damages in connection with such transactions;
(m) No Person shall have commenced a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law;
(n) The Company shall have entered into definitive agreements with respect to the Restructuring Transactions with no material conditions precedent other than the closing of the transactions contemplated by this Agreement;
(o) The Company, pursuant to or within the meaning of any Bankruptcy Law, shall not have (i) commenced a voluntary case, (ii) consented to the entry of an order for relief against it in an involuntary case, (iii) consented to the appointment of a Custodian of it or for all or substantially all of its property, or (iv) made a general assignment for the benefit of its creditors or is generally unable to pay its debts as the same become due; and
(p) A court of competent jurisdiction shall not have entered an order or decree under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or (iii) orders the liquidation of the Company or any Subsidiary.
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(q) The Company shall be simultaneously closing on the issuance and sale of Securities for an aggregate purchase price of not less than $40.0 million.
(r) The Company shall have filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2018, with the SEC.
9. INDEMNIFICATION.
In consideration of the Investors execution and delivery of this Agreement and acquiring the Securities, and in addition to all of the Companys other obligations under the Transaction Documents to which it is a party, the Company shall defend, protect, indemnify and hold harmless each Investor and all of its affiliates, stockholders, members, managers, partners, officers, directors and employees and any of the foregoing Persons agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by the Transaction Documents) (collectively, the Indemnitees) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys fees and disbursements (the Indemnified Liabilities), incurred by any Indemnitee as a result of, or arising out of, or relating to: (a) any misrepresentation or breach of any representation or warranty made by the Company in any of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in any of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (c) any cause of action, suit or claim brought or made against such Indemnitee and arising out of or resulting from the execution, delivery, performance or enforcement of any of the Transaction Documents, the Restructuring Transactions or any other certificate, instrument or document contemplated hereby or thereby, (d) any violation of the Securities Act, the Exchange Act, state securities or Blue Sky laws, or the rules and regulations of the Principal Market in connection with the transactions contemplated by the Transaction Documents by the Company or any of its affiliates, officers, directors or employees, (e) any untrue statement or alleged untrue statement of a material fact contained, or incorporated by reference, in the Registration Statement or any amendment thereto or any omission or alleged omission to state therein, or in any document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein not misleading, or (f) any untrue statement or alleged untrue statement of a material fact contained, or incorporated by reference, in the Prospectus, or any omission or alleged omission to state therein, or in any document incorporated by reference therein, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that (I) the indemnity contained in clause (c) of this Section 9 shall not apply to any Indemnified Liabilities which directly and primarily result from the fraud, gross negligence or willful misconduct of an Indemnitee, (II) the indemnity contained in clauses (d), (e) and (f) of this Section 9 shall not apply to any Indemnified Liabilities of an Investor to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Investor expressly for use in any Prospectus
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Supplement, if the Prospectus was timely made available by the Company to such Investor pursuant to Section 5(l), (III) the indemnity contained in clauses (d), (e) and (f) of this Section 9 shall not inure to the benefit of an Investor to the extent such Indemnified Liabilities are based on a failure of such Investor to deliver or to cause to be delivered the Prospectus made available by the Company, if such Prospectus was timely made available by the Company pursuant to Section 5(l), and if delivery of the Prospectus by such Investor was required under the Securities Act with respect to the Securities and such delivery by such Investor would have cured the defect giving rise to such Indemnified Liabilities, and (IV) the indemnity in this Section 9 shall not apply to amounts paid in settlement of any claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Any required indemnification payment for any particular claim shall be made within thirty (30) days from the date an Investor makes a written request for it. A certificate containing reasonable detail as to the amount of such indemnification submitted to the Company by an Investor shall be conclusive evidence, absent manifest error, of the amount due from the Company to such Investor. If any action shall be brought against any Indemnitee in respect of which indemnity may be sought pursuant to this Agreement, such Indemnitee shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Indemnitee. Any Indemnitee shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnitee, except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of such Indemnitee, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
10. TERMINATION.
This Agreement may be terminated only as follows:
(a) If pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors, this Agreement shall automatically terminate without any liability or payment to the Company (except as set forth below) without further action or notice by any Person.
(b) In the event that the Closing shall not have occurred on or before April 10, 2019, due to the failure to satisfy the conditions set forth in Sections 7 and 8 above with respect to the Closing, either the Company, on the one hand, or any Investor, on the other hand, shall have the option to terminate this Agreement at the close of business on such date or thereafter without liability of any party to any other party (except as set forth below); provided, however,
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that the right to terminate this Agreement under this Section 10(b) shall not be available to any party if such party is then in breach of any covenant or agreement contained in this Agreement or any representation or warranty of such party contained in this Agreement fails to be true and correct such that the conditions set forth in Section 7(c) or Section 8(d), as applicable, could not then be satisfied. Any termination of this Agreement pursuant to this Section 10(b) shall be effected by written notice from the Company to each of the Investors, or any Investor to the Company and each of the other Investors, as the case may be, setting forth the basis for the termination hereof.
The representations and warranties and covenants of the Company and the Investors contained in Sections 3, 4, 5, and 6 hereof, the indemnification provisions set forth in Section 9 hereof and the agreements and covenants set forth in Sections 10 and 11, shall survive the Closing and any termination of this Agreement. No termination of this Agreement shall be deemed to release the Company or any Investor from any liability for intentional misrepresentation or willful breach by such party of any of the Transaction Documents to which it is a party.
11. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of Illinois, County of Cook, for the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and the other Transaction Documents 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
(b) Counterparts. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a
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facsimile signature or signature delivered by e-mail in a .pdf format data file shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.
(c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement; Amendment. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements among the Investors, the Company, their respective affiliates and Persons acting on their behalf with respect to the subject matter hereof, and this Agreement, the other Transaction Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any of the Investors makes any representation, warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in the Transaction Documents. No provision of this Agreement or the other Transaction Documents may be amended other than by a written instrument signed by each of the parties hereto or thereto.
(f) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon receipt when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses for such communications shall be:
If to the Company:
Endologix, Inc.
2 Musick
Irvine, CA
Telephone: (949) 595-7200
E-mail: vmahboob.com
Attention: Vaseem Mahboob, Chief Financial Officer
With a copy to (which shall not constitute notice or service of process):
DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
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San Diego, CA 92121
Telephone: (858) 677-1400
E-mail: michael.kagnoff@dlapiper.com
Attention: Michael Kagnoff, Esq.
If to an Investor, to its address set forth opposite its name on Schedule I hereto, with copies to such Investors representatives as set forth on Schedule I hereto,
If to the Transfer Agent:
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Telephone: 718-921-8300
Facsimile: 718-765-8782
Attention: Corporate Actions Department
or at such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the senders facsimile machine or email account containing the time, date, and recipient facsimile number or email address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or email or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and any permitted successors and assigns of the Company. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of each of the Investors, including by merger or consolidation. None of the Investors may assign its rights or obligations under this Agreement.
(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and any permitted successors and assigns of the Company and, except as set forth in Section 9, is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(i) Publicity. The Company shall afford each of the Investors and its counsel with the opportunity to review and comment upon the form and substance of, and shall give reasonable consideration to all such comments from such Investor or its counsel on, any press release, SEC filing or any other public disclosure by or on behalf of the Company relating to such Investor, its purchases hereunder or any aspect of the Securities, any of the Transaction Documents or the transactions contemplated thereby, not less than 24 hours prior to the issuance, filing or public disclosure thereof. Each Investor must be provided with a final version of any
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such press release, SEC filing or other public disclosure at least 24 hours prior to any release, filing or use by the Company thereof. The Company agrees and acknowledges that its failure to fully comply with this provision constitutes a Material Adverse Effect. Except as required by law, no Investor shall issue a press release or any other public disclosure regarding this Agreement or the substance hereof without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.
(j) Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k) No Placement Agent, Broker or Finder. The Company represents and warrants to each of the Investors that it has not engaged any placement agent, broker or finder in connection with the transactions contemplated hereby. Each Investor, severally and only with respect to itself and not jointly, represents and warrants to the Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. The Company shall be responsible for the payment of any fees or commissions, if any, of any placement agent, broker or finder relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each of the Investors harmless against, any liability, loss or expense (including, without limitation, attorneys fees and out of pocket expenses) arising in connection with any such claim.
(l) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
(m) Remedies, Other Obligations, Breaches and Injunctive Relief. The Investors remedies provided in this Agreement, including, without limitation, the Investors remedies provided in Section 9, shall be cumulative and in addition to all other remedies available to the Investors under this Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief), no remedy of any of the Investors contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit any Investors right to pursue actual damages for any failure by the Company to comply with the terms of this Agreement. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Investors and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, any Investor shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
(n) Enforcement Costs; Expenses. If: (i) this Agreement is placed by any Investor in the hands of an attorney for enforcement or is enforced by any Investor through any legal proceeding; (ii) an attorney is retained to represent any Investor in any bankruptcy, reorganization, receivership or other proceedings affecting creditors rights and involving a claim
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under this Agreement; or (iii) an attorney is retained to represent any Investor in any other proceedings whatsoever in connection with this Agreement, then the Company shall pay to such Investor, as incurred by such Investor, all reasonable costs and expenses including attorneys fees incurred in connection therewith, in addition to all other amounts due hereunder. At the Closing, the Company shall reimburse the Investors for their out-of-pocket costs and expenses related to the negotiation and documentation of the transactions contemplated hereby and contemplated by the Restructuring Transactions, including the legal fees of Tannenbaum Helpern Syracuse & Hirschtritt LLP as counsel to the Investors, up to a maximum amount of $50,000.
(o) Waivers. No provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
(p) Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of the Investors set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by the Investors or the Company or any of the officers, directors, employees, agents or controlling persons referred to in Section 9, and will survive delivery of and payment for the Securities.
(q) Independent Nature of Investors Obligations and Rights. The obligations of each Investor under the Transaction Documents are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Investors are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction Documents. The decision of each Investor to purchase Securities pursuant to the Transaction Documents has been made by such Investor independently of any other Investor. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with such Investor making its investment hereunder and that no other Investor will be acting as agent of such Investor in connection with monitoring such Investors investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Investor confirms that each Investor has independently participated with the Company in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and sale of the Securities
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contemplated hereby was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among the Investors.
* * * * *
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IN WITNESS WHEREOF, the Investors and the Company have caused this Agreement to be duly executed as of the date first written above.
THE COMPANY: | ||
ENDOLOGIX, INC. |
By: |
|
Name: |
||
Title: |
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IN WITNESS WHEREOF, the Investors and the Company have caused this Agreement to be duly executed as of the date first written above.
INVESTORS: | ||
[__] |
By: |
|
[Signature page to Endologix Purchase Agreement]
Exhibit 10.2
EXECUTION VERSION
EXCHANGE AGREEMENT
This Exchange Agreement (this Agreement) is made and entered into as of March 31, 2019, by and among Endologix, Inc., a Delaware corporation (the Company), the noteholders listed on Schedule A (or their permitted assigns) hereto (collectively, the Noteholders). The Company and the Noteholders are collectively referred to herein as the Parties and individually as a Party as the context may require.
RECITALS
WHEREAS, reference is made to that certain Indenture, dated as of December 10, 2013, (the Original Indenture), between the Company and Wells Fargo Bank, National Association, as trustee (Trustee), to provide for, among other things, the issuance, from time to time, of debentures, notes, or other debt instruments of the Company, in one or more series to be established by the Company under, and authenticated and delivered as provided in, the Original Indenture;
WHEREAS, reference is made to that certain Second Supplemental Indenture, dated as of November 2, 2015 (the Second Supplemental Indenture, together with the Original Indenture, the Indenture), between the Company and Trustee, pursuant to which the Company issued $125,000,000 in aggregate principal amount of 3.25% Convertible Senior Notes due 2020 (the Notes);
WHEREAS, on the Closing Date (as defined below), on the terms and subject to the conditions set forth herein, the Noteholders desire to exchange (the Exchange) the Notes in the principal amounts set forth opposite each Noteholders name on Schedule A hereto (the Applicable Note Amount) for 5.00% Voluntary Convertible Senior Notes of the Company (the New Voluntary Notes) and 5.00% Mandatory Convertible Senior Notes of the Company (the New Mandatory Notes, together with New Voluntary Notes, the New Notes) in the principal amounts set forth opposite each Noteholders name on Schedule A;
WHEREAS, the New Voluntary Notes will be issued pursuant to an indenture to be entered into on the Closing Date (the New Voluntary Indenture) by and among the Company and Wilmington Trust, National Association or another trustee reasonably acceptable to the Parties (the New Trustee), substantially in the form attached hereto as Exhibit A;
WHEREAS, the New Mandatory Notes will be issued pursuant to an indenture to be entered into on the Closing Date (the New Mandatory Indenture, together with the New Voluntary Indenture, the New Indentures) by and among the Company and the New Trustee, substantially in the form attached hereto as Exhibit B;
WHEREAS, the New Voluntary Notes will be delivered in book-entry form through the facilities of the Depositary Trust Company (DTC), and will be deposited with, or on behalf of DTC, and registered in the name of Cede & Co., as DTCs nominee;
WHEREAS the New Mandatory Notes will be delivered in definitive registered form to the Noteholders; and
WHEREAS, the Exchange will result in no new proceeds to the Company.
NOW, THEREFORE, in consideration of the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Exchange
Section 1.1 Exchange of the Notes. On the terms and subject to the satisfaction of the conditions set forth in this Agreement, the Company and the Noteholders, severally and not jointly, agree to consummate the Exchange and certain of the transactions contemplated hereby on the Closing Date as provided herein. Each Noteholder shall, severally and not jointly, surrender, transfer and deliver Notes to the Company in the aggregate principal amount set forth on Schedule A. The Company shall then surrender, transfer and deliver such Notes to the Trustee for cancellation in accordance with the terms of the Indenture through the Deposit/Withdrawal at Custodian procedures of DTC (and the Company shall promptly effect such cancellation), together with all right, title and interest to the Notes. Such transfer of the Notes shall be made solely in exchange for the following: on the Closing Date, the Company shall (a) issue and deliver New Voluntary Notes to the Noteholders in the principal amount (x) set forth opposite each Noteholders name on Schedule A hereto, plus (y) an amount equal to the accrued and unpaid interest in respect of the principal amount of Notes so exchanged from, and including, the most recent date on which interest thereon was paid, to, but not including, the Closing Date (to be calculated in accordance with the Indenture); and (b) issue and deliver New Mandatory Notes to the Noteholders in the principal amount set forth opposite each Noteholders name on Schedule A hereto. For the avoidance of doubt, interest on the New Notes shall accrue from the Closing Date.
Section 1.2 Closing. Subject to the satisfaction (or waiver by the applicable Parties) of the conditions set forth in Section 1.3 below, the closing of the Exchange (the Closing) will take place at the offices of DLA Piper LLP (US), counsel to the Company, on April 3, 2019 or on such other date and at such other place as the Parties may agree in writing (the Closing Date). The Company will not pay or owe any prepayment or redemption premium or any other amount under the Indenture in respect of the Notes exchanged for New Notes except as set forth herein.
Section 1.3 Conditions to Closing.
(a) The obligation of the Noteholders hereunder to consummate the Exchange and the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing, of each of the following conditions; provided, that these conditions are for the Noteholders sole benefit and may be waived by the Noteholders at any time in their sole discretion by providing the Company with prior written notice thereof:
(i) Transaction Documents. (A) This Agreement, the New Indentures, the New Notes and any other instruments or agreements entered into in connection with the transactions contemplated hereby or thereby (collectively, the Transaction Documents) shall have been duly and validly authorized, executed and delivered (and in the case of the New Notes, duly and validly authenticated by the New Trustee) by the Company, and (B) each of the New Trustee and the Noteholders shall have received either (x) a counterpart of this Agreement, the New Indentures, and the New Notes signed on behalf of each party thereto or (y) written evidence reasonably satisfactory to it (which may include telecopy or electronic transmission of a signed signature page) that each party to this Agreement, the New Indentures, and the New Notes has signed a counterpart of the requisite agreements.
(ii) Representations, Warranties and Agreements. (x) The representations and warranties of the Company contained in Article III hereof shall be true and correct in all respects, in the case of representations and warranties which are qualified as to materiality, Material Adverse Effect, or words of similar effect) at and as of such time, and shall be true and correct in all material respects, in the case of representations and warranties that are not so qualified, and (y) the
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Company shall have complied in all material respects with all of its covenants, obligations and agreements set forth herein to be performed or satisfied at or prior to the Closing Date;
(iii) Officers Certificate. The Company shall have furnished to the Noteholders a certificate, dated as of the Closing Date, of the Chief Executive Officer of the Company in which such officer shall state that at and as of the Closing Date (x) the representations and warranties of the Company contained in Article III hereof are true and correct in all respects, in the case of representations and warranties which are qualified as to materiality, Material Adverse Effect, or words of similar effect), and true and correct in all material respects, in the case of representations and warranties that are not so qualified and (y) the Company has complied in all material respects with all of their covenants, obligations and agreements set forth herein to be performed or satisfied at or prior to the Closing Date.
(iv) Secretarys Certificate. With respect to the New Indentures, the New Trustee shall have received:
(a) a copy of the certificate of formation or incorporation, as applicable, including all amendments thereto, of the Company, certified as of a recent date by the Secretary of State of Delaware, and a certificate as to the good standing of the Company as of a recent date from such Secretary of State or other certifying authority;
(b) a certificate of the Secretary or Assistant Secretary of the Company dated the Closing Date and certifying:
(i) that attached thereto is a true and complete copy of the by-laws of the Company, as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (ii) below;
(ii) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors of the Company authorizing the execution, delivery and performance, as applicable, of the Transaction Documents, the Exchange, and the issuance of the New Notes, and the transactions related thereto, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Closing Date;
(iii) that the certificate of incorporation of the Company has not been amended since the date of the last amendment thereto disclosed pursuant to clause (a) above;
(iv) as to the incumbency and specimen signature of each officer executing the New Indentures on behalf of the Company; and
(v) as to the absence of any Default or Event of Default (as such terms are defined in the Indenture);
(vi) that no Fundamental Change (as such term is defined in the Indenture) shall have occurred under the Indenture, and the Company has not taken, or otherwise agreed to take, any actions that could reasonably be executed to result in a Fundamental Change under the Indenture; and
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(c) a certificate of a director or an executive officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary or similar officer executing the certificate pursuant to clause (b) above.
(v) No Prohibitions. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or other legal restraint or prohibition shall be in effect preventing the consummation by the Company or any Noteholder of the Exchange and the issuance of the New Notes.
(vi) Consents. The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale to the Noteholder of the New Notes.
(vii) No Material Change. On or after the date of this Agreement and until the Closing, there shall not have occurred any of the following: (a) an ongoing suspension or material limitation in trading in securities generally on The New York Stock Exchange or on The NASDAQ Stock Market; (ii) an ongoing suspension or material limitation in trading on the Companys securities on the NASDAQ Global Select Market (or any other market the Companys securities are trading on at such time); (b) a general moratorium on commercial banking activities declared by either federal or any state authorities; (d) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, which in the Noteholders judgment makes it impracticable or inadvisable to proceed with the purchase of the New Notes; or (e) any calamity or crisis, change in national, international or world affairs, act of God, change in the international or domestic markets, or change in the existing financial, political or economic conditions in the United States or elsewhere, that in the Noteholders judgment makes it impracticable or inadvisable to proceed with the purchase of the New Notes.
(viii) NASDAQ. On the Closing Date, any actions for the shares of the Companys common stock, par value $0.001 per share (the Common Stock), issuable upon the conversion of the New Notes (the Conversion Shares) to be duly listed on the NASDAQ Global Select Market, subject to official notice of issuance, shall have been taken.
(ix) Contemporaneous Transactions. Prior to or contemporaneously with the Closing, the Company shall have completed the closing of that certain transaction between the Company and Deerfield ELGX Revolver, LLC, or an affiliate thereof, as contemplated in that certain term sheet dated March 15, 2019 between the parties, and in form and substance reasonably satisfactory to the Noteholders.
(x) Legal Opinion. The Noteholders shall have received the opinion of DLA Piper LLP (US), the Companys outside counsel, dated as of the Closing Date, in substantially the form of Exhibit C attached hereto.
(xi) Other Documents. The Company shall have executed and delivered such other customary information, certificates and documents relating to the Company as the Noteholder may reasonably request.
(b) In connection with the Closing, the Company shall have received from the Noteholders (i)(x) an IRS Form W-8 and (y) a certification that such Noteholder is not (A) a 10-percent shareholder of the Company within the meaning of Section 871(h)(3)(B) of Internal Revenue Code of 1986, as
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amended (the Code) or (B) a controlled foreign corporation described in section 881(c)(3)(C) of the Code (or any successor provision), or (ii) an IRS Form W-9, as applicable.
Section 1.4 Nature of Obligations and Rights of Noteholders. The respective obligations of each Noteholder under the Transaction Documents are several and not joint with the obligations of any other Noteholder, and no Noteholder shall be responsible in any way for the performance of the obligations of any other Noteholder under the Transaction Documents. The failure or waiver of performance under this Agreement by any Noteholder, or on its behalf, does not excuse performance by any other Noteholder. Nothing contained herein or in any other Transaction Document, and no action taken by any Noteholder pursuant thereto, shall be deemed to constitute the Noteholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Noteholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by any Transaction Document. Except as otherwise provided in the Transaction Documents, each Noteholder shall be entitled to independently protect and enforce its rights, including the rights arising out of the Transaction Documents, and it shall not be necessary for any other Noteholder to be joined as an additional party in any proceeding for such purpose. The decision of each Noteholder to acquire the New Notes pursuant to the Transaction Documents has been made by such Noteholder independently of any other Noteholder. Each Noteholder acknowledges that no other Noteholder has acted as agent for such Noteholder in connection with making its investment hereunder and that no Noteholder will be acting as agent of such Noteholder in connection with monitoring its investment in the New Notes or enforcing its rights under the Transaction Documents. The Company acknowledges that each of the Noteholders has been provided with the same Transaction Documents for the purpose of closing a transaction with multiple Noteholders and not because it was required or requested to do so by any Noteholder.
ARTICLE II
Representations and Warranties of the Noteholders
Each Noteholder hereby makes the following representations and warranties on behalf of itself individually and each such Noteholder makes no representation as to any other Noteholder:
Section 2.1 Organization; Requisite Authority. Each Noteholder is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Noteholder possesses all requisite power and authority necessary to consummate the Exchange and the transactions contemplated by this Agreement and to transfer the Notes to the Company as contemplated by Section 1.1.
Section 2.2 Authorization. The execution, delivery and performance of this Agreement has been duly authorized by each Noteholder. This Agreement, when executed and delivered by each Noteholder in accordance with the respective terms hereof, and assuming the due authorization, execution and delivery of this Agreement by the Company, shall constitute a valid and binding obligation of such Noteholder, enforceable against such Noteholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws affecting creditors rights generally and by general equitable principles.
Section 2.3 Information; Consultation with Counsel and Advisors. None of the Company, or to the knowledge of the Noteholder, any of the Company affiliates or agents, are acting as a fiduciary for any Noteholder and each Noteholder is entering into this Agreement with a full understanding of the terms, conditions and risks thereof. Each Noteholder or its representatives (a) has consulted with its own
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legal, regulatory, tax, business, investment, financial and accounting advisers in connection herewith to the extent such Noteholder has deemed necessary, (b) has had a reasonable opportunity to ask questions of and receive answers from officers and representatives of the Company concerning its financial condition and results of operations and the Exchange to which this Agreement relates, and any such questions have been answered to its satisfaction, and (c) has conducted its own due diligence on the Company and the Exchange and has made its own investment decisions based upon its own judgment, due diligence and advice from such advisers as such Noteholder has deemed necessary and not upon any view expressed by or on behalf of the Company.
Section 2.4 Brokers Fees. None of the Noteholders has retained or authorized any investment banker, broker, finder or other intermediary to act on behalf of such Noteholder or incurred any liability for any bankers, brokers or finders fees or commissions in connection with the transactions contemplated by this Agreement.
Section 2.5 Ownership. Each Noteholder is the beneficial owner of (or otherwise has sole discretionary management authority with respect to) the aggregate principal amount of and is entitled to any and all accrued and unpaid interest on the Notes set forth on Schedule A. Upon delivery to the Company of the Notes, and upon each Noteholders receipt of the New Notes, as consideration in respect thereof as set forth herein, pursuant to this Agreement, good and valid title to the Notes delivered by such Noteholder will pass to the Company, free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind.
Section 2.6 Accredited Investor. Each Noteholder is an accredited investor within the meaning of Regulation D of the Securities Act of 1933, as amended (the Securities Act).
Section 2.7 No Registration. Each Noteholder acknowledges that as of the Closing Date the New Notes will have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act.
ARTICLE III
Representations, Warranties and Covenants of the Company
The Company hereby makes the following representations as of the date hereof:
Section 3.1 The Company has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of Delaware, with power and authority (corporate or other) to own its properties and conduct its business; and the Company is duly qualified to do business as a foreign entity in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to be duly qualified or in good standing would not individually or in the aggregate have a material adverse effect on the condition (financial or other), business, properties, results of operations or prospects of the Company taken as a whole (a Material Adverse Effect).
Section 3.2 The Company possesses all requisite corporate power and authority necessary to enter into the Transaction Documents and carry out the transactions contemplated hereby and thereby and perform its obligations contemplated hereunder and thereunder, including the Exchange. The New Indentures will be, as of the Closing Date, duly and validly authorized by the Company; the New Notes will be, as of the Closing Date, duly and validly authorized by the Company; and the New Indentures, when executed and delivered by the Company, and assuming due authorization, execution and delivery by the New Trustee, will have been duly and validly executed and delivered by the Company, and, on the
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Closing Date, the New Indentures and the New Notes will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles. The New Notes will not be subject to any preemptive, participation, rights of first refusal or other similar rights, other than as set forth in the Transaction Documents.
Section 3.3 This Agreement has been duly and validly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors rights and to general equity principles.
Section 3.4 Upon delivery to the Company of the Notes, and upon each Noteholders receipt of the New Notes, as consideration in respect thereof as set forth herein, pursuant to this Agreement, good and valid title to the New Notes delivered by the Company will pass to such Noteholder, free and clear of any liens, claims, encumbrances, security interests, options or charges of any kind, except as set forth in the Transaction Documents. As of the Closing, the Conversion Shares shall have been duly authorized and reserved for issuance sufficient to provide for the conversion of all New Notes (without taking into account any limitations on the exercise of the New Notes set forth in the New Notes). Upon conversion in accordance with the terms of the New Notes and the New Indentures, the Conversion Shares will be validly issued, fully paid and nonassessable and the Noteholder will acquire good and valid title to such Conversion Shares free and clear of all liens, encumbrances, equities, preemptive rights and other claims.
Section 3.5 Assuming the accuracy of the representations and warranties of the Noteholders made pursuant to Articles II, no consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required (except as may be required as a result of the identity or status of the Noteholders) for the consummation of the transactions contemplated by this Agreement, or the execution, delivery and performance of the Transaction Documents, the consummation of the Exchange or the issuance of the New Notes, except such as will have been obtained on or prior to the Closing Date. No approval of the Companys stockholders is required for the issuance of the New Notes or for the issuance of any Conversion Shares received upon conversion of such New Notes.
Section 3.6 The execution, delivery and performance by the Company of the Transaction Documents and compliance with the terms and provisions thereof will not conflict with, result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, or (ii) any agreement or instrument to which the Company is a party or by which the Company is bound, or (iii) the charter or by-laws or any equivalent organizational document of the Company, except, in the case of clauses (i) and (ii), where such breach, violation or default would not, individually or in the aggregate, have a Material Adverse Effect.
Section 3.7 The Company will not be an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the United States Investment Company Act of 1940 (the Investment Company Act); and the Company is not, and after giving effect to the Exchange and the issuance of the New Notes, will not be an investment company as defined in the Investment Company Act.
Section 3.8 None of the Company, its affiliates or any person acting on its or their behalf has: (i) engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the New Notes or (ii) engaged in any directed selling efforts (within the meaning of Regulation S) with respect to the New Notes.
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Section 3.9 Since December 31, 2017, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Commission (SEC) pursuant to the reporting requirements of the Exchange Act of 1934, as amended (the Exchange Act) or timely filed notifications of late filings for any of the foregoing (all of the foregoing filed prior to the date hereof, and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the SEC Documents). There are no SEC Documents not available on the SECs EDGAR filing system. As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, 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 and schedules of the Company and its consolidated subsidiaries included in the SEC Documents comply in all material respects with the applicable accounting requirements of Regulation S-X and have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved (except as otherwise noted therein).
Section 3.10 The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and accepted for listing on the NASDAQ Global Select Market, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the NASDAQ Global Select Market, nor has the Company received any notification that the SEC or The NASDAQ Stock Market is contemplating terminating such registration or listing. The Company has complied in all material respects with the applicable requirements of The NASDAQ Stock Market for maintenance of listing of the Common Stock thereon.
Section 3.11 The New Notes that will be issued pursuant to the Exchange and the Conversion Shares will be exempt from registration under the Securities Act, and the holding period of the New Notes and the Conversion Shares may be tacked onto the holding period of the Notes for purposes of Rule 144 promulgated under the Securities Act.
Section 3.12 Giving effect to the filings set forth in Section 4.1 herein, the Company confirms that neither it nor any other person acting on its behalf has provided any of the Noteholders or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The Company understands and confirms that each of the Noteholders will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Noteholders regarding the Company, or any of its subsidiaries, their business and the transactions contemplated hereby, furnished by or on behalf of the Company is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Giving effect to the filings set forth in Section 4.1 herein, and other than the Transaction Documents and the transactions contemplated hereby and thereby, no event or circumstance has occurred or information exists with respect to the Company or any of its subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed.
Section 3.13 All indebtedness represented by the New Notes is being incurred for proper purposes and in good faith; at the Closing, after giving pro forma effect to the Exchange and other good faith assumptions of the Company, the Company and its subsidiaries, taken as a whole on a consolidated basis, will have sufficient capital for carrying on their business.
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ARTICLE IV
Covenants
Section 4.1 Form 8-K. The Company shall, prior to 9:30 AM (New York City time) on the next trading day after each of (i) the date hereof and (ii) the Closing Date, and (iii) the date this Agreement is terminated in accordance with its terms, issue a press release or file a Form 8-K announcing, as applicable (a) the material terms and conditions of the transactions contemplated by this Agreement, (b) the consummation of the Exchange, and (c) any material nonpublic information previously disclosed to Noteholders or any of their representatives, such press release or Form 8-K to be in a manner and form reasonably satisfactory to the Noteholders. The obligations set forth in this Section 4.1 shall be in addition to, and not in lieu of, any similar or related obligations set forth in that certain Confidentiality Agreement, dated February 22, 2019, between the Company and Partner Fund Management, L.P.
Section 4.2 Opinion of Counsel. The Company will provide an opinion of counsel if required by the Companys transfer agent confirming the commencement date of any Rule 144 holding period with respect to the New Notes and/or Conversion Shares will provide at its own cost and expense such other opinions of counsel and representations as may be reasonably required or necessary in the future in connection with resales of the New Notes or Conversion Shares
Section 4.3 DTC. The Company will cooperate with the holders of the New Voluntary Notes and use commercially reasonable efforts to permit the New Voluntary Notes to be eligible for clearance and settlement through DTC.
Section 4.4 Conversion Shares. The Company will use its reasonable best efforts to obtain approval for, and maintain the listing of the Conversion Shares on NASDAQ for so long as the Common Stock is listed thereon. So long as any Noteholder owns any New Notes, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less the number of shares of Common Stock sufficient to provide for the conversion of all outstanding New Notes (without taking into account any limitations on the conversion of the New Notes set forth in the Notes). If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to provide for the conversion of all outstanding New Notes, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of shareholders of the Company to authorize additional shares to meet the Companys obligations under this Section 4.4, in the case of an insufficient number of authorized shares, obtain shareholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to provide for the conversion of all outstanding New Notes.
Section 4.5 Stabilization. The Company will not take directly or indirectly any action designed, or that might reasonably be expected to cause or result in, or that will constitute, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the New Notes or Conversion Shares.
Section 4.6 CUSIP. The Company shall take commercially reasonable efforts to obtain a CUSIP code for the New Mandatory Notes; provided that the Company shall not be obligated to take any action, or make any efforts, to permit the New Mandatory Notes to be eligible for clearance and settlement through DTC, or any other action or efforts related to any such CUSIP code.
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ARTICLE V
Miscellaneous Provisions
Section 5.1 Termination. In the event that the Closing Date does not occur on or before the date that is April 19, 2019 days after the date hereof, then this Agreement and the Parties agreements to consummate the Exchange, shall automatically terminate without further action or notice and without further obligation to any Party; provided, however, that a party hereto shall not have the right to terminate this Agreement if the failure to consummate the transactions contemplated by this Agreement shall be primarily attributable to such partys failure to satisfy its obligations hereunder.
Section 5.2 Notice. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail (postage prepaid) with return receipt requested or sent by reputable overnight courier service (charges prepaid). Notices will be deemed to have been given hereunder when delivered personally, three business days after deposit in the U.S. mail postage prepaid with return receipt requested and one business day after deposit postage prepaid with a reputable overnight courier service for delivery on the next business day. The addresses for any such notices shall be, unless changed by the applicable Party via notice to the other Parties in accordance herewith:
If to the Company:
Endologix, Inc.
2 Musick
Irvine, CA 92618
Attention: Chief Financial Officer
With a copy to (which shall not constitute notice):
DLA Piper LLP (US)
4365 Executive Drive, Suite 1100
San Diego, CA 92121
Attention: Michael S. Kagnoff, Ann Lawrence
If to the Noteholders, to the address on the signature page to this Agreement
Section 5.3 Entire Agreement. The Transaction Documents and the other documents and agreements executed and delivered among the parties hereto and thereto in connection with the Exchange embody the entire agreement and understanding of the parties hereto and thereto with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents exchanged in connection with the negotiation of the Exchange or otherwise.
Section 5.4 Assignment; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. No Party shall assign this Agreement or any rights or obligations hereunder, (b) any of the Notes held by such Parties, or (c) so long as such Party remains the legal owner, beneficial owner and/or investment advisor or manager of or with power and/or authority to bind such Notes, any of the Notes, without in each case the prior written consent of the other Parties hereto; provided, however, that the Noteholders may assign their rights and obligations hereunder and their Notes to any other person without the prior written consent of any other Party, so long such
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other person executes a joinder to this Agreement in the form attached as Exhibit D by which such other person agrees to be bound by the obligations of such transferring person under this Agreement.
Section 5.5 Counterparts. This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon delivered by facsimile or other electronic transmission shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such Party.
Section 5.6 Remedies Cumulative. Each Party acknowledges that the remedies at law of the other parties for a breach of this Agreement would be inadequate and, in recognition of this fact, any party to this Agreement, without posting any bond or furnishing other security, and in addition to all other remedies that may be available, shall be entitled to equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy that may then be available and no party shall oppose the granting of such relief on the basis that money damages would be sufficient. Except as otherwise provided herein, all rights and remedies of the parties under this Agreement are cumulative and without prejudice to any other rights or remedies available at law; provided, however, that if a Party hereto has exercised its remedies in connection with a purported event of default under the Indenture, such Party shall not be entitled to seek specific performance of any provisions of this Agreement.
Section 5.7 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each Party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such Party at the address for such 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 manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
Section 5.8 No Third Party Beneficiaries or Other Rights. Nothing herein shall grant to or create in any person not a party hereto, or any such persons dependents or heirs, any right to any benefits hereunder, and no such party shall be entitled to sue any Party to this Agreement with respect thereto.
Section 5.9 Waiver; Consent. This Agreement may not be changed, amended, terminated, augmented, rescinded or discharged (other than in accordance with its terms), in whole or in part, except by a writing executed by the Parties hereto. No waiver of any of the provisions or conditions of this Agreement or any of the rights of a Party hereto shall be effective or binding unless such waiver shall be in writing and signed by the Party claimed to have given or consented thereto. Except to the extent otherwise agreed in writing, no waiver of any term, condition or other provision of this Agreement, or any
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breach thereof shall be deemed to be a waiver of any other term, condition or provision or any breach thereof, or any subsequent breach of the same term, condition or provision, nor shall any forbearance to seek a remedy for any non-compliance or breach be deemed to be a waiver of a Partys rights and remedies with respect to such non-compliance or breach.
Section 5.10 Word Meanings. The words such as herein, hereinafter, hereof and hereunder refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires. The masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires.
Section 5.11 Further Assurances. The Parties hereto each hereby agree to execute and deliver, or cause to be executed and delivered, such other documents, instruments and agreements, and take such other actions, including giving any further assurances, as any Party may reasonably request in connection with the transactions contemplated by and in this Agreement. In addition, subject to the terms and conditions set forth in this Agreement, each of the Parties shall use its reasonable best efforts (subject to, and in accordance with, applicable law) to take promptly, or to cause to be taken, all actions, and to do promptly, or to cause to be done, and to assist and to cooperate with the other Parties in doing, all things necessary, proper or advisable under applicable laws to consummate and make effective the transactions contemplated hereby, including the obtaining of all necessary, proper or advisable consents, approvals or waivers from third parties and the execution and delivery of any additional instruments reasonably necessary, proper or advisable to consummate the transactions contemplated hereby.
Section 5.12 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Section 5.13 Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Section 5.14 Tax Treatment.
(a) The Parties agree (i) that for U.S. federal and other applicable income tax purposes, exchange of a Note for a New Note, pursuant to the terms of this Agreement, is an exchange, for purposes of applying Section 1.1001-1(a) of the United States Treasury Regulations, of each such Note pursuant to Section 1.1001-3 of the United States Treasury Regulations, (ii) that the New Notes are part of the same issue pursuant to Section 1.1275-1(f) of the United States Treasury Regulations, (iii) that the issue price of the New Notes shall be determined in accordance with the applicable provisions of Section 1.1273-2 of the United States Treasury Regulations, and (iv) to file all U.S. federal income tax and state income tax and franchise tax returns, as applicable, in a manner consistent with the foregoing unless otherwise required pursuant to a final determination under Section 1313(a) of the Code. .
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(b) The Parties agree that the Company will not withhold any income tax from any consideration transferred in the Exchange to a Noteholder, subject to receipt by the Company, from such Noteholder, of the documentation set forth in Section 1.3(b).
Section 5.15 Survival of Representations. The representations, warranties, covenants and agreements of the Company and each of the Noteholders contained in this Agreement or in any certificate furnished hereunder shall survive the Closing.
Section 5.16 Expenses. The Company shall reimburse the Partner Noteholders (as defined in Schedule A attached hereto) for all costs and expenses, not to exceed One Hundred Fifty Thousand Dollars ($150,000.00) in the aggregate (Expense Cap), and Citadel Noteholder (as defined in Schedule A attached hereto) for all costs and expenses, not to exceed Thirty-Five Thousand Dollars ($35,000.00), incurred in connection with the Transaction Documents and the transactions contemplated hereby and thereby (including all legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by Transaction Documents and the transactions contemplated hereby and thereby and the administration, modification and/or enforcement of this Agreement or the New Indentures), whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated. Notwithstanding the foregoing, the Parties acknowledge and agree that Ten Thousand Dollars ($10,000.00) of the Expense Cap has been reimbursed to the Partner Noteholders by the Company as of March 25, 2019. The Company shall be responsible for the payment of any agents fees, financial advisory fees, or brokers commissions (other than for persons engaged by any Noteholder) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold the Noteholders harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in this Agreement, the New Indentures and any other document contemplated hereby and thereby, each party to this Agreement shall bear its own expenses in connection with the Exchange.
Section 5.17 Indemnification. In consideration of each Noteholders execution and delivery of this Agreement and acquiring the New Notes thereunder and in addition to all of the Companys other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Noteholder and each other holder of the New Notes and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing persons agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the Indemnitees) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys fees and disbursements (the Indemnified Liabilities), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit, or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the New Notes, or (iii) the status of such Noteholder or holder of the New Notes as an investor in the Company pursuant to the transactions contemplated by Transaction Documents and the transactions contemplated hereby and thereby; in each of the foregoing cases other than Indemnified Liabilities (x) resulting from a claim solely
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among the Indemnitees, and (y) to the extent finally determined by a court of competent jurisdiction to have resulted from (i) the bad faith, gross negligence or willful misconduct of such Indemnitees, or (ii) a breach by a Noteholder of its obligations under this Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law.
Section 5.18 Indemnification Procedures. Promptly after receipt by an Indemnitee of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under Section 5.17, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under Section 5.17 unless and to the extent such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any Indemnitee other than the indemnification obligation provided in Section 5.17. The indemnifying party shall be entitled to appoint counsel of the indemnifying partys choice at the indemnifying partys expense to represent the Indemnitee in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, retained by the Indemnitee or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the Indemnitee. Notwithstanding the indemnifying partys election to appoint counsel to represent the Indemnitee in an action, the Indemnitee shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the Indemnitee would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the Indemnitee and the indemnifying party and the Indemnitee shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnitees that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the Indemnitee to represent the Indemnitee within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the Indemnitee in writing to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the Indemnitees, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnitees are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each Indemnitee from all liability arising out of such claim, action, suit or proceeding.
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EXECUTION VERSION
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed as of the date first above written.
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ENDOLOGIX, INC. | ||
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Exhibit 10.3
SECOND AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO
GUARANTY AND SECURITY AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT AND FIRST AMENDMENT TO GUARANTY AND SECURITY AGREEMENT (this Amendment) is entered into as of March 30, 2019, by and among ENDOLOGIX, INC., a Delaware corporation (Endologix), the other Borrowers party hereto, the Lenders party hereto and Deerfield ELGX Revolver, LLC, as agent for itself and the other members of the Lender Group (in such capacity, together with its successors and assigns in such capacity, Agent).
W I T N E S S E T H:
WHEREAS, the Borrowers, Agent and the Lenders party thereto are parties to that certain Credit Agreement dated as of August 9, 2018 (as amended, restated, supplemented or otherwise modified from time to time to (and not including) the date hereof, including by that certain First Amendment to Credit Agreement, dated as of November 20, 2018, by and among the Borrowers, the Lenders party thereto and Agent, the Credit Agreement);
WHEREAS, the Borrowers and Agent are parties to that certain Guaranty and Security Agreement dated as of August 9, 2018 (as in effect as of the date hereof without giving effect to the amendments thereto set forth herein, the Security Agreement);
WHEREAS, the Borrowers have requested that Agent and the Lenders (a) amend certain provisions of the Credit Agreement and the Security Agreement and (b) waive certain Designated Occurrences (as defined below) under the Credit Agreement, and, subject to certain terms and limitations and the satisfaction of the conditions set forth herein, Agent and the Lenders are willing to do so, on the terms set forth herein; and
WHEREAS, the Credit Agreement and the Security Agreement are being amended as part of, and pursuant to, a Plan of Recapitalization and Reorganization of Endologix described in Section 368(a)(1)(E) of the IRC;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Capitalized terms used herein (including in the preamble and recitals above) but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Credit Agreement.
SECTION 2. Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, as of the Second Amendment Effective Date (as defined below):
(a) The Credit Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following
example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example:
double-underlined text) as set forth in Exhibit A-I attached hereto (the Amended Credit Agreement); and
(b) The Schedules to the Credit Agreement are hereby amended and restated in their entirety in the form attached hereto as Exhibit A-II.
(c) The Security Agreement is hereby amended by adding the following language to the end of Section 5.9 thereof immediately before the . appearing therein: (for the avoidance of doubt, taking into account any cure periods applicable thereto).
(d) The Schedules to the Security Agreement are hereby amended and restated in their entirety in the form attached hereto as Exhibit A-III.
SECTION 3. Limited Waiver.
(a) Subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment and subject to the terms, conditions and limitations set forth below, Agent and the Lenders hereby agree as of the Second Amendment Effective Date that the possible failure to comply with the representations and covenants of the Credit Agreement specifically mentioned in clauses (i) (xi) below in this Section 3 solely with respect to the matters and in the instances specifically mentioned in such clauses (and, for the avoidance of doubt, not any other failures, matters or instances) (such failures, collectively, the Designated Occurrences and each, a Designated Occurrence), are hereby, solely to the extent expressly set forth below, waived (but, solely to the extent and subject to any limitations on the length of time of any such waiver set forth below):
(i) any Default or Event of Default under Section 8.03 of the Credit Agreement which occurred with respect to the failure of the representations and warranties in the last sentence of Section 4.30 of the Credit Agreement to be true and correct solely between the dates of January 8, 2019 and March 20, 2019 (such period, the Minimum Bid Price Requirement Non-Compliance Period), solely due to the failure to meet the Principal Markets minimum bid price requirements during the Minimum Bid Price Requirement Non-Compliance Period;
(ii) any Default or Event of Default under Section 8.03 of the Credit Agreement which occurred with respect to the failure of the representations and warranties in the third and fourth sentences of Section 4.33(a) made by Endologix to be true and correct between the dates of November 27, 2018 and the day immediately prior to the date hereof, in each case, solely due to the market withdrawal of Nellix EndoVascular Aneurysm Sealing System and the suspension of the CE mark related thereto, in each case, that occurred prior to February 24, 2019;
(iii) any Default or Event of Default under Section 8.02(a)(i) of the Credit Agreement which occurred with respect to the Loan Parties failure to comply with Section 7.01(b) of the Credit Agreement solely with respect to having at least $22,500,000 of Global Excess Liquidity as of (A) the end of the last Business Day of February 2019 and (B) each date that a Borrowing Base Certificate (Third Party Agent) was delivered to the Third Party Agent under Section 5.16(a)(i)(B) of the Credit Agreement between the dates of February 22, 2019 and the day immediately prior to the date hereof;
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(iv) any Default or Event of Default under (x) Section 8.02(c) of the Credit Agreement which occurred with respect to the Loan Parties failure to comply with Section 5.18 of the Credit Agreement prior to the date hereof, (y) Section 8.02(a)(ii) of the Credit Agreement which occurred with respect to the Loan Parties failure to comply with Section 5.3(a) of the Security Agreement prior to the date hereof, and (z) Section 8.03 of the Credit Agreement which occurred with respect to the failure of the representations and warranties in the first sentence of Section 4.45 of the Credit Agreement to be true and correct prior to the date hereof, in each cause of clause (x), clause (y) and clause (z), solely due to Endologixs storage of up to a maximum aggregate amount of $125,000 in book value (which shall be determined in accordance with GAAP by Endologix and with using reasonable and justifiable calculations and estimations by Endologix) of computer servers as of the date hereof at the Flexential Colorado Corp.s data center located at 3330 E. Lone Mountain Road, North Las Vegas, NV 89081pursuant to that certain service order entered into by Endologix on September 5, 2018 (which, for the avoidance of doubt, (A) the Loan Parties represent, warrant, acknowledge and agree that such location, placement and storage of such computer servers at such location occurred prior to the date hereof and (B) the parties hereto hereby acknowledge and agree that the waiver in this clause (v) shall not apply to any other computer servers, property or assets that may be located, placed or stored at such location or any other location);
(v) any Default or Event of Default under Section 8.02(a)(i) of the Credit Agreement which occurred due to Endologixs and its Subsidiaries failure to comply with clause (i) of the first sentence of Section 5.05(a) of the Credit Agreement solely by not timely filing Endologixs annual report on a 10-K for the fiscal year ended December 31, 2018 so long as (A) a Form 12b-25 was adequately and timely filed in respect of such late 10-K filing and (B) such 10-K is filed with the SEC by no later than April 1, 2019, such that the 10-K shall be deemed to have been timely filed pursuant to Rule 12b-25 under the Exchange Act;
(vi) any Default or Event of Default under 8.03 of the Credit Agreement which occurred with respect to the failure of the representations and warranties in Section 4.03(d) to be true and correct on or prior to the day immediately prior to the date hereof, so long as at each time that such representations and warranties were made on or prior to such day, none of the current directors (or equivalent persons) or current officers of Endologix and its Subsidiaries (A) had been convicted or had pled no contest (or agreed to a settlement or plea agreement related) to, or been subject to any order of any Governmental Authority relating to, any violations of any securities laws, rules or regulations, or (B) had been enjoined from engaging in any conduct relating to offers or sales of securities or service as an officer or director of a public company (the Loan Parties hereby representing and warranting that the foregoing was and is true, correct and complete at each such time);
(vii) any Default or Event of Default under Section 8.02(a)(i) of the Credit Agreement which occurred due to the Loan Parties failure to comply with Section 5.05(b)(ii)(A) of the Credit Agreement solely with respect to the Loan Parties failure to provide written notice to Agent of any Designated Occurrence;
(viii) any Default or Event of Default under Section 8.02(a)(i) of the Credit Agreement which occurred due to Endologixs failure to comply with Section 5.15(a) of the Credit Agreement solely with respect to Endologixs failure to provide written notice to Agent of any
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default or event of default under any of the Term Debt Documents caused by the Designated Occurrences (as defined in the Term Amendment (as defined below), the Term Designated Occurrences);
(ix) any Default or Event of Default under (y) Section 8.02(a)(i) of the Credit Agreement which occurred due to the Loan Parties failure to comply with Section 5.02(b) and the first sentence of Section 6.14 of the Credit Agreement, and (z) Section 8.03 of the Credit Agreement which occurred with respect to the failure of the representations and warranties in the first sentence and clause (vi) of the second sentence of Section 4.24 of the Credit Agreement, the first sentence of Section 4.25 of the Credit Agreement, the first sentence and the second sentence of Section 4.26 of the Credit Agreement and Section 4.27 of the Credit Agreement made by the Loan Parties to be true and correct between the dates of January 1, 2018 and the day immediately prior to the date hereof, in each case of clause (y) and clause (z), solely with respect to six units of AFX Endovascular AAA System products (which the Loan Parties represent and warrant constitute medical devices under 15 CFR § 772.1) being sold into Cuba by Endologixs Spanish distributor named DGM Vascular S.L. (which resulted in less than $30,000 of revenue to Endologix and its Subsidiaries in the aggregate for all fiscal periods) in the first two fiscal quarters of 2018 (with such products being implanted into patients in Cuba in the second fiscal quarter of 2018) without first obtaining a license from the Bureau of Industry and Security of the United States Department of Commerce in accordance with 15 CFR § 746.2(a), so long as the Loan Parties report such violation to the Office of Foreign Assets Control of the United States Department of the Treasury by no later than May 31, 2019 and the only penalty (if any) resulting from such violation is a monetary fine not in excess of $250,000;
(x) any Default or Event of Default under Section 8.08(b), Section 8.13, Section 8.14 and Section 8.22(b) of the Credit Agreement relating solely to the Term Debt Documents (and not any other agreements, instruments or documents mentioned in such Section) caused directly and solely by any event of default under the Term Debt Documents resulting solely from the Term Designated Occurrences and the Designated Occurrences (and, for the avoidance of doubt, not any other event, circumstance, breach, violation, default or event of default); and
(xi) any Default or Event of Default under Section 8.03 of the Credit Agreement which occurred with respect to the failure of the certification made by Endologix in clause (a) of the last paragraph of each Borrowing Base Certificate (Third Party Agent) that was delivered to the Third Party Agent under Section 5.16(a)(i)(B) of the Credit Agreement during the Relevant Period solely with respect to the Designated Occurrences (and, for the avoidance of doubt, not any other noncompliance, breach, violation, Default or Event of Default under the Loan Documents) to be true and correct solely during the Relevant Period.
(b) Notwithstanding anything to the contrary, the parties hereto agree that (i) nothing herein, nor any communications among any Loan Party, any of its Subsidiaries or Affiliates and/or any member of the Lender Group, shall be deemed a waiver with respect to (A) any Default or Event of Default, other than the Designated Occurrences, or (B) any future failure of any Loan Party or any of its Subsidiaries and Affiliates to comply fully and completely with any provision of any Loan Document, and (ii) in no event shall the foregoing waivers provided in Section 3(a) of this Amendment be deemed to be a waiver of enforcement of any of any member of the Lender Groups rights or remedies under the Loan Documents, at law (including under the UCC), in
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equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable and/or to terminate the Commitments pursuant to Section 9.01 of the Credit Agreement, with respect to any Defaults or Events of Default (other than the Designated Occurrences) now existing or hereafter arising. Except as expressly provided herein, each member of the Lender Group hereby reserves and preserves all of its rights and remedies against each Loan Party and each of its Subsidiaries under the Loan Documents, at law (including under the UCC), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable and/or to terminate the Commitments pursuant to Section 9.01 of the Credit Agreement.
SECTION 4. Conditions. The effectiveness of the amendments set forth in Section 2 and the limited waivers set forth in Section 3 of this Amendment, in each case, is subject to the satisfaction of the following conditions precedent on or prior to April 5, 2019 (such date of satisfaction, the Second Amendment Effective Date):
(a) the execution and delivery of this Amendment by the Borrowers, Agent and the Required Lenders;
(b) the representations and warranties in Section 3 and Section 5 of this Amendment being true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof and as of the Second Amendment Effective Date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties are true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date);
(c) no Default or Event of Default has occurred or is continuing (or would result after giving effect to the transactions contemplated by this Amendment and the other Loan Documents (as amended hereby, as applicable) and the Term Amendment and the other Term Debt Documents (as amended by the Term Amendment, as applicable));
(d) the receipt in cash by the Lender Group of the payment of all fees, costs and expenses incurred thereby on or prior to the date of this Amendment that are required to be reimbursed pursuant to Section 2.05(d) and Section 2.09 of the Credit Agreement or Section 8 of this Amendment and all other fees, costs and expenses incurred in connection with this Amendment (and the transactions contemplated hereby) by the Lender Group (including, in each case, all Lender Group Expenses and all attorneys fees of the Lender Group and any estimates of post-closing fees, costs and expenses (including all attorneys fees) expected to be incurred by the Lender Group in connection with this Amendment);
(e) the receipt by the Agent and the Lenders of a fully executed copy of a corresponding amendment to the Term Credit Agreement in form and substance reasonably satisfactory to the Agent and the Lenders (the Term Amendment);
(f) the consummation by Endologix on the Second Amendment Effective Date of the sale of shares of Common Stock at a price of $6.61 per share, resulting in gross proceeds to Endologix (excluding any proceeds from any sale of shares to any of the Lenders or their Affiliates) of at least $40,000,000 and net cash proceeds (the Net Equity Cash Proceeds) to Endologix (after
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deducting any underwriting or placement fees, discounts or commissions and any legal, accounting and other offering related expenses) of at least $38,000,000 (in each case, excluding any proceeds from any sale of shares to any of the Lenders or their Affiliates) (the Equity Financing), pursuant to that certain Purchase Agreement, dated as of the date hereof (the Equity Purchase Agreement), by and among Endologix and the investors identified on Schedule I thereto, and the schedules and exhibits thereto, and the Pre-Paid Warrants (as defined in the Equity Purchase Agreement), each in substantially the form provided to the Lenders prior to the date hereof and each in form and substance satisfactory to the Agent and the Lenders (collectively, the Equity Financing Documents), which Net Equity Cash Proceeds shall have been deposited on the Second Amendment Effective Date into either (i) a deposit account maintained by Endologix that is covered by a Control Agreement in favor of the Agent or (ii) a trust account maintained by Piper Jaffray Companies (PJC) in the name of Endologix, in each case of the foregoing, in a manner (and pursuant to procedures) acceptable to the Agent and the Lenders (the Net Equity Cash Proceeds in such trust account, the Trust Account Net Equity Cash Proceeds).
(g) the consummation of the Exchange (as defined in the below-defined Exchange Agreement) (the Convertible Debenture Restructuring) contemplated to occur on the Amendment Effective Date by (A) that certain Exchange Agreement, dated as of the date hereof (the Exchange Agreement), by and among Endologix and the noteholders listed on Schedule A thereto, (B) that certain Indenture, to be dated as of the Second Amendment Effective Date in respect of the 5.0% Mandatory Convertible Senior Notes due 2024 (the 5.0% Mandatory Convertible Senior Notes Indenture), between Endologix, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), (C) that certain Indenture, to be dated as of the Second Amendment Effective Date in respect of the 5.0% Voluntary Convertible Senior Notes due 2024 (together with the 5.0% Mandatory Convertible Senior Notes Indenture, the Exchanged Senior Notes Indentures), between Endologix, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), and (D) those certain unsecured 5.0% Mandatory Convertible Senior Notes due 2024 and 5.0% Voluntary Convertible Senior Notes due 2024 issued in connection with the foregoing by Endologix on the Second Amendment Effective Date (collectively, the Original 5.00% Convertible Notes, and together with the Exchange Agreement and the Exchanged Senior Notes Indentures, the Convertible Debenture Restructuring Documents ), in each case, in form and substance satisfactory to the Agent and the Lenders.
(h) receipt by Agent of a certificate from an Authorized Officer of each Loan Party in form and substance satisfactory to Agent and the Lenders:
(i) attesting to the resolutions of such Loan Partys board of directors authorizing its execution, delivery, and performance of this Amendment, the Amended Credit Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents, and the execution, delivery and performance of each of the Term Amendment, the other Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents to which it is party,
(ii) authorizing specific officers of such Loan Party to execute the same, attesting to the incumbency and signatures of such specific officers of such Loan Party,
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(iii) attesting to copies of each Loan Partys Organizational Documents, as amended, modified, or supplemented to the date hereof, which Organizational Documents shall be (A) certified by an Authorized Officer of such Loan Party, and (B) with respect to Organizational Documents that are charter documents, certified as of a recent date (not more than thirty (30) days prior to the Second Amendment Effective Date) by the appropriate governmental official,
(iv) attesting to certificates of status with respect to each Loan Party, dated within ten (10) days of the Second Amendment Effective Date, such certificates to be issued by the appropriate officer of the jurisdiction of organization of such Loan Party, which certificates shall indicate that such Loan Party is in good standing in such jurisdiction, and
(v) attesting to certificates of status with respect to each Loan Party, each dated within thirty (30) days of the Second Amendment Effective Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Loan Party) in which such Loan Partys failure to be duly qualified or licensed would constitute a Material Adverse Effect, which certificates shall indicate that such Loan Party is in good standing in such jurisdictions;
(i) an opinion letter from counsel to the Loan Parties with respect to the transactions contemplated by this Amendment, the Amended Credit Agreement and the Security Agreement (as amended hereby), in form and substance satisfactory to the Agent and the Lenders; and
(j) the receipt by the Agent and the Lenders of all other documents, agreements, instruments and other information requested by the Agent or any Lender.
Notwithstanding anything to the contrary in this Amendment or any other Loan Document, none of the amendments set forth in Section 2 and none of the limited waivers set forth in Section 3 of this Amendment will become (or ever be) effective unless all of the conditions set forth in this Section 4 are completely and fully satisfied on or prior to April 5, 2019.
SECTION 5. Representations and Warranties. Each Loan Party party hereto hereby represents and warrants to Agent and each Lender as follows as of the date hereof and as of the Second Amendment Effective Date:
(a) Each Loan Party is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable. Each Loan Party (i) has full power and authority (and all governmental licenses, authorizations, permits (including all Regulatory Required Permits), consents and approvals) to (A) own its properties and conduct its business (solely with respect to governmental licenses, authorizations, permits (including all Regulatory Required Permits), consents and approvals, except where the failure to have such governmental licenses, authorizations, permits (including all Regulatory Required Permits), consents and approvals could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect) and (B) to (x) enter into, and perform its obligations under, this Amendment (including the Amended Credit Agreement), the Security Agreement (including as amended
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hereby) and the other Loan Documents, the Term Amendment, the other Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents, and (y) consummate the transactions contemplated under this Amendment (including the Amended Credit Agreement), the Security Agreement (as amended hereby) and the other Loan Documents, the Term Amendment and the other Term Debt Documents (as amended by the Term Amendment, as applicable) and to consummate the Equity Financing Documents and the Convertible Debenture Restructuring Documents, and (ii) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, in each case of this clause (ii), where the failure to be so qualified, licensed or in good standing could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b) The execution, delivery and performance of this Amendment (including the Amended Credit Agreement), the Security Agreement (as amended hereby) and the other Loan Documents, and the execution, delivery and performance of the Term Amendment, the Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents, in each case, have been duly authorized by each Loan Party and no further consent or authorization is required by any Loan Party, any Loan Partys board of directors (or other equivalent governing body) or the holders of any Loan Partys Stock. Each of this Amendment, the Term Amendment, the Equity Purchase Agreement and the Exchange Agreement has been duly executed and delivered by each of the Loan Parties and constitutes a valid, legal and binding obligation of each Loan Party, enforceable in accordance with its terms, except as such enforceability may be limited by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors rights generally. On and after the Second Amendment Effective Date, each of this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)) and the Term Amendment, the Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents has been duly executed and delivered by each of the Loan Parties and constitutes a valid, legal and binding obligation of each Loan Party, enforceable in accordance with its terms, except as such enforceability may be limited by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors rights generally. The execution, delivery and performance of this Amendment (including the Amended Credit Agreement), the Security Agreement (as amended hereby) and the other Loan Documents and the Term Amendment, the Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents by each Loan Party party hereto and the consummation of the transactions contemplated hereby and thereby will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to (i) the Loan Documents and (ii) to the extent permitted by the Credit Agreement, the Term Debt Documents) upon any assets of any such Loan Party pursuant to, any agreement, document or instrument to which such Loan Party is a party or by which any Loan Party is bound or to which any of the assets or property of any Loan Party is subject, except, with respect to this clause (A), as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (B) result in any violation of or conflict with the provisions of the Organizational
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Documents, (C) result in the violation of any Applicable Law, (D) result in the violation of any judgment, order, rule, regulation or decree of any Governmental Authority, or (E) violate, conflict with or cause a breach or default under any agreement or instrument binding upon it, except, with respect to clauses (C) and (E) only, as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No consent, approval, Authorization or order of, or registration or filing with any Governmental Authority is required for (i) the execution, delivery and performance of this Amendment (including the Amended Credit Agreement), the Security Agreement (as amended hereby) and the other Loan Documents and the Term Amendment, the Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents and (ii) the consummation by any Loan Party of the transactions contemplated hereby and thereby.
(c) Except for the amounts owed to Jeffries, LLC that have been disclosed to the Agent on or prior to the date hereof, no brokerage or finders fees or commissions are or will be payable by Endologix or any of its affiliates or representatives to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Amendment, the other Loan Documents (as amended hereby, as applicable), the Term Amendment, the Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents. The members of the Lender Group 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 5(c) that may be due in connection with the transactions contemplated hereby.
(d) The amendments and transactions contemplated hereby, including the consummation of the Equity Financing and the Convertible Debenture Restructuring, do not contravene, or require stockholder approval pursuant to, the rules and regulations of the Principal Market.
(e) Other than for the existence of the Designated Occurrences prior to giving effect to the limited waiver thereof in Section 3, each of the representations and warranties of any of the Loan Parties set forth in the Amended Credit Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents are true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof and as of the Second Amendment Effective Date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date).
(f) The Convertible Debenture Restructuring Documents constitute all of the agreements, instruments and documents entered into in connection with, and necessary to effectuate, the Convertible Debenture Restructuring. The Equity Financing Documents constitute all of the agreements, instruments and documents entered into in connection with, and necessary to effectuate, the Equity Financing. Each of the representations and warranties of any of the Loan Parties set forth in the Convertible Debenture Restructuring Documents and the Equity Financing Documents are true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof and as of the Second Amendment
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Effective Date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date).
(g) Other than for the existence of the Designated Occurrences prior to giving effect to the limited waiver thereof in Section 3, no Default or Event of Default has occurred and is continuing (or would result after giving effect to the transactions contemplated by this Amendment and the other Loan Documents (as amended hereby, as applicable) and the Term Amendment and the other Term Debt Documents (as amended by the Term Amendment, as applicable)).
(h) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated by this Amendment, the Amended Credit Agreement, the Security Agreement (as amended hereby), the other Loan Documents, the Term Amendment, the other Term Debt Documents (as amended by the Term Amendment, as applicable), the Equity Financing Documents or the Convertible Debenture Restructuring Documents has been issued and remains in force by any Governmental Authority against any Loan Party or any member of the Lender Group.
(i) (i) This Amendment has been entered into without force or duress of the free will of each Borrower, (ii) each Borrowers decision to enter into this Amendment is a fully informed decision, and (iii) each Borrower is aware of all legal and other ramifications of such decision.
(j) In executing this Amendment, no Borrower is relying on any representations or warranties, either written or oral, express or implied, made to any Borrower by any other party hereto or any member of the Lender Group.
(k) Attached hereto as Exhibit B is a true, correct and complete copy of the Term Amendment, which has not been (and is not currently being contemplated as of the Second Amendment Effective Date to be) amended, restated, supplemented, changed or otherwise modified in any manner.
(l) Attached hereto as Exhibit C are true, correct and complete copies of the Equity Financing Documents, which have not been (and are not currently being contemplated as of the Second Amendment Effective Date to be) amended, restated, supplemented, changed or otherwise modified in any manner.
(m) Attached hereto as Exhibit D are true, correct and complete copies of the Convertible Debenture Restructuring Documents, which have not been (and is not currently being contemplated as of the Second Amendment Effective Date to be) amended, restated, supplemented, changed or otherwise modified in any manner.
(n) The representations and warranties set forth in Section 3 of this Amendment are true, correct and complete.
SECTION 6. Covenant. Endologix covenants and agrees that it shall receive from PJC (and Endologix has required PJC to deliver to Endologix) the Trust Account Net Equity Cash Proceeds into a deposit account in the name of Endologix that is covered by a Control Agreement
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in favor of the Agent in a manner, and subject to procedures, acceptable to the Agent within one (1) Business Day after the Second Amendment Effective Date. Any failure of Endologix to timely comply with the immediately preceding sentence shall be an immediate Event of Default
SECTION 7. SEC Filing. At or prior to 8:30 a.m. (New York City time) on the first (1st) Business Day following the date of this Amendment, Endologix shall file a Form 8- K with the SEC describing the terms of the transactions contemplated by this Amendment, the Term Amendment, the Equity Financing Documents and the Convertible Debenture Restructuring Documents, including as exhibits to such Form 8-K this Amendment (including the exhibits and other documents attached hereto and thereto), the Term Amendment (and the documents required to be attached pursuant to the Term Amendment), each of the Equity Financing Documents and each of the Convertible Debenture Restructuring Documents and any related documents (such Form 8- K, the Announcing Facility Amendment Form 8-K) and disclosing any other presently material non-public information (if any) provided or made available to any member of the Lender Group (or any such members agents or representatives) on or prior to the filing of the Announcing Facility Amendment Form 8-K. At or prior to 8:30 a.m. (New York City time) on the first (1st) Business Day following the earlier of the Second Amendment Effective Date and April 5, 2019, the Borrower shall file a Form 8-K with the SEC describing the consummation (or termination) of the transactions contemplated by this Amendment, the Equity Financing and the Convertible Debenture Restructuring (such Form 8-K, the Closing Facility Amendment Form 8-K) and disclosing and other presently material non-public information (if any) provided or made available to any Secured Party (or any such Secured Partys agents or representatives) on or prior to the filing of the Closing Facility Amendment Form 8-K. Subject to the foregoing, no Loan Party will issue any press releases or any other public statements with respect to the transactions contemplated by this Amendment or the Term Amendment or disclosing the name of any member of the Lender Group; provided, however, that Endologix will be entitled, without the prior approval of any member of the Lender Group, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the Announcing Facility Amendment Form 8-K or the Closing Facility Amendment 8-K and contemporaneously therewith and (ii) as is required by Applicable Law and regulations (provided that each member of the Lender Group will be consulted by Endologix in connection with any such press release or other public disclosure prior to its release and will be provided with a copy thereof by Endologix, other than in the case of filings required by the Exchange Act to be made with the SEC, which Endologix may make without such consultation or notice). From and after Endologixs filing of the Announcing Facility Amendment Form 8-K, no member of the Lender Group shall be in possession of any material nonpublic information received from Endologix, any other Loan Party or any of their Subsidiaries or Affiliates or any of its or their respective officers, directors, employees, attorneys, representatives or agents. Notwithstanding anything contained in this Amendment to the contrary and without implication that the contrary would otherwise be true, after giving effect to the filing of the Announcing Facility Amendment Form 8-K, Endologix expressly acknowledges and agrees that no member of the Lender Group shall have any duty of trust or confidence with respect to, or duty not to trade in any securities on the basis of, any information regarding Endologix that is otherwise possessed (or continued to be possessed) by any member of the Lender Group as a result of a breach of any of the covenants set forth in this Section 5.
SECTION 8. Fees, Costs and Expense Reimbursement. In connection with the Agent and the Lenders party hereto agreeing to enter into this Amendment and provide the
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accommodations hereunder, the Loan Parties agree to pay on the date of this Amendment all fees, costs and expenses (including all Lender Group Expenses and all attorneys fees) incurred by the Lender Group in connection with this Amendment and any other Loan Document and the transactions contemplated hereby and thereby.
SECTION 9. Captions. Captions used in this Amendment are for convenience only and shall not modify or affect the interpretation or construction of this Amendment or any of its provisions.
SECTION 10. Counterparts. This Amendment may be executed in several counterparts, and by each party hereto on separate counterparts, each of which and any photocopies, facsimile copies and other electronic methods of transmission thereof shall be deemed an original, but all of which together shall constitute one and the same agreement.
SECTION 11. Severability. If any provision of this Amendment shall be invalid, illegal or unenforceable in any respect under any Applicable Law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. The parties hereto shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.
SECTION 12. Entire Agreement. The Credit Agreement and the Security Agreement, each as amended hereby, together with all other Loan Documents, contains the entire understanding among the parties hereto with respect to the matters covered thereby and supersedes any and all other written and oral communications, negotiations, commitments and writings with respect thereto.
SECTION 13. Successors; Assigns. This Amendment shall be binding upon the Borrowers, the Lenders and Agent and their respective successors and permitted assigns, and shall inure to the benefit of the Borrowers, the Lenders, Agent and the other members of the Lender Group and the successors and assigns of the Lenders, Agent and the other members of the Lender Group. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Amendment or any of the other Loan Documents. No Loan Party may assign or transfer any of its rights or obligations under this Amendment without the prior written consent of Agent and each Lender, and any prohibited assignment or transfer shall be absolutely void ab initio.
SECTION 14. Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE. Article XII of the Amended Credit Agreement is incorporated herein, mutatis mutandis.
SECTION 15. Reaffirmation and Ratification; No Novation. Each Loan Party party hereto as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in which such Person grants Liens in its property or otherwise acts as accommodation party or guarantor,
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as the case may be pursuant to the Loan Documents (including as amended hereby, as applicable), hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under the Amended Credit Agreement (including the Credit Agreement as amended hereby), the Security Agreement (as amended hereby) and each other Loan Document to which it is a party (after giving effect hereto) and (ii) to the extent such Person granted Liens or security interests in any of its property pursuant to any Loan Documents (including as amended hereby, as applicable) as security for or otherwise guaranteed the Obligations under or with respect to the Loan Documents (including as amended hereby, as applicable), ratifies and reaffirms such guarantee and grant (and the validity and enforceability thereof) of Liens and confirms and agrees and acknowledges that such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof and from and after the Second Amendment Effective Date. Each Loan Party party hereto hereby consents to this Amendment and acknowledges that the Amended Credit Agreement (including the Credit Agreement as amended hereby), the Security Agreement as amended hereby) and each other Loan Document remains in full force and effect and is hereby ratified and reaffirmed. The execution and delivery of this Amendment shall not operate as a waiver of any right, power or remedy of Agent, the Lenders or any other member of the Lender Group, constitute a waiver of any provision of the Credit Agreement (except for any waiver of the Designated Occurrences specifically provided in Section 3 of this Amendment), the Amended Credit Agreement (including the Credit Agreement as amended hereby), the Security Agreement (including as amended hereby) or any other Loan Document or serve to effect a novation of the obligations (including the Obligations). For the avoidance of doubt, this Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement (including the Amended Credit Agreement) and the other Loan Documents (including as amended hereby, as applicable) or an accord and satisfaction in regard thereto.
SECTION 16. Effect on Loan Documents.
(a) The Credit Agreement and the Security Agreement, each as amended hereby, and each of the other Loan Documents, as amended as of the date hereof (as applicable), shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except with respect to the waivers, modifications and amendments expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the Credit Agreement, the Security Agreement or any other Loan Document. Except for the amendments to the Loan Documents expressly set forth herein or contemplated hereby, the Credit Agreement, the Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The waivers, amendments, modifications and other agreements set forth herein or contemplated hereby are limited to the specified provisions of this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)), shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with the Loan Documents nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents and shall not be construed as an indication that any waiver of covenants or any other provision of the Amended Credit Agreement (including the Credit Agreement as amended hereby), the Security Agreement (as amended hereby) or any other Loan Document will be agreed to, it being understood that the
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granting or denying of any waiver which may hereafter be requested by the Borrowers or any other Loan Party remains in the sole and absolute discretion of the Agent and the Lenders.
(b) Upon and after the Second Amendment Effective Date, each reference in the Credit Agreement to this Agreement, hereunder, herein, hereof or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the Credit Agreement, thereunder, therein, thereof or words of like import referring to the Credit Agreement, shall mean and be a reference to the Amended Credit Agreement. Upon and after the Second Amendment Effective Date, each reference in the Security Agreement to this Agreement, hereunder, herein, hereof or words of like import referring to the Security Agreement, and each reference in the other Loan Documents to the Security Agreement, the Guaranty and Security Agreement, thereunder, therein, thereof or words of like import referring to the Security Agreement, shall mean and be a reference to the Security Agreement (as amended hereby).
(c) To the extent that any of the terms and conditions in any of the Loan Documents shall contradict or be in conflict with any of the terms or conditions of the Amended Credit Agreement or the Security Agreement, as applicable, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Amended Credit Agreement and the Security Agreement (as amended hereby), as applicable (effective, in each case, as of the Second Amendment Effective Date).
(d) This Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)) is a Loan Document.
SECTION 17. Guarantors Acknowledgment and Agreement. Although the Guarantors party hereto have been informed of the matters set forth herein and have agreed to the same, each such Guarantor understands, acknowledges and agrees that none of the members of the Lender Group has any obligations to inform such Guarantor of such matters in the future or to seek its acknowledgment or agreement to future amendments, restatements, supplements, changes, modifications, waivers or consents, and nothing herein shall create such a duty.
SECTION 18. Release.
(a) As of the date of this Amendment and the Second Amendment Effective Date, each Loan Party, for itself and on behalf of its successors, assigns, Subsidiaries and such Loan Partys and its Subsidiaries officers, directors (and any equivalent governing body), employees, agents, representatives, advisors, consultants, accountants and attorneys, and any Person acting for or on behalf of, or claiming through it (collectively, the Releasing Persons), hereby waives, releases, remises and forever discharges each member of the Lender Group, each of their respective Affiliates and successors in title, and past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals of the foregoing entities and all other Persons and entities to whom any member of the Lender Group would be liable if such Persons were found to be liable to such Releasing Persons (each a Releasee and collectively, the Releasees), from any and all past, present and future claims, suits, liens, lawsuits, amounts paid in settlement, debts, deficiencies, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and
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expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a Claim and collectively, the Claims), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which such Releasing Persons ever had from the beginning of the world until (and including) the day that is the later of (i) the date hereof and (ii) the Second Amendment Effective Date, against any such Releasing Person which relates, directly or indirectly, to the Credit Agreement, the Amended Credit Agreement, the Security Agreement (including as amended hereby), any other Loan Document, the Stock owned by any Releasee or to any acts or omissions of any such Releasee with respect to the Credit Agreement, the Amended Credit Agreement, the Security Agreement (including as amended hereby) or any other Loan Document or any Stock owned by any Releasee, or to the lender-borrower relationship evidenced by the Loan Documents (including as amended hereby, as applicable).
(b) As to each and every Claim released hereunder, each Loan Party hereby agrees, represents and warrants that it has received the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
As to each and every Claim released hereunder, each Loan Party also waives the benefit of each other similar provision of applicable federal, state or foreign law (including without limitation the laws of the State of New York), if any, pertaining to general releases after having been advised by legal counsel to such Loan Party with respect thereto.
(c) Each Loan Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims and agrees that this Amendment shall be and remain effective in all respects notwithstanding any such differences or additional facts. Each Loan Party understands, acknowledges and agrees that the release set forth above in this Section 18 may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(d) Each Loan Party hereby agrees, represents, and warrants that (i) neither such Loan Party nor any other Releasing Person has voluntarily, by operation of law or otherwise, assigned, conveyed, transferred or encumbered, either directly or indirectly, in whole or in part, any right to or interest in any of the Claims released pursuant to this Section 18; (ii)(A) this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)) has been entered into (1) without force or duress and (2) of the free will of each Loan Party, and (B) the decision of such undersigned to enter into this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)) is a fully informed decision and such undersigned is aware of all legal and other ramifications of each such decision; and (iii) such Loan Party has (A) read and understands this Amendment (including the release
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granted in this Section 18 and the Amended Credit Agreement and the Security Agreement (as amended hereby)), (B) consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)), (C) read this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)) in full and final form, and (D) been advised by its counsel of its rights and obligations under this Amendment (including the Amended Credit Agreement and the Security Agreement (as amended hereby)).
(e) Each Loan Party, for itself and on behalf of each other Releasing Person, hereby absolutely, unconditionally and irrevocably covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Person pursuant to the above release in this Section 18. Each Loan Party further agrees that it shall not dispute the validity or enforceability of the this Amendment, the Credit Agreement, the Security Agreement (including as amended hereby) or any of the other Loan Documents, or any of its obligations hereunder or thereunder, or the creation, validity, perfection, priority, enforceability or the extent of Agents security interest or Lien on any item of Collateral under the Credit Agreement, the Amended Credit Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents or the providing of any control (within the meaning of Articles 8 and 9 under the applicable UCC) under any Control Agreement or any other Loan Document. If any Loan Party or any other Releasing Person breaches or otherwise violates the foregoing covenant and provisions, such Loan Party, for itself and its Releasing Persons, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys fees, expenses and costs and any other fees, expenses and costs incurred by such Releasee as a result of such breach or violation.
(f) The provisions of this Section 18 shall survive the termination of this Amendment, the Amended Credit Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents and the payment in full of the Obligations and the termination of the Commitments.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the first day written above.
BORROWER: | ||
ENDOLOGIX, INC., a Delaware corporation | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO | |
CVD/RMS ACQUISITION CORP., a Delaware corporation | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary | |
NELLIX, INC., a Delaware corporation | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary | |
TRIVASCULAR TECHNOLOGIES, INC., a Delaware corporation | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary | |
TRIVASCULAR, INC., a California corporation | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary |
[Signature Page to Second Amendment to Credit Agreement and First Amendment to
Guaranty and Security Agreement]
ENDOLOGIX CANADA, LLC, | ||
a Delaware limited liability company | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary | |
TRIVASCULAR SALES LLC, a Texas limited liability company | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary | |
RMS/ENDOLOGIX SIDEWAYS MERGER CORP., a Delaware corporation | ||
By: |
/s/ Vaseem Mahboob | |
Name: |
Vaseem Mahboob | |
Title: |
CFO and Secretary |
[Signature Page to Second Amendment to Credit Agreement and First Amendment to
Guaranty and Security Agreement]
LENDERS: | ||||||
DEERFIELD PARTNERS, L.P. | ||||||
By: |
Deerfield Mgmt, L.P. | |||||
General Partner | ||||||
By: |
J.E. Flynn Capital, LLC | |||||
General Partner | ||||||
By: |
/s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory | ||||||
DEERFIELD PRIVATE DESIGN FUND III, L.P. | ||||||
By: |
Deerfield Mgmt III, L.P. | |||||
General Partner | ||||||
By: |
J.E. Flynn Capital III, LLC | |||||
General Partner | ||||||
By: |
/s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory | ||||||
DEERFIELD PRIVATE DESIGN FUND IV, L.P. | ||||||
By: |
Deerfield Mgmt IV, L.P. | |||||
General Partner | ||||||
By: |
J.E. Flynn Capital IV, LLC | |||||
General Partner | ||||||
By: |
/s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory |
[Signature Page to Second Amendment to Credit Agreement and First Amendment to
Guaranty and Security Agreement]
AGENT: | ||||||
DEERFIELD PRIVATE DESIGN FUND IV, L.P. | ||||||
By: |
Deerfield Mgmt IV, L.P. | |||||
General Partner | ||||||
By: |
J.E. Flynn Capital IV, LLC | |||||
General Partner | ||||||
By: |
/s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory |
[Signature Page to Second Amendment to Credit Agreement and First Amendment to
Guaranty and Security Agreement]
EXHIBIT A-I
Amended Credit Agreement
[Attached]
Execution Version
Conformed through the First Amendment, dated November 20, 2018
CREDIT AGREEMENT
by and among
DEERFIELD ELGX REVOLVER, LLC,
as Agent,
THE LENDERS THAT ARE PARTIES HERETO,
as the Lenders,
ENDOLOGIX, INC.,
each of its direct and indirect subsidiaries listed on the signature pages hereto and any
additional borrower that hereafter becomes party hereto, each as a Borrower, and
collectively as Borrowers
as amended by:
that certain First Amendment to Credit Agreement dated November 20, 2018 and that certain
Second Amendment to Credit Agreement dated March 30, 2019
Closing Date: August 9, 2018
TABLE OF CONTENTS
Page | ||||||
ARTICLE I. DEFINITIONS AND CONSTRUCTION |
1 | |||||
1.01 |
Definitions | 1 | ||||
1.02 |
Accounting Terms | |||||
1.03 |
Code | |||||
1.04 |
Construction | |||||
1.05 |
Time References | |||||
1.06 |
Schedules and Exhibits | |||||
ARTICLE II. LOANS AND TERMS OF PAYMENT |
||||||
2.01 |
Revolving Loans | |||||
2.02 |
Borrowing Procedures and Settlements | |||||
2.03 |
Payments; Reductions of Commitments; Prepayments | |||||
2.04 |
Promise to Pay; Promissory Notes | |||||
2.05 |
Interest Rates: Rates, Payments, and Calculations | |||||
2.06 |
[Reserved] | |||||
2.07 |
Designated Account | |||||
2.08 |
Maintenance of Loan Account; Statements of Obligations | |||||
2.09 |
Fees, Changes, Damages and Revolver Exit Payment. | |||||
2.10 |
[Reserved] | |||||
2.11 |
Capital Requirements | |||||
2.12 |
Collections; Crediting Payments | |||||
2.13 |
Appointment of Borrower Representative | |||||
2.14 |
Joint and Several Liability of Borrowers | |||||
ARTICLE III. CONDITIONS; TERM OF AGREEMENT |
||||||
3.01 |
Conditions Precedent to the Initial Extension of Credit | |||||
3.02 |
Conditions Precedent to all Extensions of Credit | |||||
3.03 |
Effect of Maturity | |||||
3.04 |
Conditions Subsequent | |||||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES |
||||||
4.01 |
Due Organization and Qualification; No Event of Default; Solvency | |||||
4.02 |
Existence; Power and Authority | |||||
4.03 |
Litigation | |||||
4.04 |
Due Authorization; No Conflict | |||||
4.05 |
Permits and Authorizations | |||||
4.06 |
Title to Assets; No Encumbrances | |||||
4.07 |
Intellectual Property | |||||
4.08 |
No Default | |||||
4.09 |
Taxes |
-i-
TABLE OF CONTENTS
(continued)
Page | ||||||
4.10 |
Compliance with Laws | |||||
4.11 |
SEC Filings | |||||
4.12 |
Financial Statements | |||||
4.13 |
Internal Controls | |||||
4.14 |
ERISA | |||||
4.15 |
Subsidiaries | |||||
4.16 |
No Dividends | |||||
4.17 |
Stock | |||||
4.18 |
Material Contracts | |||||
4.19 |
Use of Proceeds | |||||
4.20 |
Environmental Condition | |||||
4.21 |
Governmental Regulation | |||||
4.22 |
Employee and Labor Matters | |||||
4.23 |
Name and Address; Properties | |||||
4.24 |
Sanctions | |||||
4.25 |
Anti-Money Laundering | |||||
4.26 |
Anti-Corruption | |||||
4.27 |
Anti-Terrorism | |||||
4.28 |
Sarbanes-Oxley | |||||
4.29 |
Accounting Practices | |||||
4.30 |
Common Stock | |||||
4.31 |
DTC | |||||
4.32 |
Fees | |||||
4.33 |
Products; Regulatory Required Permits | |||||
4.34 |
No Violation of Healthcare Laws | |||||
4.35 |
No Third Party Payor Program | |||||
4.36 |
Conduct of Business at Facilities | |||||
4.37 |
No Adulteration; Product Manufacturing | |||||
4.38 |
FDA | |||||
4.39 |
Margin Stock | |||||
4.40 |
Complete Disclosure | |||||
4.41 |
Investments | |||||
4.42 |
Schedules | |||||
4.43 |
Eligible Accounts | |||||
4.44 |
Eligible Inventory | |||||
4.45 |
Location of Inventory | |||||
4.46 |
Inventory and Equipment Records | |||||
4.47 |
No Violation of Usury Laws | |||||
4.48 |
Eligible Equipment | |||||
ARTICLE V. AFFIRMATIVE COVENANTS |
||||||
5.01 |
Existence; Permits |
-ii-
TABLE OF CONTENTS
(continued)
Page | ||||||
5.02 |
Compliance with Laws | |||||
5.03 |
Insurance | |||||
5.04 |
Taxes | |||||
5.05 |
Reports, Notices | |||||
5.06 |
Inspection | |||||
5.07 |
Disclosure Updates | |||||
5.08 |
Cash Management | |||||
5.09 |
Further Assurances | |||||
5.10 |
Environmental | |||||
5.11 |
ERISA | |||||
5.12 |
FDA; Healthcare Laws | |||||
5.13 |
Regulatory Required Permits | |||||
5.14 |
Material Contracts | |||||
5.15 |
Notices Regarding Indebtedness | |||||
5.16 |
Reporting | |||||
5.17 |
Lender Meetings | |||||
5.18 |
Location of Collateral | |||||
5.19 |
Updated Borrowing Base Certificate | |||||
5.20 |
Announcing Form 8-K | |||||
5.21 |
Eligible Equipment | |||||
5.22 |
Maximum Revolver Related Notices | |||||
5.23 |
Collateral Access Agreements | 117 | ||||
ARTICLE VI. NEGATIVE COVENANTS |
||||||
6.01 |
Restrictions on Fundamental Changes | |||||
6.02 |
Joint Ventures; Restricted Payments | |||||
6.03 |
Liens | |||||
6.04 |
Disposal of Assets | |||||
6.05 |
Indebtedness | |||||
6.06 |
Investments | |||||
6.07 |
Transactions with Affiliates | |||||
6.08 |
ERISA | |||||
6.09 |
Nature of Business | |||||
6.10 |
Amendments to Organizational Documents and Material Contracts | |||||
6.11 |
Changes to Fiscal Year; GAAP | |||||
6.12 |
||||||
6.13 |
Restrictions on Distributions | |||||
6.14 |
Sanctions; Anti-Corruption | |||||
6.15 |
Sale Leaseback Transactions | |||||
6.16 |
Environmental | |||||
6.17 |
Investment Company | |||||
6.18 |
Intercreditor Agreement; Term Debt |
-iii-
TABLE OF CONTENTS
(continued)
Page | ||||||
6.19 |
Payment of Convertible Notes | |||||
6.20 |
Commingling of Assets | |||||
6.21 |
Limitation on Issuance of Stock | |||||
6.22 |
Use of Proceeds | |||||
6.23 |
Anti-Layering | |||||
6.24 |
Convertible Notes Restrictions | |||||
ARTICLE VII. FINANCIAL COVENANTS |
||||||
7.01 |
Financial Covenants | |||||
ARTICLE VIII. EVENTS OF DEFAULT. |
||||||
8.01 |
Payments | |||||
8.02 |
Covenants | |||||
8.03 |
Representations, etc | |||||
8.04 |
Insolvency; Bankruptcy | |||||
8.05 |
Judgments | |||||
8.06 |
No Governmental Authorization | |||||
8.07 |
Agreement Invalid Under Applicable Law | |||||
8.08 |
Cross-Default | |||||
8.09 |
Loan Documents; Security Interests | |||||
8.10 |
ERISA | |||||
8.11 |
Product Withdrawal | |||||
8.12 |
Change in Law | |||||
8.13 |
Material Contract Default | |||||
8.14 |
Other Default or Breach | |||||
8.15 |
Criminal Proceedings | |||||
8.16 |
Payment of Subordinated Debt | |||||
8.17 |
Any Intercreditor Agreement Provisions Invalid | |||||
8.18 |
Guaranty | |||||
8.19 |
Subordination Provisions | |||||
8.20 |
Change in Control | |||||
8.21 |
Not Publicly Traded | |||||
8.22 |
Term Debt Defaults | |||||
8.23 |
Invalidity of any Subordination Agreement | 132 | ||||
8.24 |
3.25% Convertible Note Document Defaults | 132 | ||||
ARTICLE IX. RIGHTS AND REMEDIES. |
||||||
9.01 |
Rights and Remedies | |||||
9.02 |
Remedies Cumulative |
-iv-
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE X. WAIVERS; INDEMNIFICATION |
||||||
10.01 |
Demand; Protest; etc | |||||
10.02 |
The Lender Groups Liability for Collateral | |||||
10.03 |
Indemnification | |||||
ARTICLE XI. NOTICES |
||||||
ARTICLE XII. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION |
||||||
ARTICLE XIII. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS |
||||||
13.01 |
Assignments and Participations | |||||
13.02 |
Successors | |||||
ARTICLE XIV. AMENDMENTS; WAIVERS |
||||||
14.01 |
Amendments and Waivers | |||||
14.02 |
[Reserved] | |||||
14.03 |
No Waivers; Cumulative Remedies | |||||
ARTICLE XV. AGENT; THE LENDER GROUP |
||||||
15.01 |
Appointment and Authorization of Agent | |||||
15.02 |
Delegation of Duties | |||||
15.03 |
Liability of Agent | |||||
15.04 |
Reliance by Agent | |||||
15.05 |
Notice of Default or Event of Default | |||||
15.06 |
Credit Decision | |||||
15.07 |
Costs and Expenses; Indemnification | |||||
15.08 |
Agent in Individual Capacity | |||||
15.09 |
Assignment by Agent; Resignation of Agent; Successor Agent | |||||
15.10 |
Lender in Individual Capacity | |||||
15.11 |
Collateral Matters | |||||
15.12 |
Restrictions on Actions by Lenders; Sharing of Payments | |||||
15.13 |
Agency for Perfection | |||||
15.14 |
Payments by Agent to the Lenders | |||||
15.15 |
Concerning the Collateral and Related Loan Documents | |||||
15.16 |
Several Obligations; No Liability | |||||
15.17 |
Right to Request and Act on Instructions |
-v-
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE XVI. WITHHOLDING TAXES |
||||||
16.01 |
Payments | |||||
16.02 |
Exemptions | |||||
16.03 |
Refunds | |||||
ARTICLE XVII. GENERAL PROVISIONS |
||||||
17.01 |
Effectiveness | |||||
17.02 |
Article and Section Headings | |||||
17.03 |
Interpretation | |||||
17.04 |
Severability of Provisions | |||||
17.05 |
Debtor-Creditor Relationship | |||||
17.06 |
Counterparts; Electronic Execution | |||||
17.07 |
Revival and Reinstatement of Obligations; Certain Waivers | |||||
17.08 |
Confidentiality | |||||
17.09 |
Survival | |||||
17.10 |
Patriot Act | |||||
17.11 |
Integration | |||||
17.12 |
No Setoff | |||||
17.13 |
Intercreditor Agreement |
-vi-
EXHIBITS AND SCHEDULES
Exhibit A-1 |
Form of Assignment and Acceptance | |
Exhibit B-1 |
Form of Borrowing Base Certificate (Agent) | |
Exhibit B-2 |
Form of Borrowing Base Certificate (Third Party Agent) | |
Exhibit C-1 |
Form of Compliance Certificate | |
Exhibit P-1 |
Form of Perfection Certificate | |
Schedule A-1 |
Agents Account | |
Schedule A-2 |
Authorized Person | |
Schedule C-1 |
Commitments | |
Schedule D-1 |
Designated Account | |
Schedule E-1 |
Approved Account Debtor | |
Schedule P-1 |
Existing Investments | |
Schedule 3.04 |
Conditions Subsequent | |
Schedule 4.01(d) |
Existing Liens | |
Schedule 4.01(f) |
Existing Indebtedness | |
Schedule 4.03 |
Litigation | |
Schedule 4.06 |
Real Estate | |
Schedule 4.07 |
Intellectual Property | |
Schedule 4.15 |
Borrowers Subsidiaries | |
Schedule 4.17 |
Borrowers Outstanding Shares of Stock, Options and Warrants | |
Schedule 4.18 |
Material Contracts | |
Schedule 4.20 |
Environmental | |
Schedule 4.22 |
Labor Relations | |
Schedule 4.23 |
Jurisdiction of Organization, Legal Name, Organizational Identification Number and Chief Executive Office | |
|
||
Schedule 4.41 |
Stock of the Subsidiaries of the Loan Parties | |
Schedule 4.45 |
Inventory Location | |
Schedule 5.20 |
Other Loan Documents to be Form 8-K Exhibits | |
Schedule 6.05 |
Contingent Obligations | |
Schedule 6.07 |
Transactions with Affiliates |
-vii-
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this Agreement), is entered into as of August 9, 2018, by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a Lender, as that term is hereinafter further defined), DEERFIELD ELGX REVOLVER, LLC, a Delaware limited liability company, as Agent for each member of the Lender Group, Endologix, Inc., a Delaware corporation (Endologix), each of its direct and indirect Subsidiaries set forth on the signature pages hereto and any additional borrower that may hereafter be added to this Agreement (individually as a Borrower, and collectively with any entities that become party hereto as Borrower and each of their successors and permitted assigns, the Borrowers).
RECITALS
Borrowers have requested that Lenders make available to Borrowers the financing facility described herein. Lenders are willing to extend such credit to Borrowers under the terms and conditions set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE I.
DEFINITIONS AND CONSTRUCTION.
1.01 Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
2.25% Convertible Note Documents means the 2.25% Convertible Notes, the 2.25% Senior Note Indenture and each other document or agreement from time to time entered into in connection with the foregoing.
2.25% Convertible Notes means those certain 2.25% senior unsecured notes, governed by the terms of a base indenture, as supplemented by the first supplemental indenture relating to the 2.25% senior notes (together, the 2.25% Senior Notes Indenture), between Endologix and Wells Fargo Bank, National Association, as trustee, each of which were entered into on December 10, 2013.
2.25% Senior Notes Indenture has the meaning provided therefor in the definition of 2.25% Convertible Notes.
3.25% Convertible Notes means (a) those certain 3.25% senior unsecured notes issued by Endologix (the Original 3.25% Convertible Notes), governed by the terms of a base indenture, as supplemented by the second supplemental indenture relating to the 3.25% senior notes (together, the 3.25% Senior Notes Indenture), between Endologix and Wells Fargo Bank, National Association, as trustee, each of which were entered into on November 2, 2015, and (b)
those (i) certain unsecured 5.0% mandatory convertible senior notes due 2024 (the 5.00% Mandatory Convertible Notes) that are issued by Endologix in the form attached as Exhibit D to the Second Amendment (and that are governed by the terms of that certain Indenture entered into as of the Second Amendment Effective Date between Endologix, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), in the form attached as Exhibit D to the Second Amendment (the Exchanged Mandatory Senior Notes Indenture)) and (ii) certain unsecured 5.0% voluntary convertible senior notes due 2024 (the 5.00% Voluntary Convertible Notes, together with the 5.00% Mandatory Convertible Notes, the 5.00% Convertible Notes) that are issued Endologix in the form attached as Exhibit D to the Second Amendment (and that are governed by the terms of that certain Indenture entered into as of the Second Amendment Effective Date between Endologix, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), in the form attached as Exhibit D to the Second Amendment (the Exchanged Voluntary Senior Notes Indenture, together with the Exchanged Mandatory Senior Notes Indenture, the Exchanged Senior Notes Indentures)), in each case of clause (b)(i) and clause (b)(ii), (A) on the Second Amendment Effective Date in exchange for certain of the Original 3.25% Convertible Notes outstanding as of the Second Amendment Effective Date pursuant to the terms of that certain Exchange Agreement entered in to as of the Second Amendment Date (the Exchange Agreement) by and among Endologix and the noteholders party thereto, or (B) after the Second Amendment Effective Date in exchange for any equal principal amount of the Remaining Original 3.25% Convertible Notes in accordance and compliance with the terms and provisions of this Agreement (including clause (j) of the definition of Permitted Indebtedness), in each case of clause (a) and (b), as the same may be amended, restated, refinanced, supplemented or otherwise modified in connection with a Permitted 3.25% Convertible Note Refinancing, in each case, to the extent expressly permitted by the terms of this Agreement.
3.25% Convertible Note Documents means the 3.25%
Convertible Notes, the 3.25% Senior Note Indenture, the Exchanged Senior Notes Indentures, the Exchange Agreement and each other
document, instrument or agreement from time to entered into in connection with the foregoing, as the same may be amended, restated, refinanced, supplemented or otherwise modified in
onconnection with a Permitted 3.25% Convertible Note Refinancing, in each case, to the extent expressly permitted by
the terms of this Agreement.
3.25% Senior Notes Indenture has the meaning provided therefor in the definition of 3.25% Convertible Notes.
5.00% Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
5.00% Mandatory Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
5.00% Voluntary Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
10-K means an annual report on Form 10-K (or successor form thereto), as required to be filed pursuant to the Exchange Act.
2
10-Q means a quarterly report on Form 10-Q (or successor form thereto), as required to be filed pursuant to the Exchange Act.
Account means an account (as that term is defined in the Code).
Account Debtor means any Person who is obligated on an Account, chattel paper, or a general intangible.
Acquisition means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of fifty percent
(50%) of the Stock of any Person or otherwise causing any Person to become a Subsidiary of theany Borrower, (c) a merger or consolidation or any other combination
with another Person or (d) the acquisition (including through licensing) of any Product or Intellectual Property of or from another Person if the Acquisition Consideration paid in connection with such acquisition is in excess of $5,000,000
individually or in the aggregate with respect to all such acquisitions in any twelve (12) month period.
Acquisition Consideration has the meaning specified therefor in the definition of Permitted Acquisitions.
Administrative Questionnaire has the meaning specified therefor in Section 13.01(a).
Affected Lender has the meaning specified therefor in Section 2.11(b).
Affiliate means, with respect to any Person, (a) any Person that directly or indirectly controls such Person, (b) any Person which is controlled by or is under common control with such controlling Person, and (c) each of such Persons (other than, with respect to any Lender, any Lenders) officers or directors (or Persons functioning in substantially similar roles) and the spouses, parents, descendants and siblings of such officers, directors or other Persons. As used in this definition, the term control of a Person means the possession, directly or indirectly, of the power to vote five percent (5%) or more of any class of voting securities of such Person or to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
Agent means Deerfield Revolver, in its capacity as administrative agent for itself and for the other members of the Lender Group hereunder, as such capacity is established in, and subject to the provisions of, Article XV, and the successors and assigns of Deerfield Revolver in such capacity, and including, when the context may require, during any Third Party Agent Retention Period, any Third Party Agent.
Agent-Related Persons means Agent (including, for the avoidance of doubt, any Third Party Agent), together with its Affiliates, controlling persons and their respective directors, officers, employees, partners, advisors, agents and other representatives of each of the foregoing and their respective successors.
3
Average Revolver Usage means, with respect to any period, the sum of the aggregate amount of Revolver Usage for each Business Day in such period (calculated as of the end of each respective Business Day) divided by the number of Business Days in such period.
Bank of America Cash Collateral Account means that certain deposit account #1453234066 of
BorrowerEndologix at Bank of America, N.A. (or such replacement deposit account provided by Bank of America, N.A. or by another commercial bank) established and maintained
for the sole purpose of providing cash collateral in favor of Bank of America, N.A. (or such replacement commercial bank) for obligations of the BorrowerEndologix in
respect of certain commercial credit cards (or with respect to a replacement commercial bank, similar commercial credit cards to those provided by Bank of America, N.A. as of the Closing Date) provided to the
BorrowerEndologix by Bank of America, N.A. (or such replacement commercial bank); provided that the aggregate amount on deposit in such deposit account (or such replacement deposit
account) shall not at any time exceed $2,500,000.
Bankruptcy Code means title 11 of the United States Code, as in effect from time to time.
Blocked Account has the meaning specified therefor in Section 2.12(a).
Board of Governors means the Board of Governors of the Federal Reserve System of the United States (or any successor).
Borrowers has the meaning specified therefor in the preamble.
Borrower Representative means Endologix, in its capacity as Borrower Representative pursuant to the provisions of Section 2.13, or any successor Borrower Representative selected by Borrowers and approved by Agent.
Borrowing means a borrowing consisting of Loans made on the same day by the Lenders (or Agent on behalf thereof), or by Agent in the case of an Extraordinary Advance.
Borrowing Base means, as of any date of determination, an amount equal to:
(a) | the lesser of: |
(i) | the Maximum Revolver Amount, and |
(ii) | an amount equal to: |
(A) an amount not to exceed 85% of the aggregate amount of Eligible Accounts; less
(B) the amount, if any, of the Dilution Reserve; plus
(C) the least of (1) the product of 50% multiplied by the value (calculated at the lower of cost or market based on the Borrowers historical accounting practices) of Eligible Inventory at such time, (2) the product of 85% multiplied by
6
taken as a whole, materially increase the risk of the investments made by Endologix from time to time from Endologix investment policy in effect as of the Closing Date.
Cash Management Services means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other customary cash management arrangements.
Change in Law means the occurrence after the Closing Date of: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that notwithstanding anything in the Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a Change in Law, regardless of the date enacted, adopted or issued.
Change in
Control or Change of Control means any of the following events: (a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of or control over, voting Stock of Endologix (or other securities convertible into such voting Stock)
representing more than 50% of the combined voting power of all voting Stock of Endologix; (b) Endologix shall have ceased to own, directly or indirectly, 100% of the Stock of any of its Subsidiaries (with the exception of any Subsidiaries
permitted to be dissolved or merged to the extent otherwise permitted by this Agreement and other than, solely with respect to Foreign Subsidiaries, directors qualifying shares as necessary to comply with foreign law); (c) the occurrence of a
Change of Control, Change in Control, Fundamental Change or terms of similar import under the 2.25% Convertible Note Documents, the 3.25% Convertible Note Documents, the Term Debt Documents or any Permitted Japan
Lifeline Unsecured Debt Documents; or (d) the occurrence of any Major Transaction (as defined in any Warrant). As used herein, beneficial ownership shall have the meaning provided in Rule 13d-3 of the SEC under the
Exchange Act; provided that no Change in Control shall be deemed to have occurred with respect to a Permitted Successor Transaction (as defined in the Term Loan Credit Agreement as in effect on the Closing Date)
which prohibits the Term Lenders from delivering a Put Notice (as defined in the Term Loan Credit Agreement as in effect on the Closing Date) under the Term Loan Credit Agreement as in
effect on the Closing Date.
Closing Date means the date of this Agreement.
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another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so Guaranteed or otherwise supported or, if not a fixed and determinable amount, the maximum amount so Guaranteed or otherwise supported.
Control Agreement means a control agreement, in form and substance reasonably satisfactory to Agent and the Lenders, executed and delivered by Borrowers or one of their Subsidiaries, Agent, Term Agent and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).
Convertible Note Documents means, collectively the 2.25% Convertible Note Documents and the 3.25% Convertible Note Documents (which, for the avoidance of doubt, shall include the indenture and each other document, instrument or agreement from time to time entered into in connection with any Permitted 3.25% Convertible Note Refinancing, in each case, to the extent such indenture, documents, instruments or agreements are permitted pursuant to the terms of the definition of Permitted 3.25% Convertible Note Refinancing).
Copyrights has the meaning specified therefor in the Guaranty and Secured Agreement.
Copyright Security Agreement has the meaning specified therefor in the Guaranty and Security Agreement.
Correction means the repair, modification, adjustment, relabeling, destruction, or inspection (including patient monitoring) of a product or device without its physical removal from its point of use to some other location.
Cortland means Cortland Capital Market Services LLC, a Delaware limited liability company, and its Affiliates and its and their successors and assigns.
DEA means the Drug Enforcement Administration of the United States of America, any comparable state or local Governmental Authority, any comparable Governmental Authority in any non-United States jurisdiction, and any successor agency of any of the foregoing.
Deerfield Revolver means Deerfield ELGX Revolver, LLC and its successors and assigns.
Default means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.
Deposit Account means any deposit account (as that term is defined in the Code).
Depositary Bank has the meaning specified therefor in Section 2.12(a).
Designated Account means the Deposit Account of Borrower Representative identified on Schedule D-1 (or such other Deposit Account of Borrower Representative located at Designated Account Bank that has been designated as such, in writing, by Borrowers to Agent (and, during any Third Party Agent Retention Period, also to the Third Party Agent)).
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Designated Account Bank has the meaning specified therefor in Schedule D-1 (or such other bank that is located within the United States that has been designated as such, in writing, by Borrowers to Agent (and, during any Third Party Agent Retention Period, also to the Third Party Agent)).
Dilution means, as of any date of determination, a percentage, based upon the experience of the immediately prior three (3) months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Borrowers Accounts during such period, by (b) Borrowers billings with respect to Accounts during such period.
Dilution Reserve means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by one (1) percentage point for each percentage point by which Dilution is in excess of 5%.
Dispose and Disposition mean (a) the sale, lease, license, transfer, assignment,
conveyance or other disposition of any assets or property (including any transfer or conveyance of any assets or property pursuant to a division or split of a limited liability company or other entity or Person into two or more limited liability
companies or other entities or Persons), and (b) the sale or transfer by theany Borrower or any Subsidiary of
theany Borrower of any Stock issued by any Subsidiary of theany Borrower.
Disqualified Stock means any Stock which, by its terms (or by the terms of any security or other Stock into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Stock that does not constitute Disqualified Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable (in each case, other than solely for Stock that does not constitute Disqualified Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is one year and one day following the Maturity Date (excluding any provisions requiring redemption upon a change in control or similar event, provided that such change in control or similar event results in the occurrence of the payment in full in cash of all of the Obligations (other than unasserted contingent indemnification obligations) and the termination of all of the Commitments, (b) is convertible into or exchangeable for (i) debt securities or (ii) any Stock referred to in (a) above, in each case, at any time on or prior to the date that is one year and one day following the Maturity Date at the time such Stock was issued, or (c) is entitled to receive scheduled dividends or distributions in cash prior to the date that is one year and one day following the Maturity Date.
Dollars or $ means United States dollars.
Domestic Subsidiary means, with respect to any Person, a Subsidiary of such Person, which is organized, incorporated or otherwise formed under the laws of the United States or any state thereof or the District of Columbia.
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(j) such Inventory is not covered by casualty insurance reasonably acceptable to Agent and the Lenders,
(k) it consists of goods that can be transported or sold only with licenses that are not readily available or of any substances defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic substance, or similar term, by any environmental law or any Governmental Authority applicable to Borrowers or their business, operations or assets,
(l) it does not meet all standards imposed by any Governmental Authority in all material respects, including with respect to its production, acquisition, sale or importation (as the case may be,
(m) it has expired or is obsolete,
(n) such Inventory is located at the Santa Rosa location and a reserve has been established on the books of the Borrowers against such Inventory in accordance with Endologixs standards in place regarding aged Inventory,
(o) it is held for rental or lease by or on behalf of Borrowers,
(p) it is subject to third party trademark, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights, or
(q) it fails to meet such other specifications and requirements which may from time to time be established by Agent (including, during any Third Party Agent Retention Period, the Third Party Agent) in its Permitted Discretion. Notwithstanding the foregoing, the valuation of Inventory shall be subject to any legal limitations on sale and transfer of such Inventory.
Employee means any employee of any Loan Party or any Subsidiary of any Loan Party.
Employee Benefit Plan means any employee benefit plan within the meaning of Section 3(3)
of ERISA, under which (A) any current or former employee, director or independent contractor of theany Borrower or any of its Subsidiaries has any present or future
right to benefits or compensation and which is contributed to, sponsored by or maintained by theany Borrower or any of its Subsidiaries or
(B) theany Borrower or any of its Subsidiaries has had or has or could reasonably be expected, individually or in the aggregate, to have any present or future
obligation or liability.
Environmental Action means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of or liability under Environmental Laws or releases of Hazardous Materials, including, without limitation, (a) from any assets, properties, or businesses of any Borrower, any Subsidiary of a Borrower, or any of their predecessors in interest, (b) from adjoining properties or
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businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest.
Environmental Laws means all Applicable Laws, Authorizations and permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.
Environmental Liabilities means all Liabilities (including costs of removal and remedial actions, natural resource damages and costs and expenses of investigation and feasibility studies, including the cost of environmental consultants and attorneys costs) that may be imposed on, incurred by or asserted against any Loan Party or any Subsidiary of any Loan Party as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law resulting from the ownership, lease, sublease or other operation or occupation of property by any Loan Party or any Subsidiary of any Loan Party, whether on, prior or after the date hereof.
Environmental Permits has the meaning specified therefor in Section 4.20(a).
Equipment means all equipment, as such term is defined in the UCC, now owned or hereafter acquired by any Loan Party, wherever located.
Equity Financing Documents has the meaning provided therefor in the Second Amendment.
ERISA means the Employee Retirement Income Security Act of 1974, as amended and applicable published guidance thereunder.
ERISA Affiliate means collectively
theany Borrower, any Subsidiary of any Borrower and
any Person under common control or treated as a single employer with, any Borrower or any Subsidiary of
any Borrower within the meaning of IRC Section 414 (b), (c), (m) or (o) or under ERISA.
ERISA Event means any of the following: (a) a reportable event described in Section 4043(b) or (c) of ERISA (other than an event for which the 30-day notice period is waived) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of insolvency or termination, or treatment of a plan amendment as termination, under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan, or treatment of a plan amendment as termination, under Section 4041 of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a Lien under Section 412 or 430(k) of the IRC or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of an
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Employee Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the IRC or other Applicable Law to qualify thereunder; (j) a Title IV plan is in at risk status within the meaning of IRC Section 430(i); (k) a Multiemployer Plan is in endangered status or critical status within the meaning of Section 432(b) of the IRC; and (l) any other event or condition that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any Liability upon any ERISA Affiliate under Title IV of ERISA other than for contributions to Title IV Plans and Multiemployer Plans in the ordinary course and PBGC premiums due but not delinquent
Event of Default has the meaning specified therefor in Article VIII.
Excess Availability means, as of any date of determination, the amount equal to Availability minus the aggregate amount, if any, of all trade payables of Borrowers and their Subsidiaries aged in excess of thirty (30) days with respect thereto and all book overdrafts of Borrowers and their Subsidiaries in excess of historical practices with respect thereto, in each case as determined by Agent (including, during any Third Party Agent Retention Period, the Third Party Agent) in its Permitted Discretion.
Exchange Act means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
Exchange Agreement has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Exchanged Mandatory Senior Notes Indenture has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Exchanged Voluntary Senior Notes Indenture has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Exchanged Senior Notes Indentures has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Excluded Accounts has the meaning specified therefor in Section 5.08.
Excluded Domestic Holdco means a wholly-owned Domestic Subsidiary of a Borrower substantially all of the assets of which consist of Stock of Excluded Foreign Subsidiaries held directly or indirectly by such Subsidiary and which does not engage in any business, operations or activity other than that of a holding company, excluding for purposes of such determination, Indebtedness of such Excluded Foreign Subsidiaries.
Excluded Foreign Subsidiary means any Foreign Subsidiary which is a controlled foreign corporation (as defined in the IRC) that has not guaranteed or pledged any of its assets to secure, or with respect to which there shall not have been pledged two-thirds or more of the voting Stock to secure, any Indebtedness (other than the Obligations) of a Loan Party.
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Excluded Property means, collectively:
(a) voting shares of any (A) Excluded Foreign Subsidiary of
BorrowerEndologix or (B) Excluded Domestic Holdco, in each case, in excess of 65% of all of the issued and outstanding voting shares of capital stock of such subsidiary;
(b) any lease, license, contract, property right or agreement as to which, if and to the extent that, and only for so long as, the grant of a security interest therein shall (1) constitute or result in a breach, termination or default under any such lease, license, contract, property right or agreement or render it unenforceable, (2) be prohibited by any applicable law or (3) require the consent of any third party (in each case of clauses (1), (2) and (3), other than to the extent that any such breach, termination, default, prohibition or requirement for consent would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable Law), provided that such security interest shall attach immediately to each portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified above;
(c) any intent to use trademark applications for which a statement of use has not been filed (but only until such statement is filed);
(d) motor vehicles and other assets, in each instance, in which perfection of a security requires notation on certificates of title with a value, individually, of less than $250,000;
(e) without in any way limiting clause (a) above, equity interests in any Person (other than wholly owned Subsidiaries) to the extent not permitted by the terms of such Persons organizational or joint venture documents (so long as such joint venture was not entered into (or such Subsidiary was not formed) in contravention of the terms of the Loan Documents and such prohibition did not arise in anticipation of the restrictions under the Loan Documents);
(f) any assets financed by purchase money Indebtedness or Capital Leases, to the extent such purchase money Indebtedness or Capital Lease is permitted hereunder, if the documentation governing such purchase money Indebtedness or Capital Leases securing such purchase money Indebtedness or Capital Leases prohibits the creation of a security interest or lien thereon or requires the consent of any Person as a condition to the creation of any other security interest or lien on such property or if such contract or other agreement would be breached or give any party the right to terminate it as a result of creation of such security interest or lien;
(g) those assets as to which Agent determines (in its sole discretion) that the cost of obtaining such a security interest or perfection thereof are excessive in relation to the benefit to the Lender Group of the security to be afforded thereby; and
(h) the Bank of America Cash Collateral Account;
provided, however, notwithstanding anything to the contrary herein or under the other Loan Documents, Excluded Property shall not include (i) any proceeds, products, substitutions, receivables or replacements of Excluded Property (unless such proceeds, products, substitutions, receivables or replacements would otherwise constitute Excluded Property), or (ii) any assets or
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FDCA means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C. Section 301 et seq., and all regulations promulgated thereunder.
Federal Reserve Board means the Board of Governors of the Federal Reserve System or any entity succeeding to any of its principal functions.
First Period has the meaning specified in Section 2.09(d)(ii).
Fixed Charge Coverage Ratio means, as of any date of determination and with respect to Borrowers determined on a consolidated basis in accordance with GAAP, the ratio of (a) for the applicable Measurement Period ending on such date, EBITDA minus Capital Expenditures (other than Capital Expenditures financed with Indebtedness (other than Revolving Loans)) made or incurred during such Measurement Period or the proceeds of Stock, to (b) Fixed Charges for such Measurement Period.
Fixed Charges means, with respect to any fiscal period and with respect to Borrowers determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense accrued (other than interest paid-in-kind, amortization of financing fees, and other non-cash Interest Expense) during such period, (b) principal payments in respect of Indebtedness that are required to be paid during such period, (c) all federal, state, and local income taxes accrued during such period, and (d) all Restricted Payments paid (whether in cash or other property, other than common Stock) during such period.
Flexential Data Center Location has the meaning specified in Section 5.23.
Foreign Benefit Plan means any employee benefit plan that is subject to the laws of a jurisdiction outside the United States, including those mandated by a government other than that of the United States of America.
Foreign Lender means any Lender or Participant that is not a United States person within the meaning of IRC section 7701(a)(30).
Foreign Subsidiary means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not a Domestic Subsidiary.
Funding Date means the date on which a Borrowing occurs.
GAAP means generally accepted accounting principles as in effect from time to time in the United States, consistently applied, subject to the provisions of Section 1.02 .
Global Excess Liquidity means, as of any date of determination by Agent (or, during any Third Party Agent Retention Period, the Third Party Agent), the sum of (a) without duplication of clause (b) of this definition, Qualified Cash; provided that, for the avoidance of doubt, no cash or Cash Equivalents maintained in any Excluded Accounts shall be included in this clause (a), plus (b) without duplication of clause (a) of this definition, unrestricted cash and Cash Equivalents of Loan Parties that is in Excluded Accounts maintained by a branch office of the bank or securities intermediary located outside the United States in an aggregate amount not
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to exceed the lesser of (i) $10,000,000 and (ii) 20% of clause (a) of this definition, plus (c)(i) without duplication of any cash or Cash Equivalents from any Borrowing or Loan made hereunder or under the other Loan Documents that would count towards either of clause (a) or clause (b) of this definition and (ii) solely to the extent the applicable conditions in Article III (and any additional conditions to Borrowing or the making of Loans hereunder or under the Loan Documents that may be added or included from time to time after the Closing Date) have been satisfied (or would be satisfied if a Borrowing or a Loan would have been made hereunder or under the other Loan Documents) as of such date of determination (after giving effect to any such Borrowing or Loan hereunder or thereunder and any Revolver Usage as of such date), the amount of Availability.
Good Manufacturing Practices means current good manufacturing practices, as set forth in 21 C.F.R. Parts 210, 211, 820 and any comparable foreign requirements.
Governmental Authority means any nation, sovereign, government, quasi-governmental agency, governmental department, ministry, cabinet, commission, board, bureau, agency, court, tribunal, regulatory authority, instrumentality, judicial, legislative, fiscal or administrative or public body or entity, whether domestic or foreign, federal, state, local or other political subdivision thereof, having jurisdiction over the matter or matters and Person or Persons in question or having the authority to exercise executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, securities exchange, regulatory body, arbitrator, public sector entity, supra-national entity and any self-regulatory organization.
Guarantee by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, however, that the term Guarantee shall not include endorsements for collection or deposit in the Ordinary Course of Business. The term Guarantee used as a verb has a corresponding meaning.
Guarantor means (a) each Subsidiary of Borrowers (other than any Excluded Subsidiary), and (b) each other Person that becomes a guarantor after the Closing Date pursuant to Section 5.09.
Guaranty and Security Agreement means the Guaranty and Security Agreement, dated as of the Closing Date, in form and substance reasonably satisfactory to Agent and the Lenders, executed and delivered by Borrowers and each of the Guarantors to Agent, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
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Hazardous Materials means any substance, material or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and radioactive substances.
Healthcare Laws means all Applicable Laws relating to the procurement, development, provision, clinical and non-clinical evaluation or investigation, product approval or clearance, manufacture, production, analysis, distribution, dispensing, importation, exportation, use, handling, quality, reimbursement, sale, labeling, advertising, promotion, or post-market requirements of any drug, medical device, clinical laboratory service, food, dietary supplement or other product (including, without limitation, any ingredient or component of, or accessory to, the foregoing products) subject to regulation under the FDCA or otherwise regulated by the FDA, or subject to regulation under the Clinical Laboratory Improvement Amendments of 1988 (42 U.S.C. §263a et seq) and its implementing regulations (42 C.F.R. Part 493) and similar state or foreign laws, controlled substances laws, pharmacy laws, consumer product safety laws, Medicare, Medicaid, and all laws, policies, procedures, requirements and regulations pursuant to which Regulatory Required Permits are issued, in each case, as the same may be amended from time to time.
Immaterial Subsidiaries shall mean, as of any date of determination, any Subsidiary of the
BorrowerEndologix that is not a Loan Party that, when measured as of the most recent fiscal quarter end or fiscal year end for which Endologix has filed its 10-K or 10-Q, when
taken together with all other Immaterial Subsidiaries as of such date, (i) did not have assets with a value in excess of 5.0% of the total property and assets of the Loan Parties and their Subsidiaries on a consolidated basis set forth in the
balance sheet included in such 10-K or 10-Q in accordance with GAAP and on a pro forma basis and (ii) did not have revenues representing in excess of 5.0% of total revenues of the Loan Parties and their Subsidiaries on a consolidated basis.
Indebtedness means the following with respect to any Person:
(a) all indebtedness for borrowed money of such Person;
(b) the deferred purchase price of assets or services (other than trade payables entered into in the Ordinary Course of Business and which are not more than 120 days past due and other than items covered by clause (xiv) of this definition) of such Person, which in accordance with GAAP should be shown to be a liability on the balance sheet;
(c) all guarantees of Indebtedness by such Person;
(d) the face amount of all letters of credit issued or acceptance facilities established for the account of such Person (or for which such Person is liable), including without duplication, all drafts drawn thereunder;
(e) all Capital Lease Obligations of such Person;
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(o) all off-balance sheet liabilities of such Person; or
(p) all obligations arising under non-compete agreements, bonus, deferred compensation, incentive compensation or similar arrangements, other than those arising in the Ordinary Course of Business (it being understood that obligations to make cash payments for incentive compensation for officers of Endologix made in lieu of equity awards shall be deemed to have arisen in the Ordinary Course of Business to the extent (and only to the extent) that (A) none of such obligations or cash payments are in excess of 15% greater than the fair market value of the equity awards they are in lieu of and (B) such obligations of the Borrowers do not exceed $5,000,000 in the aggregate at any one time (or $0 in the aggregate at any time after December 31, 2021), with a maximum aggregate amount allowed to be paid or distributed thereon of (1) $0 in all calendar years prior to the 2019 calendar year, (2) $2,500,000 in the 2020 calendar year, (3) $2,500,000 in the 2021 calendar year and (4) $0 in all calendar years after the 2021 calendar year).
Indemnified Liabilities has the meaning specified therefor in Section 10.03.
Indemnified Person has the meaning specified therefor in Section 10.03.
Indemnified Taxes means, any Taxes other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of Borrowers under any Loan Document.
Insolvency Proceeding means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
Intellectual Property means all Intellectual Property Licenses and all Copyrights, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any Patents, patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks, trademarks, trade names, service marks, mask works, rights of use of any name, domain names, or any other similar rights, any applications therefor, whether registered or not, know-how, operating manuals, trade secret rights, clinical and non-clinical data, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing.
Intellectual Property Licenses has the meaning specified therefor in the Guaranty and Security Agreement.
Intercompany Subordination Agreement means an intercompany subordination agreement, dated as of the Closing Date, executed and delivered by Borrowers, each of their Subsidiaries, and Agent, the form and substance of which is reasonably satisfactory to Agent and the Lenders.
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Intercreditor Agreement means that certain Intercreditor Agreement, dated as of the Closing Date, by and between Agent and the Term Agent and acknowledged and agreed by the Loan Parties, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
Interest Expense means, for any period, the aggregate of the interest expense of Borrowers for such period, determined on a consolidated basis in accordance with GAAP.
Internal Controls has the meaning ascribed to it in Section 4.13(a).
Inventory means inventory (as that term is defined in the Code).
Inventory Cap means, initially, $10,000,000; provided, that, (x) after
the first anniversary of the Closing Date, such cap may be increased to $15,000,000 to the extent the following conditions have been met: (i) Agent (or, during any Third Party Agent Retention Period, the Third Party Agent) shall have received
an appraisal detailing the value of Borrowers Intellectual Property, in scope and with results acceptable to Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) and (ii) Borrowers
shall have achieved TTM EBITDA of greater than $0 for two consecutive fiscal quarters and (y) the Inventory Cap shall be reduced to $0 in the event that Market Capitalization of Endologix is less than
$200,000,000.25,000,000.
Investment has the meaning specified therefor in Section 6.06.
Investment Company Act means the Investment Company Act of 1940, as amended, including the rules and regulations promulgated thereunder.
IP means all Intellectual Property that is necessary for the conduct of the Loan Parties business as currently conducted.
IRC means the Internal Revenue Code of 1986, as in effect from time to time.
Japan Lifeline Subordination Agreement has the meaning specified therefor in clause (r) of the definition of Permitted Indebtedness.
Landlord Reserve means, as to each location at which Borrowers have Collateral or books and records located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an amount equal to the greater of (a) the number of months rent for which the landlord will have, under applicable law, a Lien in the Collateral of Borrowers to secure the payment of rent or other amounts under the lease relative to such location, or (b) three (3) months rent under the lease relative to such location.
Latest Balance Sheet Date has the meaning specified therefor in Section 4.12.
Lender has the meaning specified therefor in the preamble, shall include any other Person made a party hereto pursuant to the provisions of Section 13.01 and Lenders means each of the Lenders or any one or more of them.
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whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral.
Lender-Related Person means, with respect to any Lender, such Lender, together with such Lenders Affiliates, officers, directors, employees, attorneys, and agents.
Liabilities means all claims, actions, suits, judgments, damages, losses, liabilities, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, and whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.
LIBOR Adjustment Date means the first calendar day of such calendar month.
LIBOR Rate means the
greater of (a) 1.00% and (b) the rate per annum equal to the London interbank offered rate administered by ICE Benchmark Administration Limited or a comparable, replacement or successor rate, which rate is approved by Agent, as published
on the applicable Bloomberg screen (or such other commercially available source providing such quotations as may be designated by Agent from time to time), for deposits in Dollars for a term of thirty (30) days on or about 11:00 a.m. (London
time) two (2) Business Days prior to the LIBOR Adjustment Date. The LIBOR Rate may not be the lowest or best rate at which Agent calculates interest or extends credit. The LIBOR Rate for each calendar month shall be adjusted (if necessary) on
each LIBOR Adjustment DatewhichDate which determination shall be conclusive in the absence of manifest error; provided that to the extent a comparable, replacement
or successor rate is approved by Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice.
Lien means any lien, pledge, preferential arrangement, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention or other encumbrance on or with respect to property or interest in property having the practical effect of constituting a security interest, in each case with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind. For purposes of this Agreement and the other Loan Documents, any Loan Party or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
Liquidated Damages has the meaning specified in Section 2.09(d)(i).
Loan means any Revolving Loan or Extraordinary Advance made (or to be made) hereunder.
Loan Account has the meaning specified therefor in Section 2.08.
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Loan Documents means the Agreement, any Notes, the Control Agreements, any Borrowing Base Certificate, each Compliance Certificate, the Intercreditor Agreement, the Japan Lifeline Subordination Agreement, any Subordination Agreement, the Guaranty and Security Agreement, the Intercompany Subordination Agreement, the Patent Security Agreement, the Trademark Security Agreement, the Copyright Security Agreement, any note or notes executed by Borrowers in connection with the Agreement and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by Borrowers or any of their Subsidiaries and any member of the Lender Group in connection with the Agreement.
Loan Party means any Borrower or any Guarantor.
Lockbox has the meaning specified therefor in Section 2.12(a).
Margin Stock means margin stock as such term is defined in Regulation T, U or X of the Federal Reserve Board.
Market Capitalization shall mean, on any date of determination, an amount equal to (i) the total number of issued and outstanding shares of common Stock of Endologix on the date of measurement multiplied by (ii) the arithmetic mean of the closing prices per share of such Stock on the Nasdaq Stock Market for the 30 consecutive trading days immediately preceding such date of determination.
Market Withdrawal means a Persons Removal or Correction of a distributed product which involves a minor violation that would not be subject to legal action by the FDA or which involves no violation (e.g., normal stock rotation practices and routine equipment adjustments and repairs, etc.).
Material Adverse Effect means a material adverse effect on (a) the business, operations, results of operations, financial condition or properties of the Loan Parties and their Subsidiaries, taken as a whole, (b) the legality, validity or enforceability of any provision of any Loan Document, (c) the ability of any Loan Party to timely perform the Obligations, (d) the creation, perfection or priority of the Liens, taken as a whole for the Collateral, granted under the Loan Documents, or (e) the rights and remedies of the Secured Parties under any Loan Document.
Material Contracts means (a) the Operative Documents,
(b) the Term Debt Documents, (c) the Convertible Note Documents, (d) the agreements listed on Schedule 4.18, (e) the Permitted Japan Lifeline Unsecured Debt Documents,
(f) the Equity Financing Documents, and (fg) each other agreement or contract to which such Loan Party or its Subsidiaries is a party the termination of which
could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; provided that Capped Calls shall not be considered Material Contracts.
Material Intangible Assets means all of (i) each Loan Partys Intellectual Property and (ii) license or sublicense agreements or other agreements with respect to rights in Intellectual Property (including each Intellectual Property License), in each case that are material to the financial condition, business or operations of the applicable Loan Party.
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Maturity Date means April 2,
2022.the date that is the earlier of (a) April 2, 2023 and (b) the date that the loans under the Term Credit Agreement are paid in full.
Maximum Revolver Amount means $40,000,000 (provided that such amount shall be increased to $50,000,000 during any Maximum Revolver Increased Amount Period), decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 2.03(c).
Maximum Revolver Decreased Market Capitalization Event means any time, after a Maximum Revolver Increased Amount Trigger Event occurs, the Market Capitalization of Endologix decreases to an amount less than or equal to $350,000,000.
Maximum Revolver Decreased Market Capitalization Notice Trigger Event means the first occurrence of a Maximum Revolver Decreased Market Capitalization Event after a Maximum Revolver Increased Amount Trigger Event has occurred and was continuing immediately before such Maximum Revolver Decreased Market Capitalization Event occurred.
Maximum Revolver Decreased Market Capitalization Overadvance Amount means, at any time a Maximum Revolver Decreased Market Capitalization Overadvance Event occurs, if Revolver Usage at such time is in excess of $40,000,000, the result of (a) the amount of the Revolver Usage, minus (b) $40,000,000.
Maximum Revolver Decreased Market Capitalization Overadvance Event means any time that the Market Capitalization of Endologix is less than or equal to $350,000,000 and the Revolver Usage is more than $40,000,000.
Maximum Revolver Increased Amount Period means from the time a Maximum Revolver Increased Amount Trigger Event occurs until the time that the Market Capitalization of Endologix is less than or equal to $350,000,000.
Maximum Revolver Increased Amount Trigger Event means, at any time that the Market Capitalization of Endologix is in excess of $350,000,000 for at least ten (10) consecutive Business Days, the Borrower Representative delivers an officers certificate executed by an Authorized Officer of the Borrower Representative to the Agent (and, during a Third Party Agent Retention Period, also the Third Party Agent) certifying as such and providing reasonable detail thereof, all in form and substance reasonably satisfactory to the Agent (and, during a Third Party Agent Retention Period, also the Third Party Agent).
Measurement Period means, at any date of determination, the most recently completed twelve (12) fiscal months of Borrowers for which financial statements have been delivered pursuant to Section 5.05(a).
Medicaid means the medical assistance programs administered by state agencies and approved by CMS pursuant to the terms of Title XIX of the Social Security Act, codified at 42 U.S.C. 1396 et seq.
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expenditures related to research and development, clinical and regulatory affairs, marketing and sales, and general and administrative) on the income statements of such Person and its Subsidiaries that are included in such Persons financial statements (including those financial statements required by Section 5.05(a)), which amount shall (i) be in compliance and accordance with GAAP and any SEC requirements and regulations, but (ii) exclude one-time non-recurring expenditures that are not regularly incurred in the Ordinary Course of Business of such Person and its Subsidiaries.
Operative Documents means the Loan Documents and the Term Debt Documents.
Ordinary Course of Business means, in respect of any transaction involving any Loan Party, the ordinary course of business of such Loan Party, as conducted by such Loan Party in accordance with past practices, as applicable.
Organizational Documents means, with respect to any Loan Party, the documents by which such Person was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Person (such as by-laws, a partnership agreement or an operating, limited liability company or members agreement), including any and all shareholder agreements or voting agreements relating to the capital stock or other equity interests of such Person.
Original 3.25% Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Originating Lender has the meaning specified therefor in Section 13.01(e).
Overadvance means, as of any date of determination, that the Revolver Usage is greater than any of the limitations set forth in Section 2.01.
Participant has the meaning specified therefor in Section 13.01(e).
Participant Register has the meaning specified therefor in Section 13.01(i).
Patents has the meaning specified therefor in the Guaranty and Security Agreement.
Patent Security Agreement has the meaning specified therefor in the Guaranty and Security Agreement.
Patriot Act means Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001).
Perfection Certificate means a certificate in the form of Exhibit P-1.
Permitted 3.25% Convertible Note Refinancing has the meaning provided therefor in the definition of Permitted Indebtedness.
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(i) the total consideration paid or payable (including without limitation,
costs and expenses, deferred purchase price, seller notes and other liabilities incurred, assumed or to be reflected on a consolidated balance sheet of the Loan Parties and their Subsidiaries after giving effect to such Acquisition but excluding
(A) any equity interests issued as consideration for such Acquisition and (B) the net proceeds of any issuance of equity interests made after the ClosingSecond
Amendment Effective Date that are used for purposes of such Acquisition (for the avoidance of doubt, other than the net proceeds of any equity interests or other Stock issued under or in
connection with the Equity Financing Documents)) (such amounts, collectively, the Acquisition Consideration) shall be in an amount not to exceed $15,000,000 in the aggregate for all such Acquisitions during the term of this
Agreement; provided, however, that, in the case of each Acquisition, (1) during any Non-Third Party Agent Retention Period, subject to Section 5.20, to the extent requested by Agent, Agent, and (2) during any Non-Third Party
Agent Retention Period, the Third Party Agent, in each case, has received prior to the consummation of such Acquisition evidence satisfactory to Agent (or such Third Party Agent) that Borrowers have, immediately before and immediately after giving
effect to the consummation of such Acquisition, unrestricted cash (it being understood and agreed that cash and Cash Equivalents shall not be considered restricted cash for purposes of this proviso solely due to compliance by the Loan
Parties with the requirements set forth in Section 5.08) in one or more deposit accounts subject to a Control Agreement in an aggregate amount equal to or greater than the positive value of the product of (x) eighteen
(18) multiplied by (y) the Monthly Cash Burn Amount, as determined as of the last day of the month immediately preceding such Acquisition.
Notwithstanding the foregoing, no Accounts, Inventory or Equipment acquired by a Loan Party in a Permitted Acquisition shall be included as Eligible Accounts, Eligible Equipment or Eligible Inventory until a field examination (and, if required by Agent (or, during any Third Party Agent Retention Period, the Third Party Agent), an Inventory appraisal or an Equipment appraisal, as applicable) with respect thereto has been completed to the reasonable satisfaction of Agent (and, during any Third Party Agent Retention Period, the Third Party Agent), including the establishment of reserves required in Agents (or, during any Third Party Agent Retention Period, the Third Party Agents) reasonable discretion; provided that field examinations and appraisals in connection with Permitted Acquisitions shall not count against the limited number of field examinations or appraisals for which expense reimbursement may be sought.
Permitted Contingent Obligations means:
(a) Contingent Obligations arising in respect of the Indebtedness under the Loan Documents;
(b) Contingent Obligations resulting from endorsements for collection or deposit in the Ordinary Course of Business;
(c) Contingent Obligations outstanding on the date of this Agreement and set forth on Schedule 6.05 (but not including any refinancings, extensions, increases or amendments to the indebtedness underlying such Contingent Obligations other than extensions of the maturity thereof without any other material change in terms adverse to the Lenders);
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(d) Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other similar obligations not to exceed $2,000,000 in the aggregate at any time outstanding;
(e) Contingent Obligations arising under indemnity agreements with title insurers to cause such title insurers to issue to Agent mortgagee title insurance policies;
(f) Contingent Obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions of personal property assets permitted under Section 6.04;
(g) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such
transaction, Contingent Obligations existing or arising under any Swap Contract or Capped Call; provided, however, that such obligations are (or were) entered into by a Borrower or an
Affiliate of a Borrower for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person
and not for purposes of speculation and either (i) with respect to a Swap Contract or a Capped Call, are (or were) entered into in the Ordinary Course of Business or (ii) with respect to a Capped Call, are (or were) entered into in
connection with the 2.25% Convertible Notes, the 3.25% Convertible Notes, any refinancings thereofPermitted 3.25%
Convertible Note Refinancing permitted hereunder or in connection with this Agreement or any of the other Loan Documents;
(h) guarantees by (i) one or more Loan Parties of the obligations of Foreign Subsidiaries up to $1,000,000 in the aggregate at any time outstanding, (ii) any Loan Party of the obligations of any other Loan Party (but, for the avoidance of doubt, excluding any Immaterial Subsidiary that may be a Loan Party where, before and immediately after giving effect to such guarantee (including any rights of contribution set forth in the Loan Documents or otherwise), the Loan Parties cannot represent and warrant that such Immaterial Subsidiary is Solvent on an individual basis) and (iii) any Foreign Subsidiary of the obligations of any other Foreign Subsidiary;
(i) Contingent Obligations arising in respect of the Indebtedness under, subject to the terms of the Intercreditor Agreement and this Agreement, the Term Debt Documents; and
(j) other Contingent Obligations not permitted by clauses (a) through (i) above, not to exceed $2,500,000 in the aggregate at any time outstanding.
Permitted Discretion means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.
Permitted Dispositions means:
(a) dispositions of inventory in the Ordinary Course of Business;
(b) dispositions of furniture, fixtures and equipment (excluding any Collateral included in the Borrowing Base) in the Ordinary Course of Business that the applicable Loan
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(f) Indebtedness in the form of insurance premiums financed through the applicable insurance company;
(g) trade accounts payable arising and paid within 120 days of the date when due and in the Ordinary Course of Business;
(h) Subordinated Debt;
(i) the Term Debt under the Term Credit Facility, in accordance with the terms of the Intercreditor Agreement and this Agreement;
(j) Indebtedness of the Loan Parties incurred under the 3.25% Convertible Notes in an aggregate principal
amount not to exceed the aggregate principal amount outstanding on the ClosingSecond Amendment Effective Date after giving effect to any
payments, repayments or prepayments thereon or conversion, cash settlements or distributions related thereto (which,
for the avoidance of doubt, shall not be greater than the aggregate principal amount outstanding on the Closing Date), and,
so long as no Default or Event of Default has occurred and is continuing or would result after giving effect thereto, any
refinancing or extension thereof or new issuance in connection with the exchange thereof and/or a new issuancein which all or any portion of the proceeds of
which will be used in connection with theto repurchase or other refinancingrefinance
of all or any portion thereof therewith that, in each case of the foregoing (i)(A) has an aggregate outstanding
principal amount not greater than $200,000,000 (when taking into account all such existing, refinanced, extended, exchanged and newly issued Indebtedness),
and(B) does not provide for any amortization payments or other principal payments of any kind,
prepayments, repayments, redemptions or distributions of any kind or cash settlements or cash conversions (or requires or mandates any settlements or conversions thereof) in advance of the date that is one year and one day after the Maturity
Date, and (C) except as expressly provided in the 5.00% Convertible Notes issued on the Second Amendment Effective Date (or issued after the Second Amendment Effective Date in exchange for
any of the Remaining Original 3.25% Convertible Notes in accordance and compliance with the terms and provisions of this Agreement), does not provide for (or include) any terms or provisions requiring or mandating the conversion or cash settlement
of any such Indebtedness or obligations at any time prior to the date that is one year and one day after the Maturity Date, (ii) has a maturity no shorter than the date that is one
year and one day after the Maturity Date (in the case of clause (i) and clause (ii), it being understood that, in each case, any provision requiring an offer to purchase such Indebtedness as a result of a change in control, fundamental change,
delisting, asset sale or similar provision or any exercise or conversion of Stock (other than Disqualified Stock) shall not violate the foregoing restrictions in clause (i) or clause (ii)), (iii) is unsecured, (iv) does not have one
or more issuers, borrowers, guarantors or obligors that are not Loan Parties, (v) contains terms that are prevailing market
terms at the time of issuing or initial borrowing for the type of financing and for the quality of issuer or borrower, as determined by Endologix and its advisors in their reasonable business judgment, (vi) does not have an All-in Yield greater
than the lesser of (A) 6% per annum and (B) an All-in Yield that would result in more than $10,000,000 per annum being paid in interest thereunder (whether in cash, in-kind or
otherwise), (vii) does not cause Endologix either on an individual basis or together with its Subsidiaries (on a consolidated basis), immediately before, at the time of and immediately after giving effect to such Indebtedness (and after
giving effect to
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the use of the proceeds thereof), to be no longer be Solvent (or such Persons are not Solvent immediately prior to giving effect thereto), and (vii) if in existence at such time or on the same date, is permitted under the Term Debt Documents and the Equity Financing Documents (collectively, a Permitted 3.25% Convertible Note Refinancing);
(k) Indebtedness of the Borrowers incurred under the 2.25% Convertible Notes in an aggregate principal amount not to exceed the aggregate principal amount outstanding on the Closing Date minus any prepayments, repayments, redemptions or payments thereon made on the Closing Date or from time to time thereafter;
(l) without limiting the provisions of Article VI with respect to any Investment by a Loan Party, Indebtedness consisting of unsecured intercompany loans and advances (i) incurred by any Loan Party owing to one or more other Loan Parties, (ii) incurred by any Foreign Subsidiaries owing to any Loan Party solely to the extent constituting a Permitted Investment made by such Loan Party, or (iii) incurred by any Foreign Subsidiaries owing to any other Foreign Subsidiary;
(m) Indebtedness related to commercial credit cards provided by Bank of America, N.A. (or such other commercial bank permitted under the definition of Bank of America Cash Collateral Account) that, in the aggregate outstanding at any one time, does not exceed $2,500,000, which Indebtedness may be secured by Liens permitted pursuant to clause (r) of the definition of Permitted Liens;
(n) to the extent constituting Indebtedness, any Permitted Contingent Obligations;
(o) unsecured Indebtedness incurred in respect of netting services, overdraft protection and other like services, in each case, incurred in the Ordinary Course of Business;
(p) unsecured earn-out obligations and other similar contingent purchase price obligations incurred in connection with a Permitted Acquisition to the extent earned and payable and permitted pursuant to the definition of Permitted Acquisition and the other terms of this Agreement;
(q) any other unsecured Indebtedness incurred by the Loan Parties or any of their Subsidiaries in an aggregate outstanding amount not to exceed $2,500,000 at any one time; and
(r) unsecured Indebtedness in an amount not to exceed $4,280,500
pursuant to a promissory note dated on or around the AgreementClosing Date, by the
BorrowerEndologix in favor of Japan Lifeline Co., Ltd. (the Permitted Japan Lifeline Unsecured Debt), so long as (i) other than as expressly set forth in
clause (ii) directly below, no prepayments, repayment, redemptions or payments shall be made with respect to the Permitted Japan Lifeline Unsecured Debt at any time until ninety-one (91) days after all of the Obligations have been paid in
full and all the Commitments have terminated, (ii) subject to the terms of the Japan Lifeline Subordination Agreement, the all-in interest rate and pricing charged thereon shall not
exceed 2.5% per annum and such interest shall not be paid (A) more frequently than annually in arrears and (B) unless (1) expressly permitted pursuant to the terms of the Japan Lifeline Subordination Agreement, (2) the Japan
Lifeline Subordination Agreement is in full force and effect and
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(g) Investments consisting of (i) deposit accounts in which Agent has received a Control Agreement, and (ii) deposit accounts that are Excluded Accounts (subject to any caps and applicable restrictions set forth in such definition);
(h) Investments by any Loan Party in any Subsidiary now owned or hereafter created by such Loan Party, which Subsidiary is a Loan Party or has otherwise provided a Guarantee of the Obligations of the Loan Party which Guarantee is secured by a Lien granted by such Subsidiary to Agent in all or substantially all of its property of the type described in the Guaranty and Security Agreement and otherwise made in compliance with Section 5.09;
(i) Investments by (A) any Loan Party consisting solely of cash and Cash Equivalents in a Foreign Subsidiary; provided that at the time of the making of such Investment and immediately after giving effect thereto (i) no Event of Default has occurred and is continuing and (ii) Loan Parties have unrestricted (it being understood and agreed that cash and Cash Equivalents shall not be considered restricted cash for purposes of this proviso solely due to compliance by the Loan Parties with the requirements set forth in Section 7.01(b)) cash and Cash Equivalents in an aggregate amount of not less than $10,000,000, which cash and Cash Equivalents (x) are subject to a first priority perfected lien in favor of Agent for the benefit of Lender Group (subject to Permitted Liens), (y) are held in a deposit account that is subject to a Control Agreement or a securities account subject to a Control Agreement and (z) unless the same could not be reasonably expected to reduce the amounts in such accounts below $10,000,000 at the time of such Investment and immediately after giving effect thereto, do not include any drawn or committed but unpaid drafts, ACH or EFT transactions and (B) a non-Loan Party Foreign Subsidiary in another non-Loan Party Foreign Subsidiary; provided, that, Investments pursuant to clause (i)(A) above shall be subject to the proviso at the end of this definition;
(j) Investments by any Loan Party consisting solely of inventory in any wholly-owned Foreign Subsidiaries, to the extent
(i) such Investments are made in the Ordinary Course of Business consistent with its customary practices as in effect on and immediately prior to the Closing Date and (ii) no Event of Default exists or would arise therefrom and
(iii) no Event of Default (as defined in the Term Credit Agreement as in effect as of the ClosingSecond Amendment Effective Date) then exists or would
arise therefrom; provided, that (x) no such Investment shall result in an Overadvance and (y) such Investments shall be subject to the proviso at the end of this definition;
(k) so long as no Default or Event of Default shall have occurred and be continuing at the time thereof or would result therefrom, Investments consisting solely of cash and Cash Equivalents in joint ventures or similar arrangements in an amount not to exceed $5,000,000 in the aggregate during the term of this Agreement; provided, that, such Investments shall be subject to the proviso at the end of this definition;
(l) Permitted Acquisitions;
(m) Investments deemed to exist under any Swap Contracts or Capped Calls; provided, however, that such obligations are (or were) entered into by a Borrower or an Affiliate of a Borrower for the purpose of directly mitigating risks associated with liabilities,
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commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation and are (or were) entered into either (i) with respect to a Swap Contract or a Capped Call, in the Ordinary Course of Business or (ii) with respect to a Capped Call, in connection with the 2.25% Convertible Notes, the 3.25% Convertible Notes, any Permitted 3.25% Convertible Note Refinancing permitted hereunder or in connection with this Agreement or any of the other Loan Documents; and
(n) other Investments in an amount not exceeding $5,000,000 in the aggregate; provided, that, such Investments shall be subject to the proviso at the end of this definition;
provided, that, that Investments pursuant to clauses (i), (j), (k), and (n) of this definition of Permitted Investments shall not exceed $12,000,000 in the aggregate in any calendar year and, provided, further, that with respect to clause (j) above, such Investments consisting solely of Inventory in Foreign Subsidiaries shall be valued at the lesser of cost and book value.
Permitted Japan Lifeline Unsecured Debt has the meaning specified therefor in clause (r) of the definition of Permitted Indebtedness.
Permitted Japan Lifeline Unsecured Debt Documents has the meaning specified therefor in clause (r) of the definition of Permitted Indebtedness.
Permitted License means (a) any
non-exclusive license of patent rights of a Loan Party or its Subsidiaries so long as all such Permitted Licenses are granted to third parties in the Ordinary Course of Business, do not result in a legal transfer of title to the licensed property,
and have been granted in exchange for fair consideration, and (b) any exclusive license of patent rights of BorrowerEndologix or its Subsidiaries so long as such
Permitted Licenses do not result in a legal transfer of title to the licensed property, are exclusive solely as to discrete geographical areas outside of the United States, and have been granted in exchange for fair consideration.
Permitted Liens means:
(a) Liens set forth on Schedule 4.01(d); provided, that to qualify as a Permitted Lien, any such Lien described on Schedule 4.01(d) shall only secure the Indebtedness that it secures on the Closing Date;
(b) Liens in favor of the Secured Parties under the Loan Documents;
(c) carriers, warehousemens, mechanics, landlords, materialmens, repairmens or other similar Liens arising in the Ordinary Course of Business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the assets or property subject thereto and for which adequate reserves in accordance with GAAP are being maintained;
(d) Liens for Taxes, assessments or governmental charges or levies not past due or payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP are being maintained;
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Related Fund means (a) any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers, advises or manages a Lender, or (b) any Approved Fund.
Related Parties means, with respect to any Person, such Persons Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, attorneys, advisors and representatives of such Person and of such Persons Affiliates.
Releases means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.
Remaining Original 3.25% Convertible Notes means the Original 3.25% Convertible Notes that were not exchanged for 5.00% Convertible Notes on the Second Amendment Effective Date pursuant to the terms of the Exchange Agreement.
Removal means the physical removal of a product from its point of use to some other location for repair, modification, adjustment, relabeling, destruction or inspection.
Required Lenders means, at any time, Lenders the aggregate Pro Rata Shares of which (calculated under clause (d) of the definition of Pro Rata Shares) exceed 50%.
Reserves means, as of any date of determination, those reserves that Agent (including, during any Third Party Agent Retention Period, the Third Party Agent) deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.01(c), to establish and maintain (including reserves with respect to (a) sums that Borrowers or their Subsidiaries are required to pay under any Section hereof or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, and (b) amounts owing by Borrowers or their Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent (including, during any Third Party Agent Retention Period, the Third Party Agent) likely would have a priority superior to Agents Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Borrowing Base or the Maximum Revolver Amount. Without limiting the foregoing, to the extent that any Accounts, Inventory or Equipment are included in the most recently delivered Borrowing Base Certificate and such Accounts, Inventory or Equipment are no longer eligible in accordance with the definitions of Eligible Domestic Accounts, Eligible Foreign Accounts, Eligible Inventory and Eligible Equipment, as applicable, Agent (and, during any Third Party Agent Retention Period, the Third Party Agent) may establish Reserves against the Borrowing Base in the amount of any such Accounts, Inventory or Equipment prior to delivery of an updated Borrowing Base Certificate that removes such items.
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Restricted Payment means, with respect to any Person,
(i) the declaration or making of any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any of its Stock, (ii) the purchasing, redemption or other acquisition for value of
any of its Stock (other than, when no Default or Event of Default has occurred or is continuing (or would occur after giving effect to any such purchase, redemption or other acquisition) and to the extent there would be pro forma compliance with the
financial covenants in Article VII (after giving effect to any such purchase, redemption or other acquisition), solely pursuant to Endologix stock option exchange program on the terms set forth, and specifically described (and without
giving effect to any changes thereto that would be adverse to the Lender Group), in that certain proxy statement of Endologix filed with the SEC on April 20, 2018, Endologix shall have the ability to provide certain qualified employees of
Endologix (which shall not include name executive officers or board of directors of Endologix and only with respect to Eligible Participants (as described therein)) the option to surrender certain out-of-the-money or
underwater options with an exercise price of $6.50 or greater that are Eligible Options (as described therein) for cancellation in exchange for a grant of a lesser number of new restricted stock units of
EndolgoixEndologix that may be settled for shares of Endologix common stock under Endologix amended and restated 2015 stock incentive plan of Endologix that is
attached to such aforementioned proxy statement (and without giving effect to any material changes thereto), all as further specifically described (and without giving effect to any material changes thereto) in such proxy statement) now or hereafter
outstanding or (iii) the making of any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness
subordinated to the Obligations as to right and time of payment or as to other rights and remedies thereunder. For the avoidance of doubt, the entry into, any payments or deliveries in respect of, and the performance, exercise and/or settlement of
the Borrowers 2.25% Convertible Notes, 3.25% Convertible Notes (including, for the avoidance of doubt, any Permitted 3.25% Convertible Note Refinancing), Capped Calls, or under the Term Debt Facility are not Restricted Payments.
Revolver Commitment means, with respect to each Revolving Lender, its Revolver Commitment, and, with respect to all Revolving Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Revolving Lenders name under the applicable heading on Schedule C-1 or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender hereunder, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.01. Notwithstanding anything to the contrary in this Agreement, the Revolver Commitment shall never be more than the Maximum Revolver Amount.
Revolver Exit Payment has the meaning specified thereof in Section 2.09(g).
Revolver Usage means, as of any date of determination, the amount of outstanding Revolving Loans (inclusive of Protective Advances).
Revolving Facility means, at any time, the aggregate amount of the Revolving Lenders Revolver Commitments at such time.
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Revolving Lender means a Lender that has a Revolver Commitment or that has an outstanding Revolving Loan.
Revolving Loan Exposure means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the Revolver Commitments, the amount of such Lenders Revolver Commitment, and (b) after the termination of the Revolver Commitments, the aggregate outstanding principal amount of the Revolving Loans of such Lender.
Revolving Loans has the meaning specified therefor in Section 2.01(a).
Sanctioned Entity means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
Sanctioned Person means a Person named on the list of Specially Designated Nationals maintained by OFAC.
Sanctions means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majestys Treasury of the United Kingdom.
S&P has the meaning specified therefor in the definition of Cash Equivalents.
SEC means the United States Securities and Exchange Commission and any successor thereto.
SEC Documents means all reports, schedules, forms, statements and other documents filed by Endologix with the SEC pursuant to the Securities Act or the Exchange Act since January 1, 2016 (including all financial statements and schedules included therein, all exhibits thereto and all documents incorporated by reference therein).
Second Amendment means that certain Second Amendment to Credit Agreement, dated as of the Second Amendment Date, by and among the Borrowers, the Lenders party thereto and Agent.
Second Amendment Date means March 30, 2019.
Second Amendment Effective Date has the meaning set forth in the Second Amendment.
Second Period has the meaning specified in Section 2.09(d)(ii).
Secured Parties means Agent (including any Third Party Agent), the Lenders and all Indemnified Persons.
Securities Account means a securities account (as that term is defined in the Code).
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Securities Act means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.
Securitization has the meaning specified therefor in Section 13.01(h).
Settlement has the meaning specified therefor in Section 2.02(d)(i).
Settlement Date has the meaning specified therefor in Section 2.02(d)(i).
Solvent means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such Person at a fair valuation (as referenced in the Bankruptcy Code) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature, and (c) such Person does not have unreasonably small capital in relation to such Persons business as contemplated as of the Closing Date. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Stifel has the meaning
specified therefor in Section 5.08(viii).
Stifel Account has the meaning
specified therefor in Section 5.08(viii).
Stifel Sweep Agreement has the
meaning specified therefor in Section 5.08(viii)(a)(1).
Stock means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting; and (b) all securities convertible into or exchangeable for any other Stock and all warrants, options or other rights (other than the 2.25% Convertible Notes, the 3.25% Convertible Notes, any Permitted 3.25% Convertible Note Refinancing permitted hereunder, any Capped Call transactions, and the Warrants) to purchase, subscribe for or otherwise acquire any other Stock, whether or not presently convertible, exchangeable or exercisable.
Subordinated Debt means any Indebtedness of the Loan Parties incurred pursuant to the terms of the Subordinated Debt Documents and with the prior written consent of Agent and the Lenders, all of which documents must be in form and substance acceptable to Agent and the Lenders in their sole discretion. As of the Closing Date, there is no Subordinated Debt. Notwithstanding anything to the contrary in this Agreement and for the avoidance of doubt, Subordinated Debt shall not include the Permitted Japan Lifeline Unsecured Debt, which is separately covered by this Agreement.
Subordinated Debt Documents means any documents evidencing and/or securing Indebtedness governed by a Subordination Agreement, all of which documents must be in form and substance acceptable to Agent and the Lenders in their sole discretion. As of the Closing Date, there are no Subordinated Debt Documents. Notwithstanding anything to the contrary in
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this Agreement and for the avoidance of doubt, Subordinated Debt Documents shall not include the Permitted Japan Lifeline Unsecured Debt Documents, which are separately covered by this Agreement.
Subordination Agreement means any agreement between Agent and another creditor of one or more Loan Parties, as the same may be amended, supplemented, restated or otherwise modified from time to time in accordance with the terms thereof, pursuant to which the Indebtedness owing from any Loan Party or Loan Parties and/or the Liens securing such Indebtedness granted by any Loan Party or Loan Parties to such creditor are subordinated in any way to the Obligations and the Liens created under the Guaranty and Security Agreement, the terms and provisions of such Subordination Agreements to have been agreed to by, and be acceptable to, Agent in the exercise of its sole discretion. Notwithstanding anything to the contrary in this Agreement and for the avoidance of doubt, Subordination Agreement shall not include the Japan Lifeline Subordination Agreement, which is separately covered by this Agreement.
Subordination Provisions has the meaning specified therefor in Section 8.19.
Subsidiary or Subsidiaries means, with respect to any Person, (a) any corporation of which an aggregate of more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, capital stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of more than fifty percent (50%) of such capital stock whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%) or of which any such Person is a general partner or may exercise the powers of a general partner. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of a Loan Party.
Swap Contract means any agreement, contract or transaction that constitutes a swap within the meaning of Section 1a(47) of the Commodity Exchange Act, not including Capped Calls.
Taxes means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.
Tax Affiliate means (a) the
BorrowerBorrowers and itstheir Subsidiaries and (b) any Affiliate of the
BorrowerBorrowers with which theany Borrower files or is required to file consolidated,
combined or unitary tax returns.
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specified by Borrowers to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.
(v) For purposes of Section 2.03(b)(ii), paid in full of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, any premium or prepayment penalty, Commitment Fee, Liquidated Damages and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.
(vi) In the event of a direct conflict between the priority provisions of this Section 2.03 and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid then the terms and provisions of this Section 2.03 shall control and govern.
(c) Reduction of Revolver Commitments. The Revolver Commitments shall terminate on the Maturity Date. The Revolver
Commitments may be reduced by the BorrowerBorrowers subject to payment of Liquidated Damages in accordance with Section 2.09(d), to an amount (which may be
zero) not less than the sum of (i) the Revolver Usage as of such date, plus (ii) the principal amount of all Revolving Loans not yet made as to which a request has been given by Borrowers under Section 2.02(a). Each such
reduction pursuant to clause (i) shall be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in excess thereof (unless the Revolver Commitments are being reduced to zero and the amount of the Revolver Commitments in effect
immediately prior to such reduction are less than $5,000,000), shall be made by providing not less than 10 Business Days prior written notice to Agent (and, during any Third Party Agent Retention Period, the Third Party Agent) and the Lenders, and
shall be irrevocable. Each such reduction of the Revolver Commitments shall be permanent, shall be accompanied by any payment of Liquidated Damages required pursuant to Section 2.09(d) and shall reduce the Revolver Commitments of each
Lender proportionately in accordance with its ratable share thereof.
(d) Optional Prepayments. Upon at least one (1) Business Day prior written notice the Borrowers may prepay the Loans at any time, in whole or in part, plus accrued and unpaid interest on the principal amount being prepaid to the prepayment date and all fees, costs, expenses and other amounts related thereto. No prepayment of Revolving Loans under this Section 2.03(d) shall result in a permanent reduction of the Revolver Commitments.
(e) Mandatory Prepayments.
(i) If, at any time, (i) the Revolver Usage on such date exceeds (ii) either (A) the Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrower to Agent (or, during the Third Party Agent Retention Period, the Third Party Agent) (as adjusted by Agent (or the Third Party Agent, as applicable) for Reserves established by Agent (or the Third Party Agent, as applicable) from time to time) or (B) the Maximum Revolver Amount,
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form) as are reasonably necessary to release, as of record, Agents Liens and all notices of security interests and liens previously filed by Agent.
3.04 Conditions Subsequent. The obligation of the Lender Group (or any member thereof) to continue to make Revolving Loans (or otherwise extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto, of the conditions subsequent set forth on Schedule 3.04 (the failure by Borrowers to so perform or cause to be performed such conditions subsequent as and when required by the terms thereof (unless such date is extended, in writing, by Agent in its sole discretion, which Agent may do without obtaining the consent of the other members of the Lender Group), shall constitute an immediate Event of Default).
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES.
In order to induce the Agent and the Lenders to enter into this Agreement, each of the Borrowers make the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date (in the form and substance of the Credit Agreement (as defined in the Second Amendment but without giving effect to any amendments or modifications thereto)), the Second Amendment Date (in the form and substance of the Amended Credit Agreement (as defined in the Second Amendment)) and the Second Amendment Effective Date (in the form and substance of the Amended Credit Agreement (as defined in the Second Amendment)), and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:
4.01 Due Organization and Qualification; No Event of Default; Solvency.
(a) Each Loan Party is (i) conducting its business in compliance with its Organizational Documents and (ii) not in violation of its Organizational Documents. Each Loan Partys Organizational Documents are in full force and effect.
(b) No Default or Event of Default has occurred or will result from the transactions contemplated by the Loan Documents.
(c) Each Loan Party (i) is Solvent and (ii) has not taken action, and no such action has been taken by a third party, for its winding up, dissolution or liquidation or similar executory or judicial proceeding or for the appointment of a liquidator, custodian, receiver, trustee, administrator or other similar officer for any Loan Party or any or all of its assets or revenues;
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provided, however, that, for the avoidance of doubt, no such representation in this Section 4.01(c) is made in respect of any Immaterial Subsidiary.
(d) No Lien exists on any Loan Partys assets, except for Permitted Liens.
(e) The obligation of the Loan Parties to make any payment under this Agreement or the other Loan Documents (together with all charges in connection therewith) is absolute and unconditional.
(f) No Indebtedness of any Loan Party exists other than Permitted Indebtedness.
4.02 Existence; Power and Authority. Each Loan Party is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable. Each Loan Party (i) has full power and authority (and all governmental licenses, authorizations, Permits, consents and approvals) to (A) own its properties and conduct its business (solely with respect to governmental licenses, authorizations, Permits, consents and approvals, except where the failure to have such governmental licenses, authorizations, Permits, consents and approvals could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect) and (B) to enter into, and perform its obligations under, the Loan Documents and consummate the transactions contemplated under the Loan Documents, and (ii) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, in each case of this clause (ii), where the failure to be so qualified, licensed or in good standing could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
4.03 Litigation.
(a) Other than as set forth on Schedule 4.03,
thereThere is no pending, or, to the knowledge of the Loan Parrties, threatened, any
action, suit or other proceeding before any Governmental Authority (i) to which any Loan Party is a party, (ii) which purports to affect or pertain to
(A) the Loan Documents, the Transactions or any other transaction contemplated hereby or thereby or
(iiiConvertible Note Documents or the Transactions, (B) the execution, delivery or performance by any Loan Party or any of its Subsidiaries hereunder or thereunder or (C) the
rights, remedies and benefits provided (or purported to be provided) to the Loan Parties hereunder or thereunder, (iii) which purports to affect or pertain to any other transactions contemplated by the Loan Documents, the Convertible Note
Documents or the Transactions that are not covered by clause (ii) above, or (iv) which has as the subject thereof any assets owned by any Loan Party or any of its Subsidiaries,
which (y) in the case of clause (i), clause (iii) and clause (iv), could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, and
(z) in the case of clause (ii), could reasonably be expect to result in monetary judgments or relief, individually or in the aggregate, in excess of $2,000,000. As of the Closing Date, other than as set forth on Schedule 4.03, there is no
pending or, to the knowledge of the Loan Parties, threatened, any action, suit or other proceeding before any Governmental Authority (A) to which any Loan Party is a party, (B) which purports to affect or pertain to the Loan
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Documents, the Transactions or any other transaction contemplated hereby or thereby or (C) which has as the subject thereof any assets owned by any Loan Party or any of its Subsidiaries, in each case which could reasonably be expected to result in monetary judgments or relief, individually or in the aggregate, in excess of $2,000,000.
(b) Other than as set forth on
No action, suit, proceeding, claim, event or disclosure
Schedule 4.03, there are no current or, to the knowledge of any of the Loan Parties, pending, legal actions, suits or other proceedings, in each case which could reasonably be expected to result in monetary judgments or
relief, individually or in the aggregate, in excess of $2,000,000, to which any Loan Party or any of its Subsidiaries or any of their respective assets is subject. With respect to
eachlistedset forth on Schedule 4.03, none of them4.03 could
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(c) No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan Document or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.
(d) Other than as
set forth on Schedule 4.03, (i) at all times on and after the Closing Date until and including the Second Amendment Effective Date, and (ii) at all time that this representation and
warranty is made on and after the Second Amendment Effective Date, in each case of clause (A) and clause (B), none of the current directors (or equivalent persons) or current officers of any of the
BorrowersEndologix and their respective Subsidiaries have been involved as a defendant in securities-related litigation or other securities-related legal proceedings during
the past five yearsits Subsidiaries has been (1) convicted or has pled no contest (or agreed to a settlement or plea agreement related) to, or been subject to any order of any
Governmental Authority relating to, any violations of any securities laws, rules or regulations, or (2) been enjoined from engaging in any conduct relating to offers or sales of securities or service as an officer or director of a public
company.
(e) No Loan Party is subject to any proceeding, suit or, to any Loan Partys knowledge, investigation by any federal, state or local government or quasi-governmental body, agency, board or authority or any other administrative or investigative body (including the Office of the Inspector General of the United States Department of Health and Human Services) which would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect on any Loan Party.
4.04 Due Authorization; No Conflict.
(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party and no further consent or authorization is required by the Loan Party, the Loan Partys board of directors (or other equivalent governing body) or the holders of the Loan Partys Stock. Each of this Agreement and the other Loan Documents has been duly executed and delivered by each of the Loan Parties and constitutes a valid, legal and binding obligation of each Loan Party, enforceable in accordance with its respective terms,
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except as such enforceability may be limited by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors rights generally.
(b) The execution, delivery and performance of this Agreement and the other Loan Documents by each Loan Party party thereto and the consummation of the transactions contemplated herein and therein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to the Loan Documents) upon any assets of any such Loan Party pursuant to, any agreement, document or instrument to which such Loan Party is a party or by which any Loan Party is bound or to which any of the assets or property of any Loan Party is subject, except, with respect to this clause (i), as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (ii) result in any violation of or conflict with the provisions of the Organizational Documents, (iii) result in the violation of any Applicable Law, (iv) result in the violation of any judgment, order, rule, regulation or decree of any Governmental Authority, or (v) violate, conflict with or cause a breach or a default under any agreement or instrument binding upon it, except, with respect to clauses (iii) and (v) only, as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No consent, approval, Authorization or order of, or registration or filing with any Governmental Authority is required for (x) the execution, delivery and performance of this Agreement or any of the other Loan Documents, and the issuance of the Securities hereunder and thereunder, and (y) the consummation by any Loan Party of the Transactions or the other transactions contemplated hereby or thereby, except for (A) the filings necessary to perfect the Liens created by the applicable Loan Documents and (B) any necessary filings with the SEC.
(c) Other than has been obtained, no Authorization is required for (i) the execution and delivery of this Agreement or the other Loan Documents, or (ii) the consummation of the Transactions and the other transactions contemplated hereby and thereby.
(d) Each Loan Party and its Subsidiaries are in compliance with Applicable Law except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
4.05 Permits and Authorizations. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (a) (i) each Loan Party holds, and is operating in compliance in all material respects with, all franchises, grants, Authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority (collectively, Necessary Documents) required for the conduct of its business and (ii) all Necessary Documents are valid and in full force and effect and (b) no Loan Party has (i) received written notice of any revocation, non-renewal, amendment, expiration, suspension, limitation, withdrawal, cancellation or other modification of any of the Necessary Documents and (ii) reason to believe that any of the Necessary Documents will not be renewed in the ordinary course of business.
4.06 Title to Assets; No Encumbrances. As of the
ClosingSecond Amendment Date and the Second Amendment Effective Date, the Real Property listed in Schedule 4.06 constitutes all of the Real Property of each Loan
Party and each of its Subsidiaries. Each Loan Party has
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good and marketable title to all of its assets and property free and clear of all Liens, except Permitted Liens. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, the property held under lease by each Loan Party is held under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of such Loan Party.
4.07 Intellectual Property. Each Loan Party owns, or, to the knowledge of the Loan Parties and their Subsidiaries, has
the right to use pursuant to a valid and enforceable written license, all IP, in each case (and without any knowledge qualifier applicable thereto) free and clear of any Liens other than Permitted Licenses and Permitted Liens. All IP that is
registered with or issued by a Governmental Authority that is currently in the name of a Loan Party is, to the knowledge of the Loan Parties and their Subsidiaries, valid and enforceable. Each patent constituting a Material Intangible Asset is, to
the knowledge of the Loan Parties and their Subsidiaries, valid and enforceable and no part of the Material Intangible Assets has been judged invalid or unenforceable, in whole or in part. Except as set forth on Schedule 4.07, as of the
Closing Date, there is no pending or, to the knowledge of the Loan Parties, threatened action, suit, other proceeding or claim by any Person challenging or contesting the validity, ownership, or enforceability of any Material Intangible Asset, the
use thereof by any Loan Party, or other rights of any Loan Party in or to any Material Intangible Asset, and no Loan Party has received any written notice regarding any such action, suit, other proceeding or claim. At all times after the Closing
Date when this representation is made or deemed made, there is no pending or, to the knowledge of the Borrowers, threatened action, suit, other proceeding or claim by any Person challenging or contesting the validity, ownership, or enforceability of
any Material Intangible Asset, the use thereof by any Loan Party, or other rights of any Loan Party in or to any Material Intangible Asset, and no Borrower has received any written notice regarding any such action, suit, other proceeding or claim,
except that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. With respect to each action, suit, proceeding, claim, challenge, contest, event and disclosure listed on Schedule 4.07, none of them
could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Neither the conduct of the business of any Loan Party, nor any Loan Party, has infringed, misappropriated or otherwise violated, or is
infringing, misappropriating or otherwise violating, any Intellectual Property of any Person, except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Other than as set forth on
Schedule 4.03, on the AgreementClosing Date, there is no pending or, to the knowledge of the Loan Parties, threatened action, suit, other proceeding or claim by any
Person alleging that any Loan Party is infringing, misappropriating or violating, or otherwise using without authorization, any Intellectual Property of any Person, and no Loan Party has received any written notice regarding, any such action, suit,
other proceeding or claim. With respect to each action, suit, proceeding, claim, event or disclosure listed on Schedule 4.03, none of them could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
Other than as set forth in Section 3.b. of the Perfection Certificate dated as of (and delivered by the Loan Parties on) the Closing Date, no Loan Party is a party to, or bound by, any options, licenses, franchise or other agreements, written
or oral, relating to trademarks, patents, copyrights, other know- how or IP (or granting any right, title or interest in or to any IP) that require annual payments in excess of $25,000 individually.
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4.08 No Default. No Loan Party is, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, in breach of or otherwise in default under, and no event has occurred which, with notice or lapse of time or both, would constitute such breach or other default in the performance of any agreement or condition contained in any agreement under which it may be bound, or to which any of its assets is subject
4.09 Taxes. All U.S. federal, state and local income and franchise and other material Tax returns, reports and
statements (collectively, the Tax Returns) required to be filed by any Tax Affiliates have been filed with the appropriate Governmental Authorities, all such Tax Returns are true and correct in all material respects, and all
Taxes, assessments and other governmental charges and impositions reflected therein or otherwise due and payable have been paid prior to the date on which any material Liability may be added thereto for non-payment thereof except for those contested
in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP. As of the
ClosingSecond Amendment Date and the Second Amendment Effective Date, no material Tax Return is under audit or examination by any Governmental Authority, and no Tax
Affiliate has received written notice from any Governmental Authority of any audit or examination or any assertion of any claim for material Taxes. To the extent material, proper and accurate amounts have been withheld by each Tax Affiliate from
their respective employees for all periods in full and complete compliance with the Tax, social security and unemployment withholding provisions of Applicable Law and such withholdings have been timely paid to the respective Governmental
Authorities. No Tax Affiliate has participated in a listed transaction within the meaning of Treasury Regulation Section 1.6011-4(b)(2) or has been a member of an affiliated, combined or unitary group other than the group of which a
Tax Affiliate is the common parent.
4.10 Compliance with Laws. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect after the Closing Date, each Loan Party: (a) at all times has complied with all Applicable Laws; (b) has not received any warning letter or other correspondence or notice from the any Governmental Authority alleging or asserting noncompliance with any Applicable Laws or any Authorizations; (c) possesses and complies with the Authorizations, which are valid and in full force and effect; (d) has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, cancel, withdraw, modify or revoke any Authorization and has no knowledge that any Governmental Authority is considering such action; (e) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions, renewals and supplements or amendments as required by any Applicable Laws or Authorizations and (f) has not received any notice, and are not aware, of any violation of applicable antitrust laws, employment or landlord-tenant laws of any federal, state or local government or quasi-governmental body, agency, board or other authority with respect to the Loan Parties.
4.11 SEC Filings. Endologix has filed all of the SEC Documents, within the time frames prescribed by the SEC for the filing of such SEC Documents such that each filing was timely filed with the SEC. Endologix has filed and made publicly available on the SECs Electronic Data Gathering, Analysis, and Retrieval system (including any successor thereto,
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EDGAR) on or prior to the date this representation is made, true, correct and complete copies of the SEC Documents. As of their respective dates, each of the SEC Documents complied in all material respects with the requirements of the Securities Act and/or the Exchange Act (as applicable) applicable to the SEC Documents. None of the SEC Documents, at the time they were filed with the SEC, 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. Since the filing of the SEC Documents, no event has occurred that would require an amendment or supplement to any of the SEC Documents and as to which such an amendment or a supplement has not been filed and made publicly available on EDGAR (and true, correct and complete copies of such amendment or supplement, if any, have been delivered to the Secured Parties or their respective representatives) on or prior to the date this representation is made. Endologix has not received any written comments from the SEC staff that have not been resolved, to the knowledge of Endologix, to the satisfaction of the SEC staff.
4.12 Financial Statements. As of their respective dates, the consolidated financial statements of Endologix and its
Subsidiaries included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in
accordance with GAAP, consistently applied (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments and lack of footnote disclosures), and fairly present in all material respects the consolidated financial
position of Endologix and its Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in stockholders equity for the periods then ended (subject, in the case of unaudited quarterly financial
statements, to normal year-end audit adjustments and lack of footnote disclosures). The accounting firm that expressed its opinion with respect to the consolidated financial statements included in Endologixs most recently filed annual report
on 10-K, and reviewed the consolidated financial statements included in the Endologixs most recently filed quarterly report on 10-Q, was independent of Endologix pursuant to the standards set forth in Rule 2-01 of Regulation S-X promulgated by
the SEC and as required by the applicable rules and guidance from the Public Company Accounting Oversight Board (United States), and such firm was otherwise qualified to render such opinion under Applicable Law and the rules and regulations of the
SEC. There is no transaction, arrangement or other relationship between Endologix (or any of its Subsidiaries) and an unconsolidated or other off-balance-sheet Person that is required to be disclosed by Endologix in the SEC Documents that has not
been so disclosed in the SEC Documents. Neither Endologix nor any of its Subsidiaries is required to file or will be required to file any agreement, note, lease, mortgage, deed or other instrument entered into prior to the date this representation
is made and to which the BorrowerEndologix or any of its Subsidiaries is a party or by which Endologix or any of its Subsidiaries is bound that has not been previously
filed as an exhibit (including by way of incorporation by reference) to the Borrowers reports filed or made with the SEC under the Exchange Act. Other than (i) the liabilities assumed or created pursuant to this Agreement and the other
Loan Documents and any fees and expenses in connection therewith, (ii) liabilities accrued for in the latest balance sheet included in Endologixs most recent periodic report (on 10-Q or 10-K) filed prior to the date this representation is
made (the date of such balance sheet, the Latest Balance Sheet Date), (iii) liabilities incurred in the ordinary course of business consistent with past practice since the later
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of the (A) Closing Date and (B) the Latest Balance Sheet Date and
(iv) liabilities set forth on the Schedules to this Agreement, Endologix and its Subsidiaries do not have any other material liabilities (whether fixed or unfixed, known or unknown, absolute or contingent, asserted or unasserted, choate or
inchoate, liquidated or unliquidated, or secured or unsecured, and regardless of when any action, claim, suit or proceeding with respect thereto is instituted). Since December 31, 2016, there has been no Material Adverse Effect or any event or
circumstance which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. All financial performance projections delivered to any Secured Party, including the financial performance projections
delivered on or prior to the ClosingSecond Amendment Date, if any, represent Endologixs and its Subsidiaries good faith estimate of future financial performance
and are based on assumptions believed by Endologix and its Subsidiaries to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by Agent and the Lenders that projections as to future events are not to be
viewed as facts and that the actual results during the period or periods covered by such projections may differ from the projected results and such differences may be material.
4.13 Internal Controls.
(a) Each Borrower and its respective Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liability is permitted only in accordance with managements general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences (such internal accounting controls (including clauses (i) (iv) above), collectively, Internal Controls).
(b) Endologix and its Subsidiaries has timely filed and made publicly available on EDGAR all certifications, statements and documents required by Rule 13a-14 or Rule 15d-14 under the Exchange Act. Endologix and its Subsidiaries maintain disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures are effective to ensure that the information required to be disclosed by Endologix and its Subsidiaries in the reports that they file with or submit to the SEC (i) is recorded, processed, summarized and reported accurately within the time periods specified in the SECs rules and forms and (ii) is accumulated and communicated to Endologixs (and, to the extent applicable, its Subsidiaries) management, including its or their principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Endologix and its Subsidiaries maintain internal control (including Internal Controls) over financial reporting required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such internal control (including Internal Controls) over financial reporting is effective and does not contain any material weaknesses.
4.14 ERISA. (i) No Loan Party has engaged, and to the knowledge of the Loan Parties, no other Person has engaged in any prohibited transaction as defined under Section
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406 of ERISA or Section 4975 of the IRC that is not exempt under ERISA Section 408
or Section 4975 of the IRC, under any applicable regulations and published interpretations thereunder or under any applicable prohibited transaction, individual or class exemption issued by the Department of Labor, with respect to any Employee
Benefit Plan, except as for such transaction that could not be expected, individually or in the aggregate, to have a Material Adverse Effect, (ii) (A) at no time within the last seven years has
theany Borrower or any ERISA Affiliate maintained, sponsored, participated in, contributed to or had any Liability with respect to, and (B) no Loan Party or any ERISA
Affiliate has any Liability or obligation in respect of, any Title IV Plan, Multiemployer Plan or any multiple employer plan for which theany Borrower or any ERISA
Affiliate has incurred or could incur Liability under Section 4063 or 4064 of ERISA, (iii) each Employee Benefit Plan is and has been operated in compliance with its terms and all Applicable Laws, including ERISA and the IRC, except for such
failures to comply that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (iv) (A) no ERISA Event has occurred and (B) no event or condition exists or existed that could reasonably be
expected to subject theany Borrower or any ERISA Affiliate to any tax, fine, lien, penalty or Liability imposed by ERISA, the IRC or other Applicable Law, except for any
such ERISA Event or tax, fine, lien, penalty or liability that could not be expected, individually or in the aggregate, to have a Material Adverse Effect, and (v) no Loan Party maintains or has any obligation or Liability with respect to any
Foreign Benefit Plan that, individually or in the aggregate, could be expected to have a Material Adverse Effect.
4.15
Subsidiaries. As of the ClosingSecond Amendment Date and the Second Amendment Effective Date, the Borrowers Subsidiaries are set forth in Schedule 4.15 and
the information set forth in Schedule 4.15 is true, correct and complete.
4.16 No Dividends. Subsequent to
December 31, 2015, the Borrower2015Endologix has not declared or paid any dividends or made any distribution of any kind with respect to its Stock, except as permitted
hereunder.
4.17 Stock.
(a) All of the issued and outstanding shares of Stock of Endologix are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing.
(b) As of the
ClosingSecond Amendment Effective Date, all of Endologixs authorized, issued and outstanding shares of Stock of Endologix and each of its Subsidiaries are set forth
in Schedule 4.17, and, except as set forth in Schedule 4.17, there are no (i) Stock options or other Stock incentive plans, employee Stock purchase plans or other plans, programs or arrangements of Endologix or any of its
Subsidiaries under which Stock options, Stock or other Stock-based or Stock-linked awards are issued or issuable to officers, directors, employees, consultants or other Persons, (ii) outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable or exercisable for, any Stock of Endologix or any of its Subsidiaries, or contracts,
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commitments, understandings or arrangements by which Endologix or any of its Subsidiaries is
or may become bound to issue additional Stock of Endologix or any of its Subsidiaries, or options, warrants or scrip for rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into
or exercisable or exchangeable for, any shares of Stock of Endologix or any of its Subsidiaries, (iii) agreements or arrangements under which Endologix or any of its Subsidiaries is obligated to register the sale of any of their securities or
Stock under the Securities Act (except the Registration Rights Agreement), (iv) outstanding Stock, securities or instruments of Endologix or any of its Subsidiaries that contain any redemption or similar provisions, or contracts, commitments,
understandings or arrangements by which Endologix or any of its Subsidiaries is or may become bound to redeem a security of Endologix other than under the Convertible Note Documents, (v) Stock or other securities or instruments containing anti-
dilution or similar provisions that may be triggered by the issuance of securities of Endologix or any of its Subsidiaries other than under the Convertible Note Documents or (vii) stock appreciation rights or phantom stock plans or
agreements or any similar plans or agreements to which Endologix or any of its Subsidiaries is a party or by which Endologix or any of its Subsidiaries is otherwise subject or bound. There are no (X) stockholders agreements, voting
agreements or similar agreements to which Endologix or any of its Subsidiaries is a party or by which Endologix or any of its Subsidiaries is otherwise subject or bound, other than in connection with clauses (i), (k) and (n) of the
definition of Permitted Investments, (Y) preemptive rights or any other similar rights to which any Stock of the Endologix or any of its Subsidiaries is subject or (Z) any restrictions upon the voting or
transfer of any Stock of Endologix or any of its Subsidiaries (other than restrictions on transfer imposed by U.S. federal and state securities laws and other than as set forth in the Loan Documents,
and the Term Debt Documents and, if such instrument is permitted hereunder to be secured, the documents governing the Permitted 3.25% Convertible Note Refinancing).
(c) Endologix has furnished to Agent and each Lender true, correct and complete copies of each Loan Partys Organizational Documents and any amendments, restatements, supplements or modifications thereto, and all documents, agreements and instruments containing the terms of all securities and Stock convertible into, or exercisable or exchangeable for, Common Stock or other Stock of any Loan Party or its Subsidiaries, and the material rights of the holders thereof in respect thereto.
4.18 Material Contracts.
(a) Except for the Operative Documents, the Convertible Note Documents and the agreements set forth on Schedule 4.18, as
of the ClosingSecond Amendment Date and the Second Amendment Effective Date there are no Material Contracts. The consummation of the transactions contemplated by the Loan
Documents will not give rise to a right to termination in favor of any party to any Material Contract (other than any Loan Party), except for such Material Contracts the noncompliance with which would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
(b) None of the Borrowers nor any of their respective Subsidiaries are in breach or default under any Material Contract, and, to the knowledge of the Borrowers, no other party to a
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restrictions imposed, by the Investment Company Act, or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Indebtedness, pledge its assets, perform its obligations under the Loan Documents or which may otherwise render all or any portion of the Obligations unenforceable.
4.22 Employee and Labor
Matters. There are no strikes, boycotts, grievances, work stoppages, slowdowns, lockouts or other job actions existing, pending (or, to the knowledge of any Loan Party, threatened) against or involving any Loan Party or any Subsidiary of any
Loan Party, except for those that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as set forth on Schedule 4.22, or except as could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, as of the Closing Date, (a) there is no memorandum of understanding, collective bargaining or similar agreement, and there is no ongoing negotiation or duty to negotiate, with
any union, labor organization, works council or similar representative covering any Employee or otherwise binding any Loan Party or any Subsidiary of any Loan Party, (b) to the Loan Parties knowledge, no petition for certification or
election of any such representative is existing or pending with respect to any Employee, (c) to the Loan Parties knowledge, no such representative has sought certification or recognition with respect to any Employee, and (d) to the
Loan Parties knowledge, no Employee or his or her representative is engaged in any organizing efforts. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, all current and former
Employees are and have been correctly classified as exempt or non-exempt under, and are and have been paid in accordance with, all applicable federal, state, and local wage and hour laws. Further, all individuals who perform or have performed
services for any Loan Party or any Subsidiary of any Loan Party are or were correctly classified under each Employee Benefit Plan, ERISA, the Internal Revenue Code and other Applicable Law as common law employees, independent contractors or other
non-employee basis, or leased employees, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Each Loan Party and Subsidiary of any Loan Party are in material compliance with all Applicable
Laws concerning employment, including without limitation hiring, background checks, compensation, benefits, wages (including payment of overtime), wage deductions and withholdings, classification, immigration, work authorization, employment
eligibility verification, reporting, taxation, occupational health and safety, equal rights, labor relations, accommodations, breaks, notices, employment policies, paid or unpaid time off work, accessibility, privacy, and workers compensation,
except for such noncompliance that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
4.23 Name and Address; Properties. During five (5) years preceding the Closing Date, no Loan Party has been known
by and has used any other name, whether corporate, fictitious or otherwise, except as set forth on Schedule 4.23. Schedule 4.23 also lists (a) each Loan Partys jurisdiction of organization and legal name and (b) each
Loan Partys organizational identification number. Each Loan Partys chief executive office or sole place of business, in each case as of the ClosingSecond Amendment
Date and the Second Amendment Effective Date, is at the chief executive office or sole place of business address identified as such in Schedule 4.23 and no Loan Party maintains any other offices or facilities except as described therein.
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4.24 Sanctions. Each Loan Party and each Subsidiary of each Loan
Party is in compliance in all material respects with all Sanctions laws as administered by OFAC and the U.S. State Department. No Loan Party and no Subsidiary of a Loan Party (i) is a Person on the list of the Specially Designated Nationals and
Blocked Persons (the SDN List), (ii) is a Person who is otherwise the target of Sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person, (iii) is a Sanctioned Entity,
(iv) is owned or controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a Sanctioned Entity such that the
entry into, or performance under, this Agreement or any other Loan Document would be prohibited by U.S. law, (v) has its assets located in Sanctioned Entities., or
(vi) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any Loan will be used to fund any operations in, finance any investments or activities in, or make any payments to, a
Sanctioned Person or a Sanctioned Entity.
4.25 Anti-Money Laundering. Each Loan Party and each Subsidiary of each Loan Party is in compliance with all Anti-Money Laundering Laws. No action, suit or proceeding by or before any court or Governmental Authority with respect to compliance with such Anti-Money Laundering Laws is pending or threatened to the knowledge of each Loan Party and each Subsidiary of each Loan Party.
4.26 Anti-Corruption. Each Loan Party and each
Subsidiary of each Loan Party is in compliance in all material respects with all applicable Anti-Corruption Laws, including the FCPA. None of any Loan Party or any Subsidiary of a Loan Party, nor to the knowledge of any Loan Party or any Subsidiary
thereof, any director, officer, agent, employee or other Person acting on behalf of the Loan Party or any Subsidiary of a Loan Party, has taken any action, directly or indirectly, that would result in a violation of applicable Anti-Corruption Laws.
No part of the proceeds of the Loans will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the FCPA. The Loan
PartiesandParties and each Subsidiary of a Loan Party maintains and implements policies and procedures designed to ensure compliance by the Loan Parties, their Subsidiaries
and their respective directors, officers, employees and agents with Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.
4.27 Anti-Terrorism. To the extent applicable, each Loan Party and each of its Affiliates is in compliance, in all material respects, with all Anti-Terrorism Laws.
4.28 Sarbanes-Oxley. Each Borrower and its Subsidiaries are in all material respects in compliance with applicable provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder (collectively, Sarbanes-Oxley).
4.29 Accounting Practices. No Borrower, any their respective Subsidiaries nor, to the Borrowers or such Subsidiaries knowledge, any director, officer or employee, of any of the Borrowers or any of their respective Subsidiaries, has received or otherwise obtained any
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material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of such Borrower or any of its Subsidiaries or its internal accounting controls, including any complaint, allegation, assertion or claim that such Borrower or any of its Subsidiaries has engaged in questionable accounting or auditing practices. No attorney representing any Borrower or any of its Subsidiaries, whether or not employed by such Borrower or any of its Subsidiaries, has reported evidence of a material violation of securities laws or breach of fiduciary duty or similar violation by such Borrower or any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Borrowers or any of its Subsidiaries board of directors (or equivalent governing body) or any committee thereof or to any director (or equivalent person) or officer of such Borrower or any of its Subsidiaries pursuant to Section 307 of Sarbanes-Oxley, and the SECs rules and regulations promulgated thereunder. There have been no internal or SEC investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, the principal financial officer or the principal accounting officer (in each case, or officer holding such equivalent position) of any Borrower or any of their respective Subsidiaries, any Borrowers or any of their respective Subsidiaries board of directors (or equivalent governing body) or any committee thereof.
4.30 Common Stock. The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act, and neither Endologix nor any of its Subsidiaries has taken, or will take, any action designed to terminate, or which to the knowledge of Endologix and its Subsidiaries is likely to have the effect of
terminating, the registration of the Common Stock under the Exchange Act, nor has Endologix or any of its Subsidiaries received any notification that the SEC is contemplating terminating such registration. Neither Endologix nor any of its
Subsidiaries is in violation of any of the rules, regulations or requirements of the Principal Market (other than Endologixs
violation of the Principal Markets minimum bid price requirement, which has been cured on or around March 20, 2019), and, to the knowledge of Endologix and its Subsidiaries,
there are no facts or circumstances (other than Endologixs violation of the Principal Markets minimum bid price
requirement, which has been cured on or around March 20, 2019) that could reasonably lead to suspension or termination of trading of the Common Stock on the Principal Market. For not less than the five (5) years preceding the
ClosingSecond Amendment Date and the Second Amendment Effective Date, (i) the Common Stock has been listed or designated for quotation, as applicable, on the Principal
Market, (ii) trading in the Common Stock has not been suspended or deregistered by the SEC or the Principal Market, and (iii) neither Endologix nor any of its Subsidiaries has received any communication, written or oral, from the SEC or
the Principal Market regarding the suspension or termination of trading of the Common Stock on the Principal Market (other than Endologixs violation of the Principal Markets minimum
bid price requirement, which has been cured on or around March 20, 2019).
4.31 DTC. The Common Stock is eligible for clearing through The Depository Trust Company (DTC), through its Deposit/Withdrawal At Custodian (DWAC) system, and Endologix is eligible for and participating in the Direct Registration System (DRS) of DTC with respect to the Common Stock. The transfer agent for the Common Stock is a participant in, and the Common Stock is eligible for transfer pursuant to, DTCs Fast Automated Securities Transfer Program. The Common Stock is not, and has not at any time been, subject to any DTC chill,
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freeze or similar restriction with respect to any DTC services, including the clearing of transactions in shares of Common Stock through DTC.
4.32 Fees. The Borrowers and the other Loan Parties are solely and jointly and severally responsible for the payment of any fees, costs, expenses and commissions of any placement agent, broker or financial adviser relating to or arising out of the transactions contemplated by the Loan Documents. The Borrowers and the other Loan Parties will pay, and hold each of the Secured Parties harmless against, any liability, loss or expense (including attorneys fees, costs and expenses) arising in connection with any claim for any such payment, other than those arising from the gross negligence or willful misconduct of Agent or any Lender as determined by a final, non-appealable judgment of a court of competent jurisdiction.
4.33 Products; Regulatory Required Permits.
(a) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Loan
Party and its Subsidiaries has made all notifications, submissions, and reports required by the FDA, any other Governmental Authority or any Healthcare Law, and all such notifications, submissions and reports were true, complete, and correct in all
respects as of the date of submission to FDA, any other Governmental Authority or to such other Person required by any Healthcare Law. There has not been any violation of any Healthcare Laws by any Loan Party or its Subsidiaries in its product
development efforts, submissions, record keeping and reports to the FDA or any other Governmental Authority that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. To the knowledge of each Loan
Party and each of its SubsidiariesExcept as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, there are no civil or criminal
proceedings relating to any Loan Party or any of its Subsidiaries or any officer, director or employee of any Loan Party or Subsidiary of any Loan Party that involve a matter within or related to the FDAs or any other Governmental
Authoritys jurisdiction or any off-label promotion or allegations of non-compliance with Healthcare Laws. Other than as expressly set forth on Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Loan Party nor any Affiliate thereof has received any
Section 4.33(a), as of the Agreement
Datematerial adverse notice (written or oral) from the FDA or any other Governmental Authority that has not been finally and fully resolved in accordance and compliance with Applicable Law and all FDA and other Governmental Authority
standards, regulations and requirements regarding any Product or regarding (i) any actions or inactions of any Loan Party or any of its Subsidiaries or any officer, director or employee of any Loan Party or Subsidiaries of any Loan Party,
including with respect to any off-label promotion or (ii) alleging non-compliance with Healthcare Laws. At all times after the Closing Date when this representation is made or deemed made, except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, no Loan Party nor any Affiliate thereof has received (A) any notice (written or oral) from the FDA or any other Governmental Authority regarding (y) any Product or
(z) any actions or inactions of any Loan Party or any of its Subsidiaries or any officer, director or employee of any Loan Party or Subsidiaries of any Loan Party, and (B) any material adverse notice (written or oral) from the FDA or any
Governmental Authority (i) any actions or inactions of any Loan Party or any of its Subsidiaries or any officer,
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service has been conducted, in accordance with all applicable Authorizations and Applicable Laws; and (d) has been and/or shall be manufactured in accordance with Good Manufacturing Practices.
4.38 FDA.
(a) To the knowledge of the Loan Parties Authorized Officers, neither any of the Loan Parties nor any of the Loan Parties officers, directors, employees, equityholders, agents or Affiliates has ever (i) made an untrue statement of material fact, fraudulent statement to the FDA or any other Governmental Authority or in any documents or records prepared or maintained to comply with the FDCA; (ii) failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority; (iii) been investigated by the FDA, National Institutes of Health, Office of the Inspector General for the Department of Health and Human Services, Department of Justice, or other comparable Governmental Authority for data or healthcare program fraud; or (iv) committed an act, made a statement, or failed to make a statement that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities, set forth in 56 Fed. Regulation 46191 (September 10, 1991).
(b) No Loan Party has received from the FDA a Warning Letter, Form FDA-483, Untitled Letter, other correspondence or notice setting forth allegedly objectionable observations or alleged violations of laws or regulations enforced by the FDA, or any comparable correspondence from any state or local authority responsible for regulating drug or device products and establishments, or any comparable correspondence from any foreign counterpart of the FDA, or any comparable correspondence from any foreign counterpart of any state or local authority with regard to any Product or the manufacture, processing, packing, or holding thereof, in each case, which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(c) As of the Closing Date, noneNone of the Loan
Parties has engaged in any material Recalls, Market Withdrawals or other forms of product retrieval from the marketplace of any Products that has not been finally and fully completed prior to the Closing Date in accordance and compliance with
Applicable Law and all FDA and other Governmental Authority standards, regulations and requirements. After the Closing Date on each date that this representation and warranty is made or deemed made, none of the Loan Parties has engaged in
any Recalls, Market Withdrawals or other forms of product retrieval from the marketplace of any Products that has not been finally and fully completed prior to the date such representation and warranty is made of deemed made in accordance and
compliance with Applicable Law and all FDA and other Governmental Authority standards, regulations and requirements, except to the extent any such engagement or action could not reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. None of the Products (for the avoidance of doubt, including those in the immediately preceding two sentences that have been so finally and fully completed) have been subject to a Recall, Market Withdrawal, or
other Correction or Removal, nor is any such action currently under consideration by Endologix or, to the knowledge of Endologix, any manufacturer or supplier of a Product, that could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. Endologix has not been restrained in its ability
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to manufacture, process, distribute, supply, import, export, market, or sell any of the Products, except to the extent that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
4.39 Margin Stock. None of the proceeds from the Loans have been or will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other purpose which might cause any of the Loans to be considered a purpose credit within the meaning of Regulation T, U or X of the Federal Reserve Board. No Loan Party nor any of their Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.
4.40 Complete Disclosure. None of the written information (financial or otherwise) (other than projections, other forward-looking information and industry information) furnished by or on behalf of any Borrower to Agent (including any Third Party Agent), any Lender or any other member of the Lender Group in connection with the consummation of the transactions contemplated by the Loan Documents contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not materially misleading in light of the circumstances under which such statements were made.
4.41 Investments.
The Loan Parties do not own any stock, partnership interests, limited liability company interest or other equity securities or Subsidiaries except for Permitted Investments. As of the
ClosingSecond Amendment Effective Date, set forth on Schedule P-1 (as such Schedule may be updated from time to time to reflect changes resulting from transactions
permitted under this Agreement) is a complete and accurate description of the authorized Stock of the Subsidiaries of the Loan Parties, by class, and, as of the Closing Date, a description of the number of shares of each such class
that are issued and outstanding.
4.42 Schedules. All information set forth in the Schedules to this Agreement is
true, accurate and complete in all material respects as of the ClosingSecond Amendment Date and the Second Amendment Effective Date and any other subsequent date in which
the Loan Parties are requested (or required pursuant to the terms of this Agreement or the other Loan Documents) to update such Schedules. All information set forth in the Perfection
Certificate is true, accurate and complete in all material respects as of the Closing Date and any other subsequent date in which the Loan Parties are requested (or required pursuant to the
terms of this Agreement or the other Loan Documents) to update such certificate.
4.43 Eligible Accounts. As to each Account that is identified by the Borrowers as Eligible Account in a Borrowing Base Certificate submitted to Agent (or to any Third Party Agent, as applicable), such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of a Loan Partys business, (b) owed to a Loan Party without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Accounts.
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4.44 Eligible Inventory. As to each item of Inventory that is identified by the Borrowers as Eligible Inventory in a Borrowing Base Certificate submitted to Agent (or any Third Party Agent), such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Inventory.
4.45 Location of Inventory and Equipment. The Inventory and Equipment of the Borrowers is located only at, or in-transit
between, the locations identified on Schedule 4.45 (as such Schedule may be updated pursuant to Section 5.18). With respect to any Inventory and Equipment listed at locations that are outside the United States (and with respect to
any Inventory and Equipment on consignment at any location (other than, with respect to clause (ii), in which case such clause shall not apply to all consignment locations but only those outside the United States)), (i) any failure of the Agent
and the other Secured Parties to (A) be fully protected on the Inventory or be fully protected or perfected with respect to any Liens granted to the Agent (for the benefit of the Secured Parties) on any such Inventory, or (B) have absolute
or full access to such locations when exercising rights and remedies after the occurrence and during the continuance of an Event of Default, in each case of clause (i)(A) and clause (i)(B), does not, individually or in the aggregate, cause a
Material Adverse Effect to occur, and (ii) as of the AgreementSecond Amendment Date and the Second Amendment Effective Date, the cost paid by the Borrowers and its
Subsidiaries for such Inventory and Equipment listed at such locations outside the United States, or on consignment at any location outside the United States, does not exceed $10,000,000.
4.46 Inventory and Equipment Records. Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and their Subsidiaries Inventory and Equipment and the book value thereof.
4.47 No Violation of Usury Laws. The rate of interest paid on any of the Obligations, and the method and manner of the calculation thereof, do not violate any usury laws or other Applicable Laws, any of the Organizational Documents, or any of the Loan Documents.
4.48 Eligible Equipment. As to each item of Equipment that is identified by the Borrowers as Eligible Equipment in a Borrowing Base Certificate submitted to Agent (or any Third Party Agent), such Equipment is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Equipment.
ARTICLE V.
AFFIRMATIVE COVENANTS.
Borrowers covenant and agree that, until termination of all of the Commitments and payment in full in cash of the Obligations:
5.01 Existence; Permits.
(a) The Loan Parties shall and shall cause their Subsidiaries to (i) preserve and maintain in full force and effect its organizational existence and good standing under the
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responsibility on Agents part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. The Loan Parties shall give Agent prompt written notice of any loss exceeding $500,000 covered by any of the Loan Parties or any of their Subsidiaries casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. A true and complete listing of such insurance, including issuers, coverages and deductibles, shall be provided by the Loan Parties to Agent promptly following Agents request (or to the Third Party Agent promptly following the Third Party Agents request during any Third Party Agent Retention Period).
5.04 Taxes. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay, discharge and perform as the same shall become due and payable or required to be performed (i) all material Tax liabilities, assessments and governmental charges or levies upon it or its property, unless the same are being contested in good faith by appropriate proceedings diligently prosecuted which stay the enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person and (ii) all Tax liabilities, assessments and governmental chares or levies upon it or its property that would create, or otherwise cause to exist, a Lien with respect thereto that is not a Permitted Lien under clause (d) of the definition of Permitted Liens.
5.05 Reports, Notices.
(a) Endologix and its Subsidiaries shall (i) timely (without giving effect to any extensions pursuant to Rule 12b-25 of the Exchange Act) file all reports required to be filed with the SEC pursuant to the Exchange Act, and Endologix and its Subsidiaries shall not terminate the registration of the Common Stock under the Exchange Act or otherwise terminate its status as an issuer required to file reports under the Exchange Act, even if the securities laws would otherwise permit any such termination, and (ii) deliver to Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) a Compliance Certificate with each of its 10-Q and 10-K filings on the date such filings are made (or, if earlier, are required by the SEC to be made) with the SEC; provided that, with respect to clause (ii) only, solely to the extent any earnings or revenue report for the same period is publicly reported or is filed with the SEC prior to the time when any 10-Q or 10-K containing the applicable quarterly or annual financial statements is filed with the SEC and to the extent the earnings or revenue set forth in any such earnings or revenue report would result in a financial covenant default under Article VII, the Compliance Certificate shall instead be delivered by the Loan Parties to the Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) and the Lenders on the same day as such earnings or revenue report is publicly reported or is filed with the SEC. Each of such reports in clause (i) of the immediately preceding sentence will comply in all material respects with the applicable requirements of the Exchange Act and each of such reports and such Compliance Certificate will not 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
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the light of the circumstances under which they were made, not misleading. The consolidated
financial statements included in such reports will comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, will be prepared in accordance with GAAP,
consistently applied (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments and lack of footnote disclosures), and will fairly present in all material respects the consolidated financial position of
Endologix and its Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in stockholders equity for the periods presented (subject, in the case of unaudited quarterly financial statements, to
normal year-end audit adjustments and lack of footnote disclosures). Each Borrower hereby agrees that the Borrower Representative shall send to each Secured Party copies of (A) any notices and other information made available or given to the
holders of the Stock of Endologix generally, contemporaneously with Endologix making available or giving such notices and other information to such holders of Stock (it being understood and agreed that delivery shall be deemed to have occurred if
such notices or other information is posted to EDGAR) and (B) all other documents, reports, financial data and other information not available on EDGAR that does not contain any material nonpublic information of
theany Borrower, that any Secured Party may reasonably request.
(b) Each of the Borrowers and their Subsidiaries will deliver to (x) during any Non-Third Party Agent Retention Period, subject to Section 5.20, Agent, and (y) during any Third Party Agent Retention Period, the Third Party Agent, each of the reports, certificates or other items set forth below at the following times in form satisfactory to Agent (or such Third Party Agent):
(i) (A) within five (5) Business Days after the filing of its 10-K or 10-Q, as the case may be, an updated Perfection Certificate (provided that Endologix shall include in the 10-K or 10-Q, as the case may be, any material nonpublic information included in the Perfection Certificate delivered during any Non-Third Party Agent Retention Period (or delivered to Agent (other than the Third Party Agent) or any Lender at any time) that would not otherwise be included in such 10-Q or 10-K); and (B) upon the reasonable request of any Secured Party, the such additional business, financial, corporate affairs, perfection certificates, items or documents related to creation, perfection or priority of Agents Liens in the Collateral and other information as any Secured Party may from time to time reasonably request;
(ii) promptly, but in any event within two (2) Business Days after the knowledge of the occurrence of (A) written
notice of any Default or Event of Default and (B) so long as such type of notification would not be material nonpublic information of theany Borrower (except during a
Third Party Agent Retention Period, in which case, such material nonpublic information shall be provided but only to the Third Party Agent), written notice of any claims (other than in connection with the denial of plan claims in the ordinary course
of business), litigation, arbitration, mediation or administrative or regulatory proceedings that are instituted or threatened against any Loan Party, or claims of infringement by any Person with respect to any Intellectual Property rights of a Loan
Party, in each case of this clause (B), to the extent such claim, litigation, arbitration, mediation or administrative or regulatory proceeding could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and
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(iii) during any Third Party Agent Retention Period, as soon as available, but in any event within thirty (30) days after the end of each fiscal month during each fiscal year, an unaudited consolidated and consolidating balance sheet and income statement of Endologix and its Subsidiaries operations during such month and for the portion of the fiscal year then ended, including comparisons to the figures in the corresponding month and year-to-date portion of the immediately preceding fiscal year of Endologix and its Subsidiaries.
(c) Further, if Endologix is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, the Loan
Parties will provide to Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) and each Lender (A) quarterly financial statements for Endologix and its Subsidiaries within 45 days after the end of each fiscal
quarter of Endologix, and an audited annual financial statements within 120 days after the end of each fiscal year of Endologix prepared in accordance with GAAP with a report thereon by Endologixs independent certified public accountants,
which accountants shall be reasonably acceptable to Agent, and (B) on the same day as delivery to Term Agent, any Term Lender or any other secured party under the Term Debt Documents, any additional financial statements, certificates, reports,
notices, agreements, instruments and documents provided under (or in connection with) the Term Debt Documents. Any such annual audited financial statements, audit or report of Endologixs independent certified public accountants (and any annual
audited financial statements, audit or report of Endologixs independent certified public accountants on any consolidated financial statements included in any SEC Document) shall (i) contain an unqualified opinion (subject to the exception
set forth below in clause (ii) of this sentence), stating that such consolidated financial statements present fairly in all material respects the financial position and condition and results of operations of the
BorrowerEndologix and its Subsidiaries as of the dates and for the periods and have been prepared in conformity with GAAP applied on a basis consistent with prior years, and
(ii) not include any explanatory paragraph expressing substantial doubt as to going concern status (other than any such paragraph arising from the impending maturity of the Loans solely in the case of the audit delivered with respect to the
fiscal year immediately prior to the fiscal year during which the applicable maturity is scheduled). No financial statements delivered pursuant to this Section 5.05(c) or included in
any SEC Document shall include any statement in the footnotes thereto that indicates there is substantial doubt about Endologixs ability to continue as a going concern within one year
after the date that such financial statements are issued, filed or delivered.
(d) Endologix and its Subsidiaries shall, prior to making any prepayment pursuant to Section 6.18(a), deliver to Agent, subject to Section 5.20 (or, during any Third Party Agent Retention Period, the Third Party Agent), a budget and projections of cash flows for the one-year period following such prepayment reflecting such prepayment and showing sources and uses for all required repayments of Indebtedness coming due during such one-year period.
5.06 Inspection. The Loan Parties will, and will cause each of their Subsidiaries to, permit Agent (including any Third Party Agent), any Lender, and each of their respective duly authorized representatives or agents to, with respect to each owned, leased or controlled property, at all times and without notice, at the sole option of Agent or any Lender: (i) provide access to such property to Agent (including any Third Party Agent), the Lenders and their respective representatives and agents, as frequently as Agent or any Lender determines to be appropriate;
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case of this clause (a), unless Agent and Term Agent consent otherwise in writing (including by electronic mail), (b) the deposit account to which the funds, amounts and other items from the Stifel Account are swept is subject to a Control Agreement at all times, (c) subject to clause (e) below, no more than $5,000,000 of cash, Cash Equivalents, other assets and/or other items are in the Stifel Account at any time, (d) neither the wire instructions nor any other term or provision in the Stifel Sweep Agreement is amended, restated, supplemented, modified, waived or otherwise changed (or any departure therefrom consented to) without the prior written consent of Agent and Term Agent (and Endologix shall immediately modify the Stifel Sweep Agreement, including the wire instructions therein, in such manner as Agent and Term Agent may request while an Event of Default exists), (e) (x) upon and during the continuance of an Event of Default, (1) the Stifel Account is not used (including no cash, Cash Equivalents, other assets or other items being held in such Stifel Account other than those being swept pursuant to clause (a) above on the Business Day immediately after the first day such Event of Default occurs), (2) Endologix shall take no action with Stifel with respect to the Stifel Account or otherwise (other than having Stifel sweep the Stifel Account pursuant to clause (a) above) and (3) no cash or other items shall be kept or maintained in the Stifel Account or otherwise held by Stifel, and (y) after the occurrence of an Event of Default, Endologix immediately closes the Stifel Account upon request by Agent, and (f) (x) Endologix provides quarterly certifications of compliance with the conditions and requirements in this Section 5.08(viii)(a)-(e), and (y) by 5pm ET on the Tuesday of the week following delivery of each such quarterly certification in clause (f) (x) directly above, Endologix (or Stifel on behalf of Endologix) shall provide a detailed description of activity for the prior week (including daily account balances and other item inventory) to Katten Muchin Rosenman LLP (at the address provided in Article XI) on behalf of Agent; (such accounts in clauses (i) through (viii), the Excluded Accounts) as of and after the Closing Date; provided that (x) the Loan Parties shall have until the date that is forty-five (45) days following the closing date of any Permitted Acquisition (or such later date as may be agreed to by Agent in its sole reasonable discretion) to comply with the provisions of this Section 5.08) with regard to such accounts (other than Excluded Accounts) of the Borrowers acquired in connection with such Permitted Acquisition, and (y) for deposit accounts, securities accounts and commodities accounts opened after the Closing Date, the Loan Parties shall have until the date that is thirty (30) days following the opening of any such new account (or such later date as may be agreed to by Agent in its sole reasonable discretion) to comply with this Section 5.08. Upon written request by the Agent, the Loan Parties shall provide the Agent with written evidence reasonably satisfactory to the Agent as of such Business Day or the next Business Day showing compliance with Section 7.01(b)..
5.09 Further Assurances. Promptly upon request by Agent (or, during any Third Party Agent Retention Period, the Third Party Agent), the Borrowers shall (and, subject to the limitations set forth herein and in the other Loan Documents, shall cause each of their Subsidiaries to) take such additional actions and execute such documents as Agent (or, during any Third Party Agent Retention Period, the Third Party Agent) may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Loan Document, (ii) to subject to the Liens created by any of the Loan Documents on any of the assets or properties, rights or interests covered by any of the Loan Documents, (iii) to perfect and maintain the validity, effectiveness and priority of any of the Loan Documents and the Liens intended to be created thereby, and (iv) to better assure, grant, preserve, protect and confirm to the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured
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Parties under any Loan Document. The Loan Parties will notify Agent in writing prior to (and on) (x) the
date of formation or acquisition of any Subsidiary and (y) any division or split of any Loan Party into two or more Subsidiaries, limited liability companies, other entities or other Persons. Without limiting the generality of the foregoing,
the Loan Parties shall cause (y) each of their Subsidiaries (other than Excluded Subsidiaries) promptly after (but, in any event, (A) within fifteen (15) days thereof for any Subsidiary that is not an Immaterial Subsidiary and
(B) within thirty (30) days thereof for any Immaterial Subsidiary) after the date of the formation or acquisition thereof (and any Subsidiaries, limited liability companies, other entities or other Persons for which any Loan Party divides
or splits itself into), to guaranty the Obligations and to cause each such Subsidiary to grant to Agent, for the benefit of the Secured Parties, a security interest in, subject to the limitations set forth herein and in the Loan Documents, all of
such Subsidiarys (and, with respect to any such division or split of a Loan Party, all such Subsidiarys limited liability companys, other entitys or other Persons) assets and property (including any assets or property
allocated, distributed, conveyed or otherwise transferred pursuant to any division or split of any Loan Party into any Subsidiaries, limited liability companies, other entities or other Persons for which any Loan Party divides or splits itself into)
assets and property to secure such guaranty and (z) any holder (that is a Loan Party) of the Stock of such Subsidiary to provide, promptly after (but, in any event, (A) within fifteen (15) days thereof for any Loan Party or any
Subsidiary that is not an Immaterial Subsidiary and (B) within thirty (30) days thereof for any Immaterial Subsidiary) the date (x) of the formation or acquisition of such Subsidiary or (y) any division or split of any Loan Party
into two or more Subsidiaries, limited liability companies, other entities or other Persons, in each case, supplements and further pledges to the Loan Documents as are necessary (or requested by Agent) to evidence Agents Lien in such Stock of
such Subsidiary. Furthermore, the BorrowerBorrowers shall notify Agent and the Lenders in writing promptly after (but, in any event, (A) within fifteen (15) days
thereof for any Loan Party or any Subsidiary that is not an Immaterial Subsidiary and (B) within thirty (30) days thereof for any Immaterial Subsidiary) the date of the issuance by or to any Loan Party (other than by Endologix) of any
Stock of any corporation or any other Person that has opted into Article 8 of the UCC (in each case, other than Excluded Property) to have its Stock constitute securities under Article 8 of the UCC and each Loan Party shall
pledge, and shall cause each of its Subsidiaries (other than Excluded Subsidiaries but including any Subsidiaries, limited liability companies, other entities or other Persons for which any such Loan Party divides or splits itself into) to pledge,
all of the Stock of each of its Subsidiaries (other than Excluded Subsidiaries), and sixty-five percent (65%) of the outstanding voting Stock and one hundred percent (100%) of the outstanding non-voting Stock of each Excluded Foreign
Subsidiary and each Excluded Domestic Holdco, directly owned by a Loan Party, in each instance, to Agent, for the benefit of the Secured Parties, to secure the Obligations, promptly after formation or acquisition (or division or split) of such
Subsidiary. The Loan Parties shall deliver, or cause to be delivered, to Agent, appropriate resolutions, secretary certificates, certified Organizational Documents and, if reasonably requested by Agent, legal opinions relating to the matters
described in this Section 5.09 (which opinions shall be in form and substance reasonably acceptable to Agent and, to the extent applicable, substantially similar to the opinions delivered on the Closing Date), in each instance with
respect to (1) each Loan Party or Subsidiary formed or acquired (and each Subsidiary, limited liability company, other entity or other Person for which a Loan Party divides or splits itself into), (2) and each Loan Party or Person (other
than a Loan Party) whose Stock is being pledged, and (3) the assets and property that are allocated distributed, conveyed or
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otherwise transferred pursuant to any division or split of any Loan Party into any Subsidiaries, limited liability companies, other entities or other Persons for which any Loan Party divides or splits itself into, in each case of clauses (1) through (3), after the Closing Date. In connection with each pledge of Stock, the Loan Parties shall deliver, or cause to be delivered, to Agent, irrevocable proxies and Stock powers and/or assignments, as applicable, duly executed in blank.
5.10 Environmental. The Loan Parties will, and will cause each of their Subsidiaries to, comply with, and maintain its Real Property, whether owned, leased, subleased or otherwise operated or occupied, in compliance with all applicable Environmental Laws and Healthcare Laws or that is required by orders and directives of any Governmental Authority, except where the failure to comply could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
5.11 ERISA. Promptly upon becoming aware that any of the following events has occurred, the Borrowers will provide written notice to the Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) specifying the nature of such event, what action the Loan Party or any ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, if applicable, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto: (i) any ERISA Event which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (ii) a prohibited transaction as defined under Section 406 of ERISA or Section 4975 of the IRC that is not exempt under ERISA Section 408 or Section 4975 of the IRC, under any applicable regulations and published interpretations thereunder or under any applicable prohibited transaction, individual or class exemption issued by the Department of Labor, with respect to any Employee Benefit Plan, which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, or (iii) the imposition of any Lien on any asset of a Loan Party or a Subsidiary of a Loan Party with respect to any Title IV Plan or Multiemployer Plan.
5.12 FDA; Healthcare Laws. Each Loan Party will,
and will cause each of its Subsidiaries willto, comply with (a) in all respects with all Healthcare
Laws and their implementation by any applicable Governmental Authority, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and (b) (i) in all respects with all lawful requests
of any Governmental Authority applicable to its Products, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, and (ii) in all material respect with requests of any Governmental
Authority applicable to its Products that is required by Applicable Law (or court order or proceeding) to be complied with. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, all Products
developed, manufactured, tested, distributed, promoted or marketed by or on behalf of any Loan Party or any of its Subsidiaries that are subject to the jurisdiction of the FDA or comparable Governmental Authority shall be (A) developed, tested,
manufactured, distributed, promoted and marketed in compliance with the Healthcare Laws and each other Applicable Law, including Healthcare Laws and other Applicable Laws governing or relating to product approval or premarket notification, good
manufacturing practices, promoting, labeling, advertising, record-keeping, and adverse event reporting, and (B)
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for the Borrowing Base, if such Borrower has not implemented electronic reporting, and (C) a summary aging, by vendor, of such Borrowers accounts payable and any book overdraft (delivered electronically in an acceptable format, if each Loan Party has implemented electronic reporting) and an aging, by vendor, of any held checks;
(iii) during any Third Party Agent Retention Period, to the Third Party Agent, monthly (no later than the fifteenth (15th) Business Day of each month), and with each request for a Borrowing, an Account roll-forward from the previous Borrowing Base Certificate delivered or most recent request for a Borrowing, in a format acceptable to Agent and such Third Party Agent in their discretion, with supporting details supplied from sales journals, collection journals, credit registers and any other records, tied to the beginning and ending account receivable balances of each Loan Partys general ledger;
(iv) during any Third Party Agent Retention Period, to the Third Party Agent, monthly (no later than the fifteenth (15th) Business Day of each month), (A) a detailed report regarding each Borrowers and its Subsidiaries cash and Cash Equivalents, (B) a perpetual Inventory report and Equipment report, and a calculation of the net book value (calculated in accordance with GAAP on a basis consistent with such Borrowers historical accounting practices) of Eligible Inventory and Eligible Equipment at the end of such period and (C) a determination of the Market Capitalization of Endologix as of the last day of the previous month;
(v) during any Third Party Agent Retention Period, to the Third Party Agent, monthly (no later than the thirtieth (30th) day of each month), a reconciliation of Accounts and trade accounts payable of each Loan Partys general ledger accounts to its monthly financial statements including any book reserves related to each category;
(vi) during any Third Party Agent Retention Period, to the Third Party Agent, (A) on the last day of each fiscal quarter, (I) a report regarding each Borrowers and its Subsidiaries accrued but unpaid, ad valorem taxes and (II) unless required to be provided under Section 5.05(b)(i) for the same fiscal quarter, a Perfection Certificate or a supplement to the Perfection Certificate, and (B) no later than the fifteenth (15th) Business Day after the end of each fiscal quarter, an updated report of the reserves established on the Borrowers books regarding excess and obsolete Inventory and excess and obsolete Equipment;
(vii) during any Third Party Agent Retention Period, to the Third Party Agent, on the last day of each fiscal year, a detailed list of each Borrowers customers, with address and contact information;
(viii) during any Third Party Agent Retention Period, to the extent a Borrower conducts any physical inventory audits or physical equipment audits during the course of any fiscal year, it shall provide the Third Party Agent with a certified report of such audit within ten (10) Business Days after the completion thereof;
(ix) (A) promptly, and in any event within two (2) Business Days after the knowledge that Borrowers do not maintain Global
Excess Liquidity in an amount of at least $22,500,000,17,500,000, notice thereof and (B) promptly within one (1) Business Day after written request by the Agent
(or, during any Third Party Agent Retention Period, the Third Party
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Agent), to Agent (or such Third Party Agent, as applicable) written evidence reasonably satisfactory to the Agent (or such Third Party Agent, as applicable) demonstrating compliance with Section 7.01(b); and
(x) promptly, upon request by Agent, subject to (other than with respect to the Third Party Agent during any Third Party Agent Retention Period) Section 5.20, (A) an insurance claim report, (B) a detailed report describing accrued expenses or (C) such other reports as to the Collateral or the financial condition of each Borrower and its Subsidiaries, as Agent may reasonably request.
(b) Notwithstanding clause (a) above, to the extent (i) Borrowers
do not have at least $22,500,00017,500,000 of Global Excess Liquidity, or (ii) any Event of Default then exists, the items, certificates and information set forth in
clause (a)(i), (a)(ii), (a)(iii) and (a)(iv) shall be delivered to the Agent (or Third Party Agent, as applicable) on a weekly basis (on the second (2nd) Business Day of such week).
5.17 Lender Meetings. Borrowers will, within ninety (90) days after the close of each fiscal year of Borrowers, at the request of Agent (or, during any Third Party Agent Retention Period, the Third Party Agent) or of the Required Lenders and upon reasonable prior notice, hold a meeting (at a mutually agreeable location and time or, at the option of Agent, by conference call) with Agent (or, during any Third Party Agent Retention Period, the Third Party Agent) and any Lenders who choose to attend such meeting at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of Borrowers and their Subsidiaries and the projections presented for the current fiscal year of Borrowers.
5.18 Location of Collateral. The Loan Parties will keep its Inventory and Equipment (other than Inventory or Equipment that is in-transit, Trunk Inventory or subject to consignment) only at the locations identified on Schedule 4.45 and their chief executive offices only at the locations identified on Schedule 4.23; provided, that Borrowers may amend Schedule 4.45 or Schedule 4.23 so long as such amendment occurs by written notice to Agent not less than ten (10) days prior to the date on which such Inventory and Equipment is moved to such new location listed on the amended Schedule 4.45 or such chief executive office is relocated to such address listed on the amended Schedule 4.23 and so long as such new location or such chief executive office is within the continental United States.
5.19 Updated Borrowing Base Certificate. Within three (3) Business Days of the written request of Required Lenders, Borrower Representative shall deliver an updated executed Borrowing Base Certificate reflecting changes in the Eligible Accounts availability since the last Borrowing Base Certificate.
5.20 Announcing Form 8-K. At or prior to 7:30 a.m. (New York City time) on the first (1st) Business Day following the Closing Date, Endologix shall file a Form 8-K with the SEC describing the terms of the transactions contemplated by the Loan Documents and the Term Debt Documents and including as exhibits to such Form 8-K this Agreement (including the schedules, annexes and exhibits hereto), the other Loan Documents listed on Schedule 5.20 (other than the Perfection Certificated executed and delivered on the Closing Date to the Agent), the Term Credit Agreement and the other agreements and instruments required to be filed
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by any Borrower or its Subsidiaries or Affiliates, or any of its or their respective officers, directors (or equivalent persons), employees, attorneys, representatives or agents, and no member of the Lender Group shall have any liability to any Borrower, any of its Subsidiaries or Affiliates or any of its or their respective officers, directors (or equivalent persons), employees, equityholders, attorneys, representatives or agents for any such disclosure.
5.21 Eligible Equipment. Each Borrower will use commercially reasonable efforts to at all times keep its furniture, fixtures and Equipment in good repair and physical condition. In addition to the foregoing, from time to time, Agent (including, during any Third Party Agent Retention Period, the Third Party Agent) may require Borrowers to obtain and (a) subject to Section 5.20, deliver to Agent, or (b) during any Third Party Agent Retention Period, deliver to the Third Party Agent, in each case of clause (a) and clause (b), appraisal reports in form and substance and from appraisers reasonably satisfactory to Agent (or, as applicable, the Third Party Agent) stating the then current fair market values of all or any portion of furniture, fixtures and equipment owned by each Borrower or any of its Subsidiaries.
5.22 Maximum Revolver Related Notices. Each Borrower will provide written notice to Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) immediately upon the occurrence of: (a) any Maximum Revolver Decreased Market Capitalization Notice Trigger Event (including reasonable details related thereto) and (b) any Maximum Revolver Decreased Market Capitalization Overadvance Event (including reasonable details related thereto and reasonable details and calculations of the Maximum Revolver Decreased Market Capitalization Overadvance Amount).
5.23 Collateral Access Agreements. Each Borrower will enter into (and will cause each landlord, warehouseman and bailee (as applicable), and all other applicable Persons, to enter into) a Collateral Access Agreement in favor of Agent (for the benefit of the Lender Group) and in form and substance reasonably satisfactory to Agent and the Lenders, in respect of each location where Collateral, assets or property (other than Inventory or Equipment that is in-transit, Trunk Inventory or subject to consignment) of any Borrower is held, stored or maintained at such location, in each case, at or prior to the time any such Collateral, assets or property is held, stored or maintained at such location; provided that, solely with respect to the location of the Flexential Colorado Corp.s data center at 3330 E. Lone Mountain Road, North Las Vegas, NV 89081 (the Flexential Data Center Location), no Collateral Access Agreement shall be required unless and until any such Collateral, property or assets of any Borrower is held, stored or maintained at the Flexential Data Center Location other than computer servers with a maximum aggregate book value of $125,000 (which book value shall be determined by Endologix in accordance with GAAP and with using reasonable and justifiable calculations and estimations thereof).
ARTICLE VI.
NEGATIVE COVENANTS.
Borrowers covenant and agree that, until termination of all of the Commitments and payment in full in cash of the Obligations:
6.01 Restrictions on Fundamental Changes. The Loan Parties will not, and will not permit any of their Subsidiaries to, directly or indirectly, (I) merge with, consolidate with or into,
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dissolve or liquidate into or convey, transfer, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except (a) a Subsidiary that is not a Loan Party may merge into any Loan Party or any
Subsidiary of a Loan Party (provided that, (w) to the extent such Subsidiary that is not a Loan Party has its equity pledged to Agent, then any Person it merges with must also have its equity pledged to Agent by at least the same percentage and
(x) if such merger is with a Loan Party, such Loan Party must be the surviving entity of any such merger), (b) a Loan Party may merge into any other Loan Party (provided that, (y) to the extent such Loan Party being merged has its
equity pledged to Agent, then any Person it merges with must also have its equity pledged to Agent by at least the same percentage and (z) to the extent theany
Borrower is part of such transaction, thea Borrower must be the surviving Person), (c) any Subsidiary of Endologix may liquidate or dissolve if (i) the Borrowers
determine in good faith that such liquidation or dissolution is in the best interests of the Borrowers and it is not materially disadvantageous to the Secured Parties and (ii) to the extent such Subsidiary is a Loan Party, any such assets or
business held by such subject Subsidiary shall be transferred to, or otherwise owned or conducted by, a Loan Party after giving effect to such liquidation or dissolution, and (d) in connection with Permitted Acquisitions, or (II) divide (or
otherwise split) itself or themselves into two or more limited liability companies or other entities or Persons. None of the Loan Parties shall establish or form any Subsidiary, unless such Subsidiary complies with Section 5.09, if
applicable, and such Subsidiary (if not an Excluded Subsidiary) executes and/or delivers all other documents, agreements and instruments reasonably requested by Agent or the Required Lenders to perfect a Lien in favor of Agent (for the benefit of
the Secured Parties and Lender Group) on such Subsidiarys (if not an Excluded Subsidiary) assets and to make such Subsidiary (if not an Excluded Subsidiary) a Loan Party under the Loan Documents.
6.02 Joint Ventures; Restricted Payments. The Loan Parties will not, and will not permit any of its Subsidiaries to,
(a) enter into any joint venture or any similar arrangement, other than as may be permitted under Permitted Investments, or (b) make any Restricted Payments, other than (i) dividends by any direct or indirect Subsidiary of any Loan
Party (A) that are not Loan Parties to such Loan Partys parent or parent entities or (B) that are Loan Parties, to such Loan Partys parent or parent entities that are Loan Parties; (ii) dividends payable solely in common
Stock; (iii) repurchases of Stock of former employees, directors or consultants so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided, however, that
such repurchase does not exceed $2,500,000 in the aggregate per fiscal year; (iv) any Restricted Payments made under Subordinated Debt Documents to the extent permitted under the terms of the applicable Subordination Agreement; (v) any
Restricted Payments made to the Secured Parties (as defined in the Term Credit Agreement) pursuant to the terms of the Term Debt Documents, the Warrants (as defined in the Term Credit Agreement) and the Registration
Rights Agreement (as defined in the Term Credit Agreement); and (vi) interest payments expressly permitted under both clause (r) of the definition of Permitted Indebtedness and the Japan Lifeline
Subordination Agreement so long as (A) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (B) no breach, violation or default has occurred under any
of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (C) no Default or Event of Default has occurred and is continuing.
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6.03 Liens. The Loan Parties will not, and will not permit any of their Subsidiaries to directly or indirectly make, create, incur, assume or suffer to exist any Lien upon or with respect to any of its assets or property, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except Permitted Liens.
6.04 Disposal of Assets. Other than Permitted Dispositions or transactions expressly permitted by Section 6.01, Borrowers will not, and will not permit any of their Subsidiaries to directly or indirectly Dispose of (whether in one or a series of transactions) any assets or property (including the Stock of any Subsidiary of any Loan Party, whether in a public or private offering or otherwise, and accounts and notes receivable, with or without recourse).
6.05 Indebtedness; Contingent Obligations. The Loan Parties will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, permit to exist or be liable with respect to any Indebtedness, other than Permitted Indebtedness. The Loan Parties will not, and will not permit any of their Subsidiaries to, directly or indirectly, create, assume, incur or suffer to exist any Contingent Obligations, except for Permitted Contingent Obligations.
6.06 Investments. The Loan Parties will not, and will not permit any of its Subsidiaries to, directly or indirectly,
(a) purchase or acquire any Stock, or any obligations or other securities of, or any interest in, any Person, including the establishment or creation of a Subsidiary, (b) make or commit to make any Acquisitions, or any other acquisition of
any of the assets of another Person other than (i) Permitted Investments or (ii) in the Ordinary Course of Business, or of any business or division of any Person, including by way of merger, consolidation, other combination or otherwise
other than Permitted Investments, (c) make, purchase or acquire any advance, loan, extension of credit (other than trade payables in the ordinary course of business) or capital contribution to or any other investment in, any Person including
theany Borrower, any Affiliate of theany Borrower or any Subsidiary of
theany Borrower or (d) enter into any joint venture or any similar arrangement (the items described in clauses (a), (b), (c) and (d) are referred to as
Investments), except for Permitted Investments.
6.07 Transactions with Affiliates. Except as otherwise disclosed on Schedule 6.07, and except for transactions that contain terms that are no less favorable to the applicable Loan Party or any Subsidiary of a Loan Party, as the case may be, than those which might be obtained from a third party not an Affiliate of any Loan Party, no Loan Party will, or permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any Loan Party that is not itself a Loan Party; provided that, Loan Parties may enter into and maintain written agreements between any Loan Party and any Foreign Subsidiary of a Loan Party for management services for compensation in the Ordinary Course of Business consistent with past practices that are customary and reasonably appropriate to do for companies in the same industry as the Loan Parties provided by management and officers of the Loan Parties to such Foreign Subsidiaries that do not have certain management or officers, and such transactions may result in non-interest bearing accounts payables for the unpaid compensation owed by such Foreign Subsidiaries to the Loan Parties for such management services in an amount not to exceed $40,000,000 (which payables may be equitized by the Loan Parties,
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provided that (y) equitization of such payables shall not reduce the outstanding amount
of payables that count towards the $40,000,000 cap above for purposes of determining whether the Loan Parties have complied with this provisions (with such equitized amounts deemed to be outstanding at all times thereafter for purposes of the
$40,000,000 capped amount) and (z) at the time of any such equitization, any such Stock received by any Loan Party in connection with such equitization shall be pledged, and a first priority security interest and Lien thereon shall be granted,
to the Agent (for the benefit of the Lender Group) and such Loan Party shall take such perfection and priority actions reasonably requested by the Agent in accordance with the Loan Documents), in each case of the foregoing in this proviso, so long
as (a) any such management or officers of the Loan Parties involved in such transactions, agreements and arrangements will have sufficient and reasonable time, energy and resources to still represent and service such Loan Parties themselves
after taking into such transactions, agreements and arrangements, (a) any such agreement, instrument, arrangement or document evidencing any of the foregoing transactions, equitization or actions shall be entered into (i) in good faith by
such Loan Party, (A) in a manner to not contravene or impair the Collateral and benefits that are intended to be provided and afforded to the Lender Group under the Loan Documents, and (B) without (I) the intention of such Loan Party
of causing (or resulting in) the Collateral to be taken from the Secured Parties and provided to Foreign Subsidiaries that are not Loan Parties at the detriment of the Secured Parties and for the benefit of such Foreign Subsidiaries, and (II) the
effect of defrauding the Secured Parties, (C) the upstream economics received (or potentially to be received) by any applicable Loan Party in connection with any such transaction, agreement or arrangement described above in this proviso, when
combined with the potential downstream economics, time, energy and recourses exhausted or disposed of in connection therewith shall be reasonably adequate and sufficient to enable the Loan Parties to timely satisfy all of the Obligations and all of
their other obligations and agreements under the Loan Documents, (D) all cash, Cash Equivalents, other assets and proceeds received or provided to the Loan Parties in connection with the foregoing shall all be part of the (and constitute)
Collateral and the Agent (for the benefit of the Lender Group) shall have a first priority security interest and Lien thereon, (E) at the reasonable request of the Agent, all such account payables will be evidenced by a promissory note issued
to the applicable Loan Party by the applicable Foreign Subsidiary and pledged to the Agent and the original thereof delivered, along with an executed allonge to the Agent in form and substance satisfactory to the Agent, (F) no Default or Event
of Default has occurred and is continuing or would result therefrom, and (G) no such agreement, arrangement, transaction or action could reasonablereasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect.
6.08 ERISA. No ERISA Affiliate shall cause or suffer to exist (a) any event that could result in the imposition of a Lien on any asset of a Loan Party or a Subsidiary of a Borrower with respect to any Title IV Plan or Multiemployer Plan, or (b) any other ERISA Event, which other ERISA Event could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
6.09 Nature of Business. The Loan Parties will not, and will not permit any of their Subsidiaries to engage in any line of business different from those lines of business carried on by it on the Closing Date and businesses reasonably related thereto.
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6.10 Amendments to Organizational Documents and Material Contracts.
Except as permitted under Section 6.01, no Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly amend or otherwise modify any of its Organizational Documents or, after the execution thereof,
any agreements or documents evidencing or contemplating any Permitted Acquisition in any respect materially adverse to any Secured Party. No Loan Party shall, or shall permit any Subsidiary to, directly or indirectly, amend, restate, supplement,
change, waive or otherwise modify any Material Contract, which amendment, restatement, supplement, change, waiver or modification in any case: (a) is contrary to (or is in violation or breach of) the terms and provisions of this Agreement or
any other Loan Document (including the Intercreditor Agreement and the Japan Lifeline Subordination Agreement); or (b) could reasonably be expected to be materially adverse to the rights, interests or privileges of Agent or the Lenders or their
ability to enforce the same (it being understood that any modification that changesamendments, restatements, supplements, changes, waivers or other modifications that
(i) move the stated maturity date of the 3.25% Convertible Notes to an earlier date shall, (ii) are part of any refinancing or extension of any 3.25% Convertible
Note Documents (or any Indebtedness evidenced thereby or related thereto) that is not a Permitted 3.25% Convertible Note Refinancing or (iii) changes the conversion rate or conversion period or otherwise adds or changes any required or
mandatory conversions or cash settlements, in each case of clauses (i)(iii), shall be deemed to be materially adverse to the Agent and the Lenders); provided, however, that the foregoing shall not restrict (x) any changes expressly
required under the terms of the 2.25% Convertible Notes as of the Closing Date, the 3.25% Convertible Notes as of the Closing Date or any indenture governing any Permitted 3.25% Convertible Note Refinancing
completely and fully meeting all of the requirements set forth in the definition of Permitted 3.25% Convertible Note
Refinancing, or (y) any modifications of the Term Credit Agreement expressly permitted by the Intercreditor Agreement and, in each case of clauses (x) and
(y), not otherwise materially adverse to Agent or the Lenders.
6.11 Changes to Fiscal Year; GAAP. No Loan Party shall, and no Loan Party shall suffer or permit any of its Subsidiaries to, (a) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (b) change the fiscal year or method for determining the fiscal quarters of any Loan Party or of any Subsidiary of any Loan Party, (c) change its name as it appears in official filings in its jurisdiction of organization or formation, or (d) change its jurisdiction of organization or formation, in the case of clauses (c) and (d), without, subject to Section 5.20, at least ten (10) days prior written notice to Agent (or such shorter period as may be agreed by Agent in its sole reasonable discretion).
6.12 PrepaymentsPayments and
Amendments. The Loan Parties shall not, and shall not permit any of their Affiliates to (Ai) declare, pay, make or set aside any amount for prepayment, payment,
redemption or repayment in respect of (1A) Subordinated Debt, except for payments made in full compliance with and permitted under the Subordination Agreement, or
(2B) any Permitted Japan Lifeline Unsecured Debt, except with respect to any interest payments expressly permitted under both clause (r) of the definition of
Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (I1) the Japan Lifeline Subordination Agreement is in full force and effect and
binding and enforceable against all parties thereto at all times, (II2) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured
Debt Documents or the Japan Lifeline Subordination Agreement and (III3) no Default
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or Event of Default has occurred and is continuing,
(Bii) amend, restate, supplement, change, waive or otherwise modify (or consent to any departure from) the terms of
(1A) any Subordinated Debt Documents, except for amendments and modifications expressly permitted by the Subordination Agreement, or
(2B) any Permitted Japan Lifeline Unsecured Debt Documents, except as both (I1) expressly
permitted by the Japan Lifeline Subordination Agreement and (II2) previously consented to in writing by the Agent and all of the Lenders; or
(Ciii) declare, prepay, pay, redeem, repay, make or set aside any amount for prepayment, payment, redemption or repayment in respect of any Indebtedness hereinafter
incurred that, by its terms, or by separate agreement, is subordinated to the Obligations, except (1A) for payments made in full compliance with and permitted under
the subordination provisions applicable thereto or (2B) solely with respect to the Permitted Japan Lifeline Unsecured Debt, any interest payments expressly permitted
under both clause (r) of the definition of Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (I1) the Japan Lifeline
Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (II2) no breach, violation or default has occurred
under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (III3) no Default or Event of Default has occurred and
is continuing.
6.13 Restrictions on Distributions. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the ability of any Loan Party or Subsidiary to pay dividends or make any other distribution on any of such Loan Partys or Subsidiarys Stock or to pay fees, including management fees, or make other payments and distributions to any Loan Party or any other Loan Party, except for those in the Loan Documents and the Term Debt Documents. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly (a) enter into, assume or become subject to any contractual obligation prohibiting or otherwise restricting the existence of any Lien upon any of its assets in favor of Agent, whether now owned or hereafter acquired or (b) create or otherwise suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Subsidiary to (i) pay any Indebtedness owed to any Borrower or any of its Subsidiaries, (ii) make loans or advances to any Borrower or any of their Subsidiaries or (iii) transfer any of its property or assets to any Borrower or any of their Subsidiaries, except (A) those in the Loan Documents and the Term Debt Documents, (B) an encumbrance or restriction consisting of customary non-assignment provisions in leases or licenses entered into in the Ordinary Course of Business, (C) customary provisions in joint venture agreement and other similar agreements that restrict the transfer of ownership interests in such joint ventures or provisions limiting the disposition or distribution of assets or property (other than dividends on a pro rata basis based on ownership percentage) of the applicable joint venture, which limitation is applicable only to the assets that are the subject of such agreements; provided that such agreement was not entered into in contravention of the terms of this Agreement, and (D) limitations set forth in Subordinated Debt (if acceptable to the Agent in its sole discretion).
6.14 Sanctions; Anti-Corruption. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to fail to comply with the Anti-Money Laundering Laws and Anti-Terrorism Laws. No Loan Party or Subsidiary of a Loan Party, nor to the knowledge of any Loan Party or any of its Subsidiaries, any director, officer, agent, employee or other Person acting
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Loan Party as a borrower, guarantor or obligor, or have such Person pledge or grant a Lien on any of its property or assets, under the Term Debt Documents, unless, in each case, the same Person becomes a Loan Party in the same capacity (and/or pledges and grants Liens on the same property or assets (and with the same Lien priority and which such Liens shall be subject to the terms of the Intercreditor Agreement) under the Loan Documents and such Person executes and delivers such agreements, instruments and documents reasonably requested by Agent to effectuate any of the foregoing in this clause (c) and such Subsidiary or Affiliate shall be subject to the terms of the Intercreditor Agreement.
6.19 Payment of Convertible Notes and Permitted Japan Lifeline Unsecured Debt. No Loan Party will, or will permit any
Subsidiary to, declare, pay, make or otherwise provide any payment, prepayment, repayment, redemption, conversion, cash settlement or
distribution in respect of (I) theany 3.25% Convertible Notes or theNote, any other 3.25%
Convertible Note Document, any 2.25% Convertible NotesNote or any other Convertible Note Document, except for: (a) regularly scheduled payments of interest and
principal as set forth in the applicable Convertible Note Documents in effect as of the Second Amendment Effective Date (in addition to allowing any cash principal payments at maturity of
the applicable 3.25% Convertible Notes and the 2.25% Convertible Notes, such amounts may also be paid in the applicable Stock of the Borrower(other than Disqualified Stock) of
Endologix or through any other conversion feature that does not effectively cause more payments, prepayments, repayments, redemptions, conversions, cash settlements and/or distributions
to be made at or prior to the maturity thereof than the cash principal payments currently provided for in the applicable Convertible Note Documents as of the
ClosingSecond Amendment Effective Date), (b) in connection with any Permitted 3.25% Convertible Note Refinancing, (c) the issuance of shares of
common stock of the BorrowerEndologix in connection with any non-cash conversion of the 3.25% Convertible Notes,
the 2.25% Convertible Notes or any convertible notes that are not Disqualified Stock issued in a Permitted 3.25% Convertible Note Refinancing, and any cash payments solely in lieu of
fractional shares (but no other cash settlementpayments, prepayments, repayments, redemptions, conversions, cash settlements or distributions other than as
otherwise expressly permitted by this Section 6.19), (d) payments and conversions (other than for any Disqualified Stock) made in connection with the repurchase (whether
for cash, upon exchange and/or for other consideration), redemption and retirement in respect of the 2.25% Convertible Notes or 3.25% Convertible Notes in a single or series of related transactions; provided that (i) no
Default or Event of Default exists at the time such payments are made or would exist immediately after giving effect thereto and (ii) such cash payments are made
solely (A) with proceeds received by Endologix from the issuance of its common Stock after the Closingstock (for the avoidance of doubt, other than any common stock or
other Stock issued under or in connection with the Equity Financing Documents) after the Second Amendment Effective Date for the purpose of making such payment, prepayment, repayment,
redemption, conversion, cash settlement or distribution and (B) regarding the 3.25% Convertible Notes, with the proceeds of Indebtedness raised in a Permitted 3.25% Convertible Note Refinancing, and (e) if the foregoing conditions do
not otherwise permit such payment, prepayment, repayment, redemption, conversion, cash settlement or distribution, then, with the express prior written consent of the Agent (which may be
withheld in its sole discretion), payments, prepayments, repayments, redemptions, conversions, cash settlements or distributions in connection with the retirement, redemption and repurchase
of the 2.25% Convertible Notes or the 3.25% Convertible Notes or (II) any of the Permitted Japan
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Lifeline Unsecured Debt, except with respect to any interest payments expressly permitted under both clause (r) of the definition of Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (a) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (b) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (c) no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto.
6.20 Commingling of Assets. (a) No Loan Party will, or permit any Subsidiary to commingle any of its assets (including any bank accounts, cash or Cash Equivalents) with the assets of any Person; and (b) no Loan Party will, or permit any Subsidiary to enter into or own any interest in a joint venture that is not itself a corporation or limited liability company or other legal entity in respect of which the equity holders are not liable for the obligations of such entity as a matter of law.
6.21 Limitation on Issuance of Stock. Endologix shall not issue any Stock (a) senior to its shares of Common Stock or (b) convertible into or exercisable or exchangeable for Stock senior to its Common Stock.
6.22 Use of Proceeds. The Loan Parties will not, and will not permit any of their Subsidiaries to use the proceeds of any Loan or other extension of credit made hereunder for any purpose other than as described in Section 4.19.
6.23 Anti-Layering. No Loan Party shall, or permit any Subsidiary to, create, incur or suffer to exist any Indebtedness which is subordinated or junior (either in respect of Lien priority or in right of payment or any combination thereof) to any of the Term Debt unless such Indebtedness is expressly subordinated or junior to the Obligations (both in terms of Lien Priority and in right of payment) on terms and conditions acceptable to Agent and the Lenders (it being understood and agreed that this Section 6.23 shall in no way limit the incurrence of unsecured Indebtedness otherwise permitted under this Agreement that is not payment subordinated to the Term Debt when not also payment subordinated to the same extent to the Obligations).
6.24 Convertible Notes Restrictions. No Loan Party shall, or shall permit any Subsidiary to, amend, restate, supplement, change, waive or otherwise modify the terms of any Indebtedness referred to in Section 6.19 above (other than with respect to 3.25% Convertible Notes, in connection with a Permitted 3.25% Convertible Note Refinancing) if the effect of such amendment, restatement, supplement, change, waiver or modification is to (a) increase the interest rate or fees on, or change the manner or timing of payment of, such Indebtedness if in any way adverse to the Agent or the Lenders, (b) accelerate or shorten the dates upon which payments of principal or interest are due on, or the principal amount of, such Indebtedness, (c) change in a manner adverse to any Loan Party, any of its Subsidiaries, Agent or any Lender any event of default or add or make more restrictive any covenant with respect to such Indebtedness, (d) change the prepayment provisions of such Indebtedness or any of the defined terms related thereto in a manner adverse to Agent or the Lenders, or (e) change or amend any other term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in a manner adverse to any Loan
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Party, any of its Subsidiaries, Agent or the Lenders; provided, however, that (y) the
foregoing shall not restrict any changes expressly required under the terms of the 3.25% Convertible Notes as in effect as of the Prior AgreementSecond Amendment Effective
Date, the 2.25% Convertible Notes as in effect as of the Closing Date or any changes that are permitted to be made hereunder in connection with a Permitted 3.25% Convertible Note Refinancing or any changes expressly required under any indenture
governing any Permitted 3.25% Convertible Note Refinancing that satisfies the conditions and requirements set forth in the definition of Permitted 3.25% Convertible Note Refinancing and (z) the exchange of the Exchanged
Deerfield Convertible Notes (as defined in the Term Credit Agreement) for the Last Out Waterfall Loans (as defined in the Term Credit Agreement) under the Term Credit Agreement on the Closing Date shall not be restricted by this
Section 6.24. The Loan Parties will, prior to entering into any such amendment, restatement, supplement, change, waiver or modification (including, for the avoidance of doubt, those that
are permitted by this Section 6.24), deliver to Agent (and, during any Third Party Agent Retention Period, also the Third Party Agent) reasonably in advance of the execution thereof, any final or execution form copy thereof.
ARTICLE VII.
FINANCIAL COVENANTS.
7.01 Financial Covenants. Each of the Borrowers covenant and agree that, until termination of all of the Commitments and payment in full in cash of the Obligations, the Loan Parties will not permit:
(a) Fixed Charge Coverage Ratio. Commencing as of the Trigger Date, the Fixed Charge Coverage Ratio for any Measurement Period, tested quarterly beginning with the fiscal quarter ending September 30, 2018, to be less than 1.00:1.00.
(b) Minimum Global Excess Liquidity. On the (i) the last Business Day of each month and (ii) each date that a
Borrowing Base Certificate is required to be delivered in accordance with Section 5.16, Global Excess Liquidity to be less than $22,500,000.17,500,000.
(c) TTM Minimum Net Revenue. Their consolidated Net Revenue for any Measurement Period, tested quarterly beginning with the fiscal quarter ending September 30, 2018, to be less than the amounts set forth below:
Measurement Period Ending |
Minimum Net Revenue for Measurement Period |
|||
September 30, 2018 |
$ | 155,000,000 | ||
December 31, 2018 |
$ | 145,000,000 | ||
March 31, 2019 and the last day of each fiscal quarter ending thereafter through (and including) December 31, 2019 March 31, 2020 and the |
$ |
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last day of each fiscal quarter ending thereafter |
$ |
(d) Quarterly Minimum Net Revenue. Their consolidated Net Revenue for any fiscal quarter
of Endologix, tested quarterly beginning with the fiscal quarter ending March 31, 2019 and on the last day of each fiscal quarter ending thereafter, to be less than
$30,000,000.27,000,000.
(e) Maximum Consolidated Capital Expenditures. The aggregate amount of consolidated Capital Expenditures made by the Loan Parties and their Subsidiaries to exceed the amounts set forth below:
Fiscal Year |
Amount | |||
2018 |
$ | 2,500,000 | ||
2019 |
$ | 3,000,000 | ||
2020 |
$ | 5,000,000 | ||
2021 |
$ | 2,000,000 |
(f) Maximum Consolidated Operating Expenditures. The aggregate amount of Operating Expenditures made by the Loan Parties and their Subsidiaries for any Measurement Period, tested for the fiscal quarters of Endologix ending December 31 2018 and December 31, 2019, to exceed the amounts set forth below:
Fiscal Year |
Amount | |||
December 31, 2018 |
$ | 160,000,000 | ||
December 31, 2019 |
$ | 140,000,000 |
ARTICLE VIII.
EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of default (each, an Event of Default) under this Agreement:
8.01 Payments. Any Borrower or any other Loan Party shall have failed (i) to pay when and as required to be paid herein or in any other Loan Document, any amount of principal of any Loan, including after maturity of the Loans, or (ii) to pay within three (3) Business Days after the same shall become due, all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including Liquidated Damages or any remaining Commitment Fee, as applicable, and any portion of the Obligations that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding).
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8.02 Covenants. If any Loan Party or any of their Subsidiaries shall
have failed to comply with or observe (a)(i) Section 3.04, 5.01(a)(i), 5.01(b), 5.02, 5.03, 5.04, 5.05, 5.06, 5.08, 5.09, 5.10, 5.13, 5.14, 5.15,
5.16, 5.17, 5.19, 5.20, 5.21 or5.21, 5.22 or 5.23 of this Agreement, Article
VI of this Agreement, Article VII of this Agreement, (ii) SectionsSection 5.2(a), 5.2(c), 5.2(d), 5.3, 5.4, 5.5, 5.7, 5.9
andor 5.10 of the Guaranty and Security Agreement or, (iii) any provision of any Note
or (iv) Section 3, 6, 7, 8, 15 or 18 of the Second Amendment, (b) Section 5.1 of the Guaranty and Security Agreement and such failure, with respect to this
Section 8.02(b) only, shall not have been cured within ten (10) days after the earlier to occur of (y) the date upon which any officer of any Loan Party or any of its Subsidiaries becomes aware of such failure and (z) the date upon
which written notice thereof is given to any Loan Party or any of its Subsidiaries by any Secured Party or (c) any covenant contained in any Loan Document (other than the covenants described in Section 8.01,
Section 8.02(a) or Section 8.02(b) above), and such failure, with respect to this Section 8.02(c) only, shall not have been cured within thirty (30) days after the earlier to occur of (y) the date upon
which any officer of any Loan Party or any of its Subsidiaries becomes aware of such failure and (z) the date upon which written notice thereof is given to any Loan Party or any of its Subsidiaries by any Secured Party.
8.03 Representations, etc. Any representation, warranty, or certification, made by any Loan Party in any Loan Document or delivered in writing to Agent (including any Third Party Agent), any Lender or any other member of the Lender Group in connection with this Agreement or any other Loan Document shall have been incorrect, false or misleading in any material respect (except to the extent that such representation or warranty is qualified by reference to materiality or Material Adverse Effect, to which extent it shall have been incorrect, false or misleading in any respect) as of the date it was made; it being acknowledged and agreed that any projections provided to the Secured Parties are not to be viewed as facts, are not a guarantee of financial performance, and are subject to uncertainties and contingencies.
8.04 Insolvency; Bankruptcy. (a) Any Loan Party or any of its Subsidiaries (other than Immaterial Subsidiaries) shall generally be unable to pay its debts as such debts become due, or shall admit in writing its inability to pay its debts as they come due or shall make a general assignment for the benefit of creditors; (b) any Loan Party or any of its Subsidiaries (other than Immaterial Subsidiaries) shall declare a moratorium on the payment of its debts; (c) the commencement by any Loan Party or any of its Subsidiaries (other than Immaterial Subsidiaries) of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the commencement of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization, intervention or other similar relief under any Applicable Law, or the consent by it to the filing of any such petition or to the appointment of an intervenor, receiver, liquidator, assignee, trustee, sequestrator or other similar official of all or substantially all of its assets; (d) the commencement against any Loan Party or any of its Subsidiaries (other than Immaterial Subsidiaries) of a proceeding in any court of competent jurisdiction under any bankruptcy or other Applicable Law (as now or hereafter in effect) seeking its liquidation, winding up, dissolution, reorganization, arrangement or adjustment, or the appointment of an intervenor, receiver, liquidator, assignee, trustee, sequestrator or other similar official, and any of the following events occur: (i) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (ii) the petition commencing the Insolvency Proceeding is not timely controverted, (iii) the petition commencing any such
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resulted (or could reasonably be expected, individually or in the aggregate, to result) in a Material Adverse Effect.
8.12 Change in Law. The introduction of, or any change in, any law or regulation governing or affecting the healthcare industry, including any Healthcare Laws, that has or could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
8.13 Material Contract Default. Any Loan Party defaults under or breaches any Material Contract (after any applicable grace period contained therein), or a Material Contract shall be terminated by a third party or parties party thereto prior to the expiration thereof (other than in accordance with its terms), the 3.25% Convertible Notes, any other 3.25% Convertible Note Document, any Permitted 3.25% Convertible Note Refinancing, the 2.25% Convertible Notes, any Term Debt Document or any Permitted Japan Lifeline Unsecured Debt Documents or there is a loss of a material right of a Loan Party under any Material Contract to which it is a party, in each case which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
8.14 Other Default or Breach. The occurrence of any breach or default under any terms or provisions of any Convertible Note Document, any Term Debt Document, any Permitted Japan Lifeline Unsecured Debt Documents or any Subordinated Debt Document or the occurrence of any event requiring the prepayment or mandatory redemption of any 3.25% Convertible Note or any other 3.25% Convertible Note Document (or any Permitted 3.25% Convertible Note Refinancing thereof or any indenture or related document governing any Permitted 3.25% Convertible Note Refinancing), any 2.25% Convertible Note, any Term Debt Document, any Permitted Japan Lifeline Unsecured Debt Documents or of any Subordinated Debt; provided, however, that, notwithstanding the foregoing, any event or condition that occurs that permits holders of convertible Indebtedness permitted hereunder to convert such Indebtedness into Stock (other than Disqualified Stock) or such other consideration permitted pursuant to Section 6.19 pursuant to the terms of the applicable agreement shall not constitute a Default or Event of Default hereunder on such basis alone.
8.15 Criminal Proceedings. The institution by any Governmental Authority of criminal proceedings against any Loan Party.
8.16 Payment of Subordinated Debt. Any Loan Party makes any prepayment, payment, redemption or repayment on account of any Subordinated Debt or any other Indebtedness that has been subordinated to any of the Obligations, other than (i) payments specifically permitted by the terms of such subordination or the applicable Subordination Agreement and (ii) solely with respect to the Permitted Japan Lifeline Unsecured Debt, any interest payments expressly permitted under both clause (r) of the definition of Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (A) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (B) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (C) no Default or Event of Default has occurred and is continuing.
131
8.17 Any Intercreditor Agreement Provisions Invalid. Any provisions of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, other than in accordance with the terms thereof, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder.
8.18 Guaranty. If the obligation of any Guarantor under the guaranty contained in the Guaranty and Security Agreement is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement).
8.19 Subordination Provisions. (a) Any subordination provisions in respect of the documents evidencing or governing any Subordinated Debt (the Subordination Provisions) shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable Subordinated Debt; or (b) any Borrower or any other Loan Party shall, directly or indirectly, disavow or contest in any manner (i) the effectiveness, validity or enforceability of any of the Subordination Provisions, (ii) that the Subordination Provisions exist for the benefit of the Lender Group or (iii) that all payments of principal of or premium and interest on the applicable Subordinated Indebtedness, or realized from the liquidation of any property of any Loan Party, shall be subject to any of the Subordination Provisions.
8.20 Change in Control. A Change in Control shall occur.
8.21 Not Publicly Traded. The Common Stock shall cease to be registered under the Exchange Act or to be listed on the Principal Market.
8.22 Term Debt Defaults. Any Loan Party or any Subsidiary (a) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of the Term Debt, or (b) fails to observe or perform any other agreement or condition relating to the Term Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Term Debt or the beneficiary or beneficiaries of any Guarantee related thereto (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, such Term Debt to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Term Debt to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded.
8.23 Invalidity of any Subordination Agreement. Any terms or provisions of the Japan Lifeline Subordination Agreement or any other Subordination Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, other than in accordance with the terms thereof, or any Person shall breach, violate or default any of the terms thereof or contest in any manner the validity or enforceability thereof or deny that such Person has any further liability or obligation thereunder.
8.24 3.25% Convertible Note Document Defaults. Any event, circumstance or other action shall occur that causes any holder of, or party to, any 3.25% Convertible Note, any other
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3.25% Convertible Note Document, any indenture, note, agreement, instrument or document with respect to (or evidencing) any Permitted 3.25% Convertible Note Refinancing or any indenture, note, agreement, instrument or document under (or evidencing) any Permitted 3.25% Convertible Note Refinancing, any other Convertible Note Document or any related agreement, instrument or document to cause the payment, prepayment, repayment, redemption, conversion or cash settlement thereof, or provides such holder or party with the right (whether exercised or not) to cause such payment, prepayment, repayment, redemption, conversion or cash settlement thereof; provided, however, that, notwithstanding the foregoing, any event, circumstance or other action that permits holders of, or party to, any 3.25% Convertible Note, any other 3.25% Convertible Note Document, or any indenture, note, agreement, instrument or document with respect to (or evidencing) any Permitted 3.25% Convertible Note Refinancing to convert such Indebtedness into Stock (other than Disqualified Stock) or such other consideration expressly permitted by the terms and provisions of Section 5.2(xx) pursuant to the terms of the applicable agreement, instrument or document shall not constitute a Default or Event of Default solely under this Section 5.4(z) on such basis alone.
ARTICLE IX.
RIGHTS AND REMEDIES.
9.01 Rights and Remedies. Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall (in each case under clauses (a) or (b) by written notice to Borrower Representative), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:
(a) declare the principal of, and any and all accrued and unpaid interest and fees (including Liquidated Damages, as applicable) in respect of, the Loans and all other Obligations, whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in full in cash, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by Borrowers;
(b) declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with any obligation of any Revolving Lender to make Revolving Loans; and
(c) exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents, under applicable law, or in equity.
Notwithstanding anything to the contrary in this Agreement, and the other Loan Documents, each Borrower hereby irrevocably and unconditionally constitutes and appoints Agent and any of Agents Affiliates, attorneys, representatives or agents, with full power of substitution, as such Borrowers true and lawful attorney-in-fact with full irrevocable and unconditional power and authority in the place and stead of such Borrower and in the name of such Borrower or in its own name, for the purpose of carrying out the terms of this Agreement, and the other Loan Documents, to take any appropriate steps or actions and to execute and deliver (and perform
133
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
BORROWERS: |
ENDOLOGIX, INC., a Delaware corporation | |||||
|
By: |
| ||||
Name: | ||||||
Title: | ||||||
CVD/RMS ACQUISITION CORP., a Delaware corporation | ||||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
NELLIX, INC., a Delaware corporation | ||||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
TRIVASCULAR TECHNOLOGIES, INC., a | ||||||
Delaware corporation | ||||||
By: |
| |||||
Name: | ||||||
Title: | ||||||
TRIVASCULAR, INC., a California corporation | ||||||
By: |
| |||||
Name: | ||||||
Title: |
ABL Credit Agreement
EXHIBIT A-II
Amended and Restated Schedules to Amended Credit Agreement
[Attached]
SCHEDULES
Schedule A-1 |
Agents Account | |
Schedule A-2 |
Authorized Person | |
Schedule C-1 |
Commitments | |
Schedule D-1 |
Designated Account | |
Schedule E-1 |
Approved Account Debtor | |
Schedule P-1 |
Existing Investments | |
Schedule 4.01(d) |
Existing Liens | |
Schedule 4.01(f) |
Existing Indebtedness | |
Schedule 4.03 |
Litigation | |
Schedule 4.06 |
Real Estate | |
Schedule 4.07 |
Intellectual Property | |
Schedule 4.15 |
Borrowers Subsidiaries | |
Schedule 4.17 |
Borrowers Outstanding Shares of Stock, Options and Warrants | |
Schedule 4.18 |
Material Contracts | |
Schedule 4.20 |
Environmental | |
Schedule 4.22 |
Labor Relations | |
Schedule 4.23 |
Jurisdiction of Organization, Legal Name, Organizational Identification Number and Chief Executive Office | |
Schedule 4.33(a) |
FDA/Governmental Notices | |
Schedule 4.41 |
Stock of the Subsidiaries of the Loan Parties | |
Schedule 4.45 |
Inventory Location | |
Schedule 5.20 |
Other Loan Documents to Be Form 8-K Exhibits | |
Schedule 6.05 |
Contingent Obligations | |
Schedule 6.07 |
Transactions with Affiliates |
Schedule A-1
Agents Account
[TO BE COMPLETED BY AGENT]
Schedule A-2
Authorized Person
Vaseem Mahboob
Cindy Pinto
Tim Brady
James Tejedor
Schedule C-1
Commitments
[TO BE COMPLETED BY AGENT]
Schedule D-1
Designated Account
Wire Payment Instruction:
Beneficiary: Endologix, Inc.
Beneficiary Address: 2 Musick, Irvine, CA 92618, USA
Account Number: 1453531702
Bank Name: Bank of America
Bank Address: 333 South Hope Street, Los Angeles, CA 90071, USA
Domestic ABA/Routing Account Number: 026009593
International Swift Code: BOFAUS3N
Schedule E-1
Approved Account Debtors
Angiocor S.A.
Endo T&D Limited LTD
Japan Lifeline Co., Ltd
Schedule P-1
Existing Investments
Name of Issuer |
Description and Value of Security |
Loan Party/Subsidiary | ||
Cianna Medical, Inc. |
8,677 Shares of Series A Preferred Stock |
Endologix, Inc. |
Schedule 4.01(d)
Existing Liens
None.
Schedule 4.01(f)
Existing Indebtedness
None.
Schedule 4.03
Litigation
Vicky Nguyen v. Endologix, Inc., et al.: (Filed January 3, 2017 in the United States District Court, Central District of California; Case No. 2:17-cv-00017). A putative shareholder class action pending in the U.S. District Court for the Central District of California. Lead plaintiff in Nguyen asserts multiple causes of action for securities fraud based on allegations that Borrower and two of its executives, John McDermott, former Chief Executive Officer of Borrower, and Vaseem Mahboob, Chief Financial Officer of Borrower misled investors by opining optimistically about Borrowers prospects for FDA pre-market approval of the Nellix EVAS System. On March 15, 2019, lead plaintiff filed an appeal of the District Courts September 2018 dismissal with prejudice of lead plaintiffs Second Amended Complaint. Borrower continues to believe that lead plaintiffs complaints are meritless. On December 5, 2017, the District Court granted Borrowers motion to dismiss lead plaintiffs First Amended Complaint, with leave to amend. On January 9, 2018, lead plaintiff filed a Second Amended Complaint. Borrowers motion for dismissal of the Second Amended Complaint with prejudice was granted on September 6, 2018. On October 6. 2018, lead plaintiff filed a notice of appeal of the District Courts decision, and on March 15, 2019, lead plaintiff filed its appeal.
Derivative Lawsuits: As of June 11, 2017, four shareholders have filed derivative lawsuits on behalf of Borrower, the nominal plaintiff, based on allegations substantially similar to those alleged by lead plaintiff in Nguyen. Those actions consist of: Sindlinger v. McDermott et al., Case No. BC662280 (Los Angeles Superior Court); Abraham v. McDermott et al., Case No. 30-2018-00968971-CU- BT-CSC (Orange County Superior Court); and Green v. McDermott et al., Case No. 8:17-cv-01155-AB (PLAx), consolidated with Cocco v. McDermott et al., Case No. 8:17-cv-01183-AB (PLAx) (U.S. District Court for the Central District of California). Plaintiffs in the Sindlinger, Abraham and Green derivative actions have agreed to stay litigation pending resolution of the Nguyen action. A related case, Ahmed v. Endologix, Inc., et al. (Filed January 11, 2017 in the United States District Court, Central District of California; Case No. 8:17-cv-00061) was consolidated into Nguyen v. Endologix, Inc.
Certain Notices: The Loan Parties have received three unrelated notices from individuals claiming that certain of our products read on certain issued patents held by such individuals. The Loan Parties, after consultation with independent patent counsel, strongly disagree with these claims; however, it is possible that should these claims proceed to litigation, that Borrowers aggregate liability arising for monetary judgements or other reliefs arising out of these matters could exceed $2,000,000. Since it is presently not possible to determine the outcome of any future discussions with these individuals in regard to their patents, and whether or not litigation will ensue, or the outcomes associated with potential litigation, no provision has been made in Borrowers financial statements for the ultimate resolution.
Schedule 4.06
Real Estate
Owned Real Property:
Loan Party or Subsidiary |
Complete street and mailing address, including zip code | |
N.A. |
Leased Real Property:
Loan Party or Subsidiary |
Complete street and mailing address, including zip code |
Landlord name and contact information | ||
Endologix, Inc. | 2 Musick, Irvine, County of Orange, California 92618 U.S.A.; 33 and 35 Hammond, Irvine, County of Orange, California 92618 U.S.A. | The Northwestern Mutual Life Insurance Company | ||
Endologix International Holdings B.V. | Burgemeester Burgerslaan 40, 5245 NH Rosmalen, The Netherlands | N.A. | ||
TriVascular Technologies, Inc. | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Sonoma Airport Properties LLC | ||
Endologix Singapore Private Limited | 10 Anson Road #21-04 & #21-04A International Plaza Singapore 079903 | Stamcorp International Pte Ltd. | ||
Endologix International B.V. | Rahmannstraße 11, 65760 Eschborn, Germany | N.A. |
Subleased Real Property:
Loan Party or Subsidiary |
Complete street and mailing address, including zip code |
Landlord and sublandlord name and contact information |
Other Real Property Operated or Occupied:
Loan Party or Subsidiary |
Complete street and mailing address, including zip code |
Nature of use | ||
ELGX South Korea Ltd. | A-311, M-Sate, 114 Beopwon-ro, Songpa-gu, Seoul, South Korea | Office |
Schedule 4.07
Intellectual Property
The items disclosed in Schedule 4.03 with the lead-in Certain Notices.
On May 7, 2018, Borrower received notice from Medtronic, Inc. (Medtronic) that Medtronic believes Borrowers Ovation product appears to use one or more claims of certain Medtronic patents. Borrower has assessed, this claim. Borrower has a robust patent portfolio at its disposal, and after conducting analysis believes that one or more of Medtronics products appears to use one or more claims of Borrowers patents. Borrower has commenced discussions with Medtronic regarding potential cross-licenses of the parties respective patents. Since it is presently not possible to determine the outcome of any future discussions with Medtronic in regard to the respective parties patents, and whether or not litigation will ensue, or the outcomes associated with potential litigation, no provision has been made in Borrowers financial statements for the ultimate resolution.
Schedule 4.15
Borrowers Subsidiaries
Parent |
Percentage |
Name of Subsidiary |
Jurisdiction of Subsidiary |
Date of formation |
Federal employer ID no. of |
Organizational no. of Subsidiary | ||||||
Endologix, Inc. | 100% | Nellix, Inc. | Delaware | 03/20/2001 | 94- 3398416 | 3359980 | ||||||
Endologix, Inc. | 100% | CVD/RMS Acquisition Corp. | Delaware | 12/13/1998 | 33- 0928438 | 2955166 | ||||||
Endologix, Inc. | 100% | RMS/Endologix Sideways Merger Corp. | Delaware | 05/30/2002 | 03- 0512974 | 3530477 | ||||||
Endologix, Inc. | 100% | Endologix Singapore Private Limited | Singapore | 01/13/2015 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | ELGX International Holdings GP | Cayman Islands | 07/05/2011 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | Endologix New Zealand Co. | New Zealand | 05/31/2012 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | ELGX South Korea Ltd. | South Korea | 12/07/2017 | N.A. | N.A. | ||||||
Endologix, Inc. ELGX | 99% | Endologix Bermuda L.P. | Bermuda | 07/24/2012 | N.A. | N.A. | ||||||
International Holdings GP | 1% | |||||||||||
Endologix International Holdings B.V. | 100% | Endologix Poland spolkda z ograniczona odpowiedzialnoscia | Poland | 03/26/2015 | N.A. | N.A. | ||||||
Endologix Bermuda L.P. | 100% | Endologix International Holdings B.V. | The Netherland s | 08/22/2011 | N.A. | N.A. | ||||||
Endologix International Holdings B.V. | 100% | Endologix Italia S.r.l. | Italy | 06/04/2012 | N.A. | N.A. | ||||||
Endologix International holdings B.V. | 100% | Endologix International B.V. | The Netherland s | 08/22/2011 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | TriVascular Technologies, Inc. | Delaware | 07/11/2007 | 87- 0807313 | 4387054 | ||||||
TriVascular Technologies , Inc. | 100% | TriVascular, Inc. | California | 01/05/1998 | 68- 0402620 | C2065374 | ||||||
TriVascular, Inc. | 100% | TriVascular Sales, LLC | Texas | 08/23/2012 | 46- 0859179 | 0801644988 | ||||||
TriVascular, Inc. | 100% | Endologix Canada, LLC | Delaware | 11/25/2014 | N.A. | 5647226 |
Parent |
Percentage |
Name of Subsidiary |
Jurisdiction of Subsidiary |
Date of formation |
Federal employer ID no. of |
Organizational no. of Subsidiary | ||||||
TriVascular, Inc. | 100% | TriVascular Germany GmbH | Germany | 05/14/2012 | N.A. | N.A. | ||||||
TriVascular, Inc. | 100% | TriVascular Switzerland Sarl | Switzerlan d | 04/30/2010 | N.A. | N.A. | ||||||
TriVascular, Inc. | 100% | TriVascular Italia S.R.L. | Italy | 04/08/2010 | N.A. | N.A. |
Schedule 4.17
Borrowers Outstanding Shares of Stock, Options and Warrants
Name of Issuer |
Authorized Securities |
Issued and Outstanding Securities |
Certificated (Yes or No) |
Loan Party/Subsidiary Owner | ||||
Endologix, Inc. | 170,000,000 Shares of Common Stock, $0.001 par value | 10,390,631 Shares of Common Stock Issued and 10,347,913 Outstanding1 |
Yes | N.A. | ||||
5,000,000 Shares of Preferred Stock, $0.001 par value, undesignated | Zero Shares of Preferred Stock | Yes, when issued |
N.A. | |||||
Nellix, Inc. | 1,000 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
CVD/RMS Acquisition Corp. | 100 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
ELGX South Korea, Ltd. | 20,000 Contribution Units, KRW 5,000 par value | 20,000 Contribution Units | No | Endologix, Inc. | ||||
RMS/Endologix Sideways Merger Corp. | 100 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
TriVascular Technologies, Inc. |
1,000 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
ELGX International Holdings GP | Unspecified Number of Partnership Interests |
Unspecified Number of Partnership Interests |
No | Endologix, Inc. | ||||
Endologix Bermuda, L.P. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests |
No | Endologix, Inc. | ||||
Endologix Singapore Private Limited |
Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix, Inc. | ||||
Endologix New Zealand Co. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix, Inc. | ||||
TriVascular, Inc. | 100 Shares of Common stock, $0.01 par value | 100 Shares of Common Stock | No | TriVascular Technologies, Inc. |
1 | As of March 25, 2019. There have been no material changes to such amount as of the Agreement Date. |
Name of Issuer |
Authorized Securities |
Issued and Outstanding Securities |
Certificated (Yes or No) |
Loan Party/ Subsidiary Owner | ||||
Endologix International Holdings B.V. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix Bermuda, L.P. | ||||
Endologix Poland spolkda z ograniczona odpowiedzialnosc ia | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix International Holdings B.V. | ||||
Endologix International B.V. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix International | ||||
Holdings B.V. | ||||||||
Endologix Italia S.r.l | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix International Holdings B.V. | ||||
TriVascular Sales LLC | 1,000 Units of Membership Interests | 1,000 Units of Membership Interests | No | TriVascular, Inc. | ||||
Endologix Canada, LLC | 1,000 Units of Membership Interests | 1,000 Units of Membership Interests | No | TriVascular, Inc. | ||||
TriVascular Italia Sarl | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | TriVascular, Inc. | ||||
TriVascular Germany GmbH | Unspecified number of Company Interests | Unspecified number of Company Interests | No | TriVascular, Inc. | ||||
TriVascular Switzerland Sárl | Unspecified number of Company Interests | Unspecified number of Company Interests | No | TriVascular, Inc. |
Options and Equity Incentive/Compensation Plans:
Equity Awards: Borrowers 2015 Stock Incentive Plan as amended (the 2015 Plan) authorizes the grant of equity awards to purchase up to 1.63 million shares of Common Stock. As of March 25, 2019, approximately 1.22 million shares were reserved for issuance under outstanding stock options, including stock options granted under equity compensation plans preceding the 2015 Plan, and approximately 490,000 shares were subject to unvested restricted stock awards. The outstanding stock options have exercise prices ranging from $5.80 to $175.80 and a weighted average exercise price of $50.81. Any changes to the items discussed in this paragraph as of the Second Amendment Effective Date are de minimis.
Amended and Restated 2006 Employee Stock Purchase Plan (the ESPP): As of March 25, 2019, approximately 40,000 shares of Common Stock were available for issuance under the ESPP. Any changes to such amount as of the Second Amendment Effective Date are de minimis.
2017 Inducement Stock Incentive Plan: The Board has reserved 400,000 shares of Borrowers Common Stock for issuance pursuant to awards granted under the 2017 Inducement Stock Incentive Plan. As of March 25, 2019, approximately 80,000 shares of Common Stock were available for issuance under this plan. Any changes to such amount as of the Second Amendment Effective Date are de minimis.
Non-Plan Inducement Grants: In connection with its merger with TriVascular Technologies, Inc., on February 4, 2016 Borrower issued non-plan inducement stock options to purchase 140,000 shares of Common Stock at an exercise price of $75.30 per share, and non-plan inducement restricted stock units for approximately 8,000 shares of Common Stock.
Warrants:
In connection with its merger with TriVascular Technologies, Inc. on February 3, 2016, Borrower assumed unexercised out-of-the-money warrants of TriVascular Technologies, Inc., which converted into warrants to purchase 3,508 shares of Common Stock, 2,426 at an exercise price of $125.80 per share and 1,082 at an exercise price of $282.10 per share.
Borrower has previously issued warrants to Lenders to purchase an aggregate of (i) 647,001 shares of Common Stock of Borrower at an exercise price of $92.30 per share, and (ii) 875,001 shares of Common Stock of Borrower at an exercise price of $47.10 per share. The number of shares of Common Stock of Borrower into which the warrants are exercisable and the exercise price of the warrants were adjusted pursuant to the 1-for-10 reverse stock split effected by Borrower in early March 2019, and will be further adjusted to reflect any future stock splits, recapitalizations or similar adjustments in the number of outstanding shares of Common Stock of Borrower.
Convertible Notes:
3.25% Convertible Notes; 5.0% Convertible Senior Notes: On November 2, 2015, Borrower issued $125.0 million aggregate principal amount of 3.25% Convertible Notes. The initial conversion rate of the 3.25% Convertible Notes is 8.9431 shares of Common Stock per $1,000 principal amount of 3.25% Convertible Notes, which represents an initial conversion price of approximately $111.82 per share. Pursuant to the terms of the Facility Agreement with Deerfield, $40.5 million of the aggregate principal amount of the 3.25% Convertible Notes was cancelled; $84.5 million aggregate principal amount of 3.25% Convertible Notes were thereafter outstanding. As of the Second Amendment Effective Date, approximately $73.36 million of the remaining $84.5 million of 3.25% Convertible Notes have been exchanged for new 5.0% Convertible Senior Notes due 2024.
Pursuant to this Agreement the Borrower may issue Conversion Shares upon exercise under the Notes by Lenders.
Other Rights to Securities of Borrower:
In connection with its merger with Nellix, Inc. (Nellix), Borrower agreed to issue shares of Common Stock to the former stockholders of Nellix upon Borrowers receipt of FDA approval to sell its Nellix EVAS System in the United States (the PMA Milestone). The number of shares of Common Stock issuable to the former stockholders of Nellix upon achievement of the PMA
Milestone shall equal the quotient obtained by dividing $15.0 million by the average per share closing price of Common Stock on The Nasdaq Global Select Market for each of the 30 consecutive trading days ending with the fifth trading day immediately preceding the date of Borrowers receipt of FDA approval to sell its Nellix EVAS System in the United States, subject to a stock price floor of $45.00 per share, but not subject to a stock price ceiling.
In June 2018, Borrower received the approval of its stockholders to conduct an exchange program (the Existing Exchange Program) in which eligible employee stock option holders would have the ability to exchange certain out-of-the-money stock options for restricted stock units (RSUs) of Borrower pursuant to fixed exchange ratios.. The material terms of the Exchange Program are as set forth in proposal 6 of the Companys definitive proxy statement in respect of its annual meeting of stockholders held on June 14, 2018.
Registration Rights
Amended and Restated Registration Rights Agreement dated as of August 9, 2018, as amended by the [Amendment], by and among the Borrower the Lenders and Agent.
Agreement and Plan of Merger and Reorganization, dated October 27, 2010, by and among Borrowerthe, Nepal Acquisition Corporation, Nellix, Inc., certain of Nellix, Inc.s stockholders listed therein and Essex Woodlands Health Ventures, Inc., as representative of Nellix, Inc.s stockholders (Section 6.12 contains registration obligation)
At-the-Market Equity Offering Sales Agreement, dated May 31, 2018, by and between Borrower and Stifel, Nicolaus & Company, Incorporated pursuant to which Stifel has agreed to use commercially reasonable efforts to sell on the Companys behalf up to $50,000,000 in aggregate gross process of the Companys common stock pursuant to the terms instructed by the Company. The Company is obligated to pay Stifel at a fixed commission rate of up to 3.0% of the gross sales price of its common stock sold pursuant to the agreement.
Schedule 4.18
Material Contracts
| Cross License Agreement dated as of October 26, 2011, by and between Borrower and Bard Peripheral Vascular, Inc. |
| Settlement Agreement, dated October 16, 2012 by and among Borrower, Cook Incorporated, Cook Group and Cook Medical, Inc. |
| Standard Industrial/Commercial Multi-Tenant LeaseNet, for 2 Musick, Irvine, California and 33 & 35 Hammond, Irvine, dated June 12, 2013, by and between Borrower and The Northwestern Mutual Life Insurance Company. |
| Lease for Santa Rosa facility for the building located at 3910 Brickway Boulevard, Santa Rosa, California as set forth in the Third Amendment to Lease, by and between Trivascular, Inc. and Sonoma Airport Properties LLC and the earlier agreements described herein. |
Schedule 4.20
Environmental
None.
Schedule 4.22
Labor Relations
None.
Schedule 4.23
Jurisdiction of Organization, Legal Name, Organizational Identification Number and Chief Executive Office
Loan Party |
Jurisdiction organization |
All other organization Party for 5 years the Agreement |
Legal name |
All other legal names of Loan Party for 5 years preceding the |
Organizational identification no. |
Location of chief executive office or sole place of business: other offices or facilities | ||||||
Endologix, Inc. | Delaware | N.A. | Same as loan party name at left | N.A. | 2338745 | 2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
Endologix, Inc. | Delaware | N.A. | Same as loan party name at left | N.A. | 2338745 | 33 and 35 Hammond, Irvine, County of Orange, California 92618 U.S.A. | ||||||
Nellix, Inc. | Delaware | N.A. | Same as loan party name at left | N.A. | 3359980 | 2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
CVD/RMS Acquisition Corp. |
Delaware | N.A. | Same as loan party name at left | N.A. | 2955166 | 2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
TriVascular Technologies, Inc. | Delaware | N.A. | Same as loan party name at left | N.A. | 4387054 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A | ||||||
TriVascular, Inc. | California | N.A. | Same as loan party name at left | N.A. | C2065374 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A | ||||||
Endologix Canada, LLC | Delaware | N.A. | Same as loan party name at left | Trivascular Canada LLC | 5647226 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A | ||||||
RMS/Endologix | Delaware | N.A. | Same as loan | N.A. | 3530477 | 2 Musick,Irvine,Countyof |
Sideways Merger Corp. | party name at left | Orange, California 92618 U.S.A. | ||||||||||
Trivascular Sales LLC | Texas | N.A. | Same as loan party name at left | N.A. | 801644988 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A |
Schedule 4.33(a)
Governmental Notices Regarding Products
Ovation® System
On August 2018, Borrower intends to issue a global field safety notice related to reinforce information contained within the IFU in order to reduce the occurrence of polymer leaks.
Schedule 4.41
See above Schedule 4.17.
Schedule 4.45
Inventory Location
The following are all of the locations where a Loan Party or any of the Loan Parties Subsidiaries, respectively, maintains Inventory:
Complete Address |
Loan Party/Subsidiary | |
2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Endologix, Inc. | |
33 & 35 Hammond, Irvine, County of Orange, CA 92618 U.S.A | Endologix, Inc. | |
3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | TriVascular Technologies, Inc.
TriVascular, Inc. | |
10 Anson Road #21-04 & #21-04A International Plaza Singapore 079903 | Endologix, Inc. | |
A-311, M-Sate, 114 Beopwon-ro, Songpa-gu, Seoul, South Korea | Endologix, Inc. | |
Burgemeester Burgerslaan 40, 5245 NH Rosmalen, The Netherlands | Endologix International Holdings B.V. | |
Rahmannstraße 11, 65760 Eschborn, Germany | Endologix International B.V. |
The following are the names and addresses of all warehousemen, bailees, or other third parties who have possession of any of the Loan Parties Inventory or the Inventory of any of the Loan Parties Subsidiaries:
Name |
Complete Street and Mailing Address, including Zip Code |
Loan Party/Subsidiary | ||
UPS | 378 Commercial Street, Malden, MA 02148 | Endologix, Inc. | ||
165 Chubb Avenue, Lyndhurst, NJ 07071 | ||||
1130 Commerce Blvd, Swedesboro, NJ 08085 | ||||
2250 Outerloop Drive, Louisville, KY 40219 | ||||
205 Kelsey Lane, Suite D, Tampa, FL 33619 | ||||
2850 South Roosevelt Street, Ste 103, Tempe, AZ 85282 |
Name |
Complete Street and Mailing Address, including Zip Code |
Loan Party/Subsidiary | ||
Rhenus | Doctor Paul Janssenweg 150, 5026 RH Tilburg, The Netherlands | Endologix International Holdings B.V. | ||
STOK UK Limited | One Fleet Place, London EC4M 7Ws | Endologix International B.V. | ||
Flexential | 3330 E Lone Mountain Road, North Las Vegas, NV 89081 | Endologix, Inc. | ||
TNT Express Korea | 54 Yangcheon-ro, Gangseo-gu, Seoul 07522 | Endologix, Inc. |
In addition to the foregoing:
| In the Ordinary Course of Business, the Loan Party or any of the Loan Parties Subsidiaries sales representatives hold Trunk Inventory in their possession for sales calls and procedures, which Trunk Inventory is not held at a specific location or locations. |
| Certain Inventory of the Loan Party or any of the Loan Parties Subsidiaries is held by numerous third parties on a consignment basis at various locations. |
Schedule 6.05
Contingent Obligations
None.
Schedule 5.20
Other Loan Documents to Be Form 8-K Exhibits
Each of the following agreements, instruments and documents, including the schedules, exhibits and annexes thereto:
| the Agreement |
| the Notes; |
| the Guaranty and Security Agreement; |
| the Intercompany Subordination Agreement; |
| the Intercreditor Agreement; |
| the Patent Security Agreement; and |
| the Trademark Security Agreement. |
Schedule 6.07
Transactions with Affiliates
Investments of Inventory pursuant to clause (j) of the definition of Permitted Investments
EXHIBIT A-III
Amended and Restated Schedules to Security Agreement
[Attached]
SCHEDULE 1
PLEDGED EQUITY AND PLEDGED DEBT INSTRUMENTS
Pledged Equity:
Grantor (owner of Record of such Pledged Equity) |
Issuer |
Par Value |
No. of Shares, Units or Interests Owned |
Total Shares, Units or Interests Authorized and Outstanding |
Percentage of Shares, Units or Interests Owned |
Certificate (Indicate No.) | ||||||
Endologix, Inc. | Nellix, Inc. | $0.001 | 100 Shares | 1,000 Shares Authorized; 100 Shares Outstanding | 100% | 65 | ||||||
Endologix, Inc. | CVD/RMS Acquisition Corp. | $0.001 | 100 Shares | 100 Shares Authorized and Outstanding | 100%4 | |||||||
Endologix, Inc. | RMS/Endologix Sideways Merger Corp. | $0.001 | 100 Shares | 100 Shares Authorized and Outstanding | 100% | Com-1 | ||||||
Endologix, Inc. | TriVascular Technologies, Inc. | $0.001 | 100 Shares | 1,000 Shares Authorized; 100 Shares Outstanding | 100% | 60 | ||||||
Endologix, Inc. | ELGX International Holdings GP | N.A. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | 100% | N.A. | ||||||
Endologix, Inc. | Endologix Bermuda L.P. | N.A. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | 99% | N.A. |
Grantor (owner of Record of such Pledged Equity) |
Issuer |
Par Value | No. of Shares, Units or Interests Owned |
Total Shares, Units or Interests Authorized and Outstanding |
Percentage of Shares, Units or Interests Owned |
Certificate (Indicate No.) | ||||||
ELGX International Holdings GP | Endologix Bermuda L.P. | N.A. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | 1% | N.A. | ||||||
Endologix, Inc. | Endologix Singapore Private Limited | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix, Inc. | Endologix New Zealand Co. | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix, Inc. | ELGX South Korea Ltd | 5,000 KRW | 20,000 Contribution Units | 20,000 Contribution Units Authorized and Outstanding | 100% | N.A. | ||||||
TriVascular Technologies, Inc. | TriVascular, Inc. | $0.01 | 100 Shares | 100 Shares Authorized and Outstanding | 100% | CS-4 | ||||||
TriVascular, Inc. | TriVascular Sales LLC | N.A. | 1,000 Units of Membership Interests | 1,000 Units of Membersh ip Interests | 100% | N.A. | ||||||
TriVascular, Inc. | TriVascular Germany GmbH | N.A. | Unspecified number of Company Interests | Unspecified number of Company Interests | 100% | N.A. | ||||||
TriVascular, Inc. | TriVascular Switzerland Sarl | N.A. | Unspecified number of Company Interests | Unspecified number of Company Interests | 100% | N.A. |
Grantor (owner of Record of such Pledged Equity) |
Issuer |
Par Value | No. of Shares, Units or Interests Owned |
Total Shares, Units or Interests Authorized and Outstanding |
Percentage of Shares, Units or Interests Owned |
Certificate (Indicate No.) | ||||||
TriVascular, Inc. | Endologix Canada, LLC | N.A. | 1,000 Units of Membership Interests | 1,000 Units of Membersh ip Interests | 100% | N.A. | ||||||
TriVascular, Inc. | TriVascular, Inc. Italia Sarl | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix Bermuda L.P. | Endologix International Holdings B.V. | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix International Holdings B.V. | Endologix Poland spolkda z ograniczona odpowiedzialnos cia | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix International Holdings B.V. | Endologix Italia Sarl | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix International Holdings B.V. | Endologix International B.V. | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. |
Pledged Debt Instruments:
Grantor (owner of Record of such Pledged Debt Instrument) |
Issuer |
Description of Debt |
Final Maturity |
Principal Amount |
Certificate (Indicate No.) | |||||
N.A. |
SCHEDULE 1A
PLEDGED INVESTMENT PROPERTY
Name of Issuer |
Description and Value of Security |
Loan Party/Subsidiary | ||
Cianna Medical, Inc. |
8,677 Shares of Series A Preferred Stock |
Endologix, Inc. |
See Schedule 1.
SCHEDULE 2
FILINGS AND PERFECTION
To be attached.
SCHEDULE 3
GRANTOR INFORMATION
GRANTOR (exact legal name) |
STATE/ OF ORGANIZATION |
FEDERAL EMPLOYER |
CHIEF EXECUTIVE OFFICE |
ORGANIZATIONAL | ||||
Endologix, Inc. | Delaware | 68-0328265 | 2 Musick,Irvine,County of Orange, CA 92618 U.S.A. | 2338745 | ||||
CVD/RMS Acquisition Corp. | Delaware | 33-0928438 | 2 Musick,Irvine,County of Orange, CA 92618 U.S.A. | 2955166 | ||||
RMS/Endologix Sideways Merger Corp | Delaware | 03-0512974 | 2 Musick,Irvine,County of Orange, CA 92618 U.S.A. | 3530477 | ||||
Nellix, Inc. | Delaware | 94-3398416 | 2 Musick,Irvine,County of Orange, CA 92618 U.S.A. | 3359980 | ||||
TriVascular Technologies, Inc. | Delaware | 87-0807313 | 3910 Brickway Blvd., County of Santa Rosa, Sonoma, CA 95403 U.S.A. | 4387054 | ||||
TriVascular, Inc. | California | 68-0402620 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | C2065374 | ||||
Endologix Canada, LLC | Delaware | 47-2442872 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | 5647226 | ||||
TriVascular Sales LLC | Texas | 46-0859179 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | 801644988 |
SCHEDULE 4
PLACES OF BUSINESS / LOCATION OF COLLATERAL
Grantor |
Location |
Specify Whether Location Has (i)
Inventory Equipment, (ii) Books and Records, or (iii) Both |
Interest |
Lessor/Property Owner/Lessee | ||||
Endologix, Inc. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Both | Lease | The Northwestern Mutual Life Insurance Company, att: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
Endologix, Inc. | 33 & 35 Hammond, Irvine, County of Orange, CA 92618 U.S.A | Inventory and/or Equipment | Lease | The Northwestern Mutual Life Insurance Company, att: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
Endologix, Inc. | 378 Commercial Street, Malden, MA 02148 | Inventory and/or Equipment | Third Party Warehouse | UPS | ||||
165 Chubb Avenue, Lyndhurst, NJ 07071 | ||||||||
1130 Commerce Blvd, Swedesboro, NJ 08085 | ||||||||
2250 Outerloop Drive, Louisville, KY 40219 | ||||||||
205 Kelsey Lane, Suite D, Tampa, FL 33619 | ||||||||
2850 South Roosevelt Street, Ste 103, Tempe, AZ |
Grantor |
Location |
Specify Whether Location Has (i) Inventory and/or Equipment, (ii) Books and Records, or (iii) Both |
Interest |
Lessor/Property Owner/Lessee | ||||
85282 | ||||||||
Endologix, Inc. | 3330 E Lone Mountain Road, North Las Vegas, NV 89081 | Inventory and/or Equipment | Data Center Co-Location | Flexential | ||||
Endologix, Inc. | 54 Yangcheon-ro, Gangseo-gu, Seoul 07522 | Inventory and/or Equipment (no other Collateral is located at this location) | Third Party Warehouse | TNT Express Korea | ||||
Endologix, Inc. | 10 Anson Road #21-04 & #21-04A International Plaza Singapore 079903 | Inventory and/or Equipment (no other Collateral is located at this location) | Occupied | Endologix Singapore Private Limited | ||||
Endologix, Inc. | A-311, M-Sate, 114 Beopwon-ro, Songpa-gu, Seoul, South Korea | Inventory and/or Equipment (no other Collateral is located at this location) | Occupied | N.A. | ||||
Endologix, Inc. | Grantor and each Guarantors sales representatives hold Trunk Inventory in their possession for sales calls and procedures, which Trunk Inventory is not held at a specific location or locations.
Certain Inventory of the Grantor and each Guarantor is held by numerous third parties on a consignment basis at various locations. |
Inventory and/or Equipment (no other Collateral is located at this location) | N.A. | N.A. | ||||
Inventory and/or Equipment (no other Collateral is located at this location) | N.A. | N.A. |
Grantor |
Location |
Specify Whether Location Has (i) Inventory and/or Equipment, (ii) Books and Records, or (iii) Both |
Interest |
Lessor/Property Owner/Lessee | ||||
CVD/RMS Acquisition Corp. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Books and Records | Occupied | The Northwestern Mutual Life Insurance Company, attn: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
Nellix, Inc. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Books and Records | Occupied | The Northwestern Mutual Life Insurance Company, attn: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
RMS/Endologix Sideways Merger Corp. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Books and Records | Occupied | The Northwestern Mutual Life Insurance Company, attn: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
TriVascular Technologies, Inc. | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Books and Records | Occupied | Sonoma Airport Properties LLC | ||||
TriVascular, Inc. | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Both | Lease | Sonoma Airport Properties LLC | ||||
TriVascular Sales LLC | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Books and Records | Occupied | Sonoma Airport Properties LLC | ||||
Endologix Canada, LLC | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Books and Records | Occupied | Sonoma Airport Properties LLC |
SCHEDULE 5
COMMERCIAL TORT CLAIMS
None.
SCHEDULE 6
ACCOUNTS
ENTITY | COUNTRY | ACCT | CURR | BANK | USE | |||||
Endologix Inc | US | XXXXX1702 | USD | Bank of America | Operating account | |||||
Endologix Inc | US | XXXXX1689 | USD | Bank of America | Payroll account | |||||
Endologix Inc | US | XXXXX5279 | USD | Wells Fargo | Old Operating account | |||||
Endologix Inc | US | XXXXX5311 | USD | Wells Fargo | Old payroll account | |||||
Endologix Inc | US | XXXXX3910 | USD | Bank of America | Lockbox account | |||||
Endologix Inc | US | XXXXX4066 | USD | Bank of America | Credit Card Cash Collateral account | |||||
Trivascular Inc | US | XXXXX5539 | USD | Silicon Valley Bank | Operating account | |||||
Trivascular Inc | The Netherlands | XXXXX8640 | EUR | KBC Bank NV Nederland | Currency account | |||||
Trivascular Inc | UK London | XXXXX8709 | GBP | National Westminster Bank | Currency account | |||||
Trivascular Sales LLC | US | XXXXX7400 | USD | Silicon Valley Bank | Payroll account | |||||
Endologix Canada LLC | Canada | XXXXX7912 | CAD | Bank of Montreal | Operating account | |||||
Endologix Inc | US | XXXXX1317 | USD | Stifel | Security account |
SCHEDULE 7
REAL PROPERTY
None.
SCHEDULE 8
COPYRIGHTS
None.
SCHEDULE 9
INTELLECTUAL PROPERTY LICENSES
1. | Inbound License Agreement, dated as of February 22, 2006, by and between Incept LLC and Nellix, Inc. |
2. | Inbound Amendment No. 1. to License Agreement, dated as of April 30, 2012, by and between Incept LLC and Nellix, Inc. |
3. | Inbound Amendment No. 2 to License Agreement, dated as of December 3, 2014, by and between Incept LLC and Nellix, Inc. |
4. | Inbound Master License Agreement, dated as of May 5, 2008, by and between SurModics, Inc. and Endologix, Inc. |
5. | Inbound Development and OEM Device Supply Agreement, dated as of August 5, 2015, by and between Bard Peripheral Vascular, Inc. and Endologix, Inc. |
6. | Inbound License Agreement, dated as of June 22, 2011, by and between NorMedix, LLC and Endologix, Inc. |
7. | Inbound Settlement and Patent License Agreement, dated as of March 17, 2016, by and between LifePort Sciences, LLC and Endologix, Inc. |
8. | Inbound License Agreement, dated as of July 23, 2013, by and between Thomas L. Fogarty and Endologix, Inc. |
9. | Inbound License Agreement, dated as of March 28, 2008, by and between Trivascular, Inc. (formerly Trivascular 2, Inc.) and Boston Scientific Scimed, Inc. and Endovascular Technologies, Inc. |
SCHEDULE 10
PATENTS
See attached.
PATENT SCHEDULE
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. | US | Stent graft | US9757262B2 | US13943246A | 2013-07-16 | |||||
ENDOLOGIX INC. | US | Catheter system and methods of using same | US9700701B2 | US13544426A | 2012-07-09 | |||||
ENDOLOGIX INC. | US | Catheter system and methods of using same | US9687374B2 | US15379268A | 2016-12-14 | |||||
ENDOLOGIX INC. | US | Percutaneous method and device to treat dissections | US9579103B2 | US12771711A | 2010-04-30 | |||||
ENDOLOGIX INC. | US | Catheter system and methods of using same | US9549835B2 | US14462485A | 2014-08-18 | |||||
ENDOLOGIX INC. | US | Method and system for treating aneurysms | US9415195B2 | US13441762A | 2012-04-06 | |||||
ENDOLOGIX INC. | US | Devices and methods to treat vascular dissections | US9393100B2 | US13988175A | 2013-05-17 |
Endologix, Inc. |
-1- | Updated: March 19, 2019 |
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. | US | Method for forming materials in situ within a medical device | US9289536B2 | US14201332A | 2014-03-07 | |||||
ENDOLOGIX INC. | US | Apparatus and method of placement of a graft or graft system | US9149381B2 | US14172126A | 2014-02-04 | |||||
ENDOLOGIX INC. | US | Stent graft | US8821564B2 | US13397952A | 2012-02-16 | |||||
ENDOLOGIX INC. | US | Apparatus and methods for repairing aneurysms | US8814928B2 | US12616928A | 2009-11-12 | |||||
ENDOLOGIX INC. | US | Catheter system and methods of using same | US8808350B2 | US13408952A | 2012-02-29 | |||||
ENDOLOGIX INC. | US | Graft systems having semi-permeable filling structures and methods for their use | US8801768B2 | US13355705A | 2012-01-23 | |||||
ENDOLOGIX INC | US | Bifurcated graft deployment systems and methods | US8764812B2 | US13745682A | 2013-01-18 |
-2-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. | US | Apparatus and method of placement of a graft or graft system | US8672989B2 | US13546950A | 2012-07-11 | |||||
ENDOLOGIX INC. | US | Graft deployment system | US8568466B2 | US13269332A | 2011-10-07 | |||||
ENDOLOGIX INC. | US | Dual concentric guidewire and methods of bifurcated graft deployment | US8523931B2 | US11623022A | 2007-01-12 | |||||
ENDOLOGIX INC. | US | Stent graft | US8491646B2 | US12837398A | 2010-07-15 | |||||
ENDOLOGIX INC. | US | Endolumenal vascular prosthesis with neointima inhibiting polymeric sleeve | US8377110B2 | US10820455A | 2004-04-08 | |||||
ENDOLOGIX INC. | US | Bifurcated graft deployment systems and methods | US8357192B2 | US13046541A | 2011-03-11 | |||||
ENDOLOGIX INC. | US | Bifurcated graft deployment systems and methods | US8236040B2 | US12101863A | 2008-04-11 |
-3-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. | US | Catheter system and methods of using same | US8216295B2 | US12496446A | 2009-07-01 | |||||
ENDOLOGIX INC. | US | Apparatus and method of placement of a graft or graft system | US8221494B2 | US12390346A | 2009-02-20 | |||||
ENDOLOGIX INC. | US | Methods and systems for endovascular aneurysm treatment | US8182525B2 | US12421297A | 2009-04-09 | |||||
ENDOLOGIX INC. | US | Single puncture bifurcation graft deployment system | US8167925B2 | US12732095A | 2010-03-25 | |||||
ENDOLOGIX INC. | US | Bifurcation graft deployment catheter | US8147535B2 | US11189101A | 2005-07-25 | |||||
ENDOLOGIX INC. | US | Material for creating multi-layered films and methods for making the same | US8133559B2 | US13100483A | 2011-05-04 | |||||
ENDOLOGIX INC. | US | Stent graft | US8118856B2 | US12844266A | 2010-07-27 |
-4-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
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TRIVASCULAR INC. | EP | Non-degradable low swelling, water soluble radiopaque hydrogels 1 Nicht abbaubares, schwach anschwellendes, wasserlosliches rontgendichtes Hydrogelpolymer 1 Polymere absorbant leau, radiopaque, soluble | EP2332590B1 | EP2010194236A | 2006-03-28 |
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dans leau, a faible gonflement et non degradable | ||||||||||
TRIVASCULAR INC. | EP | Endovascular graft 1 Endovaskulares Transplantat 1 Greffe endovasculaire | EP2147658B1 | EP200913660A | 1999-02-09 | |||||
TRIVASCULAR INC. | EP | Kink resistant endovascular graft 1 Knickbestandiges Stentimplantat 1 Stent a greffer resistant au pliage | EP2319456B1 | EP2010183146A | 2004-03-05 | |||||
TRIVASCULAR INC. | EP | Delivery system for graft 1 Abgabesystem fur Graft 1 Systeme de mise en place pour prothese | EP2145607B1 | EP2009175398A | 2004-10-15 | |||||
TRIVASCULAR INC. | EP | DELIVERY SYSTEM FOR BIFURCATED GRAFT 1 VORRICHTUNG ZUR PLATZIERUNG VON ZWEIGETEILTEN ENDOPROTHESEN 1 SYSTEME DE MISE EN PLACE DUN GREFFON A BIFURCATION | EP1377234B1 | EP2002725639A | 2002-04-11 | |||||
TRIVASCULAR INC. | EP | Advanced endovascular graft 1 Erweitertes endovaskulares Transplantat 1 Greffe endovasculaire evoluee | EP2135583B1 | EP20099090A | 2002-12-20 |
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Publication/Patent No. |
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TRIVASCULAR INC. | EP | KINK RESISTANT ENDOVASCULAR GRAFT 1 KNICKFESTES ENDOVASKULARES IMPLANTAT 1 IMPLANT ENDOVASCULAIRE RESISTANT A LA DEFORMATION | EP1601314B1 | EP2004718097A | 2004-03-05 | |||||
TRIVASCULAR INC. | EP | NON-DEGRADABLE LOW SWELLING, WATER SOLUBLE RADIOPAQUE HYDROGELS 1 NICHT- ABBAUBARE WENIG QUELLENDE WASSERLOSLICHE RONTGENDICHTE HYDROGELS 1 HYDROGEL RADIOPAQUE, SOLUBLE DANS LEAU, NON DEGRADABLE ET A FAIBLE GONFLEMENT | EP1874370B1 | EP2006739747A | 2006-03-28 | |||||
TRIVASCULAR INC. | EP | INFLATABLE INTRALUMINAL GRAFT 1 AUFBLASBARER INTRALUMINALER PFROPFEN 1 GREFFON INTRALUMINAL GONFLABLE | EP1176926B1 | EP2000907760A | 2000-03-03 | |||||
TRIVASCULAR INC. | EP | ENDOVASCULAR GRAFT I ENDOVASKULARES IMPLANTAT I GREFFON ENDOVASCULAIRE | EP1054648B1 | EP1999906812A | 1999-02-09 | |||||
TRIVASCULAR INC. | EP | STENT GRAFT DELIVERY SYSTEM WITH ACCESS CONDUIT I STENTGRAFTEINFUHRUNGSSY STEM MIT ZUGANGSKANAL I | EP3209249A1 | EP2015852460A | 2015-10-22 |
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Country |
Patent |
Publication/Patent No. |
Application Number |
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SYSTEME DE POSE DE GREFFE ET PROTHESE ENDOVASCULAIRE AVEC CONDUIT DACCES | ||||||||||
TRIVASCULAR INC. | EP | INTERNAL ILIAC PRESERVATION DEVICES AND METHODS I VORRICHTUNGEN UND VERFAHREN ZUR INTERNEN BECKENKONSERVIERUNG I DISPOSITIFS ET PROCEDES DE PRESERVATION DE LILIAQUE INTERNE | EP3226814A1 | EP2015816618A | 2015-12-03 | |||||
TRIVASCULAR INC. | EP | INFLATABLE OCCLUSION WIRE- BALLOON FOR AORTIC APPLICATIONS I AUFBLASBARER OKKLUSIONSDRAHTBALLON FUR ANWENDUNGEN IN DER AORTA I BALLONNET DE FIL DOCCLUSION GONFLABLE POUR APPLICATIONS AORTIQUES | EP3116439A1 | EP2015711020A | 2015-03-10 | |||||
TRIVASCULAR INC. | EP | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES I SYSTEME FUR FUHRUNGSDRAHTUB ERGANG FUR VERZWEIGTE PROTHESEN I SYSTEMES POUR UN CROISEMENT DE FIL-GUIDE POUR DES PROTHESES BIFURQUEES | EP3091944A1 | EP2014752969A | 2014-07-30 |
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Patent |
Publication/Patent No. |
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TRIVASCULAR INC. | Germany | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3091944 | 14752969.7 | 7/18/2018 | |||||
TRIVASCULAR INC. | UK | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3091944 | 14752969.7 | 7/18/2018 | |||||
TRIVASCULAR INC. | IT | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3091944 | 14752969.7 | 7/18/2018 | |||||
TRIVASCULAR INC. | EP | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3409243 | 18183721.2 | 2018-07-16 | |||||
TRIVASCULAR INC. | EP | TANDEM MODULAR ENDOGRAFT 1 MODULARES TANDEM- ENDOGRAFT 1 ENDOGREFFE MODULAIRE EN TANDEM | EP3049021A1 | EP2014782021A | 2014-09-23 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC. | EP | DURABLE STENT GRAFT WITH TAPERED STRUTS AND STABLE DELIVERY METHODS AND DEVICES 1 DAUERHAFTES STENTIMPLANTAT MIT KONISCHEN STREBEN UND STABILE FREISETZUNGSVERFAHREN SOWIE VORRICHTUNGEN 1 ENDOPROTHESE VASCULAIRE DURABLE AVEC ENTRETOISES CONIQUES ET PROCEDES ET DISPOSITIFS DE DELIVRANCE STABLES | EP2833830A4 | EP2013772199A | 2013-03-29 | |||||
TRIVASCULAR INC. | EP | ENDOVASCULAR DELIVERY SYSTEM WITH AN IMPROVED RADIOPAQUE MARKER SCHEME 1 ENDOVASKULARES FREISETZUNGSSYSTEM MIT VERBESSERTEM RONTGENMARKERSCHEMA 1 SYSTEME DE POSE ENDOVASCULAIRE AYANT UNE TECHNIQUE DE MARQUEUR RADIO-OPAQUE AMELIOREE | EP2861189A1 | EP2013733113A | 2013-05-31 |
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Patent |
Publication/Patent No. |
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TRIVASCULAR INC. | EP | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG 1 GEGABELTE ENDOVASKULARE PROTHESE MIT ANGEBUNDENEM KONTRALATERALEM BEIN 1 PROTHESE ENDOVASCULAIRE BIFURQUEE POSSEDANT UNE JAMBE CONTROLATERALE AVEC ATTACHE | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. | DE | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. | GB | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. | IT | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. | EP | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | 18209876.4 | 2018-12-03 | ||||||
TRIVASCULAR INC. | EP | LOW PROFILE STENT GRAFT AND DELIVERY SYSTEM | FLACHES STENTTRANSPLANTAT UND FREISETZUNGSSYSTEM 1 | EP2833829A1 | EP2013717893A | 2013-03-21 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOPROTHESE VASCULAIRE A PROFIL BAS ET SYSTEME DE DELIVRANCE | ||||||||||
TRIVASCULAR INC | EP | ALIGNMENT STENT APPARATUS AND METHOD | VORRICHTUNG UND VERFAHREN ZUR STENTAUSRICHTUNG 1 APPAREIL DENDOPROTHESE DALIGNEMENT ET PROCEDE | EP2194919A4 | EP2008834027A | 2008-09-25 | |||||
TRIVASCULAR INC | EP | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | MODULARER GEFASSERSATZ FUR PERKUTANE FREISETZUNG MIT NIEDRIGEM PROFIL | GREFFON VASCULAIRE MODULAIRE POUR ADMINISTRATION PERCUTANEE A PROFIL REDUIT | EP2194921A4 | EP2008835032A | 2008-10-03 | |||||
TRIVASCULAR INC | EP | METHOD AND APPARATUS FOR MANUFACTURING AN ENDOVASCULAR GRAFT SECTION | VERFAHREN UND VORRICHTUNG ZUR HERSTELLUNG EINES ENDOVASKULAREN TRANSPLANTATABSCHNITTS | PROCEDE ET APPAREIL DE | EP1465685A4 | EP2002805657A | 2002-12-20 |
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Grantor |
Country |
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Publication/Patent No. |
Application Number |
Application Date | |||||
FABRICATION DUNE SECTION DE GREFFON ENDOCORONAIRE | WO2017019913A1 | WO2016US44583A | 2016-07-28 | |||||||
TRIVASCULAR INC | WO | ENDOLUMINAL PROSTHESIS DEPLOYMENT DEVICES AND METHODS 1 DISPOSITIFS ET PROCEDES DE DEPLOIEMENT DE PROTHESE ENDOLUMINALE | ||||||||
TRIVASCULAR INC | WO | STENT-GRAFT WITH IMPROVED FLEXIBILITY 1 GREFFON DE STENT A FLEXIBILITE AMELIOREE | WO2016183128A1 | WO2016US31728A | 2016-05-11 | |||||
TRIVASCULAR INC | WO | BALLOON ASSISTED ENDOLUMINAL PROSTHESIS DEPLOYMENT 1 DEPLOIEMENT DE PROTHESE ENDOLUMINALE ASSISTE PAR BALLONNET | WO2016191602A1 | WO2016US34427A | 2016-05-26 | |||||
TRIVASCULAR INC | WO | INTERNAL ILIAC PRESERVATION DEVICES AND METHODS 1 DISPOSITIFS ET PROCEDES DE PRESERVATION DE LILIAQUE INTERNE | WO2016090112A1 | WO2015US63686A | 2015-12-03 | |||||
TRIVASCULAR INC | WO | STENT GRAFT DELIVERY SYSTEM WITH ACCESS CONDUIT 1 SYSTEME DE POSE DE GREFFE ET PROTHESE ENDOVASCULAIRE AVEC CONDUIT DACCES | WO2016065208A1 | WO2015US57016A | 2015-10-22 |
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Grantor |
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Patent |
Publication/Patent No. |
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TRIVASCULAR INC | WO | INFLATABLE OCCLUSION WIRE- BALLOON FOR AORTIC APPLICATIONS 1 BALLONNET DE FIL DOCCLUSION GONFLABLE POUR APPLICATIONS AORTIQUES | WO2015138402A1 | WO2015US19626A | 2015-03-10 | |||||
TRIVASCULAR INC | WO | SYSTEMS AND METHODS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES 1 SYSTEMES ET PROCEDES POUR UN CROISEMENT DE FIL-GUIDE POUR DES PROTHESES BIFURQUEES | WO2015105530A1 | WO2014US48769A | 2014-07-30 | |||||
TRIVASCULAR INC | WO | TANDEM MODULAR ENDOGRAFT 1 ENDOGREFFE MODULAIRE EN TANDEM | WO2015048004A1 | WO2014US56953A | 2014-09-23 | |||||
TRIVASCULAR INC | WO | ENDOVASCULAR GRAFT FOR ANEURYSMS INVOLVING MAJOR BRANCH VESSELS 1 GREFFON ENDOVASCULAIRE POUR ANEVRISMES METTANT EN JEU DES VAISSEAUX RAMIFIES PRINCIPAUX | WO2014059114A3 | WO2013US64290A | 2013-10-10 | |||||
TRIVASCULAR INC | WO | SAC LINER FOR ANEURYSM REPAIR 1 REVETEMENT SAC POUR REPARATION DANEVRISME | WO2014110231A3 | WO2014US10828A | 2014-01-09 |
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TRIVASCULAR INC | WO | GATE WIRE FOR CONTRALATERAL LEG ACCESS 1 FIL GUIDE POUR PERMETTRE UN ACCES A UN JAMBAGE CONTROLATERAL | WO2014110254A1 | WO2014US10870A | 2014-01-09 | |||||
TRIVASCULAR INC | WO | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG 1 PROTHESE ENDOVASCULAIRE BIFURQUEE POSSEDANT UNE JAMBE CONTROLATERALE AVEC ATTACHE | WO2013188134A1 | WO2013US43630A | 2013-05-31 | |||||
TRIVASCULAR INC | WO | ENDOVASCULAR DELIVERY SYSTEM WITH AN IMPROVED RADIOPAQUE MARKER SCHEME 1 SYSTEME DE POSE ENDOVASCULAIRE AYANT UNE TECHNIQUE DE MARQUEUR RADIO-OPAQUE AMELIOREE | WO2013188132A1 | WO2013US43615A | 2013-05-31 | |||||
TRIVASCULAR INC | WO | ENDOVASCULAR DELIVERY SYSTEM WITH FLEXIBLE AND TORQUEABLE HYPOTUBE 1 SYSTEME DE POSE ENDOVASCULAIRE POURVU DUN HYPOTUBE FLEXIBLE ET POUVANT ETRE SOUMIS A UN COUPLE DE TORSION | WO2013188133A1 | WO2013US43623A | 2013-05-31 |
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Publication/Patent No. |
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TRIVASCULAR INC | WO | DELIVERY CATHETER FOR ENDOVASCULAR DEVICE 1 CATHETER DE DELIVRANCE POUR DISPOSITIF ENDOVASCULAIRE | WO2013151924A1 | WO2013US34787A | 2013-04-01 | |||||
TRIVASCULAR INC | WO | DURABLE STENT GRAFT WITH TAPERED STRUTS AND STABLE DELIVERY METHODS AND DEVICES 1 ENDOPROTHESE VASCULAIRE DURABLE AVEC ENTRETOISES CONIQUES ET PROCEDES ET DISPOSITIFS DE DELIVRANCE STABLES | WO2013151896A1 | WO2013US34654A | 2013-03-29 | |||||
TRIVASCULAR INC | WO | LOW PROFILE STENT GRAFT AND DELIVERY SYSTEM 1 ENDOPROTHESE VASCULAIRE A PROFIL BAS ET SYSTEME DE DELIVRANCE | WO2013151793A1 | WO2013US33250A | 2013-03-21 | |||||
TRIVASCULAR INC | WO | ADVANCED KINK-RESISTANT STENT GRAFT 1 ENDOPROTHESE EVOLUEE RESISTANT AU PLIAGE | WO2013151794A3 | WO2013US33252A | 2013-03-21 | |||||
TRIVASCULAR INC | WO | ADVANCED ENDOVASCULAR GRAFT AND DELIVERY SYSTEM | GREFFE ENDOVASCULAIRE AVANCEE ET SYSTEME DE POSE ASSOCIE | WO2012068175A3 | WO2011US60873A | 2011-11-15 |
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TRIVASCULAR INC | WO | FILL TUBE MANIFOLD AND DELIVERY METHODS FOR ENDOVASCULAR GRAFT | COLLECTEUR DE TUBE DE REMPLISSAGE ET PROCEDES DE POSE DE GREFFON ENDOVASCULAIRE | WO2011100367A3 | WO2011US24248A | 2011-02-09 | |||||
TRIVASCULAR INC | DE | ENDOVASKULARES IMPLANTAT | DE69918272T2 | DE69918272A | 1999-02-09 | |||||
TRIVASCULAR INC | CA | VIRTUAL PROTOTYPING AND TESTING FOR MEDICAL DEVICE DEVELOPMENT 1 ESSAI ET PROTOTYPAGE VIRTUELS DE MISE AU POINT DE DISPOSITIFS MEDICAUX | CA2424252C | CA2424252A | 2001-09-28 | |||||
TRIVASCULAR INC | CA | DELIVERY SYSTEM AND METHOD FOR BIFURCATED GRAFT | METHODE ET SYSTEME DE MISE EN PLACE DUN GREFFON A BIFURCATION | CA2443104C | CA2443104A | 2002-04-11 | |||||
TRIVASCULAR INC | CA | ENDOVASCULAR GRAFT 1 GREFFON ENDOVASCULAIRE | CA2501892C | CA2501892A | 1999-02-09 |
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Publication/Patent No. |
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TRIVASCULAR INC | CA | INFLATABLE INTRALUMINAL GRAFT | GREFFON INTRALUMINAL GONFLABLE | CA2640263C | CA2640263A | 2000-03-03 | |||||
TRIVASCULAR INC | CA | INFLATABLE INTRALUMINAL GRAFT 1 GREFFON INTRALUMINAL GONFLABLE | CA2376253C | CA2376253A | 2000-03-03 | |||||
TRIVASCULAR INC | CA | ENDOVASCULAR GRAFT 1 GREFFON ENDOVASCULAIRE | CA2319052C | CA2319052A | 1999-02-09 | |||||
TRIVASCULAR INC | AU | Modular vascular graft for low profile percutaneous delivery | AU2008308474B2 | AU2008308474A | 2008-10-03 | |||||
TRIVASCULAR INC | AU | Advanced endovascular graft | AU2009230748B2 | AU2009230748A | 2009-10-26 | |||||
TRIVASCULAR INC | AU | Advanced endovascular graft | AU2009201682B2 | AU2009201682A | 2009-04-28 | |||||
TRIVASCULAR INC | AU | Method and apparatus for manufacturing an endovascular graft section | AU2008258148B2 | AU2008258148A | 2008-12-17 |
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Publication/Patent No. |
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TRIVASCULAR INC | AU | Advanced endovascular graft | AU2002360765C1 | AU2002360765A | 2002-12-20 | |||||
TRIVASCULAR INC | AU | Method and apparatus for manufacturing an endovascular graft section | AU2002366805B8 | AU2002366805A | 2002-12-20 | |||||
TRIVASCULAR INC | AU | Virtual prototyping and testing for medical device development | AU2001293179A1 | AU2001293179A | 2001-09-28 | |||||
TRIVASCULAR INC | AU | Delivery system and method for expandable intracorporeal device | AU200133250A | AU200133250A | 2001-02-01 | |||||
TRIVASCULAR, INC. | DE | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | 2194921 | 08835032.7 | 2018-08-29 | |||||
TRIVASCULAR, INC. | GB | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | 2194921 | 08835032.7 | 2018-08-29 | |||||
TRIVASCULAR, INC. | IT | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | 2194921 | 08835032.7 | 2018-08-29 |
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Country |
Patent |
Publication/Patent No. |
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TRIVASCULAR INC | JP | ADVANCED KINK-RESISTANT STENT GRAFT | 6297023 | 2015-504610 | 3/2/2018 | |||||
TRIVASCULAR INC | UK | INFLATABLE OCCLUSION WIRE- BALLOON FOR AORTIC APPLICATIONS | 15711020.6 | 3116439 | 2/7/2018 | |||||
TRIVASCULAR INC | UK | PASSIVE HEMOSTATIC SHEATH VALVE | 04780128.7 | 1651135 | 2/28/2018 | |||||
TRIVASCULAR INC | CN | MODULAR STENT GRAFT SYSTEMS AND METHODS WITH INFLATABLE FILL STRUCTURES | 201810370663.0 | 2015-5-5 | ||||||
ENDOLOGIX, INC. | CN | CATHETER SYSTEM AND METHODS OF USING SAME | ZL201510649289.4 | 201510649289.4 | 2018-6-8 | |||||
ENDOLOGIX, INC. | JP | CATHETER SYSTEM AND METHODS OF USING SAME | 6294669 | 2013-556828 | 2018-2-23 | |||||
TRIVASCULAR INC | Germany | PASSIVE HEMOSTATIC SHEATH VALVE | 1651135 | 04780128.7 | 2018-2-28 |
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Patent |
Publication/Patent No. |
Application Number |
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ENDOLOGIX, INC. | JP | BALLOON ASSISTED ENDOLUMINAL PROSTHESIS DEPLOYMENT | 2017-560952 | 5/26/2016 | ||||||
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Grantor | Country | Patent | Publication/Patent No. | Application Number | Application Date | |||||
ENDOLOGIX, Inc. | JP | SYSTEMS AND METHODS WITH FENESTRATED GRAFT AND FILLING STRUCTURE | 2019-500168 | 2018-534852 | 12/23/2016 | |||||
ENDOLOGIX INC. | US | STENT GRAFT SYSTEMS WITH RESTRAINTS IN CIRCUMFERENTIAL CHANNELS AND METHODS THEREOF | 62/678961 | 5/31/2018 | ||||||
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC. | US | ENDOVASCULAR DELIVERY SYSTEM WITH AN IMPROVED RADIOPAQUE MARKER SCHEME | US20180344491A1 | 16/049560 | 7/30/2018 | |||||
ENDOLOGIX INC. | PCT | SINGLE PUNCTURE BIFURCATION GRAFT DEPLOYMENT SYSTEM | WO2000053251 | PCT/US2000/006070 | 3/7/2000 | |||||
ENDOLOGIX INC. | PCT | GRAFT DEPLOYMENT SYSTEM | WO2004047885 | PCT/US2003/37685 | 11/25/2003 | |||||
ENDOLOGIX INC. | PCT | DUAL CONCENTRIC GUIDEWIRE AND METHODS OF BIFURCATED GRAFT DEPLOYMENT | WO2008089097 | PCT/US2008/050915 | 1/11/2008 | |||||
ENDOLOGIX INC. | PCT | ENDOLUMENAL VASCULAR PROSTHESIS WITH NEOINTIMA INHIBITING POLYMERIC SLEEVE | WO2005096997 | PCT/US2005/11522 | 4/6/2005 | |||||
ENDOLOGIX INC. | PCT | IMPLANTABLE VASCULAR GRAFT | WO2002039888 | PCT/US2001/47028 | 11/8/2001 | |||||
ENDOLOGIX INC. | PCT | DUAL WIRE PLACEMENT CATHETER | WO2001003762 | PCT/US2000/016352 | 6/14/2000 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. | PCT | MULTI-SEGMENTED GRAFT DEPLOYMENT SYSTEM | WO2008034106 | PCT/US2007/78565 | 9/14/2007 | |||||
ENDOLOGIX INC. | PCT | METHOD AND APPARATUS FOR DECOMPRESSING ANEURYSMS | WO2005099807 | PCT/US2005/12306 | 4/12/2005 | |||||
TRIVASCULAR INC. | EP | ENDOLUMINAL PROSTHESIS DEPLOYMENT DEVICES AND METHODS | 3328326 | 16831382.3 | 7/28/2016 | |||||
TRIVASCULAR INC. | EP | BALLOON ASSISTED ENDOLUMINAL PROSTHESIS DEPLOYMENT | 3302356 | 16800744.1 | 5/26/2016 | |||||
TRIVASCULAR INC. | EP | STENT-GRAFT WITH IMPROVED FLEXIBILITY | 3294210 | 16793394.4 | 5/11/2016 | |||||
TRIVASCULAR INC. | EP | PTFE LAYERS AND METHODS OF MANUFACTURING | 3095585 | 16171681.6 | 3/30/2006 |
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SCHEDULE 11
TRADEMARKS
See attached.
Trademarks
Grantor |
Country |
Mark |
Application No. |
Application Date |
Registration No. |
Registration Date | ||||||
Endologix, Inc. |
U.S. | 86/854470 | 12/18/15 | |||||||||
Endologix, Inc. |
U.S. | ACTIVESEAL | 85/518,608 | 01/17/12 | 5396605 | 02/06/18 | ||||||
Endologix, Inc. |
U.S. | AFX | 85/069,068 | 06/22/10 | 4214460 | 09/25/12 | ||||||
Endologix, Inc. |
U.S. | ANGIOTIP | 85/767055 | 10/30/12 | 5205176 | 05/16/17 | ||||||
Endologix, Inc. |
U.S. | DURAPLY | 86/362822 | 08/11/14 | 5433696 | 3/27/18 | ||||||
Endologix, Inc. |
U.S. | ENDOLOGIX | 75/323,314 | 07/11/97 | 2257799 | 06/29/99 | ||||||
Endologix, Inc. |
U.S. | EVAS FORWARD | 86/116940 | 11/12/13 | 5306786 | 10/10/17 | ||||||
Endologix, Inc. |
U.S. | INNOVATION TAKING SHAPE | 85/369,728 | 07/12/11 | 4220343 | 10/09/12 | ||||||
Endologix, Inc. |
U.S. | INNOVATION THAT EMPOWERS | 85/514516 | 01/11/12 | 4841631 | 10/27/15 | ||||||
Endologix, Inc. |
U.S. | INTELIX | 86/316249 | 06/20/14 | 5059968 | 10/11/16 | ||||||
Endologix, Inc. |
U.S. | INTUITRAK | 77/494,729 | 06/09/08 | 3649757 | 07/07/09 |
Endologix, Inc. |
-1- | Updated: March 18, 2019 |
Endologix, Inc. |
U.S. | INTUITRAK DELIVERY SYSTEM | 77/520,529 | 07/11/08 | 3649866 | 07/07/09 | ||||||
Endologix, Inc. |
U.S. | NELLIX | 77/090544 | 01/24/07 | 3880178 | 11/23/10 | ||||||
Endologix, Inc. |
U.S. | POWERLINK | 75/658,969 | 03/12/99 | 2456038 | 05/29/01 | ||||||
Endologix, Inc. |
U.S. | POWERLINK XL | 78/718,728 | 09/22/05 | 3573999 | 02/10/09 | ||||||
Endologix, Inc. |
U.S. | SUREPASS | 78/965,443 | 08/31/06 | 3593259 | 03/17/09 | ||||||
Endologix, Inc. |
U.S. | VELA | 85/857988 | 02/22/13 | 5296578 | 09/26/17 | ||||||
Endologix, Inc. |
Argentina | 3514846 | 06/16/16 | 2888199 | 05/19/17 | |||||||
Endologix, Inc. |
Argentina | 3514844 | 06/16/16 | 2888198 | 05/19/17 | |||||||
Endologix, Inc. |
Argentina | 3514844 | 06/16/16 | |||||||||
Endologix, Inc. |
Argentina | 3514842 | 06/16/16 | 2888196 | 05/19/17 |
Endologix, Inc. |
-2- | Updated: March 18, 2019 |
Endologix, Inc. |
Argentina | AFX | 3064304 | 01/27/11 | 2496722 | 04/04/12 | ||||||
Endologix, Inc. |
Argentina | DURAPLY | 3386456 | 02/11/15 | 2773735 | 12/09/15 | ||||||
Endologix, Inc. |
Argentina | INTELIX | 3375648 | 12/19/14 | 2766285 | 12/04/15 | ||||||
Endologix, Inc. |
Argentina | INTELIX | 3375649 | 12/19/14 | 2766286 | 11/04/15 | ||||||
Endologix, Inc. |
Argentina | INTELIX | 3375650 | 12/19/14 | 2766287 | 11/04/15 | ||||||
Endologix, Inc. |
Argentina | NELLIX | 3243024 | 05/02/13 | 2658594 | 06/26/14 | ||||||
Endologix, Inc. |
Argentina | VELA | 3271551 | 08/22/13 | 2808433 | 06/03/16 | ||||||
Endologix, Inc. |
Argentina | XPAND | 3072929 | 03/16/11 | 2506706 | 06/01/12 | ||||||
Endologix, Inc. |
Australia | 1326557 | 06/14/16 | 1326557 | 04/24/17 | |||||||
Endologix, Inc. |
Australia | DURAPLY | 1710503 | 02/10/15 | 1710503 | 11/04/15 | ||||||
Endologix, Inc. |
Australia | INTELIX | 1247823 | 12/19/14 | 1247823 | 11/25/16 | ||||||
Endologix, Inc. |
Brazil | 911.201.521 | 06/17/16 | 911.201.521 | 06/19/18 |
Endologix, Inc. |
-3- | Updated: March 18, 2019 |
Endologix, Inc. |
Brazil | 911.201.572 | 06/17/16 | 911.201.572 | 06/19/18 | |||||||
Endologix, Inc. |
Brazil | 911.201.599 | 06/17/16 | 911.201.599 | 06/19/18 | |||||||
Endologix, Inc. |
Brazil | 911.201.602 | 06/17/16 | 911.201.602 | 06/19/18 | |||||||
Endologix, Inc. |
Brazil | ACTIVESEAL | 909861684 | 08/20/15 | 909861684 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | AFX | 912186283 | 01/19/17 | 912186283 | 10/16/18 | ||||||
Endologix, Inc. |
Brazil | DURAPLY | 909861722 | 08/20/15 | 909861722 | 06/19/18 | ||||||
Endologix, Inc. |
Brazil | INTELIX | 909861749 | 08/20/15 | 909861749 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | INTELIX | 909861765 | 08/20/15 | 909861765 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | INTELIX | 909861773 | 08/20/15 | 909861773 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | NELLIX | 840506538 | 05/06/13 | 840506538 | 02/16/16 | ||||||
Endologix, Inc. |
Brazil | VELA | 840618530 | 08/22/13 | ||||||||
Endologix, Inc. |
Canada | DURAPLY | 1714718 | 02/10/15 |
Endologix, Inc. |
-4- | Updated: March 18, 2019 |
Endologix, Inc. |
Canada | INTELIX | 1707569 | 12/17/14 | ||||||||
Endologix, Inc. |
Canada | VELA | 1640416 | 08/21/13 | ||||||||
Endologix, Inc. |
Chile | XPAND | 1137099 | 12/30/14 | 1187135 | 11/27/15 | ||||||
Endologix, Inc. |
China | 1326551 | 06/14/16 | |||||||||
Endologix, Inc. |
China | DURAPLY | 1257411 | 02/10/15 | 1257411 | 02/10/15 | ||||||
Endologix, Inc. |
China | INTELIX | 1247823 | 12/19/14 | 1247823 | 12/19/14 | ||||||
Endologix, Inc. |
Colombia | AFX | 16-133051 | 05/11/16 | ||||||||
Endologix, Inc. |
Colombia | ENDOLOGIX | 16-121402 | 05/11/16 | 582446 | 11/17/17 | ||||||
Endologix, Inc. |
Colombia | XPAND | 1246435 | 12/26/14 | 1246435 | 12/26/14 | ||||||
Endologix, Inc. |
European Community | AFX | 009609884 | 12/20/10 | 009609884 | 12/01/11 | ||||||
Endologix, Inc. |
European Community | ANGIOTIP | 011780129 | 04/30/13 | 011780129 | 09/24/13 | ||||||
Endologix, Inc. |
European Community | CLASSICAL REMODELING | 4598728 | 08/19/05 | 4598728 | 08/02/06 | ||||||
Endologix, Inc. |
European Community | DURAPLY | 1257411 | 02/10/15 | 1257411 | 02/10/15 | ||||||
Endologix, Inc. |
European Community | ENDOLOGIX, INC. | 720649 | 01/12/98 | 720649 | 01/12/98 |
Endologix, Inc. |
-5- | Updated: March 18, 2019 |
Endologix, Inc. |
European Community | INTELIX | 13361399 | 10/15/14 | 13361399 | 08/20/18 | ||||||
Endologix, Inc. |
European Community | INTUITRAK | 7453401 | 11/28/08 | 7453401 | 09/21/09 | ||||||
Endologix, Inc. |
European Community | INTUITRAK DELIVERY SYSTEM | 7513302 | 12/23/08 | 7513302 | 07/21/09 | ||||||
Endologix, Inc. |
European Community | NELLIX | 011771011 | 04/26/13 | 011771011 | 09/18/13 | ||||||
Endologix, Inc. |
European Community | POWERLINK XL | 5002977 | 03/22/06 | 5002977 | 04/11/07 | ||||||
Endologix, Inc. |
European Community | VISIFLEX DELIVERY SYSTEM | 5075528 | 04/24/06 | 5075528 | 04/16/07 | ||||||
Endologix, Inc. |
European Community | VISIFLEX SURE PASS | 5749338 | 02/28/07 | 5749338 | 01/31/08 | ||||||
Endologix, Inc. |
European Union | 1326551 | 06/14/16 | 1326551 | 06/12/17 | |||||||
Endologix, Inc. |
France | POWERLINK | 043299490 | 09/13/99 | 043299490 | 12/31/04 | ||||||
Endologix, Inc. |
Hong Kong | DURAPLY | 303301280 | 02/15/15 | 303301280 | 10/05/15 | ||||||
Endologix, Inc. |
Hong Kong | INTELIX | 303240954 | 12/18/14 | 303240954 | 09/07/16 | ||||||
Endologix, Inc. |
Italy | POWERLINK | 001724 | 09/13/99 | 0001376420 | 02/27/08 |
Endologix, Inc. |
-6- | Updated: March 18, 2019 |
Endologix, Inc. |
Japan | 1326551 | 06/14/16 | 1326551 | 05/02/17 | |||||||
Endologix, Inc. |
Japan | ACTIVESEAL | 2015-078597 | 08/17/15 | 5857166 | 06/10/16 | ||||||
Endologix, Inc. |
Japan | AFX | 2015-078596 | 08/17/15 | 5824704 | 02/05/16 | ||||||
Endologix, Inc. |
Japan | DURAPLY | 1257411 | 02/10/15 | 1257411 | 01/19/16 | ||||||
Endologix, Inc. |
Japan | ENDOLOGIX, INC. | 1155/1998 | 01/12/98 | 4352035 | 01/14/00 | ||||||
Endologix, Inc. |
Japan | INTELIX | 1247823 | 12/19/14 | 1247823 | 10/27/15 | ||||||
Endologix, Inc. |
Japan | NELLIX | 2013-031634 | 04/25/13 | 5613989 | 09/06/13 | ||||||
Endologix, Inc. |
Japan | VELA | 2013-6/4901 | 08/21/13 | 6101928 | 11/30/18 | ||||||
Endologix, Inc. |
Japan | VISIFLEX DELIVERY SYSTEM | 2006-035170 | 04/17/06 | 4974084 | 07/28/06 | ||||||
Endologix, Inc. |
Japan | VISIFLEX SURE PASS | 2007-017236 | 02/28/07 | 5066349 | 07/27/07 | ||||||
Endologix, Inc. |
Korea | DURAPLY | 1257411 | 02/10/15 | 1257411 | 02/10/15 | ||||||
Endologix, Inc. |
Korea | INTELIX | 1247823 | 12/19/14 | 1247823 | 06/13/16 | ||||||
Endologix, Inc. |
Malaysia | DURAPLY | 2015052019 | 02/11/15 | 2015052019 | 12/29/16 |
Endologix, Inc. |
-7- | Updated: March 18, 2019 |
Endologix, Inc. |
Malaysia | INTELIX | 2014069128 | 12/18/14 | 2014069128 | 04/22/16 | ||||||
Endologix, Inc. |
Malaysia | INTELIX | 2014069135 | 12/18/14 | 2014069135 | 05/10/16 | ||||||
Endologix, Inc. |
Mexico | XPAND | 1246435 | 12/26/14 | 1246435 | 07/26/16 | ||||||
Endologix, Inc. |
New Zealand | DURAPLY | 1024501 | 02/10/15 | 1024501 | 12/02/15 | ||||||
Endologix, Inc. |
New Zealand | INTELIX | 1247823 | 12/19/14 | 1019974 | 09/27/16 | ||||||
Endologix, Inc. |
Peru | XPAND | 601318 | 12/29/14 | 00223114 | 04/22/15 | ||||||
Endologix, Inc. |
Singapore | DURAPLY | 40201513229 | 02/10/15 | 40201513229 | 01/06/16 | ||||||
Endologix, Inc. |
Singapore | INTELIX | 40201508694 | 12/19/14 | 40201508694 | 11/11/15 | ||||||
Endologix, Inc. |
Taiwan | DURAPLY | 104008448 | 02/11/15 | 1764288 | 04/16/16 | ||||||
Endologix, Inc. |
Taiwan | INTELIX | 103072703 | 12/18/14 | 1740066 | 11/16/15 | ||||||
Endologix, Inc. |
Thailand | DURAPLY | 973443 | 02/11/15 | 171110590 | 09/28/17 | ||||||
Endologix, Inc. |
Thailand | INTELIX | 966979 | 12/19/14 | ||||||||
Endologix, Inc. |
Thailand | INTELIX | 966980 | 12/19/14 | ||||||||
Endologix, Inc. |
United Kingdom | POWERLINK | 2369587 | 09/13/99 | 2369587 | 12/09/05 | ||||||
Endologix, Inc. |
Venezuela | XPAND | 20754-14 | 12/30/14 | P352404 | 06/07/16 |
Endologix, Inc. |
-8- | Updated: March 18, 2019 |
Endologix, Inc. |
Vietnam | DURAPLY | 1257411 | 02/10/15 | 1257411 | 11/03/16 | ||||||
Endologix, Inc. |
Vietnam | INTELIX | 1247823 | 12/19/14 | 1247823 | 05/21/15 | ||||||
Endologix, Inc. |
U.S. | ALTO | 87/906,099 | 5/3/2018 | ||||||||
Endologix, Inc. |
U.S. | VERTA | 87/116,482 | 7/26/2016 | ||||||||
TriVascular, Inc. |
U.S. | ALLEGRO | 86/758,465 | 9/16/2015 | ||||||||
TriVascular, Inc. |
U.S. | CUSTOMSEAL | 86/047,875 | 8/26/2013 | 4,732,342 | 5/5/2015 | ||||||
TriVascular, Inc. |
U.S. | OVATION | 77/941,535 | 2/22/2010 | 4,440,468 | 11/26/2013 | ||||||
TriVascular, Inc. |
U.S. | OVATION ALTO | 86/047,894 | 8/26/2013 | 5,195,890 | 5/2/2017 | ||||||
TriVascular, Inc. |
U.S. | OVATION PRIME | 85/900,037 | 4/10/2013 | 4,452,625 | 12/17/2013 | ||||||
TriVascular, Inc. |
U.S. | 85/832,445 | 1/25/2013 | 4,449,077 | 12/10/2013 | |||||||
TriVascular, Inc. |
U.S. | TRIVASCULAR | 75/879,907 | 12/21/1999 | 2,867,015 | 7/27/2004 | ||||||
TriVascular, Inc. |
U.S. | 85/831,355 | 1/24/2013 | 4,395,789 | 9/3/2013 | |||||||
TriVascular, Inc. |
Australia | CUSTOMSEAL | 1608471 | 2/27/2014 | 1608471 | 1/21/2015 | ||||||
TriVascular, Inc. |
Australia | OVATION | 1379343 | 8/20/2010 | 1379343 | 1/10/2011 | ||||||
TriVascular, Inc. |
Australia | OVATION ALTO | 1608211 | 2/26/2014 | 1608211 | 5/28/2014 |
Endologix, Inc. |
-9- | Updated: March 18, 2019 |
TriVascular, Inc. |
Australia | OVATION PRIME | 1583683 | 10/2/2013 | 1583683 | 1/7/2014 | ||||||
TriVascular, Inc. |
Australia | 1537921 | 1/29/2013 | 1537921 | 7/31/2013 | |||||||
TriVascular, Inc. |
Australia | TRIVASCULAR | 888603 | 9/7/2001 | 888603 | 9/7/2001 | ||||||
TriVascular, Inc. |
Australia | 983475 | 12/30/2003 | 983475 | 8/16/2004 | |||||||
TriVascular, Inc. |
Brazil | CUSTOMSEAL | 840.803.346 | 2/26/2014 | 840803346 | 10/18/2016 | ||||||
TriVascular, Inc. |
Brazil | OVATION | 830727035 | 8/20/2010 | 830727035 | 1/6/2015 | ||||||
TriVascular, Inc. |
Brazil | OVATION ALTO | 840.803.419 | 2/26/2014 | 840.803.419 | 3/20/2018 | ||||||
TriVascular, Inc. |
Brazil | OVATION PRIME | 840.666.152 | 10/4/2013 | 840666152 | 8/23/2016 | ||||||
TriVascular, Inc. |
Brazil | 830854487 | 11/24/2010 | 830854487 | 6/3/2014 | |||||||
TriVascular, Inc. |
Canada | CUSTOMSEAL | 1,665,277 | 2/25/2014 | ||||||||
TriVascular, Inc. |
Canada | OVATION | 1493184 | 8/20/2010 | TMA858,759 | 8/28/2013 | ||||||
TriVascular, Inc. |
Canada | OVATION ALTO | 1,665,276 | 2/25/2014 | ||||||||
TriVascular, Inc. |
Canada | OVATION PRIME | 1,645,991 | 10/2/2013 | ||||||||
TriVascular, Inc. |
Canada | 1,611,335 | 1/25/2013 | TMA934,553 | 4/12/2016 | |||||||
TriVascular, Inc. |
Canada | TRIVASCULAR | 1,612,136 | 1/31/2013 | TMA882,992 | 7/29/2014 |
Endologix, Inc. |
-10- | Updated: March 18, 2019 |
TriVascular, Inc. |
Canada | 1200748 | 12/30/2003 | TMA825955 | 6/8/2012 | |||||||
TriVascular, Inc. |
China | CUSTOMSEAL | 14075157 | 2/26/2014 | 14075157 | 4/28/2015 | ||||||
TriVascular, Inc. |
China | OVATION | 8598413 | 8/23/2010 | 8598413 | 11/7/2011 | ||||||
TriVascular, Inc. |
China | OVATION ALTO | 14075158 | 2/26/2014 | 14075158 | 4/28/2015 | ||||||
TriVascular, Inc. |
China | OVATION PRIME | 13321289 | 10/8/2013 | 13321289 | 6/21/2015 | ||||||
TriVascular, Inc. |
China | 8898103 | 11/30/2010 | 8898103 | 12/14/2011 | |||||||
TriVascular, Inc. |
EUTM | OVATION | 009325234 | 8/20/2010 | 009325234 | 2/3/2011 | ||||||
TriVascular, Inc. |
EUTM | OVATION ALTO | 012636908 | 2/25/2014 | 012636908 | 7/16/2014 | ||||||
TriVascular, Inc. |
EUTM | OVATION PRIME | 012189148 | 10/2/2013 | 012189148 | 2/26/2014 | ||||||
TriVascular, Inc. |
EUTM | 011523305 | 1/28/2013 | 011523305 | 6/24/2013 | |||||||
TriVascular, Inc. |
EUTM | TRIVASCULAR | 002374593 | 9/13/2001 | 002374593 | 3/12/2003 | ||||||
TriVascular, Inc. |
EUTM | 003598836 | 12/31/2003 | 003598836 | 4/29/2005 | |||||||
TriVascular, Inc. |
India | OVATION | 2012141 | 8/20/2010 | 2012141 | 8/23/2016 | ||||||
TriVascular, Inc. |
India | 2060383 | 11/29/2010 | 2060383 | 11/29/2010 | |||||||
TriVascular, Inc. |
Japan | CUSTOMSEAL | 2014-14237 | 2/26/2014 | 5672406 | 5/23/2014 |
Endologix, Inc. |
-11- | Updated: March 18, 2019 |
TriVascular, Inc. |
Japan | OVATION | 2010-065871 | 8/20/2010 | 5614976 | 9/13/2013 | ||||||
TriVascular, Inc. |
Japan | OVATION ALTO | 2014-14238 | 2/26/2014 | 5672407 | 5/23/2014 | ||||||
TriVascular, Inc. |
Japan | OVATION PRIME | 2013-024875 | 4/4/2013 | 5613251 | 9/6/2013 | ||||||
TriVascular, Inc. |
Japan | 2013-5504 | 1/30/2013 | 5643434 | 1/17/2014 | |||||||
TriVascular, Inc. |
Japan | TRIVASCULAR | 2001-115594 | 12/27/2001 | 4731627 | 12/5/2003 | ||||||
TriVascular, Inc. |
Japan | 2004-030615 | 3/18/2004 | 4778040 | 6/11/2004 | |||||||
TriVascular, Inc. |
Mexico | OVATION | 1113689 | 8/20/2010 | 1235645 | 8/20/2010 | ||||||
TriVascular, Inc. |
Mexico | 1139285 | 12/2/2010 | 1213946 | 4/27/2011 |
Endologix, Inc. |
-12- | Updated: March 18, 2019 |
EXHIBIT B
Term Amendment
[Attached]
Filed as Exhibit 10.4 to this Current Report
EXHIBIT C
Equity Financing Documents
[Attached]
Filed as Exhibit 10.1 to this Current Report
EXHIBIT D
Convertible Debenture Restructuring Documents
[Attached]
Filed as Exhibit 10.2 to this Current Report
Exhibit 10.4
SECOND AMENDMENT TO AMENDED AND RESTATED FACILITY AGREEMENT AND FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT
This SECOND AMENDMENT TO AMENDED AND RESTATED FACILITY AGREEMENT AND FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT (this Amendment) is entered into as of March 31, 2019, by and among ENDOLOGIX, INC., a Delaware corporation (the Borrower), the other Loan Parties party hereto, the Lenders party hereto and Deerfield Private Design Fund IV, L.P., as agent for itself and the Secured Parties (in such capacity, together with its successors and assigns in such capacity, Agent).
W I T N E S S E T H:
WHEREAS, the Borrower, the other Loan Parties party thereto, Agent and the Lenders party thereto are parties to that certain Amended and Restated Facility Agreement dated as of August 9, 2018 (as amended, restated, supplemented or otherwise modified from time to time to (and not including) the date hereof, including by that certain First Amendment to Amended and Restated Facility Agreement, dated as of November 20, 2018, by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and Agent, the Facility Agreement);
WHEREAS, the Borrower, the other Loan Parties party thereto and Agent are parties to that certain Amended and Restated Guaranty and Security Agreement dated as of August 9, 2018 (as in effect as of the date hereof without giving effect to the amendments thereto set forth herein, the Security Agreement);
WHEREAS, the Borrower has requested that Agent and the Lenders (a) amend certain provisions of the Facility Agreement, the Security Agreement, the First Out Waterfall Notes and the Warrants and (b) waive certain Designated Occurrences (as defined below) under the Facility Agreement, and, subject to certain terms and limitations and the satisfaction of the conditions set forth herein, Agent and the Lenders are willing to do so, on the terms set forth herein; and
WHEREAS, the Facility Agreement, the Security Agreement, the First Out Waterfall Notes and the Warrants are being amended as part of, and pursuant to, a Plan of Recapitalization and Reorganization of the Borrower described in Section 368(a)(1)(E) of the Code;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Capitalized terms used herein (including in the preamble and recitals above) but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Amended Facility Agreement.
SECTION 2. Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment, as of the Second Amendment Effective Date (as defined below):
(a) The Facility Agreement is hereby amended to delete the stricken text
(indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example:
double-underlined text) as set forth in Exhibit A-I attached hereto (the Amended Facility Agreement);
(b) The Schedules to the Facility Agreement are hereby amended and restated in their entirety in the form attached hereto as Exhibit A-II.
(c) The Security Agreement is hereby amended by adding the following language to the end of Section 5.10 thereof immediately before the . appearing therein: (for the avoidance of doubt, taking into account any cure periods applicable thereto).
(d) The Schedules to the Security Agreement are hereby amended and restated in their entirety in the form attached hereto as Exhibit A-III.
(e) Each of the First Out Waterfall Notes shall be amended as set forth in the Second Amendment First Out Waterfall Notes (as defined below);
(f) Each of the Initial Warrants shall be amended as set forth in the Exchanged Initial Warrants; and
(g) Each of the Additional Warrants shall be amended as set forth in the Exchanged Additional Warrants.
SECTION 3. Limited Waiver.
(a) Subject to the satisfaction of the conditions precedent set forth in Section 4 of this Amendment and subject to the terms, conditions and limitations set forth below, Agent and the Lenders hereby agree as of the Second Amendment Effective Date that the possible failure to comply with the representations and covenants of the Facility Agreement specifically mentioned in clauses (i) (x) below in this Section 3 solely with respect to the matters and in the instances specifically mentioned in such clauses (and, for the avoidance of doubt, not any other failures, matters or instances) (such failures, collectively, the Designated Occurrences and each, a Designated Occurrence), are hereby, solely to the extent expressly set forth below, waived (but, solely to the extent and subject to any limitations on the length of time of any such waiver set forth below):
(i) any Default or Event of Default under (y) Section 5.4(c) of the Facility Agreement which occurred with respect to the failure of the representations and warranties in the last sentence of Section 3.1(pp) of the Facility Agreement to be true and correct solely between the dates of January 8, 2019 and March 20, 2019 (such period, the Minimum Bid Price Requirement Non-Compliance Period), and (z) Section 5.4(b)(i)(A) of the Facility Agreement which occurred with respect to the failure to comply with the obligations of the Borrower set forth in Section 5.1(p) of the Facility Agreement during the Minimum Bid Price Requirement Non-Compliance Period, in each case of clause (y) and clause (z), solely due to the failure to meet the Principal Markets minimum bid price requirements during the Minimum Bid Price Requirement Non-Compliance Period ;
2
(ii) any Default or Event of Default under Section 5.4(c) of the Facility Agreement which occurred with respect to the failure of the representations and warranties in the third and fourth sentences of Section 3.1(uu) and the first sentence of Section 3.1(ccc) of the Facility Agreement made by the Borrower to be true and correct between the dates of November 27, 2018 and the day immediately prior to the date hereof, in each case, solely due to the market withdrawal of Nellix EndoVascular Aneurysm Sealing System and the suspension of the CE mark related thereto, in each case, that occurred prior to February 24, 2019;
(iii) any Default or Event of Default under Section 5.4(b)(i)(A) of the Facility Agreement which occurred with respect to the Loan Parties failure to comply with Section 5.2(xxiv) of the Facility Agreement solely with respect to having at least $22,500,000 of Global Excess Liquidity as of (A) the end of the last Business Day of February 2019 and (B) each date that a Borrowing Base Certificate (as defined the ABL Credit Facility) was delivered under the ABL Credit Facility or any other ABL Debt Document to the Third Party Agent (as defined in the ABL Credit Facility) between the dates of February 22, 2019 and the day immediately prior to the date hereof;
(iv) any Default or Event of Default under (x) Section 5.4(b)(i)(A) of the Facility Agreement which occurred with respect to the Loan Parties failure to comply with Section 5.1(x) of the Facility Agreement prior to the date hereof, (y) Section 5.4(b)(i)(B) of the Facility Agreement which occurred with respect to the Loan Parties failure to comply with Section 5.3(a) of the Security Agreement prior to the date hereof, and (z) Section 5.4(c) of the Facility Agreement which occurred with respect to the failure of the representations and warranties in the first sentence of Section 3.1(hh) of the Facility Agreement to be true and correct prior to the date hereof, in each cause of clause (x), clause (y) and clause (z), solely due to the Borrowers storage of up to a maximum aggregate amount of $125,000 in book value (which shall be determined in accordance with GAAP by the Borrower and with using reasonable and justifiable calculations and estimations by the Borrower) of computer servers as of the date hereof at the Flexential Colorado Corp.s data center located at 3330 E. Lone Mountain Road, North Las Vegas, NV 89081 pursuant to that certain service order entered into by the Borrower on September 5, 2018 (which, for the avoidance of doubt, (A) the Loan Parties represent, warrant, acknowledge and agree that such location, placement and storage of such computer servers at such location occurred prior to the date hereof and (B) the parties hereto hereby acknowledge and agree that the waiver in this clause (v) shall not apply to any other computer servers, property or assets that may be located, placed or stored at such location or any other location);
(v) any Default or Event of Default under Section 5.4(b)(i)(A) of the Facility Agreement which occurred due to the Borrowers and its Subsidiaries failure to comply with clause (i) of the first sentence of Section 5.1(h) of the Facility Agreement solely by not timely filing the Borrowers annual report on a 10-K for the fiscal year ended December 31, 2018 so long as (A) a Form 12b-25 was adequately and timely filed in respect of such late 10-K filing and (B) such 10-K is filed with the SEC by no later than April 1, 2019, such that the 10-K shall be deemed to have been timely filed pursuant to Rule 12b-25 under the Exchange Act;
(vi) any Default or Event of Default under Section 5.4(c) of the Facility Agreement which occurred with respect to the failure of the representations and warranties in the last sentence of Section 3.1(h) to be true and correct on or prior to the day immediately prior to the
3
date hereof, so long as at each time that such representations and warranties were made on or prior to such day, none of the current directors (or equivalent persons) or current officers of the Borrower and its Subsidiaries (A) had been convicted or had pled no contest (or agreed to a settlement or plea agreement related) to, or been subject to any order of any Governmental Authority relating to, any violations of any securities laws, rules or regulations, or (B) had been enjoined from engaging in any conduct relating to offers or sales of securities or service as an officer or director of a public company (the Loan Parties hereby representing and warranting that the foregoing was and is true, correct and complete at each such time);
(vii) any Default or Event of Default under Section 5.4(b)(i)(A) of the Facility Agreement which occurred due to the Loan Parties failure to comply with Section 5.1(g)(A) of the Facility Agreement solely with respect to the Loan Parties failure to provide written notice to Agent of any Designated Occurrence;
(viii) any Default or Event of Default under Section 5.4(b)(i)(A) of the Facility Agreement which occurred due to the Borrowers failure to comply with Section 5.1(w) of the Facility Agreement solely with respect to the Borrowers failure to provide written notice to Agent of any default or event of default under any of the ABL Debt Documents caused by the Designated Occurrences (as defined in the ABL Amendment (as defined below), the ABL Designated Occurrences);
(ix) any Default or Event of Default under (y) Section 5.4(b)(i)(A) of the Facility Agreement which occurred due to the Loan Parties failure to comply with Section 5.1(b)(ii) and the first sentence of Section 5.2(xiv) of the Facility Agreement, and (z) Section 5.4(c) of the Facility Agreement which occurred with respect to the failure of the representations and warranties in the first sentence, clause (vi) of the second sentence, the fourth sentence, the sixth sentence, the seventh sentence and the last sentence of Section 3.1(jj) of the Facility Agreement made by the Loan Parties to be true and correct between the dates of January 1, 2018 and the day immediately prior to the date hereof, in each case of clause (y) and clause (z), solely with respect to six units of AFX Endovascular AAA System products (which the Loan Parties represent and warrant constitute medical devices under 15 CFR § 772.1) being sold into Cuba by the Borrowers Spanish distributor named DGM Vascular S.L. (which resulted in less than $30,000 of revenue to the Borrower and its Subsidiaries in the aggregate for all fiscal periods) in the first two fiscal quarters of 2018 (with such products being implanted into patients in Cuba in the second fiscal quarter of 2018) without first obtaining a license from the Bureau of Industry and Security of the United States Department of Commerce in accordance with 15 CFR § 746.2(a), so long as the Loan Parties report such violation to the Office of Foreign Assets Control of the United States Department of the Treasury by no later than May 31, 2019 and the only penalty (if any) resulting from such violation is a monetary fine not in excess of $250,000; and
(x) any Default or Event of Default under Section 5.4(h)(ii), Section 5.4(o), Section 5.4(p) and Section 5.4(s)(B) of the Facility Agreement relating solely to the ABL Debt Documents (and not any other agreements, instruments or documents mentioned in such Section) caused directly and solely by any event of default under the ABL Debt Documents resulting solely from the ABL Designated Occurrences and the Designated Occurrences (and, for the avoidance of doubt, not any other event, circumstance, breach, violation, default or event of default).
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(b) Notwithstanding anything to the contrary, the parties hereto agree that (i) nothing herein, nor any communications among any Loan Party, any of its Subsidiaries or Affiliates and/or any Secured Party, shall be deemed a waiver with respect to (A) any Default or Event of Default, other than the Designated Occurrences, or (B) any future failure of any Loan Party or any of its Subsidiaries and Affiliates to comply fully and completely with any provision of any Loan Document (including as amended hereby, as applicable), and (ii) in no event shall the foregoing waivers provided in Section 3(a) of this Amendment be deemed to be a waiver of enforcement of any of any Secured Partys rights or remedies under the Loan Documents (including as amended hereby, as applicable), at law (including under the UCC), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to the introductory paragraph of Section 5.4 of the Facility Agreement, with respect to any Defaults or Events of Default (other than the Designated Occurrences) now existing or hereafter arising. Except as expressly provided herein, each Secured Party hereby reserves and preserves all of its rights and remedies against each Loan Party and each of its Subsidiaries under the Loan Documents (including as amended hereby, as applicable), at law (including under the UCC), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to the introductory paragraph of Section 5.4 of the Facility Agreement.
SECTION 4. Conditions. The effectiveness of the amendments set forth in Section 2 and the limited waivers set forth in Section 3 of this Amendment, in each case, is subject to the satisfaction of the following conditions precedent on or prior to April 5, 2019 (such date of satisfaction, the Second Amendment Effective Date):
(a) the execution and delivery of this Amendment by Borrower, each other Loan Party, Agent and the Required Lenders;
(b) the representations and warranties in Section 3 and Section 5 of this Amendment being true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof and as of the Second Amendment Effective Date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties are true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date);
(c) no Default or Event of Default has occurred or is continuing (or would result after giving effect to the transactions contemplated by this Amendment, the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants (as defined below) and the other Loan Documents (as amended hereby, as applicable) and the ABL Amendment and the other ABL Debt Documents (as amended by the ABL Amendment, as applicable));
(d) the receipt in cash by the Secured Parties of the payment of all fees, costs and expenses incurred thereby on or prior to the date of this Amendment that are required to be reimbursed pursuant to Section 6.3 of the Facility Agreement or Section 9 of this Amendment and all other fees, costs and expenses incurred in connection with this Amendment (and the transactions contemplated hereby) by the Secured Parties (including, in each case, all attorneys fees of the Secured Parties and any estimates of post-closing fees, costs and expenses (including all attorneys fees) expected to be incurred by the Secured Parties in connection with this Amendment);
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(e) the receipt by the Agent and the Lenders of a fully executed copy of a corresponding amendment to the ABL Credit Facility in form and substance reasonably satisfactory to the Agent and the Lenders (the ABL Amendment);
(f) the execution, issuance and delivery to the First Out Waterfall Lenders of new First Out Waterfall Notes (each in the form of a First Out Waterfall Note attached to the Amended Facility Agreement as Exhibit A-3) (the Second Amendment First Out Waterfall Notes) in accordance with Section 1.4(c) of the Amended Facility Agreement;
(g) the execution, issuance and delivery to the First Out Waterfall Lenders of the Amended and Restated Initial Warrants and the Amended and Restated Additional Warrants (collectively, the Second Amendment Warrants) in accordance with Section 2.8 of the Amended Facility Agreement;
(h) the consummation by the Borrower on the Second Amendment Effective Date of the sale of shares of Common Stock at a price of $6.61 per share, resulting in gross proceeds to the Borrower (excluding any proceeds from any sale of shares to any of the Lenders or their Affiliates) of at least $40,000,000 and net cash proceeds (the Net Equity Cash Proceeds) to the Borrower (after deducting any underwriting or placement fees, discounts or commissions and any legal, accounting and other offering related expenses) of at least $38,000,000 (in each case, excluding any proceeds from any sale of shares to any of the Lenders or their Affiliates) (the Equity Financing), pursuant to that certain Purchase Agreement, dated as of the date hereof (the Equity Purchase Agreement), by and among the Borrower and the investors identified on Schedule I thereto, and the schedules and exhibits thereto, and the Pre-Paid Warrants (as defined in the Equity Purchase Agreement), each in substantially the form provided to the Lenders prior to the date hereof and each in form and substance satisfactory to the Agent and the Lenders (collectively, the Equity Financing Documents), which Net Equity Cash Proceeds shall have been deposited on the Second Amendment Effective Date into either (i) a deposit account maintained by the Borrower that is covered by a Control Agreement in favor of the Agent or (ii) a trust account maintained by Piper Jaffray Companies (PJC) in the name of the Borrower, in each case of the foregoing, in a manner (and pursuant to procedures) acceptable to the Agent and the Lenders (the Net Equity Cash Proceeds in such trust account, the Trust Account Net Equity Cash Proceeds);
(i) the consummation of the Exchange (as defined in the below-defined Exchange Agreement) (the Convertible Debenture Restructuring) contemplated to occur on the Second Amendment Effective Date by (A) that certain Exchange Agreement, dated as of the date hereof (the Exchange Agreement), by and among the Borrower and the noteholders listed on Schedule A thereto, (B) that certain Indenture, to be dated as of the Second Amendment Effective Date, in respect of the 5.0% Mandatory Convertible Senior Notes due 2024 (the 5.0% Mandatory Convertible Senior Notes Indenture), between the Borrower, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), (C) that certain Indenture, to be dated as of the Second Amendment Effective Date, in respect of the 5.0% Voluntary Convertible Senior Notes due 2024 (together with the 5.0% Mandatory Convertible Senior Notes Indenture, the Exchanged Senior Notes Indentures), between the Borrower, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), and (D) those certain unsecured 5.0% Mandatory Convertible Senior Notes
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due 2024 and 5.0% Voluntary Convertible Senior Notes due 2024 issued in connection with the foregoing by the Borrower on the Second Amendment Effective Date (collectively, the Original 5.00% Convertible Notes, and together with the Exchange Agreement and the Exchanged Senior Notes Indentures, the Convertible Debenture Restructuring Documents), in each case, in form and substance satisfactory to the Agent and the Lenders;
(j) the Borrower has submitted an application for the listing of all of the Conversion Shares and the Warrant Shares to the Principal Market and secured such listing from the Principal Market;
(k) receipt by Agent of a certificate from an Authorized Officer of each Loan Party in form and substance satisfactory to Agent and the Lenders:
(i) attesting to the resolutions of such Loan Partys board of directors authorizing its execution, delivery, and performance of this Amendment, the Amended Facility Agreement, the Security Agreement (including as amended hereby), the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants and the other Loan Documents (as amended hereby, as applicable), including the issuance of the Warrant Shares upon exercise of the Second Amendment Warrants, in each case to which it is a party, and the execution, delivery and performance of each of the ABL Amendment, the other ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents and Convertible Debenture Restructuring Documents to which it is party,
(ii) authorizing specific officers of such Loan Party to execute the same, attesting to the incumbency and signatures of such specific officers of such Loan Party,
(iii) attesting to copies of each Loan Partys Organizational Documents, as amended, modified, or supplemented to the date hereof, which Organizational Documents shall be (A) certified by an Authorized Officer of such Loan Party, and (B) with respect to Organizational Documents that are charter documents, certified as of a recent date (not more than thirty (30) days prior to the Second Amendment Effective Date) by the appropriate governmental official,
(iv) attesting to certificates of status with respect to each Loan Party, dated within ten (10) days of the Second Amendment Effective Date, such certificates to be issued by the appropriate officer of the jurisdiction of organization of such Loan Party, which certificates shall indicate that such Loan Party is in good standing in such jurisdiction, and
(v) attesting to certificates of status with respect to each Loan Party, each dated within thirty (30) days of the Second Amendment Effective Date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of such Loan Party) in which such Loan Partys failure to be duly qualified or licensed would constitute a Material Adverse Effect, which certificates shall indicate that such Loan Party is in good standing in such jurisdictions.
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(l) an opinion letter from counsel to the Loan Parties with respect to the transactions contemplated by this Amendment, the Amended Facility Agreement, the Security Agreement (as amended hereby), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants, in form and substance satisfactory to the Agent and the Lenders; and
(m) the receipt by the Agent and the Lenders of all other documents, agreements, instruments and other information requested by the Agent or any Lender.
Notwithstanding anything to the contrary in this Amendment or any other Loan Document, none of the amendments set forth in Section 2 and none of the limited waivers set forth in Section 3 of this Amendment will become (or ever be) effective unless all of the conditions set forth in this Section 4 are completely and fully satisfied on or prior to April 5, 2019.
SECTION 5. Representations and Warranties. Each Loan Party party hereto hereby represents and warrants to Agent and each Lender as follows as of the date hereof and as of the Second Amendment Effective Date:
(a) Each Loan Party is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable. Each Loan Party (i) has full power and authority (and all governmental licenses, authorizations, permits (including all Regulatory Required Permits), consents and approvals) to (A) own its properties and conduct its business (solely with respect to governmental licenses, authorizations, permits (including all Regulatory Required Permits), consents and approvals, except where the failure to have such governmental licenses, authorizations, permits (including all Regulatory Required Permits), consents and approvals could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect) and (B) to (x) enter into, and perform its obligations under, this Amendment (including the Amended Facility Agreement), the Security Agreement (including as amended hereby), the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants, and the other Loan Documents (as amended hereby, as applicable), the ABL Amendment, the other ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents, and (y) consummate the transactions contemplated under this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants and the other Loan Documents (as amended hereby, as applicable), the ABL Amendment and the other ABL Debt Documents (as amended by the ABL Amendment, as applicable) and to consummate the Equity Financing and the Convertible Debenture Restructuring Documents, and (ii) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification or license, in each case of this clause (ii), where the failure to be so qualified, licensed or in good standing could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(b) The execution, delivery and performance of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants and the other Loan
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Documents (as amended hereby, as applicable), including the issuance of the Warrant Shares upon exercise of the Second Amendment Warrants and the issuance of the Conversion Shares upon Conversion (including any Voluntary Conversion, Forced Conversion or Mandatory Conversion) of the Second Amendment First Out Waterfall Notes, and the execution, delivery and performance of the ABL Amendment, the ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents, in each case, have been duly authorized by each Loan Party and no further consent or authorization is required by any Loan Party, any Loan Partys board of directors (or other equivalent governing body) or the holders of any Loan Partys Stock. Each of this Amendment, the ABL Amendment, the Equity Purchase Agreement and the Exchange Agreement has been duly executed and delivered by each of the Loan Parties and constitutes a valid, legal and binding obligation of each Loan Party, enforceable in accordance with its terms, except as such enforceability may be limited by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors rights generally. On and after the Second Amendment Effective Date, each of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the ABL Amendment, the ABL Debt Documents (as amended by the ABL Amendment, as applicable) the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants, the Equity Financing Documents and the Convertible Debenture Restructuring Documents has been duly executed and delivered by each of the Loan Parties and constitutes a valid, legal and binding obligation of each Loan Party, enforceable in accordance with its terms, except as such enforceability may be limited by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors rights generally. The execution, delivery and performance of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants and the other Loan Documents (as amended hereby, as applicable), and the ABL Amendment, the ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents by each Loan Party party hereto and the consummation of the transactions contemplated hereby and thereby will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to (i) the Loan Documents (as amended hereby, as applicable) and (ii) to the extent permitted by the Facility Agreement, the ABL Debt Documents) upon any assets of any such Loan Party pursuant to, any agreement, document or instrument to which such Loan Party is a party or by which any Loan Party is bound or to which any of the assets or property of any Loan Party is subject, except, with respect to this clause (A), as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (B) result in any violation of or conflict with the provisions of the Organizational Documents, (C) result in the violation of any Applicable Law, (D) result in the violation of any judgment, order, rule, regulation or decree of any Governmental Authority, or (E) violate, conflict with or cause a breach or default under any agreement or instrument binding upon it, except, with respect to clauses (C) and (E) only, as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No consent, approval, Authorization or order of, or registration or filing with any Governmental Authority is required for (i) the execution, delivery and performance of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants and the other Loan Documents (as amended hereby, as applicable) and the
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ABL Amendment, the ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents and (ii) the consummation by any Loan Party of the transactions contemplated hereby and thereby.
(c) The Warrant Shares issuable upon exercise of, or otherwise pursuant to, the Second Amendment Warrants, and the Conversion Shares issuable upon Conversion (including any Voluntary Conversion, Forced Conversion or Mandatory Conversion) of, or otherwise pursuant to, the Second Amendment Warrants are duly authorized and, when issued in accordance with the Second Amendment Warrants or the Second Amendment First Out Waterfall Notes (as applicable), will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by Borrower, and will not be issued in violation of, or subject to, any preemptive or similar rights of any Person. Borrower has reserved from its duly authorized capital stock 1,522,002 shares of Common Stock for issuance upon exercise of the Second Amendment Warrants and 12,776,445 shares of Common Stock for issuance upon conversion of the First Out Waterfall Notes.
(d) Except for the amounts owed to Jefferies, LLC that have been disclosed to the Agent on or prior to the date hereof, no brokerage or finders fees or commissions are or will be payable by the Borrower or any of its affiliates or representatives to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Amendment, the other Loan Documents (as amended hereby, as applicable), the ABL Amendment, the ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents and the Convertible Debenture Restructuring Documents. The Lenders and other Secured Parties 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 5(d) that may be due in connection with the transactions contemplated hereby.
(e) No registration under the Securities Act or any state securities laws is required for the offer and issuance of the Second Amendment Warrants, the Warrant Shares issuable upon exercise of, or otherwise pursuant to, the Second Amendment Warrants or the Conversion Shares issuable upon Conversion (including any Voluntary Conversion, Forced Conversion or Mandatory Conversion) of, or otherwise pursuant to, the Second Amendment First Out Waterfall Notes. The amendments and transactions contemplated hereby, including the issuance of the Second Amendment First Out Waterfall Notes and the Exchanged Warrants hereunder, the issuance of the Warrant Shares issuable upon exercise of, or otherwise pursuant to, the Second Amendment Warrants, and the issuance of the Conversion Shares issuable upon Conversion (including any Voluntary Conversion, Forced Conversion or Mandatory Conversion) of, or otherwise pursuant to, the Second Amendment First Out Waterfall Notes, and the consummation of the Equity Financing and the Convertible Debenture Restructuring, do not contravene, or require stockholder approval pursuant to, the rules and regulations of the Principal Market. Provided that a First Out Waterfall Lender is not an Affiliate of Borrower on the date of Conversion (including any Voluntary Conversion, Forced Conversion or Mandatory Conversion) of the First Out Waterfall Notes by such First Out Waterfall Lender or exercise of any of the Second Amendment Warrants by such First Out Waterfall Lender pursuant to a Cashless Exercise, Cashless Major Exercise, Cashless Default Exercise or Note Exchange Exercise (each as defined in the Second Amendment
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Warrants) and has not been an Affiliate of Borrower within the three-month period immediately preceding such date (which Borrower shall assume unless advised otherwise in writing by such First Out Waterfall Lender), the Conversion Shares or Warrant Shares (as applicable) issued to such First Out Waterfall Lender will be freely transferable, without restriction or limitation (including any volume limitation or current public information requirement) under Federal or state securities laws, pursuant to Rule 144 under the Securities Act, and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof.
(f) Neither the Borrower, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made, or will make, any offers or sales of any security or solicited, or will solicit, any offers to buy any security, under circumstances that would cause the offering and issuance of any of the Warrant Shares or the Conversion Shares to be integrated with prior offerings by the Borrower (i) for purposes of the Securities Act and which would require the registration of any such securities under the Securities Act, or (ii) for purposes of any applicable stockholder approval provisions of the Principal Market and which would require stockholder approval for the issuance of any Warrant Shares or Conversion Shares.
(g) Other than for the existence of the Designated Occurrences prior to giving effect to the limited waiver thereof in Section 3, each of the representations and warranties of any of the Loan Parties set forth in the Amended Facility Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents (including as amended hereby, as applicable) are true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof and as of the Second Amendment Effective Date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date).
(h) The Equity Financing Documents constitute all of the agreements, instruments and documents entered into in connection with, and necessary to effectuate, the Equity Financing. The Convertible Debenture Restructuring Documents constitute all of the agreements, instruments and documents entered into in connection with, and necessary to effectuate, the Convertible Debenture Restructuring. Each of the representations and warranties of any of the Loan Parties set forth in the Equity Financing Documents and the Convertible Debenture Restructuring Documents are true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of the date hereof and as of the Second Amendment Effective Date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true, complete and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date).
(g) Other than for the existence of the Designated Occurrences prior to giving effect to the limited waiver thereof in Section 3, no Default or Event of Default has occurred and is continuing (or would result after giving effect to the transactions contemplated by this Amendment, the Second Amendment First Out Waterfall Notes, the Second Amendment Warrants (as defined below) and the other Loan Documents (as amended hereby, as applicable) and the ABL Amendment and the other ABL Debt Documents (as amended by the ABL Amendment, as applicable)).
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(h) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the consummation of the transactions contemplated by this Amendment, the Amended Facility Agreement, the Security Agreement (as amended hereby), the other Loan Documents (as amended hereby, as applicable), the ABL Amendment, the other ABL Debt Documents (as amended by the ABL Amendment, as applicable), the Equity Financing Documents, the Convertible Debenture Restructuring Documents, the Second Amendment Warrants, the Second Amended Registration Rights Agreements has been issued and remains in force by any Governmental Authority against any Loan Party or any Secured Party.
(i) (i) This Amendment has been entered into without force or duress of the free will of each Loan Party, (ii) each Loan Partys decision to enter into this Amendment is a fully informed decision, and (iii) each Loan Party is aware of all legal and other ramifications of such decision.
(j) In executing this Amendment, the Second Amendment Warrants and the Second Amended Registration Rights Agreement, no Loan Party is relying on any representations or warranties, either written or oral, express or implied, made to any Loan Party by any other party hereto or any Secured Party.
(k) Attached hereto as Exhibit B is a true, correct and complete copy of the ABL Amendment, which has not been (and is not currently being contemplated as of the Second Amendment Effective Date to be) amended, restated, supplemented, changed or otherwise modified in any manner.
(l) Attached hereto as Exhibit C are true, correct and complete copies of the Equity Financing Documents, which have not been (and are not currently being contemplated as of the Second Amendment Effective Date to be) amended, restated, supplemented, changed or otherwise modified in any manner.
(m) Attached hereto as Exhibit D are true, correct and complete copies of the Convertible Debenture Restructuring Documents, which have not been (and are not currently being contemplated as of the Second Amendment Effective Date to be) amended, restated, supplemented, changed or otherwise modified in any manner.
(n) The representations and warranties set forth in Section 3 of this Amendment are true, correct and complete.
SECTION 6. Covenant. The Borrower covenants and agrees that it shall receive from PJC (and the Borrower has required PJC to deliver to the Borrower) the Trust Account Net Equity Cash Proceeds into a deposit account in the name of the Borrower that is covered by a Control Agreement in favor of the Agent in a manner, and subject to procedures, acceptable to the Agent within one (1) Business Day after the Second Amendment Effective Date. Any failure of the Borrower to timely comply with the immediately preceding sentence shall be an immediate Event of Default.
SECTION 7. Registration Rights. For avoidance of doubt, (a) the Borrower acknowledges and agrees that, on and after the Second Amendment Effective Date, for purposes of the Registration Rights Agreement, the term Warrants shall include the Amended and Restated Initial Warrants and the Amended and Restated Additional Warrants, the term Warrants
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Shares shall include the Warrant Shares issued or issuable upon exercise of, or otherwise pursuant to, the Amended and Restated Initial Warrants and the Amended and Restated Additional Warrants (without giving effect to any limitations on exercise set forth in the Warrants), and all such Warrant Shares shall constitute Registrable Securities and (b) the Investors (as defined in the Registration Rights Agreement) shall be entitled to registration rights in respect of such Warrant Shares on the same terms, and pursuant to and in accordance with, the Registration Rights Agreement, and the Registration Rights Agreement shall be deemed amended as of the Second Amendment Effective Date as shall be necessary to give effect to the foregoing. Without limiting the foregoing, the Borrower shall, within one Business Day after the Second Amendment Effective Date, file a prospectus supplement with the SEC in respect of the transactions contemplated hereby and otherwise as shall be necessary to ensure that the Registration Statement covering the Registrable Securities continues to be available for the offer and sale thereof by the Investors (as defined in the Registration Rights Agreement).
SECTION 8. SEC Filing. At or prior to 8:30 a.m. (New York City time) on the first (1st) Business Day following the date of this Amendment, the Borrower shall file a Form 8- K with the SEC describing the terms of the transactions contemplated by this Amendment, the ABL Amendment, the Equity Financing Documents and the Convertible Debenture Restructuring Documents, including as exhibits to such Form 8-K this Amendment (including the exhibits and other documents attached hereto and thereto), the ABL Amendment (and the documents required to be attached pursuant to the ABL Amendment), the form of Second Amendment First Out Waterfall Notes, the forms of Second Amendment Warrants, each of the Equity Financing Documents and each of the Convertible Debenture Restructuring Documents and any related documents (such Form 8-K, the Announcing Facility Amendment Form 8-K) and disclosing any other presently material non-public information (if any) provided or made available to any Secured Party (or any such Secured Partys agents or representatives) on or prior to the filing of the Announcing Facility Amendment Form 8-K. At or prior to 8:30 a.m. (New York City time) on the first (1st) Business Day following the earlier of the Second Amendment Effective Date and April 5, 2019, the Borrower shall file a Form 8-K with the SEC describing the consummation (or termination) of the transactions contemplated by this Amendment, the Equity Financing and the Convertible Debenture Restructuring (such Form 8-K, the Closing Facility Amendment Form 8-K) and disclosing and other presently material non-public information (if any) provided or made available to any Secured Party (or any such Secured Partys agents or representatives) on or prior to the filing of the Closing Facility Amendment Form 8-K. Subject to the foregoing, no Loan Party will issue any press releases or any other public statements with respect to the transactions contemplated by this Amendment or the ABL Amendment or disclosing the name of any Secured Party; provided, however, that the Borrower will be entitled, without the prior approval of any Secured Party, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the Announcing Facility Amendment Form 8-K or the Closing Facility Amendment 8-K and contemporaneously therewith and (ii) as is required by Applicable Law and regulations (provided that each Secured Party will be consulted by the Borrower in connection with any such press release or other public disclosure prior to its release and will be provided with a copy thereof by the Borrower, other than in the case of filings required by the Exchange Act to be made with the SEC, which Borrower may make without such consultation or notice). From and after the Borrowers filing of the Announcing Facility Amendment Form 8-K, no Secured Party shall be in possession of any material nonpublic information received from the Borrower, any other Loan Party or any of their Subsidiaries or
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Affiliates or any of its or their respective officers, directors, employees, attorneys, representatives or agents. Notwithstanding anything contained in this Amendment to the contrary and without implication that the contrary would otherwise be true, after giving effect to the filing of the Announcing Facility Amendment Form 8-K, the Borrower expressly acknowledges and agrees that no Secured Party shall have any duty of trust or confidence with respect to, or duty not to trade in any securities on the basis of, any information regarding the Borrower that is otherwise possessed (or continued to be possessed) by any Secured Party as a result of a breach of any of the covenants set forth in this Section 8.
SECTION 9. Fees, Costs and Expense Reimbursement. In connection with the Agent and the Lenders party hereto agreeing to enter into this Amendment and provide the accommodations hereunder, the Loan Parties agree to pay on the date of this Amendment all fees, costs and expenses (including attorneys fees) incurred by the Secured Parties in connection with this Amendment and any other Loan Document (including as amended hereby, as applicable) and the transactions contemplated hereby and thereby.
SECTION 10. Captions. Captions used in this Amendment are for convenience only and shall not modify or affect the interpretation or construction of this Amendment or any of its provisions.
SECTION 11. Counterparts. This Amendment may be executed in several counterparts, and by each party hereto on separate counterparts, each of which and any photocopies, facsimile copies and other electronic methods of transmission thereof shall be deemed an original, but all of which together shall constitute one and the same agreement.
SECTION 12. Severability. If any provision of this Amendment shall be invalid, illegal or unenforceable in any respect under any Applicable Law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. The parties hereto shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.
SECTION 13. Entire Agreement. The Facility Agreement, and the Security Agreement, each as amended hereby, together with all other Loan Documents (as amended hereby, as applicable), contains the entire understanding among the parties hereto with respect to the matters covered thereby and supersedes any and all other written and oral communications, negotiations, commitments and writings with respect thereto.
SECTION 14. Successors; Assigns. This Amendment shall be binding upon Borrower, the Loan Parties, the Lenders and Agent and their respective successors and permitted assigns, and shall inure to the benefit of Borrower, the Loan Parties, the Lenders, Agent and the other Secured Parties and the successors and assigns of the Lenders, Agent and the other Secured Parties. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Amendment or any of the other Loan Documents (including as amended hereby, as applicable). No Loan Party may assign or transfer any of its rights or obligations under this Amendment without the prior written consent of Agent and each Lender, and any prohibited assignment or transfer shall be absolutely void ab initio.
14
SECTION 15. Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE. Section 6.4 of the Amended Facility Agreement is incorporated herein, mutatis mutandis.
SECTION 16. Reaffirmation and Ratification; No Novation. Each Loan Party party hereto as debtor, grantor, pledgor, guarantor, assignor, or in any other similar capacity in which such Person grants Liens in its property or otherwise acts as accommodation party or guarantor, as the case may be pursuant to the Loan Documents (including as amended hereby, as applicable), hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under the Amended Facility Agreement (including the Facility Agreement as amended hereby), the Security Agreement (as amended hereby) and each other Loan Document (as amended hereby, as applicable) to which it is a party (after giving effect hereto) and (ii) to the extent such Person granted Liens or security interests in any of its property pursuant to any Loan Documents (including as amended hereby, as applicable) as security for or otherwise guaranteed the Obligations under or with respect to the Loan Documents (including as amended hereby, as applicable), ratifies and reaffirms such guarantee and grant (and the validity and enforceability thereof) of Liens and confirms and agrees and acknowledges that such Liens and security interests, and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations from and after the date hereof and from and after the Second Amendment Effective Date. Each Loan Party party hereto hereby consents to this Amendment and acknowledges that the Amended Facility Agreement (including the Facility Agreement as amended hereby), the Security Agreement (as amended hereby) and each other Loan Document (as amended hereby, as applicable) remains in full force and effect and is hereby ratified and reaffirmed. The execution and delivery of this Amendment shall not operate as a waiver of any right, power or remedy of Agent, the Lenders or any other Secured Party, constitute a waiver of any provision of the Facility Agreement (except for any waiver of the Designated Occurrences specifically provided in Section 3 of this Amendment), the Amended Facility Agreement (including the Facility Agreement as amended hereby), the Security Agreement (including as amended hereby) or any other Loan Document (including as amended hereby, as applicable) or serve to effect a novation of the obligations (including the Obligations). For the avoidance of doubt, this Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Facility Agreement (including the Amended Facility Agreement) and the other Loan Documents (including as amended hereby, as applicable) or an accord and satisfaction in regard thereto.
SECTION 17. Effect on Loan Documents.
(a) The Facility Agreement, and the Security Agreement, each as amended hereby, and each of the other Loan Documents, as amended as of the date hereof and as of the Second Amendment Effective Date (as applicable), shall be and remain in full force and effect in accordance with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment shall not operate, except with respect to the waivers, modifications and amendments expressly set forth herein, as a waiver of, consent to, or a modification or amendment of, any right, power, or remedy of Agent or any Lender under the
15
Facility Agreement, the Security Agreement or any other Loan Document. Except for the amendments to the Loan Documents expressly set forth herein or contemplated hereby, the Facility Agreement, the Security Agreement and the other Loan Documents shall remain unchanged and in full force and effect. The waivers, amendments, modifications and other agreements set forth herein or contemplated hereby are limited to the specified provisions of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants, shall not apply with respect to any facts or occurrences other than those on which the same are based, shall neither excuse future non- compliance with the Loan Documents (as amended hereby, as applicable) nor operate as a waiver of any Default or Event of Default, shall not operate as a consent to any further or other matter under the Loan Documents (as amended hereby, as applicable) and shall not be construed as an indication that any waiver of covenants or any other provision of the Amended Facility Agreement (including the Facility Agreement as amended hereby), the Security Agreement (as amended hereby) or any other Loan Document (as amended hereby, as applicable) will be agreed to, it being understood that the granting or denying of any waiver which may hereafter be requested by Borrower or any other Loan Party remains in the sole and absolute discretion of the Agent and the Lenders.
(b) Upon and after the Second Amendment Effective Date, each reference in the Facility Agreement to this Agreement, hereunder, herein, hereof or words of like import referring to the Facility Agreement, and each reference in the other Loan Documents to the Facility Agreement, thereunder, therein, thereof or words of like import referring to the Facility Agreement, shall mean and be a reference to the Amended Facility Agreement. Upon and after the Second Amendment Effective Date, each reference in the Security Agreement to this Agreement, hereunder, herein, hereof or words of like import referring to the Security Agreement, and each reference in the other Loan Documents to the Security Agreement, the Guaranty and Security Agreement, thereunder, therein, thereof or words of like import referring to the Security Agreement, shall mean and be a reference to the Security Agreement (as amended hereby).
(c) To the extent that any of the terms and conditions in any of the Loan Documents (as amended hereby, as applicable) shall contradict or be in conflict with any of the terms or conditions of the Amended Facility Agreement or the Security Agreement (as amended hereby), as applicable, such terms and conditions are hereby deemed modified and amended accordingly to reflect the terms and conditions of the Amended Facility Agreement and the Security Agreement (as amended hereby), as applicable (effective, in each case, as of the Second Amendment Effective Date).
(d) Each of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants is a Loan Document.
(e) The Borrower and each of the Lenders hereby acknowledge and agree that, after the Second Amendment Effective Date, they shall not amend or otherwise modify any of the Warrants to reduce the Exercise Price thereunder or amend or otherwise modify any of the First Out Waterfall Notes to reduce the Fixed Conversion Price thereunder, in each case without approval of the stockholders of the Borrower in accordance with the rules of the Principal Market,
16
except to the extent any such amendment or modification is effected in a stand-alone transaction as determined under the rules and guidance of the Principal Market. For the avoidance of doubt, the foregoing shall not effect the provisions of the Warrants and the First Out Waterfall Notes that provide for adjustment of the Exercise Price or the Fixed Conversion Price upon the circumstances specified therein.
SECTION 18. Guarantors Acknowledgment and Agreement. Although the Guarantors party hereto have been informed of the matters set forth herein and have agreed to the same, each such Guarantor understands, acknowledges and agrees that none of the Secured Parties has any obligations to inform such Guarantor of such matters in the future or to seek its acknowledgment or agreement to future amendments, restatements, supplements, changes, modifications, waivers or consents, and nothing herein shall create such a duty.
SECTION 19. Release.
(a) As of the date of this Amendment and the Second Amendment Effective Date, each Loan Party, for itself and on behalf of its successors, assigns, Subsidiaries and such Loan Partys and its Subsidiaries officers, directors (and any equivalent governing body), employees, agents, representatives, advisors, consultants, accountants and attorneys, and any Person acting for or on behalf of, or claiming through it (collectively, the Releasing Persons), hereby waives, releases, remises and forever discharges each Secured Party, each of their respective Affiliates and successors in title, and past, present and future officers, directors, employees, limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals of the foregoing entities and all other Persons and entities to whom any Secured Party would be liable if such Persons were found to be liable to such Releasing Persons (each a Releasee and collectively, the Releasees), from any and all past, present and future claims, suits, liens, lawsuits, amounts paid in settlement, debts, deficiencies, disbursements, demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a Claim and collectively, the Claims), whether known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated, suspected or unsuspected, which such Releasing Persons ever had from the beginning of the world until (and including) the day that is the later of (i) the date hereof and (ii) the Second Amendment Effective Date, against any such Releasing Person which relates, directly or indirectly, to the Facility Agreement, the Amended Facility Agreement, the Security Agreement (including as amended hereby), any other Loan Document (including as amended hereby, as applicable), the Stock owned by any Releasee or to any acts or omissions of any such Releasee with respect to the Facility Agreement, the Amended Facility Agreement, the Security Agreement (including as amended hereby) or any other Loan Document (including as amended hereby, as applicable) or any Stock owned by any Releasee, or to the lender-borrower relationship evidenced by the Loan Documents (including as amended hereby, as applicable) or the Warrant/Stock holder or owner-issuer of Warrant/Stock holder issuer relationship evidenced by the Loan Documents (including as amended hereby, as applicable).
(b) As to each and every Claim released hereunder, each Loan Party hereby agrees, represents and warrants that it has received the advice of legal counsel with regard to the releases
17
contained herein, and having been so advised, specifically waives the benefit of the provisions of Section 1542 of the Civil Code of California which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
As to each and every Claim released hereunder, each Loan Party also waives the benefit of each other similar provision of applicable federal, state or foreign law (including without limitation the laws of the State of New York), if any, pertaining to general releases after having been advised by legal counsel to such Loan Party with respect thereto.
(c) Each Loan Party acknowledges that it may hereafter discover facts different from or in addition to those now known or believed to be true with respect to such Claims and agrees that this Amendment shall be and remain effective in all respects notwithstanding any such differences or additional facts. Each Loan Party understands, acknowledges and agrees that the release set forth above in this Section 19 may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(d) Each Loan Party hereby agrees, represents, and warrants that (i) neither such Loan Party nor any other Releasing Person has voluntarily, by operation of law or otherwise, assigned, conveyed, transferred or encumbered, either directly or indirectly, in whole or in part, any right to or interest in any of the Claims released pursuant to this Section 19; (ii)(A) this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants has each been entered into (1) without force or duress and (2) of the free will of each Loan Party, and (B) the decision of such undersigned to enter into this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants is a fully informed decision and such undersigned is aware of all legal and other ramifications of each such decision; and (iii) such Loan Party has (A) read and understands this Amendment (including the release granted in this Section 19 and the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants, (B) consulted with and been represented by independent legal counsel of its own choosing in negotiations for and the preparation of this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants, (C) read this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants in full and final form, and (D) been advised by its counsel of its rights and obligations under this Amendment (including the Amended Facility Agreement and the Security Agreement (as amended hereby)), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants.
(e) Each Loan Party, for itself and on behalf of each other Releasing Person, hereby absolutely, unconditionally and irrevocably covenants and agrees with and in favor of each
18
Releasee above that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Person pursuant to the above release in this Section 19. Each Loan Party further agrees that it shall not dispute the validity or enforceability of the this Amendment, the Facility Agreement, the Amended Facility Agreement, the Security Agreement (including as amended hereby), the Second Amendment First Out Waterfall Notes and the Second Amendment Warrants or any of the other Loan Documents, or any of its obligations hereunder or thereunder, or the creation, validity, perfection, priority, enforceability or the extent of Agents security interest or Lien on any item of Collateral under the Facility Agreement, the Amended Facility Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents (including as amended hereby, as applicable) or the providing of any control (within the meaning of Articles 8 and 9 under the applicable UCC) under any Control Agreement or any other Loan Document (including as amended hereby, as applicable). If any Loan Party or any other Releasing Person breaches or otherwise violates the foregoing covenant and provisions, such Loan Party, for itself and its Releasing Persons, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys fees, expenses and costs and any other fees, expenses and costs incurred by such Releasee as a result of such breach or violation.
(f) The provisions of this Section 19 shall survive the termination of this Amendment, the Amended Facility Agreement, the Security Agreement (including as amended hereby) and the other Loan Documents (including as amended hereby, as applicable) and the payment in full of the Obligations.
[Signature Pages Follow]
19
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the first day written above.
BORROWER: | ||
ENDOLOGIX, INC., | ||
a Delaware corporation | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO | |
OTHER LOAN PARTIES: | ||
CVD/RMS ACQUISITION CORP., | ||
a Delaware corporation | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary | |
NELLIX, INC., | ||
a Delaware corporation | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary | |
TRIVASCULAR TECHNOLOGIES, INC., | ||
a Delaware corporation | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary |
[Signature Page to Second Amendment to Amended and Restated Facility Agreement and First Amendment to Guaranty and Security Agreement]
TRIVASCULAR, INC., | ||
a California corporation | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary | |
ENDOLOGIX CANADA, LLC, | ||
a Delaware limited liability company | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary | |
TRIVASCULAR SALES LLC, | ||
a Texas limited liability company | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary | |
RMS/ENDOLOGIX SIDEWAYS MERGER CORP., | ||
a Delaware corporation | ||
By: | /s/ Vaseem Mahboob | |
Name: | Vaseem Mahboob | |
Title: | CFO and Secretary |
[Signature Page to Second Amendment to Amended and Restated Facility Agreement and First Amendment to Guaranty and Security Agreement]
LENDERS: | ||||||
DEERFIELD PARTNERS, L.P. | ||||||
By: | Deerfield Mgmt, L.P. | |||||
General Partner | ||||||
By: | J.E. Flynn Capital, LLC | |||||
General Partner | ||||||
By: | /s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory | ||||||
DEERFIELD PRIVATE DESIGN FUND III, L.P. | ||||||
By: | Deerfield Mgmt III, L.P. | |||||
General Partner | ||||||
By: | J.E. Flynn Capital III, LLC | |||||
General Partner | ||||||
By: | /s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory | ||||||
DEERFIELD PRIVATE DESIGN FUND IV, L.P. | ||||||
By: | Deerfield Mgmt IV, L.P. | |||||
General Partner | ||||||
By: | J.E. Flynn Capital IV, LLC | |||||
General Partner | ||||||
By: | /s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory |
[Signature Page to Second Amendment to Amended and Restated Facility Agreement and First Amendment to Guaranty and Security Agreement]
AGENT: | ||||||
DEERFIELD PRIVATE DESIGN FUND IV, L.P. | ||||||
By: | Deerfield Mgmt IV, L.P. | |||||
General Partner | ||||||
By: | J.E. Flynn Capital IV, LLC | |||||
General Partner | ||||||
By: | /s/ David J. Clark | |||||
Name: David J. Clark | ||||||
Title: Authorized Signatory |
[Signature Page to Second Amendment to Amended and Restated Facility Agreement and First Amendment to Guaranty and Security Agreement]
EXHIBIT A-I
Amended Facility Agreement
[Attached]
Execution Version
Conformed through the First Amendment, dated November 20, 2018
AMENDED AND RESTATED
FACILITY AGREEMENT
dated as of August 9, 2018
by and among
Endologix, Inc.,
as the Borrower,
the other Loan Parties party hereto from time to time,
the Lenders
and
Deerfield Private Design Fund IV, L.P.,
as agent for itself and the Lenders
as amended by:
that certain First Amendment to Amended and Restated Facility Agreement dated November 20, 2018 and that certain Second Amendment to Amended and Restated Facility Agreement dated March 31, 2019
Table of Contents
ARTICLE 1 DEFINITIONS |
2 | |||||
Section 1.1 |
General Definitions | 2 | ||||
Section 1.2 |
Interpretation | |||||
Section 1.3 |
Business Day Adjustment | |||||
Section 1.4 |
Loan Records | |||||
Section 1.5 |
Accounting Terms and Principles | |||||
Section 1.6 |
Tax Treatment | |||||
Section 1.7 |
Officers | |||||
Section 1.8 |
Joint Drafting and Negotiation | |||||
ARTICLE 2 AGREEMENT FOR THE LOANS |
||||||
Section 2.1 |
Use of Proceeds | |||||
Section 2.2 |
Disbursements | |||||
Section 2.3 |
Payments; Prepayments; No Call; Non-Callable Make Whole Amount | |||||
Section 2.4 |
Payment Details | |||||
Section 2.5 |
Taxes | |||||
Section 2.6 |
Interest. | |||||
Section 2.7 |
Yield Enhancement Payment; Default Interest | |||||
Section 2.8 |
Delivery of Warrants | |||||
ARTICLE 3 REPRESENTATIONS AND WARRANTIES |
||||||
Section 3.1 |
Representations and Warranties of the Loan Parties | |||||
Section 3.2 |
Borrower Acknowledgment | |||||
Section 3.3 |
Representations and Warranties of the Lenders | |||||
ARTICLE 4 CLOSING CONDITIONS |
||||||
Section 4.1 |
Conditions to the |
|||||
ARTICLE 5 PARTICULAR COVENANTS AND EVENTS OF DEFAULT |
||||||
Section 5.1 |
Affirmative Covenants | |||||
Section 5.2 |
Negative Covenants. | |||||
Section 5.3 |
Change of Control | |||||
Section 5.4 |
General Acceleration Provision upon Events of Default | |||||
Section 5.5 |
Additional Remedies | |||||
Section 5.6 |
Recovery of Amounts Due | |||||
Section 5.7 |
Credit Bidding | |||||
ARTICLE 6 MISCELLANEOUS |
||||||
Section 6.1 |
Notices | |||||
Section 6.2 |
Waiver of Notice |
i
Section 6.3 |
Fees, Charges, Costs and Expenses Reimbursement | |||||
Section 6.4 |
Governing Law | |||||
Section 6.5 |
Successors and Assigns | |||||
Section 6.6 |
Entire Agreement; Amendments | |||||
Section 6.7 |
Severability | |||||
Section 6.8 |
Counterparts | |||||
Section 6.9 |
Survival | |||||
Section 6.10 |
No Waiver | |||||
Section 6.11 |
Indemnity | |||||
Section 6.12 |
No Usury | |||||
Section 6.13 |
Specific Performance | |||||
Section 6.14 |
Further Assurances | |||||
Section 6.15 |
Agent | |||||
Section 6.16 |
USA Patriot Act | |||||
Section 6.17 |
Placement Agent | |||||
Section 6.18 |
No Fiduciary Relationship | |||||
Section 6.19 |
Joint and Several | |||||
Section 6.20 |
No Third Parties Benefited | |||||
Section 6.21 |
Binding Effect | |||||
Section 6.22 |
Marshaling; Payments Set Aside | |||||
Section 6.23 |
No Waiver; Cumulative Remedies | |||||
Section 6.24 |
Right of Setoff | |||||
Section 6.25 |
Independent Nature of Secured Parties | |||||
Section 6.26 |
Sharing of Payments, Etc. | |||||
Section 6.27 |
Confidentiality. | |||||
Section 6.28 |
Intercreditor Agreement | |||||
Section 6.29 |
Acknowledgment of Prior Obligations and Continuation Thereof. | |||||
Section 6.30 |
No Novation | |||||
Section 6.31 |
Survival of Any Existing Unmatured Events of Default and Events of Default |
Annex
Annex A |
Disbursement Amount and Warrants | |
Schedules | ||
Schedule P-1 |
Existing Investments | |
Schedule 2.4 |
List of Agreement Date Lenders and Such Lenders Wire Instructions and Information for Notices | |
Schedule 3.1(d) |
Existing Liens | |
Schedule 3.1(f) |
Existing Indebtedness | |
Schedule 3.1(h) |
Litigation | |
Schedule 3.1(m) |
Real Estate | |
Schedule 3.1(x) |
Borrowers Subsidiaries | |
Schedule 3.1(z) |
Borrowers Outstanding Shares of Stock, Options and Warrants | |
Schedule 3.1(aa) |
Material Contracts |
ii
Schedule 3.1(dd) |
Environmental | |
Schedule 3.1(ff) |
Labor Relations | |
Schedule 3.1(gg) |
Jurisdiction of Organization, Legal Name, Organizational Identification | |
Number and Chief Executive Office | ||
Schedule 3.1(hh) |
Inventory Locations | |
Schedule 3.1(jjj) |
Stock of the Subsidiaries of the Loan Parties | |
Schedule 5.1(q) |
Other Loan Documents to Be Form 8-K Exhibits | |
Schedule 5.2(iv) |
Contingent Obligations | |
Schedule 5.2(vii) |
Transactions with Affiliates | |
Exhibits | ||
|
| |
Exhibit A-1 |
Form of First Out Waterfall Note (as of Agreement Date) | |
Exhibit A-2 |
Form of Last Out Waterfall Note | |
Exhibit A-3 |
Form of First Out Waterfall Note (as of Second Amendment Effective Date) | |
Exhibit B |
Form of Perfection Certificate | |
Exhibit C-1 |
Form of Initial Warrant | |
Exhibit C |
Form of Additional Warrant | |
Exhibit C-3 |
Form of Amended and Restated Initial Warrant | |
Exhibit C-4 |
Form of Amended and Restated Additional Warrant | |
Exhibit D |
Closing Checklist | |
|
| |
Exhibit F |
Form of Compliance Certificate |
iii
AMENDED AND RESTATED
FACILITY AGREEMENT
This AMENDED AND RESTATED FACILITY AGREEMENT (this Agreement), dated as of August 9, 2018, by and among Endologix, Inc., a Delaware corporation (the Borrower), the other Loan Parties (as defined below) party hereto from time to time, the lenders party hereto from time to time (including the First Out Waterfall Lenders (as defined below) and the Last Out Waterfall Lenders (as defined below)), Deerfield Private Design Fund IV, L.P. (Deerfield Facility Entity), as agent for itself and the Lenders (in such capacity, together with its successors and assigns in such capacity, Agent, and, together with the Lenders, the Borrower and the other Loan Parties party hereto, the Parties).
W I T N E S S E T H:
WHEREAS, the Loan Parties party thereto, Agent and the lenders party thereto are parties to that certain Facility Agreement dated as of the Prior Agreement Date (as amended, restated, supplemented or otherwise modified from time to time prior to the effectiveness hereof, the Prior Facility Agreement);
WHEREAS, Agent, the Lenders party hereto and the Loan Parties party hereto have agreed to amend and restate the Prior Facility Agreement in its entirety to read as set forth in this Agreement, and it has been agreed by such parties that the Loans, Disbursements and other Obligations outstanding under the Prior Facility Agreement or any Prior Loan Document shall continue under and be governed by and deemed to be outstanding under this Agreement, it being agreed and understood that this Agreement does not constitute a novation, satisfaction, payment or re-borrowing of any obligation or Obligation under the Prior Facility Agreement or any other Prior Loan Document, nor does this Agreement operate as a waiver of any right, power or remedy of Agent, any Lender or any other Secured Party under any Loan Document;
WHEREAS, pursuant to a recapitalization of the Borrower involving and in consideration of, among other things, (a) the amendment and restatement of the Prior Facility Agreement and the entry into this Agreement, (b) certain accommodations under the Prior Facility Agreement and this Agreement made in favor of the Loan Parties with respect to certain actions previously taken by the Loan Parties and their Subsidiaries, and (c) Deerfield Partners, L.P. (as the sole Last Out Waterfall Lender as of the Agreement Date) agreeing to extend the date of payment of the principal that would have otherwise been due until the Maturity Date with respect to such 3.25% Convertible Notes that it held and to forgo certain other benefits it had under such 3.25% Convertible Notes, it and the Loan Parties have agreed to exchange $40,500,000 of the 3.25% Convertible Notes held by Deerfield Partners, L.P. (but, for the avoidance of doubt, not any other 3.25% Convertible Notes) (the Exchanged Deerfield Convertible Notes) for a new tranche of loans in the principal amount of $40,500,000 under this Agreement, which shall constitute the Last Out Waterfall Loans and part of the Last Out Waterfall Obligations, Loans and Obligations hereunder and which such new tranche of loans shall receive the interest and other amounts and payments applicable to such loans under this Agreement and the other Loan Documents and shall be afforded the security, the Liens (including the priority thereof), the Guarantees and the other benefits applicable to such loans hereunder and under the other Loan Documents;
WHEREAS, Borrower desires to continue to secure all of the Obligations (including the Last Out Waterfall Loans) by continuing to grant to Agent, for the benefit of the Secured Parties, a first priority (subject only to the prior priority of the Permitted Priority Liens) perfected Lien upon substantially all of its personal and real property including all of the issued and outstanding Stock of its direct Subsidiaries (in each case, other than Excluded Property); and
WHEREAS, each of the Loan Parties is willing to continue to guaranty all of the Obligations (including the Last Out Waterfall Loans), and to continue to grant to Agent, for the benefit of the Secured Parties, a first priority (subject only to the prior priority of the Permitted Priority Liens) perfected Lien upon all of its respective personal and real property, including all of the issued and outstanding Stock of its direct Subsidiaries (in each case, other than Excluded Property) which are issued to a Loan Party.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree to amend and restate the Prior Facility Agreement and to provide for the Last Out Waterfall Loans hereunder, and the Prior Facility Agreement is hereby amended and restated in its entirety (and the Last Out Waterfall Loans are provided for hereunder) pursuant to the terms hereof, as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 General Definitions. Wherever used in this Agreement, the Exhibits or the Schedules attached hereto, unless the context otherwise requires, the following terms have the following meanings:
2.25%
Convertible Note Documents means the 2.25% Convertible Notes, the 2.25% Senior NoteNotes Indenture and each other document or agreement from time to time entered
into in connection with the foregoing.
2.25% Convertible Notes means those certain 2.25% senior unsecured notes, governed by the terms of a base indenture, as supplemented by the first supplemental indenture relating to the 2.25% senior notes (together, the 2.25% Senior Notes Indenture), between the Borrower and Wells Fargo Bank, National Association, as trustee, each of which were entered into on December 10, 2013.
2.25% Senior Notes Indenture has the meaning provided therefor in the definition of 2.25% Convertible Notes.
3.25% Convertible Notes means (a) those certain 3.25% senior unsecured notes issued by the Borrower (the Original 3.25% Convertible Notes), governed by the terms of a base indenture, as supplemented by the second supplemental indenture relating to the 3.25% senior notes (together, the 3.25% Senior Notes Indenture), between the Borrower, as issuer, and Wells Fargo Bank, National Association, as trustee, each of which were entered into on November 2, 2015, (b) those (i) certain unsecured 5.0% mandatory convertible senior notes due 2024 (the 5.00% Mandatory Convertible Notes) that are issued by the Borrower in the form attached as Exhibit D to the Second Amendment (and that are governed by the terms of that certain Indenture entered into as of the Second Amendment Effective Date between the Borrower, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), in the form attached as Exhibit D to the Second Amendment (the Exchanged Mandatory Senior Notes Indenture)) and (ii) certain unsecured 5.0% voluntary convertible senior notes due 2024 (the 5.00% Voluntary Convertible Notes, together with the 5.00% Mandatory Convertible Notes, the 5.00% Convertible Notes) that are issued by the Borrower in the form attached as Exhibit D to the Second Amendment (and that are governed by the terms of that certain Indenture entered into as of the Second Amendment Effective Date between the Borrower, as issuer, and Wilmington Trust, National Association, as trustee (including the exhibit, schedule and attachments thereto), in the form attached as Exhibit D to the Second Amendment (the Exchanged
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Voluntary Senior Notes Indenture, together with the Exchanged Mandatory Senior Notes Indenture, the Exchanged Senior Notes Indentures)), in each case of clause (b)(i) and clause (b)(ii), (A) on the Second Amendment Effective Date in exchange for certain of the Original 3.25% Convertible Notes outstanding as of the Second Amendment Effective Date pursuant to the terms of that certain Exchange Agreement entered in to as of the Second Amendment Date (the Exchange Agreement) by and among the Borrower and the noteholders party thereto, or (B) after the Second Amendment Effective Date in exchange for any equal principal amount of the Remaining Original 3.25% Convertible Notes in accordance and compliance with the terms and provisions of this Agreement (including clause (k) of the definition of Permitted Indebtedness), in each case of clause (a) and clause (b), as the same may be amended, restated, refinanced, supplemented or otherwise modified in connection with a Permitted 3.25% Convertible Note Refinancing, in each case, to the extent expressly permitted by the terms of this Agreement.
3.25% Convertible Note Documents means the 3.25% Convertible Notes, the 3.25% Senior
NoteNotes Indenture, the Exchanged Senior Notes Indentures, the Exchange Agreement and each other
document, instrument or agreement from time to entered into in connection with the foregoing, as the same may be amended, restated, refinanced, supplemented or otherwise modified in
onconnection with a Permitted 3.25% Convertible Note Refinancing, in each case, to the extent expressly permitted by
the terms of this Agreement.
3.25% Senior Notes Indenture has the meaning provided therefor in the definition of 3.25% Convertible Notes.
5.00% Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
5.00% Mandatory Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
5.00% Voluntary Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
10-K means an annual report on Form 10-K (or successor form thereto), as required to be filed pursuant to the Exchange Act.
10-Q means a quarterly report on Form 10-Q (or successor form thereto), as required to be filed pursuant to the Exchange Act.
ABL Agent has the meaning assigned to such term in the definition of ABL Credit Facility herein.
ABL Credit Agreement and ABL Credit Facility mean that certain Credit Agreement, dated as of the Agreement Date, by and among the Borrower, the other Persons party thereto from time to time as Borrowers (as defined therein) or guarantors therein, Deerfield ELGX Revolver, LLC, in its capacity as Agent (as defined therein (including any Third Party Agent (as defined therein)), in such capacity, together with its successors and assigns in such capacity, the ABL Agent) and the financial institutions or other entities from time to time parties thereto, each as a Lender (as defined therein), as amended, restated, supplemented or otherwise modified in accordance and in compliance with the Intercreditor Agreement.
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All-in Yield means the interest rate (including margins and floors), original issue discount and fees paid to all lenders (or consenting lenders) of such debt or their Affiliates (based on the remaining life to maturity), but not including any fees not paid to all lenders (such as fees to initial purchasers (i.e., investment banks in Rule 144A offerings), underwriters or lead agents).
Amended and Restated Additional Warrants has the meaning set forth in Section 2.8(g).
Amended and Restated Initial Warrants has the meaning set forth in Section 2.8(f).
Amortization Payments means (i) with respect to the First Out Waterfall Loans, the three principal payments due on April 2, 2021, April 2, 2022 and on the Maturity Date that are set forth in the second column of the table in Section 2.3(a) and (ii) with respect to the Last Out Waterfall Loans, the two principal payments due on April 2, 2022 and on the Maturity Date that are set forth in the third column of the table in Section 2.3(a).
Announcing Form 8-K has the meaning set forth in Section 5.1(q).
Anti-Corruption Laws means any and all laws, rules, and regulations of any jurisdiction applicable to any Loan Party or any Subsidiary of any Loan Party from time to time concerning or relating to bribery or corruption, including, without limitation, the FCPA, as amended, the UK Bribery Act 2010 and other similar legislation in any other jurisdictions.
Anti-Money Laundering Laws means any and all laws, rules, and regulations in effect from time to time related to terrorism or money laundering, including, without limitation, (i) all applicable requirements of the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. 5311 et. seq., (the Bank Secrecy Act)), as amended by Title III of the USA Patriot Act, (ii) the Trading with the Enemy Act, (iii) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079), and any other enabling legislation, executive order or regulations issued pursuant or relating thereto and (iv) other applicable federal or state laws relating to know your customer or anti-money laundering rules and regulations.
Anti-Terrorism Laws means any and all laws, regulations, rules, orders, etc. in effect from time to time relating to anti-money laundering and terrorism, including, without limitation, Executive Order No. 13224 (effective September 24, 2001), Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended), and the USA Patriot Act (Pub. L. No. 107-56 (Oct. 12, 2001)).
Applicable Laws means, with respect to any Person, the common law and any federal, state, local, foreign, multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. Applicable Laws includes Healthcare Laws and Environmental Laws.
Application Event means the occurrence of (a) a failure by the Loan Parties to repay all of the Obligations (other than (y) unasserted contingent indemnification obligations and (z) those Obligations under any Warrant or the Registration Rights Agreement that are not (or do not become) due or payable on the Maturity Date) in full in cash on the Maturity Date, (b) any Insolvency Proceeding or any event of
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of doubt, other than any Amortization Payments) in full of the Loans prior to the Maturity Date, $0.
Code means the Internal Revenue Code of 1986, as amended, and any Treasury Regulations promulgated thereunder.
Collateral has the meaning given to it in the Security Agreement.
Collateral Access Agreement means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in the Loan Parties or their Subsidiaries Collateral or books and records, in each case, in form and substance reasonably satisfactory to Agent.
Common Stock means the Common Stock of the Borrower, with a $0.001 par value per share.
Compliance Certificate means a certificate, duly executed by an Authorized Officer of the Borrower, appropriately completed and substantially in the form of Exhibit F hereto.
Contingent Obligation means, with respect to any Person, any direct or indirect liability of such Person: (a) with respect to any Indebtedness of another Person (a Third Party Obligation) if the purpose or intent of such Person incurring such liability, or the effect thereof, is to provide assurance to the obligee of such Third Party Obligation that such Third Party Obligation will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Third Party Obligation will be protected, in whole or in part, against loss with respect thereto; (b) with respect to any undrawn portion of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for the reimbursement of any drawing; (c) under any Swap Contract, to the extent not yet due and payable; (d) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement; or (e) for any obligations of another Person pursuant to any Guarantee or pursuant to any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to preserve the solvency, financial condition or level of income of another Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so Guaranteed or otherwise supported or, if not a fixed and determinable amount, the maximum amount so Guaranteed or otherwise supported.
Control Agreement means, with respect to any deposit account, securities account, commodity account, securities entitlement or commodity contract, an agreement, in form and substance reasonably satisfactory to Agent, among Agent, the financial institution or other Person at which such account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account or owning such entitlement or contract, effective to grant control (within the meaning of Articles 8 and 9 under the applicable UCC) over such account to Agent.
Conversion means any conversion any of the First Out Waterfall Notes into Conversion Shares in accordance with the First Out Waterfall Notes (including any Voluntary Conversion, Mandatory Conversion or Forced Conversion).
Conversion Shares has the meaning set forth in Section 3.1(z).
Convertible Note Documents means, collectively, the 2.25% Convertible Note Documents and the 3.25% Convertible Note Documents (which, for the avoidance of doubt, shall include the indenture
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and each other document, instrument or agreement from time to time entered into in connection with any Permitted 3.25% Convertible Note Refinancing, in each case, to the extent such indenture, documents, instruments or agreements are permitted pursuant to the terms of the definition of Permitted 3.25% Convertible Note Refinancing).
Convertible Securities means any Stock or securities (other than Options) directly or indirectly convertible into or exchangeable or exercisable for shares of Common Stock.
Copyrights has the meaning set forth in the Security Agreement.
Copyright Security Agreement means any copyright security agreement executed and delivered by a Loan Party to Agent, on behalf of the Secured Parties, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.
Correction means the repair, modification, adjustment, relabeling, destruction, or inspection (including patient monitoring) of a product or device without its physical removal from its point of use to some other location.
Current Balance Sheet has the meaning set forth in the definition of Enterprise Value.
DEA means the Drug Enforcement Administration of the United States of America, any comparable state or local Governmental Authority, any comparable Governmental Authority in any non-United States jurisdiction, and any successor agency of any of the foregoing.
Deerfield Facility Entity has the meaning set forth in the preamble to this Agreement.
Default means any event which, with the giving of notice, lapse of time or fulfillment of any other applicable condition (or any combination of the foregoing), would constitute an Event of Default.
Disbursements has the meaning set forth in Section 2.2(a)(ii).
Dispose and Disposition mean (a) the sale, lease, license, transfer, assignment, conveyance or other disposition of any assets or property (including any transfer or conveyance of any assets or property pursuant to a division or split of a limited liability company or other entity or Person into two or more limited liability companies or other entities or Persons) and (b) the sale or transfer by the Borrower or any Subsidiary of the Borrower of any Stock issued by any Subsidiary of the Borrower.
Disqualified Stock means any Stock which, by its terms (or by the terms of any security or other Stock into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Stock that does not constitute Disqualified Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable (in each case, other than solely for Stock that does not constitute Disqualified Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is one year and one day following the Maturity Date (excluding any provisions requiring redemption upon a change in control or similar event, provided that such change in control or similar event results in the occurrence of the payment in full in cash of all of the Obligations (other than (i) unasserted contingent indemnification obligations and (ii) Obligations under the Warrants and the Registration Rights Agreement that are not due and payable at the time such other Obligations are paid in full in cash)), (b) is convertible into or exchangeable for (i) debt securities or (ii) any Stock referred to in (a) above, in each case, at any time on or prior to the date that is one year and one day following the Maturity Date at the time such Stock was issued, or (c) is
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giving effect to clause (f) of the definition of Cash Equivalents) of the Successor Entity and its Subsidiaries as shown on a consolidated basis on the Current Balance Sheet.
Environmental Laws means all Applicable Laws, Authorizations and permits imposing liability or standards of conduct for or relating to the regulation and protection of human health, safety, the workplace, the environment and natural resources, and including public notification requirements and environmental transfer of ownership, notification or approval statutes.
Environmental Liabilities means all Liabilities (including costs of removal and remedial actions, natural resource damages and costs and expenses of investigation and feasibility studies, including the cost of environmental consultants and attorneys costs) that may be imposed on, incurred by or asserted against any Loan Party or any Subsidiary of any Loan Party as a result of, or related to, any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law resulting from the ownership, lease, sublease or other operation or occupation of property by any Loan Party or any Subsidiary of any Loan Party, whether on, prior or after the Agreement Date.
Equipment means equipment (as that term is defined in the UCC).
Equity Financing Documents has the meaning provided therefor in the Second Amendment.
ERISA means the Employee Retirement Income Security Act of 1974, as amended and applicable published guidance thereunder.
ERISA Affiliate means collectively the Borrower, any Subsidiary of Borrower and any Person under common control or treated as a single employer with, Borrower or any Subsidiary of Borrower within the meaning of Code Section 414 (b), (c), (m) or (o) or under ERISA.
ERISA Event means any of the following: (a) a reportable event described in Section 4043(b) or (c) of ERISA (other than an event for which the 30-day notice period is waived) with respect to a Title IV Plan; (b) the withdrawal of any ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan; (d) with respect to any Multiemployer Plan, the filing of a notice of insolvency or termination, or treatment of a plan amendment as termination, under Section 4041A of ERISA; (e) the filing of a notice of intent to terminate a Title IV Plan, or treatment of a plan amendment as termination, under Section 4041 of ERISA; (f) the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (g) the failure to make any required contribution to any Title IV Plan or Multiemployer Plan when due; (h) the imposition of a Lien under Section 412 or 430(k) of the Code or Section 303 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA Affiliate; (i) the failure of an Employee Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section 401 or 501 of the Code or other Applicable Law to qualify thereunder; (j) a Title IV plan is in at risk status within the meaning of Code Section 430(i); (k) a Multiemployer Plan is in endangered status or critical status within the meaning of Section 432(b) of the Code; and (l) any other event or condition that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any Liability upon any ERISA Affiliate under Title IV of ERISA other than for contributions to Title IV Plans and Multiemployer Plans in the ordinary course and PBGC premiums due but not delinquent.
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Exercise Price has the meaning provided therefor in the Warrants.
Event of Default has the meaning set forth in Section 5.4.
Exchange Act means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
Exchange Agreement has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Exchanged Deerfield Convertible Notes has the meaning specified therefor in the recitals hereto.
Exchanged Mandatory Senior Notes Indenture has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Exchanged Voluntary Senior Notes Indenture has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Exchanged Senior Notes Indentures has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Excluded Accounts has the meaning set forth in Section 5.1(k).
Excluded Domestic Holdco means a wholly-owned Domestic Subsidiary of the Borrower substantially all of the assets of which consist of Stock of Excluded Foreign Subsidiaries held directly or indirectly by such Subsidiary and which does not engage in any business, operations or activity other than that of a holding company, excluding for purposes of such determination, Indebtedness of such Excluded Foreign Subsidiaries.
Excluded Foreign Subsidiary means any Foreign Subsidiary which is a controlled foreign corporation (as defined in the Code) that has not guaranteed or pledged any of its assets to secure, or with respect to which there shall not have been pledged two-thirds or more of the voting Stock to secure, any Indebtedness (other than the Obligations) of a Loan Party.
Excluded Property means, collectively:
(a) voting shares of any (A) Excluded Foreign Subsidiary of Borrower or (B) Excluded Domestic Holdco, in each case, in excess of 65% of all of the issued and outstanding voting shares of capital stock of such subsidiary;
(b) any lease, license, contract, property right or agreement as to which, if and to the extent that, and only for so long as, the grant of a security interest therein shall (1) constitute or result in a breach, termination or default under any such lease, license, contract, property right or agreement or render it unenforceable, (2) be prohibited by any applicable law or (3) require the consent of any third party (in each case of clauses (1), (2) and (3), other than to the extent that any such breach, termination, default, prohibition or requirement for consent would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable Law), provided that such security interest shall attach immediately to each portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified above;
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Existing ABL Agent has the meaning assigned to such term in the definition of Existing ABL Credit Facility herein.
Existing ABL Credit Facility means that certain Credit and Security Agreement, dated as of July 29, 2016, by and among the Borrower, the other Persons party thereto from time to time as Borrowers (as defined therein), Midcap Financial Trust, a Delaware statutory trust, as Agent (as defined therein, in such capacity, the Existing ABL Agent) and the financial institutions or other entities from time to time parties thereto, each as a Lender (as defined therein) (in such capacity, the Existing ABL Lenders), as amended, restated, supplemented or otherwise modified prior to the Prior Agreement Date.
Existing ABL Debt Documents shall have the meaning of Loan Documents (as defined in the Existing ABL Credit Facility).
Existing ABL Lenders has the meaning assigned to such term in the definition of Existing ABL Credit Facility herein.
Exit Payment means the First Out
Waterfall Loan Exit Payment and/or the Last Out Waterfall Loan Exit Payment, as the context may require.
FATCA means Sections 1471 through 1474 of the Code as of the Agreement Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any applicable intergovernmental agreements entered into with respect to the foregoing.
FCPA has the meaning set forth in Section 3.1(jj).
FDA means the Food and Drug Administration of the United States of America, any comparable state or local Governmental Authority, any comparable Governmental Authority in any non-United States jurisdiction, and any successor agency of any of the foregoing.
FDCA means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C. Section 301 et seq., and all regulations promulgated thereunder.
Federal Reserve Board means the Board of Governors of the Federal Reserve System or any entity succeeding to any of its principal functions.
Final Payment means such cash amount as may be necessary to repay the outstanding principal amount of the Loans and any other Obligations (including, for the avoidance of doubt, for any applicable Non-Callable Make Whole Amount payable hereunder and the CoC Fee payable hereunder, but excluding (A) unasserted contingent indemnification obligations and (B) those Obligations under the Warrants and the Registration Rights Agreement or in respect of any Stock), owing by the Borrower and the other Loan Parties to the Secured Parties pursuant to the Loan Documents; provided that the foregoing shall be subject to the second sentence of Section 6.22.
First Amortization Date has the meaning set forth in Section 2.3(a).
First Out Waterfall Disbursement has the meaning set forth in Section 2.2(a)(i).
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First Out Waterfall Lender means any Lender to which any First Out Waterfall Obligations are owing and its successors and assigns (in each case, in its capacity as such).
First Out Waterfall Loan is defined in Section 2.2(a)(i) hereof.
First Out Waterfall Loan Exit Payment has the meaning set forth in Section 2.7(d).
First Out Waterfall Notes has the meaning set forth in the definition of Loan Notes.
First Out Waterfall Obligations means the Obligations in respect of First Out Waterfall Loans, including
any Non-Callable Make Whole Amount, any CoC Fee, the First Out Waterfall Loan ExitRestructuring Payment, all interest, fees, expenses, costs, liabilities, indebtedness and
other obligations (monetary (including post-petition interest, costs, fees, expense and other amounts, whether allowed or not) or otherwise) of (or owed by) the Borrower and the other Loan Parties under or in connection with the Loan Documents, in
each case, howsoever created, arising or evidenced, whether direct or indirect (including those acquired by assignment), absolute or contingent, now or hereafter existing, or due or to become due, and irrespective of whether the same are added to
the principal amount of the First Out Waterfall Obligations.
First Out Waterfall Pro Rata Share means, with respect to any First Out Waterfall Lender, the percentage obtained by dividing (a) the unpaid principal amount of such First Out Waterfall Lenders portion of the First Out Waterfall Loans, by (b) the unpaid principal amount of all First Out Waterfall Loans.
First Out Waterfall Restructuring Payment has the meaning set forth in Section 2.7(d).
First Out Waterfall Secured Parties means the Secured Parties (other than the Last Out Secured Parties).
First Out Waterfall Securities has the meaning set forth in Section 3.1(z).
Flexential Data Center Location has the meaning set forth in Section 5.1(bb).
Forced Conversion has the meaning given to such term in the First Out Waterfall Notes.
Foreign Benefit Plan means any employee benefit plan that is subject to the laws of a jurisdiction outside the United States, including those mandated by a government other than that of the United States of America.
Foreign Lender has the meaning set forth in Section 2.5(d).
Foreign Subsidiary means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not a Domestic Subsidiary.
GAAP means generally accepted accounting principles as in effect from time to time in the United States applied on a consistent basis, subject to the provisions of Section 1.5.
General Intangible means any general intangible as defined in Article 9 of the UCC, and any personal property, including things in action, other than accounts, chattel paper, commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter-of-credit rights, letters of
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credit, money, and oil, gas or other minerals before extraction, but including payment intangibles and software.
Global Excess Liquidity means, as of any date of determination by Agent, the sum of (a) without
duplication of clause (b) of this definition, unrestricted cash and Cash Equivalents maintained in the deposit accounts or securities accounts of the Loan Parties, in each case, subject to Control Agreements in compliance with the provisions of
Section 5.1(k); provided that, for the avoidance of doubt, no cash or Cash Equivalents maintained in any Excluded Accounts shall be included in this clause (a), plus (b) without duplication of clause (a) of this definition,
unrestricted cash and Cash Equivalents of Loan Parties that is in Excluded Accounts maintained by a branch office of the bank or securities intermediary located outside the United States in an aggregate amount not to exceed the lesser of
(i) $10,000,000 and (ii) 20% of clause (a) of this definition, plus (c) without duplication of any cash or Cash Equivalents from any borrowing under the ABL Debt Documents that would count towards either of clause (a) or
clause (b) of this definition and solely to the extent the applicable conditions in Article III of the ABL Credit Agreement (and any additional conditions to borrowing under the ABL Credit Agreement that may be added or included in the ABL Debt
Documents from time to time after the Agreement Date) have been satisfied (or would be satisfied if a borrowing would have been made thereunder) as of such date of determination after giving effect to any borrowing thereunder and any Revolver
Usage (as defined in the ABL Credit Agreement as of the Agreement Date) as of such date, the amount of Availability (as defined in the ABL Credit Agreement as of the
AgreementSecond Amendment Effective Date).
Good Manufacturing Practices means current good manufacturing practices, as set forth in 21 C.F.R. Parts 210, 211, 820 and any comparable foreign requirements.
Governmental Authority means any nation, sovereign, government, quasi-governmental agency, governmental department, ministry, cabinet, commission, board, bureau, agency, court, tribunal, regulatory authority, instrumentality, judicial, legislative, fiscal or administrative or public body or entity, whether domestic or foreign, federal, state, local or other political subdivision thereof, having jurisdiction over the matter or matters and Person or Persons in question or having the authority to exercise executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, securities exchange, regulatory body, arbitrator, public sector entity, supra-national entity and any self-regulatory organization.
Guarantee by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided, however, that the term Guarantee shall not include endorsements for collection or deposit in the Ordinary Course of Business. The term Guarantee used as a verb has a corresponding meaning.
Guarantor means each Subsidiary of the Borrower (other than any Excluded Subsidiary) or other Person who provides a guaranty of the Obligations under the Security Agreement or other Loan Document.
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otherwise acquire such obligation or any assets or property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial condition or any balance sheet item or level of income of another Person;
(xiv) earn-outs, all purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations (or continuing obligations of any nature of such Person arising out of purchase and sale contracts) (including in connection with Permitted Acquisitions), but only to the extent the same (x) have become due and payable and are recorded as a liability on the balance sheet of such Person and (y) are payable in cash;
(xv) all off-balance sheet liabilities of such Person; or
(xvi) all obligations arising under non-compete agreements, bonus, deferred compensation, incentive compensation or similar arrangements, other than those arising in the Ordinary Course of Business (it being understood that obligations to make cash payments for incentive compensation for officers of the Borrower made in lieu of equity awards shall be deemed to have arisen in the Ordinary Course of Business to the extent (and only to the extent) that (A) none of such obligations or cash payments are in excess of 15% greater than the fair market value of the equity awards they are in lieu of and (B) such obligations of the Loan Parties do not exceed $5,000,000 in the aggregate at any one time (or $0 in the aggregate at any time after December 31, 2021), with a maximum aggregate amount allowed to be paid or distributed thereon of (1) $0 in all calendar years prior to the 2019 calendar year, (2) $2,500,000 in the 2020 calendar year, (3) $2,500,000 in the 2021 calendar year and (4) $0 in all calendar years after the 2021 calendar year).
Indemnified Person has the meaning set forth in Section 6.11(a).
Indemnified Taxes means (a) any Tax imposed on or with respect to any payments made by or on account of any Obligation of any Loan Party under any Loan Document, other than an Excluded Tax, and (b) to the extent not otherwise described in clause (a) above in this definition, Other Taxes.
Indemnity has the meaning set forth in Section 6.11(a).
Initial Warrants has the meaning set forth in Section 2.8(a).
Insolvency Proceeding means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
Intellectual Property means all Intellectual Property Licenses and all Copyrights, copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any Patents, patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks, trademarks, trade names, service marks, mask works, rights of use of any name, domain names, or any other similar rights, any applications therefor, whether registered or not, know-how, operating manuals, trade secret rights, clinical and non-clinical data, rights
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to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing.
Intellectual Property Licenses has the meaning set forth in the Security Agreement.
Intercompany Subordination Agreement means an intercompany subordination agreement, dated as of the Agreement Date, executed and delivered by the Loan Parties, each of their Subsidiaries, and Agent, the form and substance of which is reasonably satisfactory to Agent.
Intercreditor Agreement means the Intercreditor Agreement dated as of the Agreement Date by and among Agent and ABL Agent and acknowledged and agreed by the Loan Parties, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
Interest Expense means, for any period, interest expense for the Successor Entity set forth in the Successor Entitys most recent publicly reported income statement; provided that such amounts shall be limited to those incurred by the Successor Entity only (and not any of its Subsidiaries) unless such Subsidiaries (other than any Excluded Subsidiaries) have completed and consummated the Successor Entity Subsidiary Joinder Actions.
Interest Payment Date has the meaning set forth in Section 2.6(a).
Interest Payment Shares means any
shares of Common Stock issued or issuable pursuant to Section 2.6 and Exhibit 2.6.
Interest Rate means (a) solely with respect to any period that occurs prior to (but not including) the Agreement Date, 6.87% per annum for the principal amount of the Loans (as defined in the Prior Facility Agreement) and any overdue interest thereon, plus any additional amounts set forth in Section 2.7(b) of the Prior Facility Agreement, and (b) at all times on or after the Agreement Date, 9.75% per annum for the principal amount of the Loans and any overdue interest thereon, plus any additional amounts set forth in Section 2.7(b).
Internal Controls has the meaning set forth in Section 3.1(u).
Inventory means inventory (as that term is defined in the UCC).
Investment has the meaning set forth in Section 5.2(v).
Investment Company Act means the Investment Company Act of 1940, as amended, including the rules and regulations promulgated thereunder.
IP means all Intellectual Property that is necessary for the conduct of the Loan Parties business as currently conducted.
IRS means the United States Internal Revenue Service.
Japan Lifeline Subordination Agreement has the meaning specified therefor in clause (h) of the definition of Permitted Indebtedness.
Last Out Waterfall Disbursement has the meaning set forth in Section 2.2(a)(ii).
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Last Out Waterfall Lender means any Lender to which any Last Out Waterfall Obligations are owing and its successors and assigns (in each case, in its capacity as such). For the avoidance of doubt, a Lender may be both a First Out Waterfall Lender and a Last Out Waterfall Lender.
Last Out Waterfall Loan is defined in Section 2.2(a) hereof.
Last Out Waterfall Loan Exit Payment has the meaning set forth in Section 2.7(e).
Last Out Waterfall Notes has the meaning set forth in the definition of Loan Notes.
Last Out Waterfall Obligations means the Obligations in respect of Last Out Waterfall Loans, including,
without limitation, any Non-Callable Make Whole Amount, any CoC Fee, the Last Out Waterfall Loan ExitRestructuring Payment all interest, fees, expenses, costs, liabilities,
indebtedness and other obligations (monetary (including post-petition interest, costs, fees, expense and other amounts, whether allowed or not) or otherwise) of (or owed by) the Borrower and the other Loan Parties under or in connection with the
Loan Documents, in each case, howsoever created, arising or evidenced, whether direct or indirect (including those acquired by assignment), absolute or contingent, now or hereafter existing, or due or to become due, and irrespective of whether the
same are added to the principal amount of the Last Out Waterfall Obligations.
Last Out Waterfall Pro Rata Share means, with respect to any Last Out Waterfall Lender, the percentage obtained by dividing (a) the unpaid principal amount of such Last Out Waterfall Lenders portion of the Last Out Waterfall Loans, by (b) the unpaid principal amount of all Last Out Waterfall Loans.
Last Out Waterfall Restructuring Payment has the meaning set forth in Section 2.7(e).
Last Out Waterfall Secured Parties means the Last Out Waterfall Lenders and each of their respective directors, partners, officers, employees, agents, counsel and advisors that are Indemnified Persons.
Latest Balance Sheet has the meaning set forth in Section 3.1(t).
Lenders means the lenders party to this Agreement from time to time, including the First Out Waterfall Lenders and the Last Out Waterfall Lenders, and their successors and assigns.
Liabilities means all claims, actions, suits, judgments, damages, losses, liabilities, obligations, responsibilities, fines, penalties, sanctions, costs, fees, Taxes, commissions, charges, disbursements and expenses (including those incurred upon any appeal or in connection with the preparation for and/or response to any subpoena or request for document production relating thereto), in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and disbursements of financial, legal and other advisors and consultants), whether joint or several, and whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise.
Lien means any lien, pledge, preferential arrangement, mortgage, security interest, deed of trust, charge, assignment, hypothecation, title retention or other encumbrance on or with respect to property or interest in property having the practical effect of constituting a security interest, in each case with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind. For purposes of this Agreement and the other Loan Documents, any Loan Party or any Subsidiary shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest
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of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset.
Loan means any loan made available from time to time by the Lenders to the Borrower pursuant to this Agreement, including any First Out Waterfall Loans and any Last Out Waterfall Loans, or, as the context may require, the principal amount thereof from time to time outstanding. Loan shall include any Disbursement.
Loan Disbursement Request means that certain Loan Disbursement Request, dated as of the Prior Agreement Date, executed and delivered by the Borrower in favor of the Secured Parties.
Loan Documents means this Agreement, the Notes, the Security Agreement, the Control Agreements, the Intercompany Subordination Agreement, the Intercreditor Agreement, the Japan Lifeline Subordination Agreement, any Subordination Agreement, the Reaffirmation Agreement, the Collateral Access Agreements, the Warrants, the Registration Rights Agreement, each Perfection Certificate, each Compliance Certificate, the Loan Disbursement Request, the Patent Security Agreements, the Trademark Security Agreements, the Copyright Security Agreements, and other documents, agreements and instruments delivered in connection with any of the foregoing (in each case, including all schedules, exhibits, annexes and other attachments thereto) and dated the Prior Agreement Date, the Agreement Date or subsequent thereto, whether or not specifically mentioned herein or therein, in each case, as amended, restated, supplemented or otherwise modified from time to time.
Loan Notes means (x) any note issued to any of the First Out Waterfall Lenders evidencing any First
Out Waterfall Loan or First Out Waterfall Disbursement funded by such First Out Waterfall Lender (or its predecessor) pursuant to the Prior Facility Agreement, as such
(which Loan Note iswas amended and restated pursuant to this Agreement on the Agreement Date to be in the
form of convertible loan note attached hereto as Exhibit A-1, and which such Loan Note is further amended and restated pursuant to the Second Amendment on the Second Amendment Effective Date to
be in the form of convertible loan note attached hereto as Exhibit A-3), and any convertible loan note in substantially such form issued after the AgreementSecond Amendment
Effective Date to any First Out Waterfall Lender that holds any First Out Waterfall Loan or First Out Waterfall Disbursement (collectively, the First Out Waterfall Notes), and (y) any note issued to any of the Last Out
Waterfall Lenders evidencing any Last Out Waterfall Loan or Last Out Waterfall Disbursement held by such Last Out Waterfall Lender pursuant to this Agreement in the form of loan note attached hereto as Exhibit A-2 (collectively, the Last Out
Waterfall Notes); in each case of clause (x) and clause (y), as may be further amended, restated, supplemented or otherwise modified from time to time.
Loan Parties means the collective reference to the Borrower and all of the Guarantors.
Loss has the meaning set forth in Section 6.11(a).
Mandatory Conversion has the meaning given to such term in the First Out Waterfall Notes.
Margin Stock means margin stock as such term is defined in Regulation T, U or X of the Federal Reserve Board.
Market Cap means the number of outstanding shares of common stock of the Successor Entity listed on a National Securities Exchange, multiplied by the per share Volume Weighted Average Price for such common stock as of the Trading Day immediately preceding the announcement of the Successor Entity Transaction.
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Market Withdrawal means a Persons Removal or Correction of a distributed product which involves a minor violation that would not be subject to legal action by the FDA or which involves no violation (e.g., normal stock rotation practices and routine equipment adjustments and repairs, etc.).
Material Adverse Effect means a material adverse effect on (a) the business, operations, results of operations, financial condition or properties of the Loan Parties and their Subsidiaries, taken as a whole, (b) the legality, validity or enforceability of any provision of any Loan Document, (c) the ability of any Loan Party to timely perform the Obligations, (d) the creation, perfection or priority of the Liens, taken as a whole for the Collateral, granted under the Loan Documents, or (e) the rights and remedies of the Secured Parties under any Loan Document.
Material Contracts means (a) the Operative Documents, (b) the Convertible Note Documents, (c) the
agreements listed on Schedule 3.1(aa), (d) the ABL Debt Documents, (e) the Permitted Japan Lifeline Unsecured Debt Documents, (f) the Equity Financing Documents and
(fg) each other agreement or contract to which such Loan Party or its Subsidiaries is a party the termination of which could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect; provided that Capped Calls shall not be considered Material Contracts.
Material Intangible Assets means all of (i) each Loan Partys Intellectual Property and (ii) license or sublicense agreements or other agreements with respect to rights in Intellectual Property (including each Intellectual Property License), in each case that are material to the financial condition, business or operations of the applicable Loan Party.
Maturity Date means April 2, 2023.
Maturity Date Payment of First Out Waterfall Loans has the meaning set forth in Section 2.3(a).
Measurement Period means, at any date of determination, the most recently completed twelve (12) fiscal months of the Loan Parties for which (a) the 10-K or 10-Q for such period was filed (or, to the extent earlier, was required by the SEC to be filed) with the SEC or (b) financial statements are required to be delivered in Section 5.1(aa).
Medicaid means the medical assistance programs administered by state agencies and approved by CMS pursuant to the terms of Title XIX of the Social Security Act, codified at 42 U.S.C. 1396 et seq.
Medicare means the program of health benefits for the aged and disabled administered by CMS pursuant to the terms of Title XVIII of the Social Security Act, codified at 42 U.S.C. 1395 et seq.
Multiemployer Plan means any multiemployer plan, as defined in Section 3(37) or 4001(a)(3) of ERISA, as to which any ERISA Affiliate incurs or otherwise has, or could reasonably be expected, individually or in the aggregate, to have, any obligation or Liabilities (including under Section 4212 of ERISA).
National Securities Exchange means the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or, in each case, a successor thereto).
Necessary Documents has the meaning set forth in Section 3.1(l).
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Net Income means, for any period, the net income (or loss) of the Successor Entity set forth in the Successor Entitys most recent publicly reported income statement; provided that such amounts shall be limited to those of the Successor Entity only (and not any of its Subsidiaries) unless such Subsidiaries (other than any Excluded Subsidiaries) have completed and consummated the Successor Entity Subsidiary Joinder Actions.
Net Revenue means, for any period, (a) the Loan Parties gross revenues during such period, less (b)(i) trade, quantity and cash discounts allowed by the Loan Parties, (ii) discounts, refunds, rebates, charge backs, retroactive price adjustments and any other allowances which effectively reduce net selling price, (iii) product returns and allowances, (iv) allowances for shipping or other distribution expenses, (v) set-offs and counterclaims, and (vi) any other similar and customary deductions used by the Loan Parties in determining net revenues, all, in respect of (a) and (b), as determined in accordance with GAAP and in the Ordinary Course of Business.
Non-Callable Make Whole Amount means, on any date of prepayment or early redemption of all or any portion of the Loans, an amount in cash equal to all required interest payments due on the Loans that are prepaid from the date of repayment or early redemption through and including the date that is the First Amortization Date, plus any accrued and unpaid interest and fees and unpaid costs and expenses incurred pursuant to the terms of the Loan Documents.
Notes means the Loan Notes.
Obligations means all Loans and Disbursements, any Non-Callable Make Whole Amount, any CoC Fee, the
ExitRestructuring Payment, interest, fees, expenses, costs, liabilities, indebtedness and other obligations (monetary (including post-petition interest, costs, fees,
expenses and other amounts, whether allowed or not) or otherwise) of (or owed by) the Borrower and the other Loan Parties under or in connection with the Loan Documents, in each case howsoever created, arising or evidenced, whether direct or
indirect (including those acquired by assignment), absolute or contingent, now or hereafter existing, or due or to become due, and irrespective of whether the same are added to the principal amount of the Obligations. For the avoidance of doubt,
Obligations shall include the First Out Waterfall Obligations and the Last Out Waterfall Obligations.
OFAC has the meaning set forth in Section 3.1(jj).
OID means original issue discount.
Operating Expenditures means, with respect to any Person for any period, the amount of all expenditures (whether such expenditures are paid in cash, financed or otherwise) by such Person and its Subsidiaries during such period that are reported as operating expenses (including expenditures related to research and development, clinical and regulatory affairs, marketing and sales, and general and administrative) on the income statements of such Person and its Subsidiaries that are included in such Persons financial statements (including those financial statements required by Section 5.1(h) and Section 5.1(aa), as applicable), which amount shall (i) be in compliance and accordance with GAAP and any SEC requirements and regulations, but (ii) exclude one-time, non-recurring expenditures that are not regularly incurred in the Ordinary Course of Business of such Person and its Subsidiaries.
Operative Documents means the Loan Documents, the Loan Documents (as defined in the ABL Credit Facility as of the Agreement Date) and the Subordinated Debt Documents (as defined in the ABL Credit Facility as of the Agreement Date).
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Options means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
Ordinary Course of Business means, in respect of any transaction involving any Loan Party, the ordinary course of business of such Loan Party, as conducted by such Loan Party in accordance with past practices, as applicable.
Organizational Documents means, with respect to any Loan Party, the documents by which such Person was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation, any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Person (such as by-laws, a partnership agreement or an operating, limited liability company or members agreement), including any and all shareholder agreements or voting agreements relating to the capital stock or other equity interests of such Person.
Original 3.25% Convertible Notes has the meaning provided therefor in the definition of 3.25% Convertible Notes.
Original Warrants means the Initial Warrants and the Additional Warrants.
Other Connection Taxes means with respect to any Lender, Taxes imposed as a result of a present or former connection between such Lender and the jurisdiction imposing such Tax (except a connection arising solely from such Lender having executed, delivered, become a party to, performed its obligations or received a payment under, received or perfected a security interest under, engaged in any transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan Document).
Other Taxes means any and all present or future stamp, value added or documentary or any other excise or property Taxes arising from any payment made hereunder or from the execution, delivery, performance, recordation or filing of, or otherwise with respect to, any Loan Document.
Outstanding Items has the meaning set forth in Section 5.1(z).
Participant has the meaning set forth in Section 6.5.
Parties has the meaning set forth in the preamble to this Agreement.
Patents has the meaning set forth in the Security Agreement.
Patent Security Agreement means any patent security agreement executed and delivered by any Loan Party to Agent, on behalf of the Secured Parties, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.
PBGC means the United States Pension Benefit Guaranty Corporation or any successor thereto.
Perfection Certificate means each perfection certificate executed or delivered from time to time by any Loan Party or any of its Subsidiaries to any Secured Party, in substantially the form of Exhibit B.
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on a consolidated balance sheet of the Loan Parties and their Subsidiaries after giving
effect to such Acquisition but excluding (A) any equity interests issued as consideration for such Acquisition and (B) the net proceeds of any issuance of equity interests made after the
AgreementSecond Amendment Effective Date that are used for purposes of such Acquisition (for the avoidance of doubt,
other than the net proceeds of any equity interests or other Stock issued under or in connection with the Equity Financing Documents)) (such amounts, collectively, the
Acquisition Consideration) shall be in an amount not to exceed $15,000,000 in the aggregate for all such Acquisitions during the term of this Agreement; provided, however, that, in the case of each Acquisition, Agent
has received prior to the consummation of such Acquisition evidence satisfactory to Agent that Borrower has, immediately before and immediately after giving effect to the consummation of such Acquisition, unrestricted cash (it being understood and
agreed that cash and Cash Equivalents shall not be considered restricted cash for purposes of this proviso solely due to compliance by the Loan Parties with the requirements set forth in Section 5.1(k)) in one or more deposit
accounts subject to a Control Agreement in an aggregate amount equal to or greater than the positive value of the product of (x) eighteen (18) multiplied by (y) the Monthly Cash Burn Amount (as defined in the ABL Credit
Facility as of the Agreement Date), as determined as of the last day of the month immediately preceding such Acquisition.
Permitted Contingent Obligations means
(a) Contingent Obligations arising in respect of the Indebtedness under the Loan Documents;
(b) Contingent Obligations resulting from endorsements for collection or deposit in the Ordinary Course of Business;
(c) Contingent Obligations outstanding on the Prior Agreement Date and set forth on Schedule 5.2(iv) (but not including any refinancings, extensions, increases or amendments to the indebtedness underlying such Contingent Obligations other than extensions of the maturity thereof without any other material change in terms adverse to the Lenders);
(d) Contingent Obligations incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds and other similar obligations not to exceed $2,000,000 in the aggregate at any time outstanding;
(e) Contingent Obligations arising under indemnity agreements with title insurers to cause such title insurers to issue to Agent mortgagee title insurance policies;
(f) Contingent Obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with dispositions of personal property assets permitted under Section 5.2;
(g) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such transaction, Contingent Obligations existing or arising under any Swap Contract or Capped Call; provided, however, that such obligations are (or were) entered into by Borrower or an Affiliate of Borrower for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation and either (i) with respect to a Swap Contract or a Capped Call, are (or were) entered into in the Ordinary Course of Business or (ii) with respect to a Capped Call, are (or were) entered into in connection with the 2.25% Convertible Notes, the 3.25% Convertible Notes, any
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refinancings thereofPermitted 3.25% Convertible Note Refinancing permitted hereunder or in connection with this
Agreement or any of the other Loan Documents;
(h) guarantees by (A) one or more Loan Parties of the obligations of Foreign Subsidiaries up to $1,000,000 in the aggregate at any time outstanding, (B) any Loan Party of the obligations of any other Loan Party (but, for the avoidance of doubt, excluding any Immaterial Subsidiary that may be a Loan Party where, before and immediately after giving effect to such guarantee (including any rights of contribution set forth in the Loan Documents or otherwise), the Loan Parties cannot represent and warrant that such Immaterial Subsidiary is Solvent on an individual basis) and (C) any Foreign Subsidiary of the obligations of any other Foreign Subsidiary;
(i) [reserved];
(j) Contingent Obligations arising in respect of the Indebtedness under the ABL Debt Documents; and
(k) other Contingent Obligations not permitted by clauses (a) through (j) above, not to exceed $2,500,000 in the aggregate at any time outstanding.
Permitted Dispositions means each of the following:
(a) dispositions of inventory in the Ordinary Course of Business;
(b) dispositions of furniture, fixtures and equipment in the Ordinary Course of Business that the applicable Loan Party or Subsidiary determines in good faith is no longer used or useful in the business of such Loan Party and its Subsidiaries (or such Subsidiary and its subsidiaries);
(c) to the extent constituting a Disposition, Permitted Investments and Permitted Licenses;
(d) disposals of obsolete, worn out or surplus tangible personal property;
(e) without limiting transactions permitted under Section 5.2 hereof, dispositions by any Loan Party to any other Loan Party so long as each Loan Party (other than, with respect to any transferring Person, an Immaterial Subsidiary) will remain Solvent after giving effect to the transfer;
(f) abandonment of Intellectual Property that does not constitute a Material Intangible Asset;
(g) the unwinding or terminating of Swap Contracts or any Capped Call permitted by clause (g) of the definition of Permitted Contingent Obligations either (i) with respect to a Swap Contract or a Capped Call, in the Ordinary Course of Business or (ii) with respect to a Capped Call, that were entered into in connection with the 2.25% Convertible Notes, the 3.25% Convertible Notes, any Permitted 3.25% Convertible Note Refinancing permitted hereunder or in connection with this Agreement or any of the other Loan Documents;
(h) dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of replacement property or (ii) the proceeds of such disposition are promptly applied to the purchase price of such replacement property;
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commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation and either (i) with respect to a Swap Contract or a Capped Call, are (or were) entered into in the Ordinary Course of Business or (ii) with respect to a Capped Call, are (or were) entered into in connection with the 2.25% Convertible Notes, the 3.25% Convertible Notes, any Permitted 3.25% Convertible Note Refinancing permitted hereunder or in connection with this Agreement or any of the other Loan Documents;
(f) Indebtedness in the form of insurance premiums financed through the applicable
insurance company;
(g) trade accounts payable arising and paid within 120 days of the date when due and in the Ordinary Course of Business;
(h) unsecured Indebtedness in an amount not to exceed $4,280,500 pursuant to a promissory note dated on or around the Agreement Date, by the Borrower in favor of Japan Lifeline Co., Ltd. (the Permitted Japan Lifeline Unsecured Debt), so long as (i) other than as expressly set forth in clause (ii) directly below, no prepayments, repayment, redemptions or payments shall be made with respect to the Permitted Japan Lifeline Unsecured Debt at any time until ninety-one (91) days after all of the Obligations have been paid in full, (ii) subject to the terms of the Japan Lifeline Subordination Agreement, the all-in interest rate and pricing charged thereon shall not exceed 2.5% per annum and such interest shall not be paid (A) more frequently than annually in arrears and (B) unless (1) expressly permitted pursuant to the terms of the Japan Lifeline Subordination Agreement, (2) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (3) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (4) no Default or Event of Default has occurred and is continuing, (iii) no fees shall be paid thereon, (iv) such unsecured Indebtedness shall not be assigned or otherwise transferred by Japan Lifeline Co., Ltd. without the consent of the Agent, (v) Japan Lifeline Co., Ltd. (and any successor or assign thereof) shall enter into a subordination agreement with the Agent, in form and substance reasonably satisfactory to the Agent and the Lenders (the Japan Lifeline Subordination Agreement), and such Japan Lifeline Subordination Agreement shall remain in full force and effect and binding and enforceable against all parties thereto at all times, and no breach, violation or default shall have occurred thereunder or under the Permitted Japan Lifeline Unsecured Debt Documents, (vi)(A) such Indebtedness remains unsecured at all times and no security interests or Liens are granted with respect thereto by any Loan Party, any of their respective Affiliates or any other Person and (B) no Person other than the Borrower shall be a borrower, guarantor or obligor (or otherwise be obligated or liable) with respect to such Indebtedness, and (vii) subordination provisions are included in such promissory note, the Japan Lifeline Subordination Agreement and any related agreements, instruments and documents (collectively, the Permitted Japan Lifeline Unsecured Debt Documents) in a manner, and in form and substance, reasonably satisfactory to the Agent and the Lenders, and such Permitted Japan Lifeline Unsecured Debt Documents shall be in form and substance reasonably satisfactory to the Agent and the Lenders;
(i) Subordinated Debt;
(j) the ABL Debt under the ABL Credit Facility, in accordance with the terms of the Intercreditor Agreement and this Agreement;
(k) Indebtedness of the Loan Parties incurred under the 3.25% Convertible Notes in an
aggregate principal amount not to exceed the aggregate principal amount outstanding on the AgreementSecond Amendment Effective Date after giving effect to any
payments, repayments or
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prepayments thereon on or prior to the Agreement Dateor conversions, cash settlements or distributions related thereto
(which, for the avoidance of doubt, shall not be greater than the aggregate principal amount outstanding on the Prior Agreement Date or the Agreement Date), and, so long as no
Default or Event of Default has occurred and is continuing or would result after giving effect thereto, any refinancing or
extension thereof or new issuance in connection with the exchange thereof and/or a new issuancein which all or any portion of the proceeds of which will be
used in connection with theto repurchase or other refinancing ofrefinance all or any portion
thereof therewith that, in each case of the foregoing, (i)(A) has an aggregate outstanding principal amount not
greater than $200,000,000 (when taking into account all such existing, refinanced, extended, exchanged and newly issued Indebtedness),
and(B) does not provide for any amortization payments or other principal payments of any kind, prepayments,
repayments, redemptions or distributions of any kind or cash settlements or cash conversions (or requires or mandates any settlements or conversions thereof) in advance of the date that is one year and one day after the Maturity
Date, and (C) except as expressly provided in the 5.00% Convertible Notes issued on the Second Amendment Effective Date (or issued after the Second Amendment Effective Date in exchange for
any of the Remaining Original 3.25% Convertible Notes in accordance and compliance with the terms and provisions of this Agreement), does not provide for (or include) any terms or provisions requiring or mandating the conversion or cash settlement
of any such Indebtedness or obligations at any time prior to the date that is one year and one day after the Maturity Date, (ii) has a maturity no shorter than the date that is one year and one day after the Maturity Date (in the case of
clause (i) and clause (ii), it being understood that, in each case, any provision requiring an offer to purchase such Indebtedness as a result of a change in control, fundamental change, delisting, asset sale or similar provision or any
exercise or conversion of Stock (other than Disqualified Stock) shall not violate the foregoing restrictions in clause (i) or clause (ii)), (iii) is unsecured, (iv) does not have one or
more issuers, borrowers, guarantors or obligors that are not Loan Parties, (v) contains terms that are prevailing market terms at the time of issuing or initial borrowing for the type
of financing and for the quality of issuer or borrower, as determined by Borrower and its advisors in their reasonable business judgment, (vi) does not have an All-in Yield greater than the lesser of (A) 6% per annum and (B) an
All-in Yield that would result in more than $10,000,000 per annum being paid in interest thereunder (whether in cash, in-kind or otherwise), (vii) does not cause Borrower either on an
individual basis or together with its Subsidiaries (on a consolidated basis), immediately before, at the time of and immediately after giving effect to such Indebtedness (and after giving effect to the use of the proceeds thereof), to be no longer
be Solvent (or such Persons are not Solvent immediately prior to giving effect thereto), and (vii) if in existence at such time or on the same date, is permitted under the ABL Debt
Documents and the Equity Financing Documents (collectively, a Permitted 3.25% Convertible Note Refinancing);
(l) Indebtedness of the Loan Parties incurred under the 2.25% Convertible Notes in an aggregate principal amount not to exceed the aggregate principal amount outstanding on the Agreement Date minus any prepayments, repayments, redemptions or payments thereon made on the Agreement Date or from time to time thereafter (which, for the avoidance of doubt, such aggregate principal amount shall not be greater than the amount outstanding as of the Prior Agreement Date);
(m) without limiting the provisions of Section 5.2 with respect to any Investment by a Loan Party, Indebtedness consisting of unsecured intercompany loans and advances (i) incurred by any Loan Party owing to one or more other Loan Parties, (ii) incurred by any Foreign Subsidiaries owing to any Loan Party solely to the extent constituting a Permitted Investment made by such Loan Party, or (iii) incurred by any Foreign Subsidiaries owing to any other Foreign Subsidiary;
(n) Indebtedness related to commercial credit cards provided by Bank of America, N.A. (or such other commercial bank permitted under the definition of Bank of America Cash Collateral
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Agent in all or substantially all of its property of the type described in the Security Agreement and otherwise made in compliance with Section 5.1(l);
(i) Investments by (A) any Loan Party consisting solely of cash and Cash Equivalents in a Foreign Subsidiary; provided that at the time of the making of such Investment and immediately after giving effect thereto (i) no Event of Default has occurred and is continuing and (ii) Loan Parties have unrestricted (it being understood and agreed that cash and Cash Equivalents shall not be considered restricted cash for purposes of this proviso solely due to compliance by the Loan Parties with the requirements set forth in Section 5.1(k)) cash and Cash Equivalents in an aggregate amount of not less than $10,000,000, which cash and Cash Equivalents (x) are subject to a first priority perfected lien in favor of Agent for the benefit of Lenders (subject to Permitted Liens), (y) are held in a deposit account that is subject to a Control Agreement or a securities account subject to a Control Agreement and (z) unless the same could not be reasonably expected to reduce the amounts in such accounts below $10,000,000 at the time of such Investment and immediately after giving effect thereto, do not include any drawn or committed but unpaid drafts, ACH or EFT transactions and (B) a non-Loan Party Foreign Subsidiary in another non-Loan Party Foreign Subsidiary; provided, that, Investments pursuant to clause (i)(A) above shall be subject to the proviso at the end of this definition;
(j) Investments by any Loan Party consisting solely of inventory in any wholly-owned Foreign Subsidiaries, to the extent
(i) such Investments are made in the Ordinary Course of Business consistent with its customary practices as in effect on and immediately prior to the Prior Agreement Date, (ii) no Event of Default then exists or would arise therefrom and
(iii) no Event of Default (as defined in the ABL Credit Facility as in effect as of the AgreementSecond Amendment Effective Date) then exists or would
arise therefrom; provided that (y) no such Investment shall result in an Overadvance (as defined in the ABL Credit Facility as in effect as of the Agreement Date) and (z) such Investments shall be subject to the proviso
at the end of this definition;
(k) so long as no Default or Event of Default shall have occurred and be continuing at the time thereof or would result therefrom, Investments consisting solely of cash and Cash Equivalents in joint ventures or similar arrangements in an amount not to exceed $5,000,000 in the aggregate during the term of this Agreement; provided, that, such Investments shall be subject to the proviso at the end of this definition;
(l) Permitted Acquisitions;
(m) Investments deemed to exist under any Swap Contracts or Capped Calls; provided, however, that such obligations are (or were) entered into by Borrower or an Affiliate of Borrower for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation and are (or were) entered into either (i) with respect to a Swap Contract or a Capped Call, in the Ordinary Course of Business or (ii) with respect to a Capped Call, in connection with the 2.25% Convertible Notes, the 3.25% Convertible Notes, any Permitted 3.25% Convertible Note Refinancing permitted hereunder or in connection with this Agreement or any of the other Loan Documents; and
(n) other Investments in an amount not exceeding $5,000,000 in the aggregate; provided, that, such Investments shall be subject to the proviso at the end of this definition;
provided, that, Investments pursuant to clauses (i), (j), (k), and (n) of this definition of Permitted Investments shall not exceed $12,000,000 in the aggregate in any calendar year (or such lesser amount provided in the ABL Credit Facility from time to time) and, provided, further, that with respect to clause
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Prior Facility Agreement has the meaning specified therefor in the recitals hereto.
Prior Loan Documents has the meaning specified therefor in Section 6.29.
Prior Registration Rights Agreement means the Registration Rights Agreement, dated as of April 3, 2017, by and among the Borrower and the First Out Waterfall Lenders.
Pro Rata Loan Share means, with respect to any Lender, the applicable amount specified opposite such Lenders name on Annex A under the column Total Disbursement Amount (as such amount may be increased, decreased or otherwise adjusted from time to time in accordance with the terms hereof (including pursuant to any PIK Interest Payment or pursuant to any assignment and transfers by the Lenders hereunder) and the actual principal amount outstanding related thereto).
Pro Rata Share means, with respect to any Lender, the applicable percentage (as adjusted from time to time in accordance with the terms hereof) obtained by dividing (a) such Lenders Pro Rata Loan Share of the outstanding Loans, by (b) the total outstanding amount of Loans held by all Lenders.
Products means, from time to time, any products currently manufactured, sold, developed, tested or marketed by any Loan Party or any of a Loan Partys Subsidiaries.
Put Notice has the meaning set forth in Section 5.3.
Reaffirmation Agreement means that certain Reaffirmation Agreement, dated as of the Agreement Date, by the Loan Parties party thereto in favor of Agent.
Real Estate means any real property owned, leased, subleased or otherwise operated or occupied by any Loan Party or any Subsidiary of any Loan Party.
Recall means a Persons Removal or Correction of a marketed product that the FDA considers to be in violation of the laws it administers and against which the FDA would initiate legal action (e.g., seizure).
Register has the meaning set forth in Section 1.4(b).
Registration Rights Agreement means that certain Amended and Restated Registration Rights
Agreement, dated as of the Agreement Date entered into byAugust 9, 2018, by and among the Borrower and the
First Out Waterfall Lenders and substantially in the form of Exhibit E (as may be amended, restated, supplemented or otherwise modified from time to time).
Regulation D means Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time and any successor to all or a portion thereof establishing reserve requirements.
Regulatory Required Permit means any and all licenses, clearances, exemptions, approvals, registrations, and permits issued by the FDA, DEA or any other applicable Governmental Authority, including, without limitation, Drug Applications, any 510(k) premarket clearance, grant of a de novo request, premarket approval application (PMA), or investigational device exemption (IDE), or the foreign equivalent to any of the foregoing necessary for the design, testing, manufacture, processing, assembly, packaging, labeling, marketing, distribution, commercialization, import, export, or sale of any Product by any applicable Loan Party (or Loan Parties) and its (or their) Subsidiaries as such activities are being conducted by such Loan Party (or Loan Parties) and its (or their) Subsidiaries with respect to
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such Product at such time; and any device listings and device establishment registrations under 21 C.F.R. Part 807, and any drug listings and drug establishment registrations under 21 U.S.C. Section 510, registrations issued by DEA under 21 U.S.C. Section 823 (if applicable to any Product) and those issued by State governments for the conduct of the Loan Parties or any of their Subsidiaries business.
Related Parties means, with respect to any Person, such Persons Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, attorneys, advisors and representatives of such Person and of such Persons Affiliates.
Releases means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment.
Remaining Original 3.25% Convertible Notes means the Original 3.25% Convertible Notes that were not exchanged for 5.00% Convertible Notes on the Second Amendment Effective Date pursuant to the terms of the Exchange Agreement.
Removal means the physical removal of a product from its point of use to some other location for repair, modification, adjustment, relabeling, destruction or inspection.
Reporting Period has the meaning set forth in Section 5.1(h).
Required First Out Waterfall Lenders means, at any time, the First Out Waterfall Lenders whose First Out Waterfall Pro Rata Share aggregate more than fifty percent (50%).
Required Last Out Waterfall Lenders means, at any time, Last Out Waterfall Lenders whose Last Out Waterfall Pro Rata Share aggregate more than fifty percent (50%).
Required Lenders means, at any time, both the Required First Out Waterfall Lenders and the Required Last Out Waterfall Lenders, unless all of the First Out Waterfall Obligations (other than (y) unasserted contingent indemnification First Out Waterfall Obligations and (z) those First Out Waterfall Obligations under any Warrant or the Registration Rights Agreement that are not due or payable at the time when all other First Out Waterfall Obligations are paid in full in cash) have been paid in full in cash and any Last Out Waterfall Obligations remain outstanding, in which case, the term Required Lenders shall mean only the Required Last Out Waterfall Lenders.
Restricted Payment means, with respect to any Person, (i) the declaration or making of any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any of its Stock, (ii) the purchasing, redemption or other acquisition for value of any of its Stock (other than, when no Default or Event of Default has occurred or is continuing (or would occur after giving effect to any such purchase, redemption or other acquisition) and to the extent there would be pro forma compliance with the financial covenants in Sections 5.2(xxiv) through (xxix) (after giving effect to any such purchase, redemption or other acquisition), solely pursuant to the Borrowers stock option exchange program on the terms set forth, and specifically described (and without giving effect to any changes thereto that would be adverse to the Secured Parties), in that certain proxy statement of the Borrower filed with the SEC on April 20, 2018, the Borrower shall have the ability to provide certain qualified employees of the Borrower (which shall not include name executive officers or board of directors of the Borrower and only with respect to Eligible Participants (as described therein)) the option to surrender certain out-of-the-money or underwater options with an exercise price of $6.50 or greater that are Eligible Options (as described therein) for cancellation in exchange for a grant of a
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lesser number of new restricted stock units of the Borrower that may be settled for shares of the Borrowers common stock under the Borrowers amended and restated 2015 stock incentive plan of the Borrower that is attached to such aforementioned proxy statement (and without giving effect to any material changes thereto), all as further specifically described (and without giving effect to any material changes thereto) in such proxy statement) now or hereafter outstanding or (iii) the making of any payment or prepayment of principal of, premium, if any, interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness subordinated to the Obligations as to right and time of payment or as to other rights and remedies thereunder. For the avoidance of doubt, the entry into, any payments or deliveries in respect of, and the performance, exercise and/or settlement of the Borrowers 2.25% Convertible Notes, 3.25% Convertible Notes (including, for the avoidance of doubt, any Permitted 3.25% Convertible Note Refinancing), Capped Calls, Warrants or under the ABL Credit Facility are not Restricted Payments.
Restructuring Payment means the First Out Waterfall Restructuring Payment and/or the Last Out Waterfall Restructuring Payment, as the context may require.
Reverse Split means an amendment to the Companys Amended and Restated Certificate of Incorporation, as amended, that effected a 1-for-10 reverse stock split of the issued and outstanding shares of Common stock on March 5, 2019.
Rights Plan has the meaning set forth in Section 3.1(rr).
Sanctioned Entity means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, (d) a Person resident in or determined to be resident in a country, in each case, that is subject to a country sanctions program administered and enforced by OFAC.
Sanctioned Person means a Person named on the list of specially designated nationals maintained by OFAC.
Sanctions means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majestys Treasury of the United Kingdom.
Sarbanes-Oxley has the meaning set forth in Section 3.1(kk).
Scheduled First Amortization Payment of First Out Waterfall Loans has the meaning set forth in Section 2.3(a).
Scheduled Second Amortization Payment of First Out Waterfall Loans has the meaning set forth in Section 2.3(a).
SDN List has the meaning set forth in Section 3.1(jj).
SEC means the United States Securities and Exchange Commission.
SEC Documents means all reports, schedules, forms, statements and other documents filed by the Borrower with the SEC pursuant to the Securities Act or the Exchange Act since January 1, 2016
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(including all financial statements and schedules included therein, all exhibits thereto and all documents incorporated by reference therein).
Second Amendment means that certain Second Amendment to Amended and Restated Facility Agreement and First Amendment to Amended and Restated Guaranty and Security Agreement, dated as of the Second Amendment Date, by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and Agent.
Second Amendment Date means March 31, 2019.
Second Amendment Effective Date has the meaning set forth in the Second Amendment.
Second Amortization Date has the meaning set forth in Section 2.3(a).
Secured Parties means Agent, the Lenders and all Indemnified Persons.
Securities means the Loans, the Notes, and the related guaranties set forth in the Security Agreement of
the Guarantors, the Interest Payment Shares, the Conversion Shares, the Warrants and the Warrant Shares.
Securities Act means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.
Security Agreement means the Amended and Restated Guaranty and Security Agreement executed and delivered on the Agreement Date pursuant to which the Loan Parties party thereto continue to grant to Agent for the benefit of the Secured Parties a security interest in all of their Collateral to secure the Obligations, as amended, restated, supplemented or otherwise modified from time to time.
Solvent means, with respect to any Person as of any date of determination, that, as of such date, (a) the value of the assets of such Person at a fair valuation (as referenced in the Bankruptcy Code) is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital in relation to such Persons business as contemplated as of the Agreement Date. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Stifel has the meaning specified therefor in Section 5.1(k)(viii).
Stifel Account has the meaning specified therefor in Section 5.1(k)(viii).
Stifel Sweep Agreement has the meaning specified therefor in Section
5.1(k)(viii)(a)(1).
Stock means (a) all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether voting or non-voting; and (b) all securities convertible into or exchangeable for any other Stock and all warrants, options or other rights (other than the 2.25% Convertible Notes, the 3.25% Convertible Notes, any Permitted 3.25% Convertible Note Refinancing
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Existing ABL Credit Facility and the Existing ABL Debt Documents), (b) the funding of the Disbursements, and (c) the payment of fees, commissions, costs and expenses in connection with each of the foregoing.
TRICARE means the program administered pursuant to 10 U.S.C. Section 1071 et seq., Sections 1320a-7 and 1320a-7a of Title 42 of the United States Code and the regulations promulgated pursuant to such statutes.
Trunk Inventory means trunk stock inventory that is in the possession of sales personnel of the Loan Parties.
UCC means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform Commercial Code, the Uniform Commercial Code as in effect from time to time in the State of New York.
United States and U.S. each means the United States of America.
USA Patriot Act means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L. 107-56, as amended from time to time.
Volume Weighted Average Price for any security as of any Trading Day means the volume weighted average sale price of such security on the National Securities Exchange on which such security is listed as reported by Bloomberg Financial Markets or an equivalent, reliable reporting service reasonably selected by the Agent (Bloomberg). Volume Weighted Average Price will be determined without regard to after-hours trading or any other trading outside of the regular trading hours.
Voluntary Conversion has the meaning given to such term in the First Out Waterfall Notes.
Warrant Distributions has the meaning set forth in Section 3.1(z).
Warrants means the Initial Warrants
and, the Additional Warrants, the Amended and Restated Initial Warrants and the Amended and Restated Additional
Warrants.
Warrant Shares has the meaning set forth in Section 3.1(z).
Section 1.2 Interpretation. In this Agreement and the other Loan Documents, unless the context otherwise requires, all words and personal pronouns relating thereto shall be read and construed as the number and gender of the party or parties requires and the verb shall be read and construed as agreeing with the required word and pronoun. The division of this Agreement and the other Loan Documents into Articles and Sections and the use of headings and captions is for convenience of reference only and shall not modify or affect the interpretation or construction of this Agreement or any of its provisions. The words herein, hereof, hereunder, hereinafter and hereto and words of similar import refer to this Agreement (or other applicable Loan Document) as a whole and not to any particular Article or Section hereof (or thereof). The term or has, except where otherwise indicated, the inclusive meaning represented by the phrase and/or. The term documents and agreements include any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. The use in any of the Loan Documents of the word include or including, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to
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similar items or matters, whether or not non-limiting language (such as without
limitation or but not limited to or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement,
term or matter. References to a specified Article, Exhibit, Section or Schedule shall be construed as a reference to that specified Article, Exhibit, Section or Schedule of this Agreement (or other applicable Loan Document). Unless specifically
stated otherwise, any reference to any of the Loan Documents means such document as the same shall be amended, restated, supplemented or otherwise modified and from time to time in effect. The references to asset (or assets)
and property (or properties) in the Loan Documents are meant to be mean the same and are used throughout the Loan Documents interchangeably, and such words shall be deemed to refer to any and all tangible and intangible
assets and properties, including cash, securities, Stock, accounts and contract rights. Unless otherwise specified herein or therein, all terms defined in any Loan Document shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto or thereto. The meanings of defined terms shall be equally applicable to the singular and plural forms of the defined terms. Terms (including uncapitalized terms) not otherwise defined herein and that are
defined in the UCC shall have the meanings therein described. In the computation of periods of time from a specified date to a later specified date, the word from means from and including; the word since means
since and including; the words to and until each mean to but excluding, and the word through means to and including. If any provision of this Agreement or any other Loan
Document refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, unless otherwise expressly stated, such provision shall be interpreted to encompass any and all means, direct or indirect, of taking,
or not taking, such action. References to any statute or regulation may be made by using either the common or public name thereof or a specific cite reference and, except as otherwise provided with respect to FATCA, are to be construed as including
all statutory and regulatory provisions related thereto or consolidating, amending, replacing, supplementing or interpreting the statute or regulation, and any reference to any law or regulation, shall, unless otherwise specified, refer to such law
or regulation as amended, modified or supplemented from time to time. Whenever any reference is made in any Loan Document to any Person such reference shall be construed to include such Persons permitted successors and permitted assigns. Any
financial ratios required to be satisfied in order for a specific action to be permitted under any Loan Document shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number
of places by which such ratio is expressed herein or therein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number). Unless otherwise specified, all references in any Loan Document to times of day
shall be references to New York City time. Notwithstanding anything to the contrary in any Loan Document, any reference to Organizational Document or Organizational Documents of any Loan Party or any of its Subsidiaries in
any Loan Document shall mean such written documents, agreements and arrangements that are in effect on the Prior Agreement Date after giving effect to the Transactions occurring on the Prior Agreement Date that have been approved by Agent, without
giving effect to any amendment, restatement, change, supplement, waiver or other modification thereto or thereof that is not permitted by Section 5.2(x). The terms shall and will are used interchangeably in this
Agreement and the other Loan Documents and mean for the Loan Parties and their Subsidiaries to have an absolute obligation to perform or do (or not perform or do) a certain action or event, as the context may require. Any reference to payment
in full, paid in full, repaid in full, prepaid in full, redeemed in full, no Obligations remain outstanding or any other term or word of similar effect used in this Agreement or any
other Loan Document with respect to the Loans or the Obligations shall mean all Obligations (including any Non-Callable Make Whole Amount, any CoC Fee and the
ExitRestructuring Payment) (other than (y) unasserted contingent indemnification obligations and (z) those Obligations under any Warrant or the Registration
Rights Agreement that are not due or payable at the time when all other Obligations are paid in full in cash) have been repaid in full in cash, have been fully performed and no longer remain outstanding.
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Section 1.3 Business Day Adjustment. Except as otherwise expressly stated herein or in any other Loan Document, if the day by which any payment or other performance is due to be made is not a Business Day, that payment or performance shall be made by the next succeeding Business Day unless that next succeeding Business Day falls in a different calendar month, in which case that payment or other performance shall be made by the Business Day immediately preceding the day by which such payment or other performance is due to be made; provided that interest will continue to accrue each additional day in connection therewith.
Section 1.4 Loan Records.
(a) The Borrower shall record on its books and records the amount of the Loan, the type and tranche of the Loans (whether the Loan is a First Out Waterfall Loan or a Last Out Waterfall Loan), the interest rate applicable thereto, all payments of principal and interest thereon and the principal balance thereof from time to time outstanding.
(b) The Borrower shall establish and maintain at its address referred to in Section 6.1, a record of ownership (the Register) in which the Borrower agrees to register by book entry the interests (including any rights to receive payment hereunder) of each Lender in the Loan (including whether the Lender is a First Out Waterfall Lender or a Last Out Waterfall Lender and whether the Loan is a First Out Waterfall Loan or a Last Out Waterfall Lender), and any assignment of any such interest or interests. The Borrower shall maintain such Register in accordance with usual and customary business practices and the Borrower shall record (1) the names and addresses of the Lenders (and any change thereto pursuant to this Agreement), (2) the amount of the Loan (and whether the amount of such Loan is related to a First Out Waterfall Loan or a Last Out Waterfall Loan) and each funding of any participation therein, (3) the amount of any principal, interest, fee or other amount due and payable or paid, and (4) any other payment received by the Lenders from the Borrower and its application to the Loan.
(c) The Loans made by each Lender are evidenced by this Agreement and the Loan Notes issued pursuant to the Prior Facility Agreement. On the Agreement Date, the Borrower shall execute and deliver to (x) each First Out Waterfall Lender, a new First Out Waterfall Note and (y) each Last Out Waterfall Lender, a new Last Out Waterfall Note, and after the Agreement Date the Borrower shall execute and deliver to each Lender (and/or, if applicable and if so requested by any assignee Lender pursuant to the assignment provisions of Section 6.5) on the date of request by such Lender an amended and restated Loan Note or new Loan Note (which (i) if to a First Out Waterfall Lender, shall be substantially in the form of a First Out Waterfall Note attached hereto as Exhibit A-1, and (ii) if to a Last Out Waterfall Lender, shall be substantially in the form of a Last Out Waterfall Note attached hereto as Exhibit A-2 (in each case, with any amendment and restatement mechanics built in as necessary that are in form and substance reasonably satisfactory to such applicable Lender and the Agent)), in each case, payable to such Lender in an amount equal to the unpaid principal amount of the Loans held by such Lender (which, at the request of such Lender shall be in the form of separate Loan Notes (taking into account the type and tranche of Loan) for separate or different parts of the Loans (taking into account the type and tranche of Loan) held by such Lender). On the Second Amendment Effective Date, the Borrower shall execute and deliver to each First Out Waterfall Lender, a new First Out Waterfall Note (which shall be substantially in the form of a First Out Waterfall Note attached hereto as Exhibit A-3 (in each case, with any amendment and restatement mechanics built in as necessary that are in form and substance reasonably satisfactory to such First Out Waterfall Lender and the Agent)), in each case, payable to such First Out Waterfall Lender in an amount equal to the unpaid principal amount of the First Out Waterfall Loans held by such First Out Waterfall Lender (which, at the request of such First Out Waterfall Lender shall be in the form of separate Loan Notes (taking into account the type and tranche of Loan) for separate or different parts of the Loans (taking into account the type and tranche of Loan) held
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by such First Out Waterfall
Lender). For the avoidance of doubt, each Loan Note (as defined in the Prior Facility Agreement) and each Loan Note (as defined in this Agreement immediately prior
to giving effect to the Second Amendment), as applicable, issued, executed and/or delivered by the Borrower prior to the Agreement Date or the Second Amendment Effective Date, as
applicable, remains valid, binding and enforceable against the Borrower and continues to evidence and cover the Loans and other Obligations owed to such Lender that is the holder or beneficiary of such Loan
Note, and, (A) effective on the Agreement Date, shall be deemed amended and restated to be in the form of
the First Out Waterfall Loan Note attached hereto as Exhibit A-1 (whether or not the new First Out Waterfall Loan Notes have then been delivered to the First Out Waterfall Lenders as required
hereby), and (B) effective on the Second Amendment Effective Date, shall be deemed amended and restated to be in the form of the First Out Waterfall Loan Note attached hereto as Exhibit
A-3 (whether or not the new First Out Waterfall Loan Notes have then been delivered to the First Out Waterfall Lenders as required hereby). On and after the Agreement Date, the principal of, and accrued and unpaid interest on, the First Out
Waterfall Notes (and the First Out Waterfall Loans evidenced thereby) shall be convertible into shares of Common Stock as provided in the First Out Waterfall Notes. Notwithstanding anything to the contrary contained in this Agreement, the Loans
(including any Note(s) evidencing the Loans) are registered obligations, the right, title and interest of the Lenders and their successors and assignees in and to the Loan shall be transferable only upon notation of such transfer in the Register and
no assignment thereof shall be effective until recorded therein. This Section 1.4 shall be construed so that the Loan is at all times maintained in registered form within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of
the Code.
(d) The Borrower, Agent and the Lenders shall treat each Person whose name is recorded in the Register as a Lender for all purposes of this Agreement. Information contained in the Register with respect to any Lender shall be available for access by the Borrower, Agent or such Lender at any reasonable time and from time to time upon reasonable prior notice, or when an Event of Default or Default exists, with just notice (whether reasonable or not) by Agent or any such Lender.
Section 1.5 Accounting Terms and Principles. All accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in accordance with GAAP. No change in the accounting principles used in the preparation of any financial statement hereafter adopted by the Borrower or its Subsidiaries (including, with respect to GAAP, any change in GAAP that would require leases that would be classified as operating leases under GAAP on the Agreement Date to be reclassified as Capital Leases) shall be given effect for purposes of measuring compliance with any provision of this Agreement or otherwise determining any relevant ratios and baskets which govern whether any action is permitted hereunder unless the Borrower and the Agent agree to modify such provisions to reflect such changes in GAAP, and unless such provisions are modified, all financial statements and similar documents provided hereunder shall be provided together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such changes in GAAP. Notwithstanding any other provision contained herein or in any other Loan Document, all terms of an accounting or financial nature used herein and in the other Loan Documents shall be construed, and all computations of amounts and ratios referred to herein and in the other Loan Documents shall be made, without giving effect to any election under Statement of Financial Accounting Standards No. 159 (Codification of Accounting Standards 825-10) to value any Indebtedness or other liabilities of any Loan Party or any Subsidiary at fair value, as defined therein.
Section 1.6 Tax Treatment. It is the intention and agreement of the Parties that the changes to the Borrowers existing indebtedness owed to the Lenders that are being effectuated pursuant to this Agreement shall be treated for federal income tax purposes as made pursuant to and as part of a plan of recapitalization and reorganization of the Borrower described in Section 368(a)(1)(E) of the Code. The
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(b) No Re-Borrowing of Disbursements or Loans. Any Loans or Disbursements which are paid, repaid, prepaid or redeemed may not be re-borrowed under any circumstance.
Section 2.3 Payments; Prepayments; No Call; Non-Callable Make Whole Amount; First Out Waterfall Note Conversions.
(a) The Borrower shall pay in cash on the earliest of (i)(A) the dates set forth in the second column of the table below, to each of the First Out Waterfall Lenders, based on their First Out Waterfall Pro Rata Share of the outstanding principal amount of the First Out Waterfall Loans and their pro rata share of all other First Out Waterfall Obligations, in the amounts set forth in the second column of the table below and (B) the dates set forth in the third column of the table below, to each of the Last Out Waterfall Lenders, based on their Last Out Waterfall Pro Rata Share of the outstanding principal amount of the Last Out Waterfall Loans and their pro rata share of all other Last Out Waterfall Obligations, in the amounts set forth in the third column of the table below (in each case of clause (A)(i) and clause (A)(ii) above, as such installments may hereafter be adjusted as a result of prepayments made pursuant to this Section 2.3 with the application of any such prepayment being applied and adjusted as set forth in Section 2.3(e)), (ii) the date the principal amount of the Obligations are declared to be or automatically becomes due and payable following an Event of Default, to each of the Lenders, based on the application set forth in Section 2.3(d), all of the outstanding Obligations (other than (y) unasserted contingent indemnification obligations and (z) those Obligations under any Warrant or the Registration Rights Agreement that are not due or payable at the time when all other Obligations are paid in full in cash) , and (iii) on the date provided for in Section 5.3, to each of the Lenders, based on the application set forth in Section 2.3(d), all of the outstanding Obligations (other than (y) unasserted contingent indemnification obligations and (z) those Obligations under any Warrant or the Registration Rights Agreement that are not due or payable at the time when all other Obligations are paid in full in cash):
Payment Dates |
Principal Amortization Payment of First Out Waterfall Loan |
Principal Amortization Payment of Last Out Waterfall Loan | ||
April 2, 2021 (the First Amortization Date) |
principal amount of all the First Out Waterfall Loans as of the First Amortization Date after taking into account the PIK Interest Payments added to the principal of the First Out Waterfall Loans on or before the First Amortization Date (such payment of First Out Waterfall Loans, the Scheduled First Amortization Payment of First Out Waterfall Loans) |
$0 | ||
April 2, 2022 (the Second Amortization Date) |
One-half (1/2) of the principal amount of all the First Out Waterfall Loans as of the Second Amortization Date after taking into account the PIK Interest Payments added to the principal of the First Out Waterfall Loans (including any prior cash payment of the PIK Interest Payments on the First Out Waterfall Loans made as part of the |
One-half (1/2) of the principal amount of all the Last Out Waterfall Loans as of the Second Amortization Date after taking into account the PIK Interest Payments added to the principal of the Last Out Waterfall Loans on or before the Second Amortization Date |
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the CoC Fee) or (B) on or after the First Amortization Date but prior to the Maturity Date, In Connection with a Change of Control, then the amount (in addition to the principal amount of the Loans and any accrued and unpaid interest owed thereon) required to be prepaid, repaid, redeemed or paid shall be the CoC Fee. The Non-Callable Make Whole Amount (together with any applicable CoC Fee) shall be paid by the Borrower to the Lenders based on their Pro Rata Share of the principal amount of the Loans on the date of such prepayment, repayment, redemption or payment. The Parties acknowledge and agree that, in light of the impracticality and extreme difficulty of ascertaining actual damages, the Non-Callable Make Whole Amount and any CoC Fee are intended to be a reasonable calculation of the actual damages that would be suffered by the Secured Parties as a result of any such prepayment, repayment, redemption or payment. The parties hereto further acknowledge and agree that the Non-Callable Make Whole Amount and the CoC Fee are not intended to act as a penalty or to punish the Borrower for any such prepayment, repayment, redemption or payment. For the avoidance of doubt, other than as set forth above in clause (B) in the second sentence of this Section 2.3(c), prepayments of the Loans made on or after the First Amortization Date, in whole or in part, are permitted and may be made without premium or penalty.
(d) Each prepayment, repayment, redemption and payment by the Borrower or any Loan Party (and all proceeds of Collateral) shall be applied as follows:
(i) So long as no Application Event has occurred and in continuing, to (A)(1) all principal amortization
payments of the Loans shall be paid as set forth in Section 2.3(a) and (2) all other principal prepayments, repayments, redemptions and payments and all interest payments shall be paid by the Borrower and the other Loan Parties (and any
such amounts received by Agent shall be apportioned) ratably amongto the Secured Parties (according to the unpaid principal balance of the principal and interest to which
such payments relate held by each Secured Party), and with any such amounts that are from any prepayment of principal being applied to the scheduled principal payments in Section 2.3(a) in
the direct order of maturity, and (B) all payments of fees, expenses and other Obligations (that, for the avoidance of doubt, are not covered in clause (A) above) shall be paid by the Borrower and the other Loan Parties (and any such
amounts received by Agent shall be apportioned), other than such fees, expenses or other Obligations that are, based on the express terms of the Loan Documents, for a Secured Partys separate account, ratably
amongto the Secured Parties having a Pro Rata Share of the type of Obligation to which such a particular fee, expense or other Obligation relates. All payments to be made
hereunder by the Borrower or the other Loan Parties shall be remitted to the Lenders (other than amounts owed specifically to Agent or such other Secured Party) and all such payments, and all proceeds of Collateral paid by the Borrower or any other
Loan Party to the Lenders or received by Agent (or any other Secured Party), shall be applied, so long as no Application Event has occurred and is continuing, to reduce the balance of the Loans and other Obligations outstanding.
(ii) At any time that an Application Event has occurred and is continuing, as follows: (i) first, to all
fees, costs and expenses (including any attorneys fees) owed to Agent under the Loan Documents, (ii) second, ratably to all fees, costs and expenses (including any attorneys fees) owed to any First Out Waterfall Lender under the
Loan Documents, (iii) third, ratably to accrued and unpaid interest owed to the First Out Waterfall Lenders under the Loan Documents, (iv) fourth, ratably to the principal amount of the Loans (including any Non-Callable Make Whole Amount,
any CoC Fee and the First Out Waterfall Loan ExitRestructuring Payment, if applicable) owed to the First Out Waterfall Lenders, (v) fifth, ratably to all other First
Out Obligations (other than any First Out Obligations in respect of any Warrant or the Registration Rights
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Agreement that are not at such time owing, due or unpaid) owing to Agent or the other First Out Waterfall Secured Parties, and with respect to any such First Out Waterfall Obligations owed to Agent and the other First Out Waterfall Secured Parties, shall be allocated ratably among Agent and the other First Out Waterfall Secured Parties based on their pro rata share of such other First Out Waterfall Secured Parties, (vi) sixth, ratably to all fees, costs and expenses (including any attorneys fees) owed to any Last Out Waterfall Lender under the Loan Documents, (vii) seventh, ratably to accrued and unpaid interest owed to the Last Out Waterfall Lenders under the Loan Documents, (viii) eighth, ratably to the principal amount of the Loans (including any Non-Callable Make Whole Amount and any CoC Fee, if applicable) owed to the Last Out Waterfall Lenders, and (ix) ninth, ratably, to all other Last Out Waterfall Obligations owing to any Last Out Waterfall Secured Party, and, with respect to any such Last Out Waterfall Obligations owed to the Last Out Waterfall Secured Parties, shall be allocated ratably among the Last Out Waterfall Secured Parties based on their pro rata share of such other Last Out Waterfall Obligations. With respect to any prepayments, repayments, redemptions, payments or distributions in cash, property or other assets that any Last Out Waterfall Lender pays over to Agent or any First Out Waterfall Lender under the terms of this Agreement, such Last Out Waterfall Lender will be subrogated to the rights of First Out Waterfall Lenders; provided, that no Last Out Waterfall Lender may assert or enforce any such rights of subrogation it may acquire as a result of any prepayment, repayment, redemption, payment or distribution hereunder until all First Out Waterfall Obligations (other than (y) unasserted contingent indemnification obligations and (z) those First Out Waterfall Obligations under any Warrant or the Registration Rights Agreement) have been paid in full in cash. Each Last Out Waterfall Lender agrees that any prepayments, repayments, redemptions, payments or distributions in respect of the Last Out Waterfall Obligations received by such Last Out Waterfall Lender in violation of this Agreement shall be as promptly as practicable paid over to Agent, for the benefit of the First Out Waterfall First Out Waterfall Lenders, in respect of the First Out Waterfall Obligations, in the same form as received, with any necessary endorsements, to be applied in accordance with this Agreement, and each Last Out Waterfall Lender hereby authorizes Agent to make any such endorsements as agent for the Last Out Waterfall Lenders (which authorization, being coupled with an interest, is irrevocable).
(e) Any principal of any Loan that is prepaid, repaid, redeemed or paid pursuant to Section 2.3(c) or Section 5.3 shall be applied to the scheduled principal payments of the Loans in the inverse order of maturity.
(f) (i) From and after
the AgreementSecond Amendment Effective Date, any conversionVoluntary Conversion or Forced
Conversion of principal under a First Out Waterfall Note by any First Out Waterfall Lender or payment by any First Out Waterfall Lender of the Exercise Price of any Warrant by reducing the principal amount of such First Out Waterfall
Lenders First Out Waterfall Loan in an amount equal to such Exercise Price, shall be applied against, and reduce, the Scheduled First Amortization Payment of First Out Waterfall Loans that is owed to such First Out Waterfall Lender until the
earlier of (A) the time the Scheduled First Amortization Payment of First Out Waterfall Loans that is owed to such converting or exercising First Out Waterfall Lender(s) has been satisfied in full
(through conversions thereof and/or payments of the Exercise Price of Warrants or pursuant to Section 2.3(c)
or Section 5.3), and (B) 5:00 p.m. (New York City time) on the Trading Day immediately preceding the First Amortization Date; (ii) from and after the earlier of the time
set forth in clauses (i)(A) and (i)(B) above, any conversionsVoluntary Conversion or Forced Conversion of principal under a First Out Waterfall Note issued to any such
converting First Out Waterfall Lender or payment by any First Out
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Waterfall Lender of the Exercise Price of any Warrant by reducing the principal amount of
such First Out Waterfall Lenders First Out Waterfall Loan in an amount equal to such Exercise Price shall be applied against, and reduce, the Scheduled Second Amortization Payment of First Out Waterfall Loans owed to such First Out Waterfall
Lender until the earliest of (A) the time that an aggregate of $60,000,000 has been applied against, and reduced, the Scheduled Amortization Payments pursuant to this clause (ii) and clause (i) above,
(Bearlier of (A) the time the Scheduled Second Amortization Payment of First Out Waterfall Loans that is owed to such converting or exercising First Out Waterfall Lender(s)
has been satisfied in full (through conversions thereof and/or payments of the Exercise Price of Warrants
or pursuant to Section 2.3(c) or Section 5.3), and (CB) 5:00 p.m. (New York City time) on the
Trading Day immediately preceding the Second Amortization Date; and (iii) from and after the earliestearlier of the times set forth in clauses (ii)(A) and (ii)(B)
above, one-half (50%) of any conversionany Voluntary Conversion or Forced Conversion of principal under a First Out Waterfall Note issued to any such converting First
Out Waterfall Lender or payment by any First Out Waterfall Lender of the Exercise Price of any Warrant by reducing the principal amount of such First Out Waterfall Lenders First Out Waterfall Loan in an amount equal to such Exercise Price
shall be applied against, and reduce, the Scheduled Second Amortization Payment owed to such converting or exercising First Out Waterfall Lender and the other half (50%) shall be applied against, and reduce, the principal amount payable
on the Maturity Date Payment of First Out Waterfall Loans owed to such converting or exercising First Out Waterfall Lender, until the earlier of
(X) the time the Scheduled Second Amortization Payment owed to such converting or exercising First Out Waterfall Lenders has been satisfied in full through conversions thereof and/or payments of the Exercise Price of Warrants, and (Y) 5:00
p.m. (New York City time) on the Trading Day immediately preceding the Second Amortization Date; and (iii) thereafter. From and after the Second Amendment Effective Date,
any conversionMandatory Conversion of principal under thea First Out Waterfall Notes
issued to such convertingNote by any First Out Waterfall Lender(s) or payment by any First Out Waterfall Lender of the Exercise Price of any Warrant by reducing the
principal amount of such First Out Waterfall Lenders First Out Waterfall Loan in an amount equal to such Exercise Price shall be applied against, and reduce, the principal amount due and payable
oneach of the Scheduled First Amortization Payment of First Out Waterfall Loans, the Scheduled Second Amortization Payment of First Out Waterfall Loans and the Maturity
Date Payment of First Out Waterfall Loans owed to such converting or exercising First Out Waterfall
Lender , on pro rata basis, based upon the unpaid principal amount of each such Amortization Payment. Each Lender and the Borrower acknowledges and agrees that, following the date hereof,
to the extent any conversionConversion of any First Out Waterfall Note issued to a converting First Out Waterfall Lender or payment by any First Out Waterfall Lender of the
Exercise Price of any Warrant by reducing the principal amount of such First Out Waterfall Lenders First Out Waterfall Loan in an amount equal to such Exercise Price reduces the principal payment due and payable on any date to such converting
or exercising First Out Waterfall Lender, such reduction shall be applied to the portion of such payment due under the applicable First Out Waterfall Notes held by each of the converting First Out Waterfall Lender on a pro rata basis in accordance
with each such converting First Out Waterfall Lenders First Out Waterfall Lender Percentage with respect to the First Out Waterfall Notes. For the avoidance of doubt, this Section 2.3(f) is not applicable (and not available) to any Last
Out Waterfall Notes or Last Out Waterfall Loans.
Section 2.4 Payment Details. All payments of the Obligations by the Borrower hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and shall be paid in cash in Dollars. Payments of any amounts and other Obligations due to Agent or the Lenders under this Agreement or the other Loan Documents shall be made in Dollars in immediately available funds prior to 2:00 p.m. (New York City time) on such date that any such payment is due, using such wire information or address for Agent or such applicable Lender that is set forth on Schedule 2.4 or at such other bank or place as Agent or such applicable Lenders shall from time to time designate in a
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Section 2.6 Interest.
(a) From (and including) and after the Prior Agreement Date, the outstanding principal amount of the Loans and any overdue
interest shall bear interest at the Interest Rate (calculated on the basis of a 360-day year for the actual number of days elapsed in each month). From (and including) the Prior Agreement Date until (but not including) the Agreement Date, interest
with respect to the Interest Rate shall be paid in cash to the Lenders quarterly in arrears for the preceding calendar quarter on the on the first Business Day of each calendar quarter, whether by acceleration or otherwise, commencing on
July 1, 2017 and on the first Business Day of each October, January, April and July thereafter through and including the calendar quarter commencing October 1, 2018. From (and including) and after the Agreement Date, interest with respect
to the Cash Interest Rate (which, for the avoidance of doubt, does not include any interest mentioned in the immediately preceding sentence) shall be paid in cash to the Lenders quarterly in arrears for the preceding calendar quarter on the first
Business Day of each calendar quarter, whether by acceleration or otherwise, commencing on July 1, 2017 and on the first Business Day of each October, January, April and July thereafter, and on the maturity (and on any date of prepayment,
repayment, redemption or payment of the principal) of the Loans (each, an Interest Payment Date); provided, however, from and after the Agreement Date, that in lieu of making any payment of interest with respect to the
Cash Interest Rate in cash on an Interest Payment Date pursuant to this Section 2.6 (but not interest payable (x) pursuant to the immediately preceding sentence, (y) pursuant to Section 2.7 and (z) with respect
to the PIK Interest Rate) and subject to the conditions set forth in Exhibit 2.6, the Borrower may elect to satisfy all or any part of such payment with respect to First Out Waterfall Loans only (and, for the avoidance of doubt, not any Last Out
Waterfall Loans) by the issuance to the First Out Waterfall Lenders of shares of Freely Tradable Common Shares (as defined in Exhibit 2.6) in accordance with the provisions of Exhibit 2.6; provided that, not later than the first Business Day prior
to the applicable Interest Payment Date, the Borrower shall provide written notice to the Agent of the amount of such payment satisfied pursuant to Exhibit 2.6. . From (and
including) and after the Agreement Date, interest with respect to the PIK Interest Rate shall be paid in-kind on each Interest Payment Date (which, for the avoidance of doubt, does not include any interest mentioned in the second sentence of this
Section 2.6(a)) by increasing the principal amount of the Loans by an amount equal to the interest that has accrued at the PIK Interest Rate during such period (such payment, a PIK Interest Payment). Following an increase in
the principal amount of the Loans as a result of a PIK Interest Payment, the Loans will bear interest at the Interest Rate on such increased principal amount from and after the date of such PIK Interest Payment and such increased principal amount
shall constitute Obligations.
(b) [Reserved].
(c) All interest, fees and other amounts under each Loan Document shall be calculated on the basis of a 360-day year for the actual number of days elapsed.
Section 2.7 Yield Enhancement Payment; Default Interest; CoC Fee;
ExitRestructuring Payment.
(a) On the Prior Agreement Date, the Borrower paid in cash in Dollars to such First Out Waterfall Lender (as such First Out Waterfall Lender funding such First Out Waterfall Disbursement directed) a yield enhancement payment in the amount of two and twenty-fifths of one hundred percent (2.25%) of the principal amount of such First Out Waterfall Disbursement funded by such First Out Waterfall Lender on the Prior Agreement Date as consideration for providing such First Out Waterfall Disbursement, and such payment, at the sole option of the applicable Lender, was able to be deducted
36
from such First Out Waterfall Disbursement. Such payment was fully earned when it was paid (or when it was deducted from such First Out Waterfall Disbursement) and is not and shall not be refundable for any reason whatsoever.
(b) At the election (which upon such election, to the extent permitted by Applicable Law, such additional interest rate shall retroactively apply to the first day of existence of such Event of Default) of Agent or the Required Lenders while any Event of Default exists (or automatically while any Event of Default under Section 5.4(a) or 5.4(d) exists), the Borrower shall pay interest (after as well as before entry of judgment thereon to the extent permitted by Applicable Law) on the Obligations (other than Obligations under any Warrant or the Registration Rights Agreement) and past due interest thereon, if any, from and after the date of occurrence of such Event of Default, at a rate per annum which is determined by adding (i) with respect to any Event of Default under Section 5.4(a), ten percent (10.0%) per annum to the Interest Rate then in effect for the Loans and (ii) with respect to any other Event of Default, two percent (2%) per annum to the Interest Rate then in effect for the Loans. Such additional interest shall be payable in cash on demand.
(c) Upon prepayment, repayment, redemption or payment of any principal of the Loans at any time (including, for the avoidance of doubt, before, after and on the date of the First Amortization Date but excluding, for the avoidance of doubt, Loans paid in full on the Maturity Date) In Connection with a Change of Control, Borrower shall pay to the Secured Parties the CoC Fee (in addition to any principal Obligations required to be paid pursuant to Section 5.3 and any applicable Non-Callable Make Whole Amount due pursuant to Section 2.3(c)) based on their Pro Rata Share of the principal of the Loans on the date of such prepayment, repayment, redemption or payment of such Loans; provided, however that if such prepayment, repayment, redemption or payment is In Connection with a Change of Control but prior to the consummation of the Change of Control, the CoC Fee shall be due and payable contemporaneously with the consummation of a Change of Control. The CoC Fee shall be non-refundable upon receiving payment thereof. The Parties acknowledge and agree that, in light of the impracticality and extreme difficulty of ascertaining actual damages occurring In Connection with a Change of Control, the CoC Fee is intended to be a reasonable calculation of the actual damages that would be suffered by the Secured Parties as a result of any such prepayment, repayment, redemption or payment. The parties hereto further acknowledge and agree that the CoC Fee is not intended to act as a penalty or to punish the Borrower for any such prepayment, repayment, redemption or payment.
(d) Notwithstanding anything to the contrary in the Loan Documents,
oneffective as of the Second Amendment Effective Date, there shall be fully due and owing by the Loan Parties a non-refundable Restructuring Payment in a total amount equal to
$10,000,000 (the First Out Waterfall Restructuring Payment), which First Out Waterfall Restructuring Payment shall be deemed an Obligation and a First Out Waterfall Obligation and shall be deemed to have been fully earned as of the
Second Amendment Effective Date. The Loan Parties obligation to pay the First Out Waterfall Restructuring Payment will not be subject to any counterclaim or setoff for, or be otherwise affected by, any claim or dispute any Loan Party may have.
The payment of the First Out Waterfall Restructuring Payment shall be made without deduction for any taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any national, state or local taxing authority, or will be grossed up
by the Loan Parties for such amounts. The First Out Waterfall Restructuring Payment shall be paid immediately without further action or notice by the Loan Parties in cash to the First Out Waterfall Lenders (based on their First Out Waterfall Pro
Rata Share of such First Out Waterfall Loans) upon the earliest to occur of (i) the date when the remaining First Out Waterfall Loans outstanding are
due, payable, paid, repaid, redeemed or prepaid (in each case, whether before, at the time of or after the Maturity Date or any acceleration,
the filing of any voluntary or involuntary bankruptcy petition, insolvency or otherwise), in
37
an amount that causes (or such lesser amount of outstanding First Out Waterfall Loans that
are so due, payable, paid, repaid, redeemed or prepaid that the First Out Waterfall Lenders have agreed to cause) the principal amount of remaining First Out Waterfall Loans outstanding
to be less than $10,000,000, the Borrower shall pay in cash at such time to the First Out Waterfall Lenders (based on their First Out Waterfall Pro Rata Share of such First Out Waterfall Loans) a non-refundable exit payment (the First
Out Waterfall Loan Exit Payment) in a total amount equal to $5,000,000. be (or a payment, repayment, redemption or prepayment is required to be made that would cause such First
Out Waterfall Loans, if such payment, repayment, redemption or prepayment would have been made to be) less than $10,000,000, including, without limitation, when the principal amount of the remaining First Out Waterfall Loans have been paid in full;
and (ii) the Maturity Date or any acceleration of any of the Obligations (and/or any of the First Out Waterfall Obligations). The Parties acknowledge and agree that the Agent and the First Out Waterfall Lenders would not have entered into
the Second Amendment, this Agreement and the other Loan Documents without the BorrowerLoan Parties agreeing to
pay the First Out Waterfall Loan ExitRestructuring Payment in the aforementioned instances. The Parties further acknowledge and agree that the First Out Waterfall
Loan ExitRestructuring Payment set forth in this Section 2.7(d) is not intended to act as a penalty or to punish the Borrower or any other Loan Party for any such
payment, repayment, redemption or prepayment (or the requirement for such payment, repayment, redemption or prepayment to be due,
payable or made).
(e) Notwithstanding anything to the contrary in the Loan Documents,
oneffective as of the Second Amendment Effective Date, there shall be fully due and owing by the Loan Parties a non-refundable Restructuring Payment in a total amount equal to
$1,113,750 (the Last Out Waterfall Restructuring Payment), which Last Out Waterfall Restructuring Payment shall be deemed an Obligation and a Last Out Waterfall Obligation and shall be deemed to have been fully earned as of the Second
Amendment Effective Date. The Loan Parties obligation to pay the Last Out Waterfall Restructuring Payment will not be subject to any counterclaim or setoff for, or be otherwise affected by, any claim or dispute any Loan Party may have. The
payment of the Last Out Waterfall Restructuring Payment shall be made without deduction for any taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any national, state or local taxing authority, or will be grossed up by
the Loan Parties for such amounts. The Last Out Waterfall Restructuring Payment shall be paid immediately without further action or notice by the Loan Parties in cash to the Last Out Waterfall Lenders (based on their Last Out Waterfall Pro Rata
Share of such Last Out Waterfall Loans) upon the earliest to occur of (i) the date when the remaining Last Out Waterfall Loans outstanding are due, payable, paid, repaid, redeemed or
prepaid (in each case, whether before, at the time of or after the Maturity Date or any acceleration, the filing of any voluntary or involuntary bankruptcy
petition, insolvency or otherwise), in an amount that causes (or such lesser amount of outstanding Last Out Waterfall Loans that are so
due, payable, paid, repaid, redeemed or prepaid that the Last Out Waterfall Lenders have agreed to cause) the principal amount of remaining Last Out Waterfall Loans outstanding to
be less than $10,000,000, the Borrower shall pay in cash at such time to the Last Out Waterfall Lenders (based on their Last Out Waterfall Pro Rata Share of such Last Out Waterfall Loans) a non-refundable exit payment (the Last Out Waterfall
Loan Exit Payment) in a total amount equal to $1,113,750. be (or a payment, repayment, redemption or prepayment is required to be made that would cause such Last Out Waterfall
Loans, if such payment, repayment, redemption or prepayment would have been made to be) less than $10,000,000, including, without limitation, when the principal amount of the remaining Last Out Waterfall Loans have been paid in full; and
(ii) the Maturity Date or any acceleration of any of the Obligations (and/or any of the Last Out Waterfall Obligations). The Parties acknowledge and agree that the Agent and the Last Out Waterfall Lenders would not have entered into
the Second Amendment, this Agreement and the other Loan Documents without the BorrowerLoan Parties agreeing to
pay the Last Out Waterfall Loan ExitRestructuring Payment in the aforementioned instances. The Parties further acknowledge and agree that the Last Out Waterfall
Loan ExitRestructuring Payment set forth in this
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Section 2.7(d) is not intended to act as a penalty or to punish the Borrower or any other Loan Party for any such payment, repayment, redemption or prepayment (or the requirement for such payment, repayment, redemption or prepayment to be due, payable or made).
Section 2.8 Delivery of Warrants.
(a) On the Prior Agreement Date under the Prior Facility Agreement, the Borrower issued to the First Out Waterfall Lenders (or their predecessors) warrants to purchase 6,470,000 shares (647,001 shares as adjusted to give effect to the Reverse Split) of Common Stock at an Exercise Price of $9.23 per share ($92.30 per shares as adjusted to give effect to the Reverse Split) (each as subject to any other adjustments provided for therein), each in substantially in the form of Exhibit C-1 attached hereto (as may be amended, restated, supplemented or otherwise modified from time to time, the Initial Warrants), with an expiration date of April 3, 2024.
(b) [Reserved].
(c) As of the Agreement Date, the Initial Warrants are allocated among the First Out Waterfall Lenders as set forth on Annex A.
(d) On the Agreement Date, the Borrower shall issue to the First Out Waterfall Lenders, based on such First Out Waterfall
Lenders First Out Waterfall Pro Rata Share, warrants to purchase 8,750,000 shares8,750,001 shares (875,001 shares as adjusted to give effect to the Reverse Split) of
Common Stock at an Exercise Price of $4.71 per share ($47.10 per shares as adjusted to give effect to the Reverse Split) (each as
subject to any other adjustments provided for therein), each in substantially in the form of Exhibit C-2 attached hereto (as may be amended, restated, supplemented or otherwise modified
from time to time, the Additional Warrants), with an expiration date of August 9, 2025
(e) The Additional Warrants issued pursuant to Section 2.8(d) shall be allocated on the Agreement Date to the First Waterfall Lenders as set forth on Annex A.
(f) On the Second Amendment Effective Date, the Borrower shall amend and restate each Initial Warrant held by each First Out Waterfall Lender, but issuing to such First Out Waterfall Lender, in exchange for such Initial Warrant, a warrant that has the same term as such Initial Warrant, is with respect to an equal number of shares of Common Stock and has an Exercise Price of $6.61 per share (each as subject to any adjustments provided for therein), in substantially the form of Exhibit C-3 attached hereto (the amended and restated warrants issuable pursuant to this Section 2.8(f), as may be amended, restated, supplemented or otherwise modified from time to time, the Amended and Restated Initial Warrants), and upon such issuance, the Initial Warrant held by such First Out Waterfall Lender shall be terminated.
(g) On the Second Amendment Effective Date, the Borrower shall amend and restate each Additional Warrant held by each First Out Waterfall Lender, but issuing to such First Out Waterfall Lender, in exchange for such Additional Warrant, a warrant that has the same term as such Additional Warrant, is with respect to an equal number of shares of Common Stock and has an Exercise Price of $6.61 per share (each as subject to any adjustments provided for therein), in substantially the form of Exhibit C-4 attached hereto (the warrants issuable pursuant to this Section 2.8(g), as may be amended, restated, supplemented or otherwise modified from time to time, the Amended and Restated Additional Warrants), and upon such issuance, the Additional Warrant held by such First Out Waterfall Lender shall be terminated.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Loan Parties. The Loan Parties, jointly and severally, represent
and warrant (A) with respect to Section 3.1(g)(i)(B), the first two sentences of Section 3.1(i), Section 3.1(y), Section 3.1(z)(A) and (C), Section 3.1(ee), the first sentence of Section 3.1(mm),
Section 3.1(nn), Section 3.1(oo), Section 3.1(rr), Section 3.1(ss) and Section 3.1(tt), at all times, and (B) with respect to all other provisions of Section 3.1, (I) as of the Prior Agreement Date (in the
form and substance thereof in the Prior Facility Agreement) and the Agreement Date (if, the Agreement Date (in the form and substance of the Facility Agreement (as defined in
the Second Amendment but without giving effect to any amendments or modifications thereto)), the Second Amendment Date (in the form and substance of the Amended Facility Agreement (as defined in the Second Amendment)) and the Second Amendment
Effective Date (in the form and substance of thisthe Amended Facility Agreement (as defined in the Second
Amendment)) and (II) as of each date that this Agreement is amended or modified (or any date any consent or waiver related to this Agreement is entered into or otherwise executed and delivered) in accordance with Section 6.6(b) (but with
respect to any representation or warranty that speaks as of an earlier date, such representation and warranty shall continue to speak only as of such earlier date):
(a) Each Loan Party is (i) conducting its business in compliance with its Organizational Documents and (ii) not in violation of its Organizational Documents. Each Loan Partys Organizational Documents are in full force and effect.
(b) No Default or Event of Default has occurred or will result from the transactions contemplated by the Loan Documents.
(c) Each Loan Party (i) is Solvent and (ii) has not taken action, and no such action has been taken by a third party, for its winding up, dissolution or liquidation or similar executory or judicial proceeding or for the appointment of a liquidator, custodian, receiver, trustee, administrator or other similar officer for any Loan Party or any or all of its assets or revenues; provided, however, that, for the avoidance of doubt, no such representation in this Section 3.1(c) is made in respect of any Immaterial Subsidiary.
(d) No Lien exists on any Loan Partys assets, except for Permitted Liens.
(e) The obligation of the Loan Parties to make any payment under this Agreement or the other Loan Documents (together with all charges in connection therewith) is absolute and unconditional.
(f) No Indebtedness of any Loan Party exists other than Permitted Indebtedness.
(g) Each Loan Party is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable. Each Loan Party (i) has full power and authority (and all governmental licenses, authorizations, Permits, consents and approvals) to (A) own its properties and conduct its business (solely with respect to governmental licenses, authorizations, Permits, consents and approvals, except where the failure to have such governmental licenses, authorizations, Permits, consents and approvals could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect) and (B) to (x) issue the Securities in accordance with the Loan Documents, (y)
40
enter into, and perform its obligations under, the Loan Documents, including the issuance of
the Securities and the reservation for issuance of the Interest Payment Shares, the Conversion Shares and the Warrant Shares, and (z) consummate the transactions contemplated under the Loan Documents, and (ii) is duly
qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its
business requires such qualification or license, in each case of this clause (ii), where the failure to be so qualified, licensed or in good standing could reasonably be expected, individually or in the aggregate, to result in a Material Adverse
Effect.
(h) OtherThere is no pending, or
threatened, action, suit or other proceeding (i) to which any Loan Party is a party, (ii) which purports to affect or pertain to (A) the Loan Documents, the Convertible Note Documents or the Transactions, (B) the execution,
delivery or performance by any Loan Party or any of its Subsidiaries hereunder or thereunder or (C) the rights, remedies and benefits provided (or purported to be provided) to the Loan Parties hereunder or thereunder, (iii) which purports
to affect or pertain to any other transactions contemplated by the Loan Documents, the Convertible Note Documents or the Transactions that are not covered by clause (ii) above, or (iv) which has as the subject thereof any assets owned by
any Loan Party or any of its Subsidiaries, which (y) in the case of clause (i), clause (iii) and clause (iv), could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, and (z) in the case
of clause (ii), could reasonably be expect to result in monetary judgments or relief, individually or in the aggregate, in excess of $2,000,000. As of the Agreement Date, other than as set forth on Schedule 3.1(h), there is no pending or, to the
knowledge of the Loan Parties, threatened, any action, suit or other proceeding before any Governmental Authority (iA) to which any Loan Party is a party,
(iiB) which purports to affect or pertain to the Loan Documents, the Transactions or any other transaction contemplated hereby or thereby or
(iiiC) which has as the subject thereof any assets owned by any Loan Party or any of its Subsidiaries, in each case which could reasonably be expected to
result in monetary judgments or relief, individually or in the aggregate, in excess of $2,000,000. Other than as set forth on Schedule 3.1(h), there are no current or, to the knowledge of the Loan Parties, pending, legal actions, suits or
other proceedings, in each case which could reasonably be expected to result in monetary judgments or relief, individually or in the aggregate, in excess of $ 2,000,000, to which any Loan Party or any of its Subsidiaries or any of their respective
assets is subject. With respect to eachNo action, suit, proceeding, claim, event or disclosure
listedset forth on Schedule 3.1(h), none of them could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Agreement or any other Loan
Document or directing that the transactions provided for herein or therein not be consummated as herein or therein provided. Other than as set forth on Schedule 3.1(h), (A) at all times on
and after the Agreement Date until and including the Second Amendment Effective Date and (B) at all times that this representation and warranty is made on and after the Second Amendment Effective Date, in each case of clause (A) and clause
(B), none of the current directors (or equivalent persons) or current officers of the Borrower and its Subsidiaries has been involved as a defendant in securities-related litigation or other securities-related legal proceedings during
the past five years(1) convicted or has pled no contest (or agreed to a settlement or plea agreement related) to, or been subject to any order of any Governmental Authority relating
to, any violations of any securities laws, rules or regulations, or (2) been enjoined from engaging in any conduct relating to offers or sales of securities or service as an officer or director of a public company.
(i) The execution, delivery and performance of each of this Agreement and the other Loan Documents, including the issuance of the Securities hereunder, has been, duly authorized by each Loan Party and no further consent or authorization is required by any Loan Party, any Loan Partys board of directors (or other equivalent governing body) or the holders of any Loan Partys Stock. Each
41
of this Agreement and the other Loan Documents has been duly executed and delivered by each of the Loan Parties and constitutes a valid, legal and binding obligation of each Loan Party, enforceable in accordance with its respective terms, except as such enforceability may be limited by applicable insolvency, bankruptcy, reorganization, moratorium or other similar laws affecting creditors rights generally. The execution, delivery and performance of this Agreement and the other Loan Documents by each Loan Party thereto and the consummation of the transactions (including the issuance of the Securities hereunder and thereunder) contemplated herein and therein will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien (other than pursuant to the Loan Documents) upon any assets of any such Loan Party pursuant to, any agreement, document or instrument to which such Loan Party is a party or by which any Loan Party is bound or to which any of the assets or property of any Loan Party is subject, except, with respect to this clause (A), as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (B) result in any violation of or conflict with the provisions of the Organizational Documents, (C) result in the violation of any Applicable Law, (D) result in the violation of any judgment, order, rule, regulation or decree of any Governmental Authority, or (E) violate, conflict with or cause a breach or a default under any agreement or instrument binding upon it, except, with respect to clauses (C) and (E) only, as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No consent, approval, Authorization or order of, or registration or filing with any Governmental Authority is required for (i) the execution, delivery and performance of this Agreement or any of the other Loan Documents, and the issuance of the Securities hereunder and thereunder, and (ii) the consummation by any Loan Party of the Transactions or the other transactions contemplated hereby or thereby, except for (A) the filings necessary to perfect the Liens created by the applicable Loan Documents and (B) any necessary filings with the SEC.
(j) Other than has been obtained, no Authorization is required for (i) the execution and delivery of this Agreement or the other Loan Documents, or (ii) the consummation of the Transactions and the other transactions contemplated hereby and thereby, including (other than the Authorization set forth on Schedule 3.1(j)) the issuance and exercise of the Warrants.
(k) Each Loan Party and its Subsidiaries are in compliance with Applicable Law except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(l) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (i) (A) each Loan Party holds, and is operating in compliance in all material respects with, all franchises, grants, Authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority (collectively, Necessary Documents) required for the conduct of its business and (B) all Necessary Documents are valid and in full force and effect and (ii) no Loan Party has (A) received written notice of any revocation, non-renewal, amendment, expiration, suspension, limitation, withdrawal, cancellation or other modification of any of the Necessary Documents and (B) reason to believe that any of the Necessary Documents will not be renewed in the ordinary course of business.
(m) As of the
AgreementSecond Amendment Date and the Second Amendment Effective Date, the Real Estate listed in Schedule 3.1(m) constitutes all of the Real Estate of each Loan Party and
each of its Subsidiaries. Each Loan Party has good and marketable title to all of its assets and property free and clear of all Liens, except Permitted Liens. Except as could not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, the property held under lease by each Loan Party is held under valid, subsisting and enforceable leases with only such exceptions with respect
42
to any particular lease as do not interfere in any material respect with the conduct of the business of such Loan Party.
(n) Each Loan Party (i) owns, or, to the knowledge of the Loan Parties and their Subsidiaries, has the right to use pursuant to a valid and enforceable written license, all IP, in each case (and without any knowledge qualifier applicable thereto) free and clear of any Liens other than Permitted Licenses and Permitted Liens. All IP that is registered with or issued by a Governmental Authority that is currently in the name of a Loan Party is, to the knowledge of the Loan Parties and their Subsidiaries, valid and enforceable. Each patent constituting a Material Intangible Asset is, to the knowledge of the Loan Parties and their Subsidiaries, valid and enforceable and no part of the Material Intangible Assets has been judged invalid or unenforceable, in whole or in part; and, except as set forth on Schedule 3.1(n), there is no pending or, to the knowledge of the Loan Parties, threatened action, suit, other proceeding or claim by any Person challenging or contesting the validity, ownership, or enforceability of any Material Intangible Asset, the use thereof by any Loan Party, or other rights of any Loan Party in or to any Material Intangible Asset, and no Loan Party has received any written notice regarding any such action, suit, other proceeding or claim. With respect to each action, suit, proceeding, claim, challenge, contest, event and disclosure listed on Schedule 3.1(n), none of them could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Neither the conduct of the business of any Loan Party, nor any Loan Party, has infringed, misappropriated or otherwise violated, or is infringing, misappropriating or otherwise violating, any Intellectual Property of any Person, except as could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Other than as set forth on Schedule 3.1(h), there is no pending or, to the knowledge of the Loan Parties, threatened action, suit, other proceeding or claim by any Person alleging that any Loan Party is infringing, misappropriating or violating, or otherwise using without authorization, any Intellectual Property of any Person, and no Loan Party has received any written notice regarding, any such action, suit, other proceeding or claim. With respect to each action, suit, proceeding, claim, event or disclosure listed on Schedule 3.1(h), none of them could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Other than as set forth in Section 3.b. of the Perfection Certificate dated as of (and delivered by the Loan Parties on) the Agreement Date, no Loan Party is a party to, or bound by, any options, licenses, franchise or other agreements, written or oral, relating to trademarks, patents, copyrights, other know-how or IP (or granting any right, title or interest in or to any IP) that require annual payments in excess of $25,000 individually.
(o) No Loan Party is, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, in breach of or otherwise in default under, and no event has occurred which, with notice or lapse of time or both, would constitute such breach or other default in the performance of any agreement or condition contained in any agreement under which it may be bound, or to which any of its assets is subject.
(p) All U.S. federal, state and local income and
franchise and other material Tax returns, reports and statements (collectively, the Tax Returns) required to be filed by any Tax Affiliates have been filed with the appropriate Governmental Authorities, all such Tax Returns are true and
correct in all material respects, and all Taxes, assessments and other governmental charges and impositions reflected therein or otherwise due and payable have been paid prior to the date on which any material Liability may be added thereto for
non-payment thereof except for those contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP. As of the
AgreementSecond Amendment Date and the Second Amendment Effective Date, no material Tax Return is under audit or examination by any Governmental Authority, and no Tax
Affiliate has received written notice from any Governmental Authority of any audit or examination or any assertion of any claim for material Taxes.
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To the extent material, proper and accurate amounts have been withheld by each Tax Affiliate from their respective employees for all periods in full and complete compliance with the Tax, social security and unemployment withholding provisions of Applicable Law and such withholdings have been timely paid to the respective Governmental Authorities. No Tax Affiliate has participated in a listed transaction within the meaning of Treasury Regulation Section 1.6011-4(b)(2) or has been a member of an affiliated, combined or unitary group other than the group of which a Tax Affiliate is the common parent.
(q) The exchange of the Exchanged Deerfield Convertible Notes for the Last Out Waterfall Loans under this Agreement and the other Loan Documents does not violate or otherwise breach any provision of any of the 3.25% Convertible Note Documents or any other agreements, instruments or documents evidencing any Indebtedness or cause any other holder of, or party to, any 3.25% Convertible Notes to become due prior to their stated maturity therein.
(r) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect after the Prior Agreement Date or the Agreement Date, each Loan Party:
(i) at all times has complied with all Applicable Laws; (ii) has not received any warning letter or other correspondence or notice from the any Governmental Authority alleging or asserting noncompliance with any Applicable Laws or any Authorizations; (iii) possesses and complies with the Authorizations, which are valid and in full force and effect; (iv) has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit, suspend, cancel, withdraw, modify or revoke any Authorization and has no knowledge that any Governmental Authority is considering such action; and (v) has filed, obtained, maintained or submitted all reports, documents, forms, notices, applications, records, claims, submissions, renewals and supplements or amendments as required by any Applicable Laws or Authorizations.
(s) The Borrower has filed all of the SEC Documents, within the time frames prescribed by the SEC for the filing of such SEC Documents such that each filing was timely filed with the SEC. The Borrower filed and made publicly available on the SECs Electronic Data Gathering, Analysis, and Retrieval system (including any successor thereto, EDGAR) on or prior to the date this representation is made, true, correct and complete copies of the SEC Documents. As of their respective dates, each of the SEC Documents complied in all material respects with the requirements of the Securities Act and/or the Exchange Act (as applicable) applicable to the SEC Documents. None of the SEC Documents, at the time they were filed with the SEC, 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. Since the filing of the SEC Documents, no event has occurred that would require an amendment or supplement to any of the SEC Documents and as to which such an amendment or a supplement has not been filed and made publicly available on EDGAR (and true, correct and complete copies of such amendment or supplement, if any, have been delivered to the Secured Parties or their respective representatives) on or prior to the date this representation is made. The Borrower has not received any written comments from the SEC staff that have not been resolved, to the knowledge of the Borrower, to the satisfaction of the SEC staff.
(t) As of their respective dates, the consolidated financial statements of the Borrower and its Subsidiaries included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with GAAP, consistently applied (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments and lack of footnote disclosures), and fairly present in all material respects the consolidated financial position of the Borrower and its Subsidiaries as of the dates thereof and the consolidated results of their
44
operations, cash flows and changes in stockholders equity for the periods then ended (subject, in the case of unaudited quarterly financial statements, to normal year-end audit adjustments and
lack of footnote disclosures). The accounting firm that expressed its opinion with respect to the consolidated financial statements included in the Borrowers most recently filed annual report on 10-K, and reviewed the consolidated financial
statements included in the Borrowers most recently filed quarterly report on 10-Q, was independent of the Borrower pursuant to the standards set forth in Rule 2-01 of Regulation S-X promulgated by the SEC and as required by the applicable
rules and guidance from the Public Company Accounting Oversight Board (United States), and such firm was otherwise qualified to render such opinion under Applicable Law and the rules and regulations of the SEC. There is no transaction, arrangement
or other relationship between the Borrower (or any of its Subsidiaries) and an unconsolidated or other off-balance-sheet Person that is required to be disclosed by the Borrower in the SEC Documents that has not been so disclosed in the SEC
Documents. Neither the Borrower nor any of its Subsidiaries is required to file or will be required to file any agreement, note, lease, mortgage, deed or other instrument entered into prior to the date this representation is made and to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound that has not been previously filed as an exhibit (including by way of incorporation by reference) to the Borrowers reports filed or
made with the SEC under the Exchange Act. Other than (i) the liabilities assumed or created pursuant to this Agreement and the other Loan Documents and any fees and expenses in connection therewith, (ii) liabilities accrued for in the
latest balance sheet included in the Borrowers most recent periodic report (on 10-Q or 10-K) filed prior to the Prior Agreement Date (the date of such balance sheet, the Latest Balance Sheet Date), (iii) liabilities
incurred in the ordinary course of business consistent with past practice since the later of the (A) Prior Agreement Date and (B) the Latest Balance Sheet Date and (iv) liabilities set forth on the Schedules to this Agreement, the
Borrower and its Subsidiaries do not have any other material liabilities (whether fixed or unfixed, known or unknown, absolute or contingent, asserted or unasserted, choate or inchoate, liquidated or unliquidated, or secured or unsecured, and
regardless of when any action, claim, suit or proceeding with respect thereto is instituted). Since December 31, 2016, there has been no Material Adverse Effect or any event or circumstance which could reasonably be expected, individually or in
the aggregate, to result in a Material Adverse Effect. All financial performance projections delivered to any Secured Party, including the financial performance projections delivered on or prior to the
AgreementSecond Amendment Date, if any, represent the Borrowers and its Subsidiaries good faith estimate of future financial performance and are based on
assumptions believed by the Borrower and its Subsidiaries to be fair and reasonable in light of current market conditions, it being acknowledged and agreed by Agent and the Lenders that projections as to future events are not to be viewed as facts
and that the actual results during the period or periods covered by such projections may differ from the projected results and such differences may be material.
(u) The Borrower and its Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liability is permitted only in accordance with managements general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any differences (such internal accounting controls (including clauses (i) (iv) above), collectively, Internal Controls). The Borrower and its Subsidiaries have timely filed and made publicly available on EDGAR all certifications, statements and documents required by Rule 13a-14 or Rule 15d-14 under the Exchange Act. The Borrower and its Subsidiaries maintain disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such controls and procedures are effective to ensure that the information required to be disclosed by the Borrower and its
45
Subsidiaries in the reports that they file with or submit to the SEC (A) is recorded, processed, summarized and reported accurately within the time periods specified in the SECs rules and forms and (B) is accumulated and communicated to the Borrowers (and, to the extent applicable, its Subsidiaries) management, including its or their principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. The Borrower and its Subsidiaries maintain internal control (including Internal Controls) over financial reporting required by Rule 13a-15 or Rule 15d-15 under the Exchange Act; such internal control (including Internal Controls) over financial reporting is effective and does not contain any material weaknesses.
(v) [Reserved].
(w) (i) No Loan Party has engaged, and to the knowledge of the Loan Parties, no other Person has engaged in any prohibited transaction as defined under Section 406 of ERISA or Section 4975 of the Code that is not exempt under ERISA Section 408 or Section 4975 of the Code, under any applicable regulations and published interpretations thereunder or under any applicable prohibited transaction, individual or class exemption issued by the Department of Labor, with respect to any Employee Benefit Plan, except as for such transaction that could not be expected, individually or in the aggregate, to have a Material Adverse Effect, (ii) (A) at no time within the last seven years has the Borrower or any ERISA Affiliate maintained, sponsored, participated in, contributed to or had any Liability with respect to, and (B) no Loan Party or any ERISA Affiliate has any Liability or obligation in respect of, any Title IV Plan, Multiemployer Plan or any multiple employer plan for which the Borrower or any ERISA Affiliate has incurred or could incur Liability under Section 4063 or 4064 of ERISA, (iii) each Employee Benefit Plan is and has been operated in compliance with its terms and all Applicable Laws, including ERISA and the Code, except for such failures to comply that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (iv) (A) no ERISA Event has occurred and (B) no event or condition exists or existed that could reasonably be expected to subject the Borrower or any ERISA Affiliate to any tax, fine, lien, penalty or Liability imposed by ERISA, the Code or other Applicable Law, except for any such ERISA Event or tax, fine, lien, penalty or liability that could not be expected, individually or in the aggregate, to have a Material Adverse Effect, and (v) no Loan Party maintains or has any obligation or Liability with respect to any Foreign Benefit Plan that, individually or in the aggregate, could be expected to have a Material Adverse Effect.
(x) As of the AgreementSecond
Amendment Date and the Second Amendment Effective Date, the Borrowers Subsidiaries are set forth in Schedule 3.1(x) and the information set forth in Schedule 3.1(x) is true, correct and complete.
(y) Subsequent to December 31, 2015, the Borrower has not declared or paid any dividends or made any distribution of any kind with respect to its Stock, except as permitted hereunder.
(z) (A) All of the issued and outstanding shares of Stock
of the Borrower are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all applicable federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities that have not been waived in writing. The Reverse Split was duly adopted and approved by the board of directors and stockholders
of the Borrower, and was duly effected on March 5, 2019 by the filing with the Secretary of State of Delaware of a certificate of amendment to the Amended and Restated Certificate of Incorporation, as amended, of the Borrower. The Borrower
has reserved for issuance the maximum of 14,300,00012,776,445 shares (giving effect to the Reverse Split) of
Common Stock initially issuable upon conversionConversion of the First Out Waterfall Notes (the Conversion Shares) (computed without regard to any
limitations on the number of shares that may be issued on conversion thereof) and
46
2,526,800 shares for issuance as Interest Payment Shares pursuant to
Section 2.6 and Exhibit 2.6.. The Borrower has reserved for issuance an aggregate number of shares of Common Stock (
6,470,000647,000 shares for the Amended and Restated Initial
Warrants, and 8,750,000875,000 shares for the Amended
and Restated Additional Warrants) sufficient to cover all shares initially issuable upon exercise of the Warrants (the Warrant Shares) (computed without regard to any limitations on the number of shares that may be issued on exercise
thereof). The Conversion Shares, the Interest Payment Shares, the Warrants, the Warrant Shares and any other distributions required to be made now or in the future pursuant to the Warrants (the Warrant
Distributions) have been duly authorized. The holdersUpon issuance of the Amended and Restated
Initial Warrants are entitled to the rights set forth in the Initial Warrants. Upon issuance of the Additional Warrants in accordance with the terms of this Agreement, the holders of the
AdditionalAmended and Restated Initial Warrants will be entitled to the rights set forth in the
AdditionalAmended and Restated Initial Warrants. Upon issuance of the Amended and Restated Additional Warrants in accordance with the terms of this Agreement, the holders of
the Amended and Restated Additional Warrants are entitled to the rights set forth in the Amended and Restated Initial Warrants. Upon exercise of the Warrants in accordance with terms thereof, the Warrant Shares will be validly issued, fully paid
and non-assessable and free from all taxes and Liens with respect to the issue thereof, with the holders thereof being entitled to all rights accorded to a holder of Common Stock. Upon
conversionany Conversion of the First Out Waterfall Notes in accordance with the terms thereof, the Conversion Shares will be validly issued, fully paid and non-assessable
and free from all taxes and Liens with respect to the issue thereof, with the holders thereof being entitled to all rights accorded to a holder of Common Stock. Upon issuance in accordance with the terms of this Agreement (including Exhibit
2.6), the Interest Payment Shares will be validly issued, fully paid and non-assessable and free from all taxes and Liens with respect to the issue thereof, with the holders thereof being entitled to all rights accorded to a holder of Common Stock.
(B) The issuance by the Borrower of the Securities is exempt from registration under the Securities Act and applicable state securities laws. For purposes of Rule 144 under the Securities Act, (I) the amendments set forth
in, and other provisions of, this Agreement and other Loan Documents effect an exchange of securities issued pursuant to the Prior Loan Documents for the First Out Waterfall Loans, First Out Waterfall Notes (together with the related guaranties set
forth in the Security Agreement of the Guarantors) and the Additional Warrants (collectively, the ) the holding period for each of the
First Out Waterfall Securities) under this Agreement, (IIInitial Warrants, the First Out Waterfall SecuritiesLoans, the First Out Waterfall Notes and any shares of Common Stock issued as Interest Payment
Shares pursuant to this Agreement (including Exhibit 2.6), upon conversionupon Conversion of any of the First Out Waterfall Notes or upon exercise of any of the Warrants pursuant
to a Cashless Exercise, Cashless Major Exercise, Cashless Default Exercise or Note Exchange Exercise (each as defined in the Warrants) shall be deemed to have commenced on the Prior Agreement Date, and
(IIIII) the holding period for each of the Last Out Waterfall Loans and the Last Out Waterfall Notes (together with the related guaranties set forth in the Security
Agreement of the Guarantors) shall be deemed to have commenced on November 2, 2015 (the date the Exchanged Deerfield Convertible Notes were original issued). Provided that a First Out Waterfall Lender is not an Affiliate of the Borrower on the
date of issuance of any Interest Payment Shares to such First Out Waterfall Lender pursuant to this Agreement (including Exhibit 2.6), conversion of any of the First Out Waterfall Notes by such First Out Waterfall Lender or exercise
of any of the Warrants by such First Out Waterfall Lender pursuant to a Cashless Exercise, Cashless Major Exercise, Cashless Default Exercise or Note Exchange Exercise and has not been an Affiliate of the Borrower within the three-month period
immediately preceding such date (which the Borrower shall assume unless advised otherwise in writing by such First Out Waterfall Lender), the Interest Payment Shares, Conversion Shares or Warrant Shares (as applicable) issued to
such First Out Waterfall Lender will be freely transferable, without restriction or limitation (including any volume limitation or current public information requirement) under Federal or state securities laws, pursuant to Rule 144 under the
Securities Act, and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof. (C) As of the
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AgreementSecond
Amendment Effective Date, all of the Borrowers authorized, issued and outstanding shares of Stock of the Borrower and each of its Subsidiaries are set forth in Schedule 3.1(z), and, except as set forth in Schedule 3.1(z), there are no
(i) Stock options or other Stock incentive plans, employee Stock purchase plans or other plans, programs or arrangements of the Borrower or any of its Subsidiaries under which Stock options, Stock or other Stock-based or Stock-linked awards are
issued or issuable to officers, directors, employees, consultants or other Persons, (ii) outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable or exercisable for, any Stock of the Borrower or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Borrower or any of its Subsidiaries is or may become bound to issue
additional Stock of the Borrower or any of its Subsidiaries, or options, warrants or scrip for rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exercisable or
exchangeable for, any shares of Stock of the Borrower or any of its Subsidiaries, (iii) agreements or arrangements under which the Borrower or any of its Subsidiaries is obligated to register the sale of any of their securities or Stock under
the Securities Act (except the Registration Rights Agreement), (iv) outstanding Stock, securities or instruments of the Borrower or any of its Subsidiaries that contain any redemption or similar provisions, or contracts, commitments,
understandings or arrangements by which the Borrower or any of its Subsidiaries is or may become bound to redeem a security of the Borrower other than under the Convertible Note Documents, (v) Stock or other securities or instruments containing
anti- dilution or similar provisions that may be triggered by the issuance of securities of the Borrower or any of its Subsidiaries other than under the Convertible Note Documents or (vi) stock appreciation rights or phantom stock
plans or agreements or any similar plans or agreements to which Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is otherwise subject or bound. There are no (X) stockholders agreements,
voting agreements or similar agreements to which Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is otherwise subject or bound, other than in connection with clauses (i), (k) and (n) of
the definition of Permitted Investments, (Y) preemptive rights or any other similar rights to which any Stock of the Borrower or any of its Subsidiaries is subject or (Z) any restrictions upon the voting or
transfer of any Stock of the Borrower or any of its Subsidiaries (other than restrictions on transfer imposed by U.S. federal and state securities laws and other than as set forth in the Loan
Documents, and the ABL Debt Documents and, if such instrument is permitted hereunder to be secured, the documents governing the Permitted 3.25% Convertible Note
Refinancing). (C). (D) The issuance and delivery of the First Out Waterfall Notes and the Warrants does not and, assuming full exercise of the
Warrants, and full conversionConversion of the First Out Waterfall Notes and issuance
of the maximum number of Interest Payment Shares, the exercise of the Warrants, the conversionConversion of the First Out Waterfall Notes and the issuance of the
Warrant Shares, and the Conversion Shares and the Interest Payment Shares, will not: (i) require approval from any Governmental Authority;
(ii) obligate the Borrower to issue shares of Common Stock or other securities to any Person (other than the Secured Parties); and (iii) will not result in a right of any holder of the Borrowers securities to adjust the exercise,
conversion, exchange or reset price under and will not result in any other adjustments (automatic or otherwise) under, any securities of the Borrower. (DE) The Borrower has
furnished to Agent and each Lender true, correct and complete copies of each Loan Partys Organizational Documents and any amendments, restatements, supplements or modifications thereto, and all documents, agreements and instruments containing
the terms of all securities and Stock convertible into, or exercisable or exchangeable for, Common Stock or other Stock of any Loan Party or its Subsidiaries, and the material rights of the holders thereof in respect thereto.
(aa) Except for the Operative Documents, the Convertible Note Documents and the agreements set forth on Schedule 3.1(aa), as of
the AgreementSecond Amendment Date and the Second Amendment Effective Date there are no Material Contracts. The consummation of the transactions contemplated by the Loan
Documents will not give rise to a right to termination in favor of any party to
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any Material Contract (other than any Loan Party), except for such Material Contracts the noncompliance with which would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(bb) Neither the Borrower nor its Subsidiaries are in breach or default under any Material Contract, and, to the knowledge of the Loan Parties, no other party to a Material Contract is in default or breach thereunder, except where any breach or default would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(cc) The proceeds of the Loans are intended to be and shall be used solely for the purposes set forth in and permitted by Section 2.1.
(dd) Except as set forth in Schedule 3.1(dd) and except where any failures to comply could not reasonably be expected, either individually or in the aggregate, to result in a Material Adverse Effect, each Loan Party and each Subsidiary of each Loan Party (a) is and has been in compliance with all applicable Environmental Laws, including obtaining and maintaining all permits, licenses, consents, Authorizations and registrations required by any applicable Environmental Law, (b) is not party to, and no Real Estate currently (or to the knowledge of any Loan Party, previously) owned, leased, subleased, operated or otherwise occupied by or for any such Person is subject to or the subject of, any contractual obligation or any pending or, to the knowledge of any Loan Party, threatened, order, action, investigation, suit, proceeding, audit, Lien, claim, demand, dispute or notice of violation or of potential liability or similar notice relating in any manner to any Environmental Law, (c) has not caused or suffered to occur a Release of Hazardous Materials at, to or from any Real Estate, (d) does not currently (or to the knowledge of any Loan Party, did not previously) own, lease, sublease, operate or otherwise occupy any Real Estate that is contaminated by any Hazardous Materials and (e) is not, and has not been, engaged in, and has not permitted any current or former tenant to engage in, operations in violation of any Environmental Law and knows of no facts, circumstances or conditions reasonably constituting notice of a violation of any Environmental Law, including receipt of any information request or notice of potential responsibility under the Comprehensive Environmental Response, Compensation and Liability Act or similar Environmental Laws.
(ee) None of any Loan Party, any Person controlling any Loan Party or any Subsidiary of any Loan Party is (a) a company registered or required to be registered as an investment company, or a company controlled by an investment company or a principal underwriter of a registered investment company within the meaning of the Investment Company Act, or otherwise registered or required to be registered, or subject to the restrictions imposed, by the Investment Company Act, or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other federal or state statute, rule or regulation limiting its ability to incur Indebtedness, pledge its assets, perform its obligations under the Loan Documents or which may otherwise render all or any portion of the Obligations unenforceable.
(ff) There are no strikes, boycotts, grievances, work stoppages,
slowdowns, lockouts or other job actions existing, pending (or, to the knowledge of any Loan Party, threatened) against or involving any Loan Party or any Subsidiary of any Loan Party, except for those that could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Except as set forth on Schedule 3.1(ff), or except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, as of the
Agreement Date, (a) there is no memorandum of understanding, collective bargaining or similar agreement, and there is no ongoing negotiation or duty to negotiate, with any union, labor organization, works council or similar
representative covering any Employee or otherwise binding any Loan Party or any Subsidiary of any Loan Party, (b) to the Loan Parties
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knowledge, no petition for certification or election of any such representative is existing or pending with respect to any Employee, (c) to the Loan Parties knowledge, no such representative has sought certification or recognition with respect to any Employee, and (d) to the Loan Parties knowledge, no Employee or his or her representative is engaged in any organizing efforts. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, all current and former Employees are and have been correctly classified as exempt or non-exempt under, and are and have been paid in accordance with, all applicable federal, state, and local wage and hour laws. Further, all individuals who perform or have performed services for any Loan Party or any Subsidiary of any Loan Party are or were correctly classified under each Employee Benefit Plan, ERISA, the Internal Revenue Code and other Applicable Law as common law employees, independent contractors or other non-employee basis, or leased employees, except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Each Loan Party and Subsidiary of any Loan Party are in material compliance with all Applicable Laws concerning employment, including without limitation hiring, background checks, compensation, benefits, wages (including payment of overtime), wage deductions and withholdings, classification, immigration, work authorization, employment eligibility verification, reporting, taxation, occupational health and safety, equal rights, labor relations, accommodations, breaks, notices, employment policies, paid or unpaid time off work, accessibility, privacy, and workers compensation, except for such noncompliance that could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(gg) During five (5) years preceding the Agreement Date, no Loan Party has been known by and has used any other name,
whether corporate, fictitious or otherwise, except as set forth on Schedule 3.1(gg). Schedule 3.1(gg) also lists (a) each Loan Partys jurisdiction of organization and legal name and (b) each Loan Partys organizational
identification number. Each Loan Partys chief executive office or sole place of business, in each case as of the AgreementSecond Amendment Date and the Second Amendment
Effective Date, is at the chief executive office or sole place of business address identified as such in Schedule 3.1(gg) and no Loan Party maintains any other offices or facilities except as described therein.
(hh) The Inventory and Equipment of the Loan Parties is located only at, or in-transit between, the locations identified on
Schedule 3.1(hh). With respect to any Inventory and Equipment listed at locations that are outside the United States (and with respect to any Inventory and Equipment on consignment at any location), (i) any failure of the Agent and the other
Secured Parties to (A) be fully protected on the Inventory and Equipment or be fully protected or perfected with respect to any Liens granted to the Agent (for the benefit of the Secured Parties) on any such Inventory or Equipment, or
(B) have absolute or full access to such locations when exercising rights and remedies after the occurrence and during the continuance of an Event of Default, in each case of clause (i)(A) and clause (i)(B), does not, individually or in the
aggregate, cause a Material Adverse Effect to occur, and (ii) as of the AgreementSecond Amendment Date and the Second Amendment Effective Date, the cost paid by the
Loan Parties and their Subsidiaries for such Inventory and Equipment listed at such locations outside the United States, or on consignment at any location outside the United States, does not exceed $10,000,000.
(ii) Each Loan Party keeps correct and accurate records itemizing and describing the type, quality and quantity of its and their Subsidiaries Inventory and the book value thereof.
(jj) Each Loan Party and each Subsidiary of each Loan Party is in compliance in all material respects with all Sanctions laws as administered by the U.S. Treasury Departments Office of Foreign Assets Control (OFAC) and the U.S. State Department. No Loan Party and no Subsidiary of a Loan Party (i) is a Person on the list of the Specially Designated Nationals and Blocked Persons (the SDN List), (ii) is a Person who is otherwise the target of Sanctions laws such that a U.S. Person cannot
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deal or otherwise engage in business transactions with such Person, (iii) is a Sanctioned Entity, (iv) is owned or controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a Sanctioned Entity such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited by U.S. law, (v) has its assets located in Sanctioned Entities, or (vi) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any Loan will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity. Each Loan Party and each Subsidiary of each Loan Party is in compliance with all Anti-Money Laundering Laws. No action, suit or proceeding by or before any court or Governmental Authority with respect to compliance with such Anti-Money Laundering Laws is pending or threatened to the knowledge of each Loan Party and each Subsidiary of each Loan Party. Each Loan Party and each Subsidiary of each Loan Party is in compliance in all material respects with all applicable Anti-Corruption Laws, including the U.S. Foreign Corrupt Practices Act of 1977 (FCPA). None of any Loan Party or any Subsidiary of a Loan Party, nor to the knowledge of any Loan Party or any Subsidiary thereof, any director, officer, agent, employee or other Person acting on behalf of the Loan Party or any Subsidiary of a Loan Party, has taken any action, directly or indirectly, that would result in a violation of applicable Anti-Corruption Laws. No part of the proceeds of the Loans will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the FCPA. The Loan Party and each Subsidiary of a Loan Party maintains and implements policies and procedures designed to ensure compliance by the Loan Parties, their Subsidiaries and their respective directors, officers, employees and agents with Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws. To the extent applicable, each Loan Party and each of its Affiliates is in compliance, in all material respects, with all Anti-Terrorism Laws.
(kk) The Borrower and its Subsidiaries are in all material respects in compliance with applicable provisions of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder (collectively, Sarbanes-Oxley).
(ll) Neither the Borrower nor any of its Subsidiaries nor, to the Borrowers or any of its Subsidiaries knowledge, any director, officer or employee, of the Borrower or any of its Subsidiaries, has received or otherwise obtained any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Borrower or any of its Subsidiaries or its internal accounting controls, including any complaint, allegation, assertion or claim that the Borrower or any of its Subsidiaries has engaged in questionable accounting or auditing practices. No attorney representing the Borrower or any of its Subsidiaries, whether or not employed by the Borrower or any of its Subsidiaries, has reported evidence of a material violation of securities laws or breach of fiduciary duty or similar violation by the Borrower or any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Borrowers or any of its Subsidiaries board of directors (or equivalent governing body) or any committee thereof or to any director (or equivalent person) or officer of the Borrower or any of its Subsidiaries pursuant to Section 307 of Sarbanes-Oxley, and the SECs rules and regulations promulgated thereunder. There have been no internal or SEC investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, the principal financial officer or the principal accounting officer (in each case, or officer holding such equivalent position) of the Borrower or any of its Subsidiaries, the Borrowers or any of its Subsidiaries board of directors (or equivalent governing body) or any committee thereof.
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(mm) The Borrower is not, and never has been, a shell company (as defined in Rule 12b-2 under the Exchange Act). The Borrower is eligible to register the Warrant Shares for resale by the holders thereof on a registration statement on Form S-3 under the Securities Act.
(nn) Neither the Borrower, nor any of its Affiliates, nor any Person acting on its or their behalf, has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer, sale or issuance of the Securities.
(oo) Neither the Borrower, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made, or will make, any offers or sales of any security or Stock or solicited any offers to buy any security or Stock, under circumstances that would require registration of any of the Securities under the Securities Act or cause this offering of the Securities to be integrated with prior offerings by the Borrower for purposes of the Securities Act or any applicable holder of Stock approval provisions of the Principal Market or any other authority.
(pp) The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and neither the Borrower nor any of its Subsidiaries has taken, or will take, any action designed to terminate, or which to the knowledge of the Borrower and its Subsidiaries is likely to have the effect of terminating, the registration of the Common Stock under the Exchange Act, nor has the Borrower or any of its Subsidiaries received any notification that the SEC is contemplating terminating such registration. Neither the Borrower nor any of its Subsidiaries is in violation of any of the rules, regulations or requirements of the Principal Market (other than the Borrowers violation of the Principal Markets minimum bid price requirement, which has been cured on or around March 20, 2019), and, to the knowledge of the Borrower and its Subsidiaries, there are no facts or circumstances (other than the Borrowers violation of the Principal Markets minimum bid price requirement, which has been cured on or around March 20, 2019) that could reasonably lead to suspension or termination of trading of the Common Stock on the Principal Market. For not less than the five years preceding the Agreement Date, the Second Amendment Date and the Second Amendment Effective Date, (i) the Common Stock has been listed or designated for quotation, as applicable, on the Principal Market, (ii) trading in the Common Stock has not been suspended or deregistered by the SEC or the Principal Market, and (iii) neither the Borrower nor any of its Subsidiaries has received any communication, written or oral, from the SEC or the Principal Market regarding the suspension or termination of trading of the Common Stock on the Principal Market (other than in respect of the Borrowers violation of the Principal Markets minimum bid price requirement, which has been cured on or around March 20, 2019).
(qq) The Common Stock is eligible for clearing through The Depository Trust Company (DTC), through its Deposit/Withdrawal At Custodian (DWAC) system, and the Borrower is eligible for and participating in the Direct Registration System (DRS) of DTC with respect to the Common Stock. The transfer agent for the Common Stock is a participant in, and the Common Stock is eligible for transfer pursuant to, DTCs Fast Automated Securities Transfer Program. The Common Stock is not, and has not at any time been, subject to any DTC chill, freeze or similar restriction with respect to any DTC services, including the clearing of transactions in shares of Common Stock through DTC.
(rr) The Borrower and the Borrowers board of directors (or equivalent governing body) have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination or other similar anti-takeover provision under the Borrowers Organizational Documents or the laws of the State of Delaware that is or could become applicable to any of the Secured Parties as a result of the transactions contemplated by the Loan Documents and the
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Borrowers fulfilling its obligations with respect thereto, including the
Borrowers issuance of the Securities and any Secured Partys ownership of the Securities. As of the AgreementSecond Amendment Date and the Second Amendment
Effective Date, the Borrower has not adopted a stockholders rights plan (or poison pill) or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of the Borrower (any such plan
or arrangement, a Rights Plan), and after the Prior Agreement Date, the Borrower will not have adopted any Rights Plan that in any way interferes with, or otherwise adversely affects, any First Out Waterfall Lenders (or
other holders) exercise in full of its rights under the Warrants and the First Out Waterfall Notes or ownership of all of the Warrant Shares, and the Conversion
Shares and the Interest Payment Shares or that otherwise affects or applies to any First Out Waterfall Lender (or such other holder of Warrants or Warrant Shares) in any respect that is less favorable than its effect on the most
favorably treated holder of Stock of the Borrower under such Rights Plan.
(ss) It is understood and acknowledged by the
Borrower that none of the Secured Parties nor holders of the Securities has been asked to agree, nor has any Secured Party agreed, to desist from purchasing or selling, long and/or short, Stock or other securities of the Borrower, or
derivative securities or Stock based on Stock or other securities issued by the Borrower or to hold the Securities for any specified term; and no Secured Party nor holder of Securities shall be deemed to have any affiliation with or
control over any arms length counterparty in any derivative transaction. The Borrower further understands and acknowledges that (i) one or more Secured Parties or holders of Securities may engage in hedging and/or trading
activities at various times during the period that the Securities are outstanding, and (ii) such hedging and/or trading activities, if any, can reduce the value of the Stock held by the existing holders of Stock of the Borrower, both at and
after the time the hedging and/or trading activities are being conducted. The Borrower acknowledges that any such hedging and/or trading activities do not constitute a breach of any Loan Document or affect the rights of any Secured Party or holder
of Securities under any Loan Document. The Borrower further acknowledges that its obligations under the Loan Documents, including its obligation to issue the Warrant Shares upon exercise of the Warrants and the Conversion Shares upon
conversionConversion of the First Out Waterfall Notes, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of any claim any Loan Party may have against any of the Secured Parties and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Borrower.
(tt) The Borrower and the other Loan Parties are solely and jointly and severally responsible for the payment of any fees, costs, expenses and commissions of any placement agent, broker or financial adviser relating to or arising out of the transactions contemplated by the Loan Documents. The Borrower and the other Loan Parties will pay, and hold each of the Secured Parties harmless against, any liability, loss or expense (including attorneys fees, costs and expenses) arising in connection with any claim for any such payment, other than those arising from the gross negligence or willful misconduct of Agent or any Lender as determined by a final, non-appealable judgment of a court of competent jurisdiction.
(uu) Except as
could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Loan Party and its Subsidiaries has made all notifications, submissions, and reports required by the FDA, any other Governmental Authority or
any Healthcare Law, and all such notifications, submissions and reports were true, complete, and correct in all respects as of the date of submission to FDA, any other Governmental Authority or to such other Person required by any Healthcare Law.
There has not been any violation of any Healthcare Laws by any Loan Party or its Subsidiaries in its product development efforts, submissions, record keeping and reports to the FDA or any other Governmental Authority that could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect. To the knowledge of each Loan Party and each of its SubsidiariesExcept
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as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, there are no civil or
criminal proceedings relating to any Loan Party or any of its Subsidiaries or any officer, director or employee of any Loan Party or Subsidiary of any Loan Party that involve a matter within or related to the FDAs or any other Governmental
Authoritys jurisdiction or any off-label promotion or allegations of non-compliance with Healthcare Laws. Other than as expressly set forth on Schedule 3.1(uu)Except as
could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Loan Party nor any Affiliate thereof has received any material adverse notice (written or oral) from the FDA or any other
Governmental Authority that has not been finally and fully resolved in accordance and compliance with Applicable Law and all FDA and other Governmental Authority standards, regulations and requirements regarding any Product or regarding (i) any
actions or inactions of any Loan Party or any of its Subsidiaries or any officer, director or employee of any Loan Party or Subsidiaries of any Loan Party, including with respect to any off-label promotion or (ii) alleging non-compliance with
Healthcare Laws.
(vv) With respect to any Product, (i) the Loan Parties and their Subsidiaries have received, and such Product is the subject of, all Regulatory Required Permits needed in connection with the design, testing, manufacture, processing, assembly, packaging, labeling, marketing, distribution, commercialization, import, export or sale of such Product as currently being conducted by or on behalf of such Loan Parties or Subsidiaries, except where the failure to have such Regulatory Required Permits would not have a Material Adverse Effect, and (ii) such Product is being designed, tested, manufactured, processed, assembled, packaged, labeled, marketed, distributed, commercialized, imported, exported or sold, as the case may be, except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, in compliance with all Applicable Laws and Authorizations.
(ww) None of the Loan Parties are in violation of any Healthcare Laws, except where any such violation would not have a Material Adverse Effect.
(xx) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Loan Party and its Subsidiaries is in compliance with the written procedures, record-keeping and reporting requirements required by (or of) (i) the FDA or any comparable Governmental Authority pertaining to the reporting of adverse events involving the Products or concerning the actions or inactions of the Loan Parties and their Subsidiaries and the directors, officers and employees of the Loan Parties and their Subsidiaries, including with respect to off-label promotion, as applicable, and (ii) Healthcare Laws.
(yy) No Loan Party is a participating provider under contract to provide health care services and receive payment or reimbursement for such services under any Third Party Payor Program.
(zz) To the knowledge of the Loan Parties Authorized Officers, neither any of the Loan Parties nor any of the Loan Parties officers, directors, employees, equityholders, agents or Affiliates has ever (i) made an untrue statement of material fact, fraudulent statement to the FDA or any other Governmental Authority or in any documents or records prepared or maintained to comply with the FDCA; (ii) failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Authority; (iii) been investigated by the FDA, National Institutes of Health, Office of the Inspector General for the Department of Health and Human Services, Department of Justice, or other comparable Governmental Authority for data or healthcare program fraud; or (iv) committed an act, made a statement, or failed to make a statement that could reasonably be expected to provide a basis for the FDA to invoke its policy respecting Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities, set forth in 56 Fed. Regulation 46191 (September 10, 1991).
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(aaa) No Loan Party has received any written notice that any Governmental Authority, including the FDA, the Office of the Inspector General of the United States Department of Health and Human Services or the United States Department of Justice has commenced or threatened to initiate any investigation or action against a Loan Party, any action to enjoin a Loan Party, or any of its officers, directors, employees, equityholders, agents or Affiliates, from conducting their businesses at any facility owned or used by them or for any civil penalty, injunction, seizure or criminal action, in each case, which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(bbb) No Loan Party has received from the FDA a Warning Letter, Form FDA-483, Untitled Letter, other correspondence or notice setting forth allegedly objectionable observations or alleged violations of laws or regulations enforced by the FDA, or any comparable correspondence from any state or local authority responsible for regulating drug or device products and establishments, or any comparable correspondence from any foreign counterpart of the FDA, or any comparable correspondence from any foreign counterpart of any state or local authority with regard to any Product or the manufacture, processing, packing, or holding thereof, in each case, which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(ccc) None of the Loan Parties has engaged in any material Recalls, Market Withdrawals or other forms of product retrieval from the marketplace of any Products that has been not been finally and fully completed prior to the Agreement Date in accordance and compliance with Applicable Law and all FDA and other Governmental Authority standards, regulations and requirements, except to the extent any such engagement or action could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. None of the Products (for the avoidance of doubt, including those in the immediately preceding sentence that have been so finally and fully completed) have been subject to a Recall, Market Withdrawal, or other Correction or Removal, nor is any such action currently under consideration by Borrower or, to the knowledge of Borrower, any manufacturer or supplier of a Product, that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Borrower has not been restrained in its ability to manufacture, process, distribute, supply, import, export, market, or sell any of the Products, except to the extent that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(ddd) Each Product, except as would not be reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (a) is not adulterated or misbranded within the meaning of the FDCA; (b) is not an article prohibited from introduction into interstate commerce under the provisions of Sections 404, 505 or 512 of the FDCA; (c) has been and/or shall be manufactured, imported, possessed, owned, warehoused, marketed, promoted, sold, labeled, furnished, distributed and marketed, and each service has been conducted, in accordance with all applicable Authorizations and Applicable Laws; and (d) has been and/or shall be manufactured in accordance with Good Manufacturing Practices.
(eee) No Loan Party is subject to any proceeding, suit or, to any Loan Partys knowledge, investigation by any federal, state or local government or quasi-governmental body, agency, board or authority or any other administrative or investigative body (including the Office of the Inspector General of the United States Department of Health and Human Services) which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on any Loan Party;
(fff) The Loan Parties have not received any notice, and are not aware, of any violation of applicable antitrust laws, employment or landlord-tenant laws of any federal, state or local government or quasi-governmental body, agency, board or other authority with respect to the Loan
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Parties that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(ggg) None of the proceeds from the Loans have been or will be used, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock, for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry any Margin Stock or for any other purpose which might cause any of the Loans to be considered a purpose credit within the meaning of Regulation T, U or X of the Federal Reserve Board. No Loan Party nor any of their Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.
(hhh) None of the written information (financial or otherwise) (other than projections, other forward-looking information and industry information) furnished by or on behalf of any Loan Party to Agent or any Lender in connection with the consummation of the transactions contemplated by the Loan Documents contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not materially misleading in light of the circumstances under which such statements were made.
(iii) The rate of interest paid under the Notes and other Loan Documents or on any other Obligations, and the method and manner of the calculation thereof, do not violate any usury law or other Applicable Laws, any of the Organizational Documents, or any of the Loan Documents.
(jjj) The Loan Parties do not own any stock, partnership interests, limited liability company interest or other equity
securities or Subsidiaries except for Permitted Investments. As of the AgreementSecond Amendment Effective Date, set forth on Schedule 3.1(jjj) (as such Schedule may be
updated from time to time to reflect changes resulting from transactions permitted under this Agreement) is a complete and accurate description of the authorized Stock of the Subsidiaries of the Loan Parties, by class, and a description of the
number of shares of each such class that are issued and outstanding.
(kkk) All information set forth in the Schedules is
true, accurate and complete in all material respects as of the AgreementSecond Amendment Date and the Second Amendment Effective Date and any other subsequent date in which
the Loan Parties are requested (or required pursuant to the terms of this Agreement or the other Loan Documents) to update such Schedules. All information set forth in the Perfection
Certificate is true, accurate and complete in all material respects as of the Agreement Date and any other subsequent date in which the Loan Parties are requested (or required pursuant to the
terms of this Agreement or the other Loan Documents) to update such certificate.
Section 3.2 Borrower Acknowledgment. The Loan Parties (on their behalf and on their Subsidiaries behalf) acknowledge that they have made the representations and warranties referred to in Section 3.1 with the intention of persuading Agent and the Lenders to enter into the Loan Documents and that Agent and the Lenders have entered into the Loan Documents on the basis of, and in full reliance on, each of such representations and warranties, each of which shall survive the execution and delivery of this Agreement, the other Loan Documents, the making of any Disbursement and the issuance of the Securities until the later of (a)(i) all of the Obligations are repaid in full and (ii) all of the Warrants have expired or been terminated and (b) the end of the Reporting Period.
Section 3.3 Representations and Warranties of the Lenders. Each Lender, severally and not jointly, represents and warrants to the Borrower as of the Agreement Date that:
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(i) Such Lender understands that the Securities are characterized as restricted securities under the U.S. federal securities laws inasmuch as they were, or are being, acquired from the Borrower (or the Guarantors, as applicable) in a transaction not involving a public offering and that none of the Securities may be resold and/or hedged except pursuant to an effective registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act, including Rule 144 under the Securities Act, Section 4(a)(7) of the Securities Act or a so-called 4[(a)] and a half transaction (without limiting the representations and warranties of the Borrower set forth in Section 3.1(z)).
ARTICLE 4
CLOSING CONDITIONS
Section 4.1 Conditions to the
DisbursementDisbursementss. The effectiveness of this Agreement and the other Loan Documents being executed and delivered on the Agreement Date, in
each case, shall be subject to the fulfillment and satisfaction of all of the following conditions:
(a) Agent and the Lenders shall have received executed counterparts of each of the following documents and the Loan Documents and other agreements, instruments and documents set forth on the closing checklist attached hereto as Exhibit D, each in form and substance satisfactory to Agent:
(i) this Agreement
(ii) the Control Agreements required to be delivered on the Agreement Date pursuant to this Agreement and the other Loan Documents;
(iii) the Security Agreement;
(iv) the Intercompany Subordination Agreement;
(v) the Copyright Security Agreement;
(vi) the Patent Security Agreement;
(vii) the Intercreditor Agreement; and
(viii) the Trademark Security Agreement;
(b) the Additional Warrants shall have been duly executed, issued and delivered to the Lenders in accordance with Section 2.8;
(c) each representation and warranty by any Loan Party or any of its Subsidiaries contained herein or in any other Loan Document is true, correct and complete in all material respects (without duplication of any materiality qualified contained therein) as of such date, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true, correct and complete in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date);
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Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions.
(c) The Loan Parties will, and will cause their Subsidiaries to, obtain, make and keep in full force and effect all licenses, certificates, approvals, registrations, clearances, Authorizations and permits required to conduct their businesses, except where the failure to make and keep such licenses, certificates, approvals, registrations, clearances, authorizations and permits in full force and effect could not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(d) Each Loan Party will, except as otherwise permitted by this Agreement, maintain, and will cause each of its Subsidiaries to maintain, and preserve all its assets and property which is used or useful in its business in good working order and condition, ordinary wear and tear excepted and will make all necessary repairs thereto and renewals and replacements thereof, except, in each case, where the failure to do so could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(e) The Loan Parties will, and will cause each of their Subsidiaries to, maintain with financially sound and reputable insurance companies with respect to their assets, properties and business, against such hazards and liabilities, of such types and in such amounts, as is customarily maintained by companies in the same or similar businesses similarly situated. All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard lenders loss payable endorsement with a standard noncontributory lender or secured party clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders interest in the Collateral and to any payments to be made under such policies. All certificates and endorsements of property and general liability insurance are to be delivered to Agent by the Loan Parties, with the lenders loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and will provide for not less than 30 days (10 days in the case of non-payment) prior written notice to Agent of the exercise of any right of cancellation or any modification thereof; provided, however, that, for the avoidance of doubt, Agent need not be named on any workers compensation or D&O policies. If Loan Parties or their Subsidiaries fail to maintain such insurance, Agent may arrange for such insurance, but at Loan Parties expense and without any responsibility on Agents part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. The Loan Parties shall give Agent prompt written notice of any loss exceeding $500,000 covered by any Loan Partys or any Loan Partys Subsidiarys casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies. A true and complete listing of such insurance, including issuers, coverages and deductibles, will be provided by the Loan Parties to Agent promptly following Agents request.
(f) Each
Loan Party will, and will cause each of its Subsidiaries to, pay, discharge and perform as the same shall become due and payable or required to be performed (i) all
material Tax liabilities, assessments and governmental charges or levies upon it or its property, unless the same are being contested in good faith by appropriate proceedings diligently
prosecuted which stay the enforcement of any Lien and for which adequate reserves in accordance with GAAP are being maintained by such Person. and (ii) all Tax
liabilities, assessments and governmental chares or levies
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upon it or its property that would create, or otherwise cause to exist, a Lien with respect thereto that is not a Permitted Lien under clause (d) of the definition of Permitted Liens.
(g) The Loan Parties will promptly after knowledge (and, in any event, within two (2) Business Days after knowledge) notify the Agent of the occurrence of (A) any Default or Event of Default and (B) so long as such type of notification would not be material nonpublic information of the Borrower, any claims (other than in connection with the denial of plan claims in the ordinary course of business), litigation, arbitration, mediation or administrative or regulatory proceedings that are instituted or threatened against any Loan Party, or claims of infringement by any Person with respect to any Intellectual Property rights of a Loan Party, in each case of this clause (B), to the extent such claim, litigation, arbitration, mediation or administrative or regulatory proceeding could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(h) From the Prior Agreement Date until the later of (y) the first date on which no Warrants remain outstanding, and (z) the first date on which the Secured Parties no longer own any Securities (the period ending on such latest date, the Reporting Period), the Borrower and its Subsidiaries will (i) timely (without giving effect to any extensions pursuant to Rule 12b-25 of the Exchange Act) file all reports required to be filed with the SEC pursuant to the Exchange Act, and the Borrower and its Subsidiaries will not terminate the registration of the Common Stock under the Exchange Act or otherwise terminate its status as an issuer required to file reports under the Exchange Act, even if the securities laws would otherwise permit any such termination and (ii) deliver to Agent a Compliance Certificate with each of its 10-Q and 10-K filings on the date such filings are made (or, if earlier, are required by the SEC to be made) with the SEC; provided that, with respect to clause (ii) only, solely to the extent any earnings or revenue report for the same period is publicly reported or is filed with the SEC prior to the time when any 10-Q or 10-K containing the applicable quarterly or annual financial statements is filed with the SEC and to the extent the earnings or revenue set forth in any such earnings or revenue report would result in a financial covenant default under Section 5.2(xxv), the Compliance Certificate shall instead be delivered by the Loan Parties to the Agent and the Lenders on the same day as such earnings or revenue report is publicly reported or is filed with the SEC. Each of such reports in Section 5.1(h)(i) above will comply in all material respects with the applicable requirements of the Exchange Act and each of such reports in Section 5.1(h)(i) above and such Compliance Certificate will not 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 light of the circumstances under which they were made, not misleading. The consolidated financial statements included in such reports will comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, will be prepared in accordance with GAAP, consistently applied (subject, in the case of unaudited quarterly financial statements, to normal year-end adjustments and lack of footnote disclosures), and will fairly present in all material respects the consolidated financial position of the Borrower and its Subsidiaries as of the dates thereof and the consolidated results of their operations, cash flows and changes in stockholders equity for the periods presented (subject, in the case of unaudited quarterly financial statements, to normal year-end audit adjustments and lack of footnote disclosures). The Borrower hereby agrees that, during the Reporting Period, the Borrower will send to each Secured Party copies of (A) any notices and other information made available or given to the holders of the Stock of the Borrower generally, contemporaneously with the Borrowers making available or giving such notices and other information to such holders of Stock (it being understood and agreed that delivery will be deemed to have occurred if such notices or other information is posted to EDGAR) and (B) all other documents, reports, financial data and other information not available on EDGAR that does not contain any material nonpublic information of the Borrower, that any Secured Party may reasonably request.
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issued by the Department of Labor, with respect to any Employee Benefit Plan, which could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, or (iii) the imposition of any Lien on any asset of a Loan Party or a Subsidiary of a Loan Party with respect to any Title IV Plan or Multiemployer Plan.
(o) The Borrower agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to each Secured Party promptly after such filing. The Borrower will make all filings and reports relating to the offer and sale of the Securities required under applicable securities or Blue Sky laws of the states of the United States following the Prior Agreement Date.
(p) The Borrower will take all actions necessary to cause the Common
Stock to remain listed on the Principal Market during the Reporting Period. The Borrower will not, and will cause each of the Subsidiaries not to, take any action within its control that
would be reasonably expected to result in the delisting or suspension or termination of trading of the Common Stock on the Principal Market. The Loan Parties will pay all fees, costs and expenses in connection with satisfying its obligations under
this Section 5.1(p). The Borrower shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, a sufficient number of Common Shares to enable the Borrower to satisfy its obligations under the
Warrants and the First Out Waterfall Notes (computed without regard to any limitations on the number of shares that may be issued on exercise or conversionConversion
thereof).
(q) At or prior to 7:30 a.m. (New York City time) on the first (1st) Business Day following the Agreement
Date, the Borrower will file a Form 8-K with the SEC describing the terms of the transactions contemplated by the Loan Documents and the ABL Credit Facility and the ABL Debt Documents and including as exhibits to such Form 8-K this Agreement
(including the schedules, annexes and exhibit forms hereto), the forms of Notes, the form of Additional Warrant, the Registration Rights Agreement, the other Loan Documents listed on Schedule 5.1(q) and the ABL Credit Facility and the ABL Debt
Documents (such Form 8-K, the Announcing Form 8-K). Subject to the foregoing, no Loan Party will issue any press releases or any other public statements with respect to the transactions contemplated by any Loan Document or
disclosing the name of any Secured Party; provided, however, that the Borrower will be entitled, without the prior approval of any Secured Party, to make any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the Announcing Form 8-K and contemporaneously therewith and (ii) as is required by Applicable Law and regulations (provided that each Secured Party will be consulted by the Borrower in connection
with any such press release or other public disclosure prior to its release and will be provided with a copy thereof by the borrower other than filings required by the Exchange Act to be made with the SEC, which Borrower may make without such
consultation or notice). From and after the Borrowers filing of the Announcing Form 8-K, no Secured Party shall be in possession of any material nonpublic information received from the Borrower or any of its Subsidiaries or Affiliates or any
of its or their respective officers, directors, employees, attorneys, representatives or agents. Without limiting the foregoing, the Loan Parties represent and warrant that no Loan Document or other agreement, instrument, certificate, information or
other document provided by any Loan Party or any of its Related Parties to any Secured Party on or about the Agreement Date that is not filed as an exhibit to the Announcing Form 8-K constitutes, or contains, reflects or references any information
that constitutes, material nonpublic information with respect to the Borrower or any of its SubidiariesSubsidiaries or Affiliates (except to the extent the same information
is expressly set forth in the Announcing Form 8-K or an exhibit thereto). Notwithstanding any other requirement of this Agreement or any other Loan Document, each Loan Party will not, and will cause each of its Subsidiaries and Affiliates and its
and each of their respective officers, directors, employees. Attorneys, representatives and agents to not, provide any Secured Party with any
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passage of time or the occurrence of certain events automatically is reduced or is adjusted or at the option of any Person may be reduced or adjusted, whether or not based on a formulation of the then current market price of the Common Stock (other than proportional adjustments as a result of subdivisions or combinations of the Common Stock in the form of stock splits, stock dividends, reverse stock splits, combinations or recapitalizations). For the avoidance of doubt, this clause (s) does not prohibit any convertible notes contemplated under clause (k) of the definition of Permitted Indebtedness with a fixed conversion rate subject to anti-dilution adjustments or other provisions related to the conversion price and/or conversion rate that are broadly similar to the analogous provisions in the 2.25% Convertible Note Documents or the 3.25% Convertible Note Documents or any Permitted 3.25% Convertible Note Refinancing permitted hereunder.
(t) Within five Business Days after the filing (or, to the extent earlier, the date filing is required by the SEC) of its 10-K or 10-Q with the SEC (and by each date that the financial statements are required to be delivered in Section 5.1(aa)), as the case may be, the Loan Parties and their Subsidiaries will deliver to Agent an updated Perfection Certificate. Upon the reasonable request of any Secured Party, the Loan Parties and their Subsidiaries will promptly deliver to such Secured Party such additional business, financial, corporate affairs, perfection certificates, items or documents related to creation, perfection or priority of Agents Liens in the Collateral and other information as any Secured Party may from time to time reasonably request.
(u) Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, the Borrower will, and will cause each Loan Party to, (i) obtain all Regulatory Required Permits necessary for compliance in all respects with Applicable Laws with respect to the design, testing, manufacturing, developing, processing, assembly, packaging, labeling, distribution, commercialization, import, export, selling or marketing of Products, and (ii) maintain and comply fully and completely in all respects with all such Regulatory Required Permits.
(v) Each Loan Party will comply, and cause each Subsidiary to comply, with the requirements of all Applicable Laws and Material Contracts, except to the extent that failure to so comply could not reasonably be expected to (a) individually or in the aggregate, have a Material Adverse Effect, or (b) result in any Lien upon either (i) a material portion of the assets of any such Person in favor of any Governmental Authority, or (ii) any Collateral (other than Permitted Liens).
(w) The Borrower will, within two Business Days after delivery by a Loan Party or receipt or knowledge thereof, provide written notice to Agent of any default or event of default under any of the ABL Debt Documents, any of the Convertible Note Documents or any of the Permitted Japan Lifeline Unsecured Debt Documents, and of any amendments, restatements, supplements, waivers or other modifications to (or any consents to any events or actions under) any of the ABL Debt Documents, any of the Convertible Note Documents or any of the Permitted Japan Lifeline Unsecured Debt Documents or any prepayment of any of the Indebtedness thereunder.
(x) The Loan Parties will keep its Inventory and Equipment (other than Inventory or Equipment that is in-transit, Trunk Inventory or subject to consignment) only at the locations identified on Schedule 3.1(hh) and their chief executive offices only at the locations identified on Schedule 3.1(gg); provided that the Loan Parties may amend Schedule 3.1(hh) or Schedule 3.1(gg) so long as such amendment occurs by written notice to Agent not less than ten (10) days prior to the date on which such Inventory and Equipment is moved to such new location listed on the amended Schedule 3.1(hh) or such chief executive office is relocated to such address listed on the amended Schedule 3.1(gg) and so long as such new location or such chief executive office is within the continental United States.
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(y) Each Loan Party
will, and itswill cause each ofits Subsidiaries
willto, comply with (A) in all respects with all Healthcare Laws and their implementation by any applicable Governmental Authority, except as could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect, and (B) (1) in all respects with all lawful requests of any Governmental Authority applicable to its Products, except as could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, and (2) in all material respect with requests of any Governmental Authority applicable to its Products that is required by Applicable Law (or court order or proceeding) to be
complied with. Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, all Products developed, manufactured, tested, distributed, promoted or marketed by or on behalf of any Loan Party or any
of its Subsidiaries that are subject to the jurisdiction of the FDA or comparable Governmental Authority shall be (i) developed, tested, manufactured, distributed, promoted and marketed in compliance with the Healthcare Laws and each other
Applicable Law, including Healthcare Laws and other Applicable Laws governing or relating to product approval or premarket notification, good manufacturing practices, promoting, labeling, advertising, record-keeping, and adverse event reporting, and
(ii) tested, investigated, distributed, labeled, promoted, marketed, and sold in compliance with Healthcare Laws and all other Applicable Laws.
(z) Notwithstanding the conditions precedent set forth in Article 4 or any other provision set forth herein to the contrary above, the Loan Parties have informed the Agent that certain of such items required to be delivered to the Agent and/or the Lenders or otherwise satisfied as conditions precedent to the effectiveness of this Agreement will not be delivered to Agent and the Lenders as of the Agreement Date. Therefore, with respect to the items set forth in this Section 5.1(z) below (collectively, the Outstanding Items), the Loan Parties will, and the Loan Parties will cause their Subsidiaries to, deliver (or otherwise satisfy) each Outstanding Item to the satisfaction of the Agent in the form and manner set forth below for such Outstanding Item within twenty (20) days after the Agreement Date (or within such longer time or different form or manner as the Agent may agree in its sole discretion):
(i) Collateral Access Agreements with respect to the leases of real property located at: (1) 2 Musick and 33 and 35 Hammond, Irvine, County of Orange, CA 92618 U.S.A., and (2) 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A.;
(ii) Collateral Access Agreement with respect to Collateral held by UPS at the following locations: (1) 378 Commercial Street, Malden, MA 02148, (2) 165 Chubb Avenue, Lyndhurst, NJ 07071, (3) 1130 Commerce Blvd, Swedesboro, NJ 08085, and (4) 2250 Outerloop Drive, Louisville, KY 40219; and
(iii) Control Agreements with respect to the accounts of the Loan Parties located at (1) Wells Fargo (with respect to the account ending in 5279), (2) Bank of America (with respect to each of the accounts ending in 1702 and 3910), and (3) Silicon Valley Bank (with respect to the account ending in 5539).
(aa) If the Borrower is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, the Loan Parties will deliver to Agent and each Lender, as soon as available, but in any event within thirty (30) days after the end of each fiscal month during each fiscal year, an unaudited consolidated and consolidating balance sheet and income statement of Borrower and its Subsidiaries operations during such month and for the portion of the fiscal year then ended, including comparisons to the figures in the corresponding month and year-to-date portion of the immediately preceding fiscal year of Borrower and its Subsidiaries. Further, if the Borrower is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, the Loan Parties will provide to Agent and each Lender (A) quarterly financial statements for the Borrower and its Subsidiaries and a Compliance Certificate for
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such period within 45 days after the end of each fiscal quarter of the Borrower, and an audited annual financial statements and a Compliance Certificate for such period within 120 days after the end of each fiscal year of the Borrower prepared in accordance with GAAP with a report thereon by the Borrowers independent certified public accountants, which accountants shall be reasonably acceptable to Agent and (B) on the same day as delivery to ABL Agent, any ABL Lender or any other secured party under the ABL Debt Documents, any additional financial statements, certificates, reports, notices, agreements, instruments and documents provided under (or in connection with) the ABL Debt Documents. Any such annual audited financial statements, audit or report of the Borrowers independent certified public accountants (and any annual audited financial statements, audit or report of the Borrowers independent certified public accountants on any consolidated financial statements included in any SEC Document filed during the Reporting Period, and including those required by Section 5.1(h)) shall (i) contain an unqualified opinion (subject to the exception set forth below in clause (ii) of this sentence), stating that such consolidated financial statements present fairly in all material respects the financial position and condition and results of operations of the Borrower and its Subsidiaries as of the dates and for the periods and have been prepared in conformity with GAAP applied on a basis consistent with prior years, and (ii) not include any explanatory paragraph expressing substantial doubt as to going concern status (other than any such paragraph arising from the impending maturity of the Loans solely in the case of the audit delivered with respect to the fiscal year immediately prior to the fiscal year during which the applicable maturity is scheduled). No financial statements delivered pursuant to this Section 5.1(aa) or included in any SEC Document filed during the Reporting Period shall include any statement in the footnotes thereto that indicates there is substantial doubt about the Borrowers ability to continue as a going concern within one year after the date that such financial statements are issued, filed or delivered.
(bb) Each Loan Party will enter into (and will cause each landlord, warehouseman and bailee (as applicable), and all other applicable Persons, to enter into) a Collateral Access Agreement in favor of Agent (for the benefit of the Secured Parties) and in form and substance reasonably satisfactory to Agent and the Lenders, in respect of each location where Collateral, assets or property of any Loan Party (other than Inventory or Equipment that is in-transit, Trunk Inventory or subject to consignment) is held, stored or maintained at such location, in each case, at or prior to the time any such Collateral, assets or property is held, stored or maintained at such location; provided that, solely with respect to the location of the Flexential Colorado Corp.s data center at 3330 E. Lone Mountain Road, North Las Vegas, NV 89081 (the Flexential Data Center Location), no Collateral Access Agreement shall be required unless and until any such Collateral, property or assets of any Loan Party is held, stored or maintained at the Flexential Data Center Location other than computer servers with a maximum aggregate book value of $125,000 (which book value shall be determined by the Borrower in accordance with GAAP and with using reasonable and justifiable calculations and estimations thereof).
Section 5.2 Negative Covenants.
For so long as the Obligations (other than unasserted contingent indemnification obligations and other than those Obligations under any Warrant or the Registration Rights Agreement; provided that Section 5.2(xvii) shall survive until the end of the Reporting Period) remain outstanding:
(i) No Loan Party will, nor will it permit any of its Subsidiaries to, directly or indirectly, (A) merge with, consolidate with or into, dissolve or liquidate into or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except (1) a Subsidiary that is not a Loan Party may merge into any Loan Party or any Subsidiary of a Loan Party (provided that, (w) to the extent such Subsidiary that is not a Loan Party has its equity pledged to Agent, then
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the Intercreditor
Agreement and the Japan Lifeline Subordination Agreement); or (b) could reasonably be expected to be materially adverse to the rights, interests or privileges of Agent or the Lenders
or their ability to enforce the same (it being understood that any modification that changesamendments, restatements, supplements, changes, waivers or other modifications that
(1) move the stated maturity date of the 3.25% Convertible Notes to an earlier date shall, (2) are part of any refinancing or extension of any 3.25% Convertible
Note Documents (or any Indebtedness evidenced thereby or related thereto) that is not a Permitted 3.25% Convertible Note Refinancing or (3) changes the conversion rate or conversion period or otherwise adds or changes any required or mandatory
conversions or cash settlements, in each case of clauses (1)(3), shall be deemed to be materially adverse to Agent and the Lenders); provided, however, that the foregoing shall not restrict (x) any changes expressly required under the
terms of the 2.25% Convertible Notes as of the Prior Agreement Date, the 3.25% Convertible Notes as of the Prior Agreement Date or any indenture governing any Permitted 3.25% Convertible Note Refinancing
completely and fully meeting all of the requirements set forth in the definition of Permitted 3.25% Convertible Note
Refinancing or (y) any modifications of the ABL Credit Facility expressly permitted by the Intercreditor Agreement and, in each case of clauses (x) and (y), not otherwise
materially adverse to Agent or the Lenders.
(xi) No Loan Party will, and no Loan Party will suffer or permit any of its Subsidiaries to, (a) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (b) change the fiscal year or method for determining the fiscal quarters of any Loan Party or of any Subsidiary of any Loan Party, (c) change its name as it appears in official filings in its jurisdiction of organization or formation, or (d) change its jurisdiction of organization or formation, in the case of clauses (c) and (d), without at least ten (10) days prior written notice to Agent (or such shorter period as may be agreed by Agent in its sole reasonable discretion).
(xii) No Loan Party will, nor will it permit any of its Affiliates to, (A) declare, pay, make or set aside any amount for prepayment, payment, redemption or repayment in respect of (1) Subordinated Debt, except for payments made in full compliance with and permitted under the Subordination Agreement, or (2) any Permitted Japan Lifeline Unsecured Debt, except with respect to any interest payments expressly permitted under both clause (h) of the definition of Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (I) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (II) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (III) no Default or Event of Default has occurred and is continuing, (B) amend, restate, supplement, change, waive or otherwise modify (or consent to any departure from) the terms of (1) any Subordinated Debt Documents, except for amendments and modifications expressly permitted by the Subordination Agreement, or (2) any Permitted Japan Lifeline Unsecured Debt Documents, except as both (I) expressly permitted by the Japan Lifeline Subordination Agreement and (II) previously consented to in writing by the Agent and all of the Lenders; or (C) declare, prepay, pay, redeem, repay, make or set aside any amount for prepayment, payment, redemption or repayment in respect of any Indebtedness hereinafter incurred that, by its terms, or by separate agreement, is subordinated to the Obligations, except (1) for payments made in full compliance with and permitted under the subordination provisions applicable thereto
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Subsidiaries to, create, incur or suffer to exist any Indebtedness which is subordinated or junior (either in respect of Lien priority or in right of payment or any combination thereof) to any of the ABL Debt unless such Indebtedness is expressly subordinated or junior to the Obligations (both in terms of Lien priority and in right of payment) on terms and conditions acceptable to Agent and the Lenders; it being understood and agreed that the foregoing shall in no way limit the incurrence of unsecured Indebtedness otherwise permitted hereunder that is not payment subordinated to the ABL Debt when not also payment subordinated to the same extent to the Obligations.
(xx) No Loan Party will, or will permit any Subsidiary to, declare,
pay, make or otherwise provide any payment, prepayment, repayment, redemption, conversion, cash settlement or distribution in
respect of (I) theany 3.25% Convertible Notes or theNote, any other 3.25% Convertible Note
Document, any 2.25% Convertible NotesNote or any other Convertible Note Documents, except for: (a) regularly scheduled payments of interest and principal as set
forth in the applicable Convertible Note Documents in effect as of the Second Amendment Effective Date (in addition to allowing any cash principal payments at maturity of the applicable
3.25% Convertible Notes and the 2.25% Convertible Notes, such amounts may also be paid in the applicable Stock (other than Disqualified Stock) of the Borrower or through any other
conversion feature that does not effectively cause more payments, prepayments, repayments, redemptions, conversions, cash settlements and/or distributions to be made
at or prior to the maturity thereof than the cash principal payments currently provided for in the applicable Convertible Note Documents as of the Prior
AgreementSecond Amendment Effective Date), (b) in connection with any Permitted 3.25% Convertible Note Refinancing, (c) the issuance of shares of common
stock of the Borrower in connection with any non-cash conversion of the 3.25% Convertible Notes, the 2.25% Convertible Notes or any convertible notes that are not Disqualified Stock issued
in a Permitted 3.25% Convertible Note Refinancing, and any cash payments solely in lieu of fractional shares (but no other cash
settlementpayments, prepayments, repayments, redemptions, conversions, cash settlements or distributions other than as otherwise
expressly permitted by this clause (xx)), (d) payments and conversions (other than for any Disqualified Stock) made in connection with the repurchase (whether for cash, upon exchange
and/or for other consideration), redemption and retirement in respect of the 2.25% Convertible Notes or 3.25% Convertible Notes in a single or series of related transactions; provided that (1) no
Default or Event of Default exists at the time such payments are made or would exist immediately after giving effect thereto and (2) such cash payments are made solely
(A) with proceeds received by the Borrower from the issuance of its common Stock after the Agreementstock (for the avoidance of doubt, other than any common stock or other
Stock issued under or in connection with the Equity Financing Documents) after the Second Amendment Effective Date for the purpose of making such payment, prepayment, repayment, redemption,
conversion, cash settlement or distribution, (B) [reserved] and (C) regarding the 3.25% Convertible Notes, with the proceeds of Indebtedness raised in a Permitted 3.25% Convertible Note Refinancing, and (e) if the foregoing
conditions do not otherwise permit such payment, prepayment, repayment, redemption, conversion, cash settlement or distribution, then, with the express prior written consent of the Agent
(which may be withheld in its sole discretion), payments, prepayments, repayments, redemptions, conversions, cash settlements or distributions in connection with the retirement, redemption
and repurchase of the 2.25% Convertible Notes or the 3.25% Convertible Notes, or (II) any of the Permitted Japan Lifeline Unsecured Debt, except with respect to any interest payments
expressly permitted under
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both clause (h) of the definition of Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (a) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (b) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (c) no Default or Event of Default has occurred and is continuing or would exist after giving effect thereto.
(xxi) (a) No Loan Party will, or permit any Subsidiary to, commingle any of its assets (including any bank accounts, cash or Cash Equivalents) with the assets of any Person; and (b) no Loan Party will, or permit any Subsidiary to enter into or own any interest in a joint venture that is not itself a corporation or limited liability company or other legal entity in respect of which the equity holders are not liable for the obligations of such entity as a matter of law.
(xxii) No Loan Party will, or will permit any Subsidiary to, amend, restate, supplement, change, waive or
otherwise modify the terms of any Indebtedness referred to in Section 5.2(xx) above (other than with respect to 3.25% Convertible Notes, in connection with a Permitted 3.25% Convertible Note Refinancing) if the effect of such amendment,
restatement, supplement, change, waiver or modification is to (a) increase the interest rate or fees on, or change the manner or timing of payment of, such Indebtedness if in any way adverse to the Agent or the Lenders, (b) accelerate or
shorten the dates upon which payments of principal or interest are due on, or the principal amount of, such Indebtedness, (c) change in a manner adverse to any Loan Party, any of its Subsidiaries, Agent or any Lender any event of default or add
or make more restrictive any covenant with respect to such Indebtedness, (d) change the prepayment provisions of such Indebtedness or any of the defined terms related thereto in a manner adverse to Agent or the Lenders, or (e) change or
amend any other term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in a manner adverse to any Loan Party, any of its Subsidiaries, Agent
or Lenders; provided, however, that (y) the foregoing shall not restrict any changes expressly required under the terms of the 3.25% Convertible Notes as in effect as of the Prior
AgreementSecond Amendment Effective Date, the 2.25% Convertible Notes as in effect as of the Prior Agreement Date or any changes that are permitted to be made hereunder in
connection with a Permitted 3.25% Convertible Note Refinancing or any changes expressly required under any indenture governing any Permitted 3.25% Convertible Note Refinancing that satisfies the conditions and requirements set forth in the
definition of Permitted 3.25% Convertible Note Refinancing and (z) for the avoidance of doubt, the exchange of the Exchanged Deerfield Convertible Notes for the Last Out Waterfall Loans under this Agreement shall not be restricted
by this Section 5.2(xxiii). The Loan Parties will, prior to entering into any such amendment, restatement, supplement, change, waiver or modification (including, for the avoidance of
doubt, those that are permitted by this clause (xxii)), deliver to Agent reasonably in advance of the execution thereof, any final or execution form copy thereof.
(xxiii) Borrower will not issue any Stock (a) senior to its shares of Common Stock or (b) convertible into or exercisable or exchangeable for Stock senior to its Common Stock.
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(xxiv) As of (A) the end of the last Business Day of
each calendar month and (B) each date that a Borrowing Base Certificate (as defined in the ABL Credit Facility) is required to be delivered under the ABL Credit Facility or any other ABL Debt Document, the Loan Parties will not permit Global Excess
Liquidity to be less than $22,500,000.17,500,000.
(xxv) No Loan Party will permit the consolidated Net Revenue of the Loan Parties for any Measurement Period, tested quarterly beginning with the fiscal quarter ending September 30, 2018, to be less than the amounts set forth below:
Measurement Period Ending |
Minimum Net Revenue for Measurement Period |
|||
September 30, 2018 |
$ | 155,000,000 | ||
December 31, 2018 |
$ | 145,000,000 | ||
March 31, 2019 and the last day of each fiscal quarter ending thereafter through (and including) December 31, 2019 |
$ |
|||
March 31, 2020 and the last day of each fiscal quarter ending thereafter |
$ |
(xxvi) No Loan Party will permit the consolidated Net Revenue of the Loan
Parties for any fiscal quarter of the Borrower, tested quarterly beginning with the fiscal quarter ending March 31, 2019 and on the last day of each fiscal quarter ending thereafter, to be less than
$30,000,000.27,000,000.
(xxvii) No Loan Party will, or will permit any Subsidiary to, have the aggregate amount of Operating Expenditures made by the Loan Parties and their Subsidiaries for any Measurement Period, tested for the fiscal quarters of the Borrower ending December 31, 2018 and December 31, 2019, to exceed the amounts set forth below:
Measurement Period Ending |
Amount | |||
December 31, 2018 |
$ | 160,000,000 | ||
December 31, 2019 |
$ | 140,000,000 |
(xxviii) Commencing as of the Trigger Date (as defined in the ABL Credit Agreement as of the Agreement Date), no Loan Party, will, or will permit any Subsidiary, to have a Fixed Charge Coverage Ratio (such term, and all components and subcomponents thereof, as defined in the ABL Credit Agreement as of the Agreement Date) for any Measurement Period, tested quarterly beginning with the fiscal quarter ending September 30, 2018, to be less than 1.00:1.00.
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(b) Borrowers Prepayment Right. Notwithstanding anything to the contrary in this Agreement and for the avoidance of doubt, Borrower shall be permitted to prepay the Loans and other Obligations (other than Obligations under the Warrant and the Registration Rights Agreement, the treatment of which are addressed separately in such agreements) so long as (i) to the extent any such prepayment is made prior to the First Amortization Date, the applicable Non-Callable Make Whole Amount on the Loans so prepaid is paid at the same time in accordance with Section 2.3(c) and (ii) if In Connection with a Change of Control, the CoC Fee is paid at the time set forth in Section 2.7(c).
Section 5.4 General Acceleration Provision upon Events of Default. For so long as the Obligations (other than unasserted contingent indemnification obligations and other than those Obligations under any Warrant or the Registration Rights Agreement) remain outstanding, if one or more of the events specified in this Section 5.4 shall have happened or occurred and have continued beyond any applicable cure period expressly provided in this Section 5.4 (each, an Event of Default), the Required Lenders or Agent may, or Agent (upon written election by the Required Lenders but subject to the protections for Agent set forth in Section 6.15) shall, by (subject to Section 5.5(a), which, for the avoidance of doubt, shall not require any such notice and shall occur automatically) written notice to the Borrower, declare the principal of, and accrued and unpaid interest on, all of the Loans and other Obligations or any part of any of them (together with any other amounts accrued or payable under the Loan Documents) to be, and the same shall thereupon become, immediately due and payable, without any further notice and without any presentment, demand or protest of any kind, all of which are hereby expressly waived by the Borrower and the other Loan Parties, appoint a receiver for the Loan Parties and their Subsidiaries, and take any further action available at law or in equity or that are provided in the Loan Documents, including the sale or transfer of the Loan and other Obligations and all other rights acquired in connection with the Loan or the other Obligations or under the Loan Documents:
(a) The Borrower or any other Loan Party shall have failed (i) to pay when and as required to be paid herein or in any other Loan Document, any amount of principal of any Loan, including after maturity of the Loans, or (ii) to pay within three (3) Business Days after the same shall become due, interest on any Loan, any fee or any other amount or Obligation payable hereunder or pursuant to any other Loan Document.
(b) Any
Loan Party shall have failed to comply with or observe (i)(A) Section 1.4, Section 2.1, Section 5.1(a), 5.1(b), 5.1(c), 5.1(e), 5.1(f), 5.1(g), 5.1(h), 5.1(i), 5.1(k), 5.1(l), 5.1(m), 5.1(o), 5.1(p), 5.1(q), 5.1(r), 5.1(s), 5.1(t),
5.1(u), 5.1(v), 5.1(w), 5.1(x), 5.1(y), 5.1(z) or, 5.1(aa) or 5.1(bb), Section 5.2 or Section 5.3 of
this Agreement, (B) SectionsSection 5.2(a), 5.2(c), 5.2(d), 5.3, 5.4, 5.5, 5.7, 5.9(a), 5.9(c)
andor 5.10 of the Security Agreement or, (C) any provision of any
Note or (D) Section 3, 6, 7, 8, 9, 16, 17(e) or 19 of the Second Amendment, (ii) Section 5.1 of the Security Agreement and such failure, with respect to this
Section 5.2(b)(ii) only, shall not have been cured within ten (10) days after the earlier to occur of (y) the date upon which any officer of any Loan Party or any of its Subsidiaries becomes aware of such failure and (z) the date
upon which written notice thereof is given to any Loan Party or any of its Subsidiaries by any Secured Party or (iii) any covenant contained in any Loan Document (other than the covenants described in Section 5.4(a), Section 5.4(b)(i)
or Section 5.4(b)(ii) above and other than in respect of the Warrants or the Registration Rights Agreement), and such failure, with respect to this Section 5.2(b)(iii) only, shall not have been cured within thirty (30) days after the
earlier to occur of (y) the date upon which any officer of any Loan Party or any of its Subsidiaries becomes aware of such failure and (z) the date upon which written notice thereof is given to any Loan Party or any of its Subsidiaries by
any Secured Party.
(c) Any representation, warranty, or certification, made by any Loan Party in any Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any
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market or to enjoin a Loan Party, such Loan Partys Subsidiaries or any representative of a Loan Party or its Subsidiaries from testing, manufacturing, processing, assembly, packaging, labeling, marketing, importing, exporting, selling or distributing any Product or Product category that has, individually or in the aggregate, resulted (or could reasonably be expected, individually or in the aggregate, to result) in a Material Adverse Effect, (ii) the institution of any action or proceeding by the DEA, the FDA, or any other Governmental Authority to revoke, suspend, reject, withdraw, limit, or restrict any Regulatory Required Permit held by a Loan Party, its Subsidiaries or any representative of a Loan Party or its Subsidiaries, which, in each case of this clause (ii), has, individually or in the aggregate, resulted (or could reasonably be expected, individually or in the aggregate, to result) in a Material Adverse Effect, (iii) the commencement of any enforcement action against a Loan Party, a Loan Partys Subsidiaries or any representative of a Loan Party or its Subsidiaries (with respect to the business of a Loan Party or its Subsidiaries) by the DEA, the FDA, or any other Governmental Authority which has, individually or in the aggregate, resulted (or could reasonably be expected, individually or in the aggregate, to result) in a Material Adverse Effect, or (iv) the occurrence of adverse test results in connection with a Product which has, individually or in the aggregate, resulted (or could reasonably be expected, individually or in the aggregate, to result) in a Material Adverse Effect.
(n) The introduction of, or any change in, any law or regulation governing or affecting the healthcare industry, including any Healthcare Laws, that has or could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(o) Any Loan Party defaults under or breaches any Material Contract (after any applicable grace period contained therein), or a Material Contract shall be terminated by a third party or parties party thereto prior to the expiration thereof (other than in accordance with its terms) (other than the Warrant), the 3.25% Convertible Notes, any other 3.25% Convertible Note Document, any Permitted 3.25% Convertible Note Refinancing, the 2.25% Convertible Notes, any ABL Debt or any ABL Debt Documents or any Permitted Japan Lifeline Unsecured Debt Documents, or there is a loss of a material right of a Loan Party under any Material Contract to which it is a party, in each case which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
(p) The occurrence of any breach or default under any terms or provisions of any Convertible Note Document, any ABL Debt Document, any Permitted Japan Lifeline Unsecured Debt Documents or any Subordinated Debt Document or the occurrence of any event requiring the prepayment or mandatory redemption of any 3.25% Convertible Note or any other 3.25% Convertible Note Document (or any Permitted 3.25% Convertible Note Refinancing thereof or any indenture or related document governing any Permitted 3.25% Convertible Note Refinancing), any 2.25% Convertible Note, any ABL Debt Document, any Permitted Japan Lifeline Unsecured Debt Documents or of any Subordinated Debt; provided, however, that, notwithstanding the foregoing, any event or condition that occurs that permits holders of convertible Indebtedness permitted hereunder to convert such Indebtedness into Stock (other than Disqualified Stock) or such other consideration permitted pursuant to Section 5.2(xx) pursuant to the terms of the applicable agreement shall not constitute a Default or Event of Default hereunder on such basis alone.
(q) The institution by any Governmental Authority of criminal proceedings against any Loan Party.
(r) Any Loan Party makes any prepayment, payment, redemption or repayment on account of any Subordinated Debt or any other Indebtedness that has been subordinated to any of the Obligations, other than (i) payments specifically permitted by the terms of such subordination or the applicable Subordination Agreement and (ii) solely with respect to the Permitted Japan Lifeline
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Unsecured Debt, any interest payments expressly permitted under both clause (h) of the definition of Permitted Indebtedness and the Japan Lifeline Subordination Agreement so long as (A) the Japan Lifeline Subordination Agreement is in full force and effect and binding and enforceable against all parties thereto at all times, (B) no breach, violation or default has occurred under any of the Permitted Japan Lifeline Unsecured Debt Documents or the Japan Lifeline Subordination Agreement and (C) no Default or Event of Default has occurred and is continuing.
(s) Any Loan Party or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of the ABL Debt, or (B) fails to observe or perform any other agreement or condition relating to the ABL Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such ABL Debt or the beneficiary or beneficiaries of any Guarantee related thereto (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, such ABL Debt to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such ABL Debt to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded.
(t) Any provisions of the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, other than in accordance with the terms thereof, or any Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder.
(u) If the obligation of any Guarantor under the guaranty contained in the Security Agreement is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement).
(v) (i) Any subordination provisions in respect of the documents evidencing or governing any Subordinated Debt (the Subordination Provisions) shall, in whole or in part, terminate, cease to be effective or cease to be legally valid, binding and enforceable against any holder of the applicable Subordinated Debt; or (ii) any Borrower or any other Loan Party shall, directly or indirectly, disavow or contest in any manner (A) the effectiveness, validity or enforceability of any of the Subordination Provisions, (B) that the Subordination Provisions exist for the benefit of the Secured Parties or (C) that all payments of principal of or premium and interest on the applicable Subordinated Indebtedness, or realized from the liquidation of any property of any Loan Party, shall be subject to any of the Subordination Provisions.
(w) A Change of Control shall occur.
(x) The Borrower at any time announces or states in writing that it will not honor its
obligations to issue shares of Common Stock to a First Out Waterfall Lender upon conversionConversion of any of the First Out Waterfall Notes in accordance with the terms
thereof.
(y) Any terms or provisions of the Japan Lifeline Subordination Agreement or any other Subordination Agreement shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, other than in accordance with the terms thereof, or any Person shall breach, violate or default any of the terms thereof or contest in any manner the validity or enforceability thereof or deny that such Person has any further liability or obligation thereunder.
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(z) Any event, circumstance or other action shall occur that causes any holder of, or party to, any 3.25% Convertible Note, any other 3.25% Convertible Note Document or any indenture, note, agreement, instrument or document under (or evidencing) any Permitted 3.25% Convertible Note Refinancing, any other Convertible Note Document, any indenture, note, agreement, instrument or document with respect to (or evidencing) any Permitted 3.25% Convertible Note Refinancing or any related agreement, instrument or document to cause the payment, prepayment, repayment, redemption, conversion or cash settlement thereof, or provides such holder or party with the right (whether exercised or not) to cause such payment, prepayment, repayment, redemption, conversion or cash settlement thereof; provided, however, that, notwithstanding the foregoing, any event, circumstance or other action that permits holders of, or party to, any 3.25% Convertible Note, any other 3.25% Convertible Note Document, or any indenture, note, agreement, instrument or document with respect to (or evidencing) any Permitted 3.25% Convertible Note Refinancing to convert such Indebtedness into Stock (other than Disqualified Stock) or such other consideration expressly permitted by the terms and provisions of Section 5.2(xx) pursuant to the terms of the applicable agreement, instrument or document shall not constitute a Default or Event of Default solely under this Section 5.4(z) on such basis alone.
Section 5.5 Additional Remedies.
(a) Automatic Acceleration on Dissolution or Bankruptcy. Notwithstanding any other provisions of this Agreement, if an
Event of Default under Section 5.4(d) shall occur, the principal of the Loans (together with any interest, other amounts and Obligations accrued or payable under this Agreement or the other Loan Documents (including the
ExitRestructuring Payment, any Non-Callable Make Whole Amount and any CoC Fee, if applicable)) shall thereupon become immediately and automatically due and payable, in each
case, without any presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower and the other Loan Parties.
(b) Power of Attorney. Notwithstanding anything to the contrary in this Agreement, the Warrants, and the other Loan Documents, each Loan Party hereby irrevocably and unconditionally constitutes and appoints Agent and any of Agents Affiliates, attorneys, representatives or agents, with full power of substitution, as such Loan Partys true and lawful attorney-in-fact with full irrevocable and unconditional power and authority in the place and stead of such Loan Party and in the name of such Loan Party or in its own name, for the purpose of carrying out the terms of this Agreement, the Warrants, and the other Loan Documents, to take any appropriate steps or actions and to execute and deliver (and perform under on such Loan Partys behalf) any agreement, document or instrument that may be necessary or desirable to accomplish the purposes and/or effectuate the items and actions set forth in this Agreement, the Warrants, and the other Loan Documents, in each case, (i) that any such Loan Party fails to take that are required under such documents, agreements or instruments, (ii) during the existence of any Event of Default, or (iii) in delivering the original shares of Common Stock to be issued under any Warrants to the applicable holder thereof upon such holder exercising its rights pursuant to the terms of such Warrants.
Section 5.6 Recovery of Amounts Due. If any Obligation or other amount payable hereunder or under any of the other Loan Documents is not paid as and when due, the Borrower and the other Loan Parties hereby authorize Agent and the Lenders to proceed, to the fullest extent permitted by Applicable Law, without prior notice, by right of set-off, bankers lien or counterclaim, against any moneys or other assets of the Borrower or any other Loan Party to the full extent of all Obligations or other amounts payable to Agent and/or the Secured Parties.
Section 5.7 Credit Bidding. The Loan Parties and the Lenders hereby irrevocably authorize Agent based upon the written instruction of the Lenders, to (a) credit bid and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral at any
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terms of the Intercreditor Agreement, (ii) in the event of any conflict between the express terms and provisions of this Agreement or any other Loan Document, on the one hand, and of the Intercreditor Agreement, on the other hand, the terms and provisions of the Intercreditor Agreement, shall control, (iii) any Collateral held by (or in the possession or control of) the ABL Agent (or its agents or bailees) shall be held as agent and bailee for security, Lien perfection and control purposes in favor of Agent (for the benefit of the Secured Parties) in accordance with the terms of the Intercreditor Agreement and the Loan Documents, and (iv) each Lender (and, by its acceptance of the benefits of any Loan Document, each other Secured Party) hereunder authorizes and instructs Agent to execute the Intercreditor Agreement on behalf of such Lender, and such Lender agrees to be bound by the terms thereof.
(b) Each Lender (and, by its acceptance of the benefits of any Loan Document, each other Secured Party) hereunder authorizes and instructs the Agent, as Agent and on behalf of such Lender or other Secured Party, to enter into one or more intercreditor agreements (including any Intercreditor Agreement) from time to time pursuant to, or as contemplated by, the terms of this Agreement and agrees that it will be bound by the terms and provisions thereof and will take no actions contrary to the terms and provisions thereof.
Section 6.29 Acknowledgment of Prior Obligations and Continuation Thereof. Each of the Loan Parties
(a) consent to the amendment and restatement of the Prior Facility Agreement by this Agreement (and any other Loan Documents (as defined in the Prior Facility Agreement, the Prior Loan Documents) that are being
amended and restated); (b) acknowledges and agrees that (i) there are Obligations (as defined in the Prior Facility Agreement) owing to the Secured Parties that will continue to be owed and owing to the Secured Parties as
Obligations under this Agreement and the other Loan Documents, including the obligations under the InitialOriginal Warrants and the
Prior Registration Rights Agreement that existed immediately prior to the effectiveness of this Agreement, and (ii) the prior grant or grants of Liens or security interests in favor of
any of the Agent or the other Secured Parties in such Loan Parties properties and assets, under each Prior Loan Document continue to exist and will continue to exist under the Loan Documents, and each Loan Document to which it is a party shall
be in respect of the Obligations of each of the Loan Parties under this Agreement and the other Loan Documents; provided, however, that such security interests or Liens shall be as modified (if applicable) pursuant to the terms of the
Loan Documents applicable thereto which are entered into on the Agreement Date, if any; (c) reaffirms (i) all of the Obligations (as defined in the Prior Facility Agreement) owing to the Secured Parties, and (ii) all prior or
concurrent grants of Liens or security interests in favor of any of the Agent or the Secured Parties under each Prior Loan Document and each Loan Document; provided, however, that such Liens or security interests shall be as modified
(if applicable) pursuant to the terms of the Loan Documents applicable thereto which are entered into on the Agreement Date, if any; and (d) agrees that, except as expressly amended hereby or unless being amended and restated concurrently
herewith, each of the Prior Loan Documents to which it is a party is and shall remain in full force and effect. Each of the Loan Parties hereby confirms and agrees that all outstanding principal, interest and fees (including such accrued and unpaid
principal, interest, and fees set forth in the immediately preceding sentence) and other Obligations (as defined in the Priority Facility Agreement) under the Prior Facility Agreement and the other Prior Loan Documents immediately prior
to the Agreement Date shall, from and after the Agreement Date, be, without duplication, Obligations owing and payable pursuant to this Agreement and the other Loan Documents as in effect from time to time, shall accrue interest thereon as specified
in this Agreement, and shall be secured by the Loan Documents. Although each of the Loan Parties has been informed of the matters set forth herein and has acknowledged and agreed to the same, it understands that no Secured Party shall have any
obligation to inform it of such matters in the future or to seek its acknowledgement or agreement to future amendments, restatements, supplements or other modifications, and nothing herein shall create such a duty.
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Section 6.30 No Novation. This Agreement does not extinguish the
obligations for the payment of money outstanding under the Prior Facility Agreement or the other Prior Loan Documents or discharge or release the obligations or the Liens or priority of any pledge, security agreement or any other security therefor
or any of the obligations under the Prior Loan Documents (including the InitialOriginal Warrants and the Prior
Registration Rights Agreement). Nothing herein contained shall be construed as a substitution or novation of the obligations outstanding under the Prior Facility Agreement, the other Prior Loan Documents or agreements, instruments or documents
securing the same, which shall remain in full force and effect, except as modified hereby or by agreements, instruments or documents executed concurrently herewith. Nothing expressed or implied in this Agreement shall be construed as a release or
other discharge of any Loan Party from any of its obligations or liabilities under the Prior Facility Agreement and the other Prior Loan Documents or any of the security agreements, pledge agreements, guaranties or other loan documents executed in
connection therewith. Each of Loan Parties hereby (a) confirms and agrees that each Prior Loan Document and each Initial Warrant to which it is a party that is not being amended and restated concurrently herewith is, and shall continue to be,
in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Agreement Date, all references in any such Prior Loan Document to (i) the Facility Agreement, thereto,
thereof, thereunder or words of like import referring to the Prior Facility Agreement shall mean the Prior Facility Agreement as amended and restated by this Agreement or (ii) any other Prior Loan Document being amended
and restated, thereto,, thereof, thereunder, or words of like import referring to such Prior Loan Document shall mean such Prior Loan Document as amended and restated by the corresponding Loan Document; and (b) confirms
and agrees that to the extent that any such Prior Loan Document purports to assign or pledge to any of the Agent or the other Secured Parties or to grant to any of the Agent or the other Secured Parties a security interest in or Lien on, any
collateral as security for the obligations of any Loan Party, as the case may be, from time to time existing in respect of the Prior Facility Agreement or the other Prior Loan Documents, such pledge or assignment or grant of the security interest or
Lien is hereby ratified and confirmed in all respects with respect to this Agreement and the other Loan Documents.
Section 6.31 Survival of Any Existing Unmatured Events of Default and Events of Default. Notwithstanding anything
to the contrary in this Agreement, the other Loan Documents (including the Original Warrants and the Prior Registration Rights
Agreement) or otherwise, except as expressly set forth otherwise in any Loan Document, (a) any Default and any Event of Default under the Prior Loan Documents, the
Original Warrants or the Prior Registration Rights Agreement (including any incorrect or inaccurate (or breach of a)
representation, warranty or certification made under the Prior Facility Agreement, any other Prior Loan Document, any Original Warrant or the
Prior Registration Rights Agreement) arising on or prior to the Agreement Date shall continue to exist under this Agreement and the other Loan Documents and (b) such amendments,
amendments and restatements, supplements and modifications made to the Prior Facility Agreement and the other Prior Loan Documents, any Original Warrant or the
Prior Registration Rights Agreement shall not be deemed to be a waiver, forbearance or other modification thereof. Any representation, warranty or certification made under the Prior Loan
Documents, the Original Warrants and the Prior Registration Rights Agreement that continued to be made after initially being made
shall continue to be made under this Agreement, the Loan Documents, the Original Warrants and the Prior Registration Rights
Agreement, as amended (but, for the avoidance of doubt, without giving effect to any such amendment with respect to the making of such representation, warranty or certification prior to the date of such amendment), and any
incorrectness, inaccurateness or breach of any such representation, warranty or certification shall be a breach or violation under this Agreement, the Loan Documents, the Warrants and the Registration Rights Agreement and subject to the rights and
remedies provided hereunder and thereunder for any such breach or violation of a representation, warranty or certification.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the first day written above.
BORROWER: | ||
ENDOLOGIX, INC., a Delaware corporation |
By: |
|
Name: | ||
Title: | ||
OTHER LOAN PARTIES: | ||
CVD/RMS ACQUISITION CORP., a Delaware corporation |
By: |
|
Name: | ||
Title: | ||
NELLIX, INC., a Delaware corporation |
By: |
|
Name: | ||
Title: | ||
TRIVASCULAR TECHNOLOGIES, INC., a Delaware corporation |
By: |
|
Name: | ||
Title: | ||
TRIVASCULAR, INC., a California corporation |
By: |
|
Name: | ||
Title: |
[Signature Page to Amended and Restated Facility Agreement]
LENDERS: | ||
DEERFIELD PRIVATE DESIGN FUND III, L.P. | ||
By: Deerfield Mgmt III, L.P., General Partner | ||
By: J.E. Flynn Capital III, LLC, General Partner | ||
By: |
| |
Name: |
David J. Clark | |
Title: |
Authorized Signatory | |
DEERFIELD PARTNERS, L.P. | ||
By: Deerfield Mgmt, L.P., General Partner | ||
By: J.E. Flynn Capital, LLC, General Partner | ||
By: |
| |
Name: |
David J. Clark | |
Title: |
Authorized Signatory | |
DEERFIELD PRIVATE DESIGN FUND IV, L.P. | ||
By: Deerfield Mgmt IV, L.P., General Partner | ||
By: J.E. Flynn Capital IV, LLC, General Partner | ||
By: |
| |
Name: |
David J. Clark | |
Title: |
Authorized Signatory |
[Signature Page to Amended and Restated Facility Agreement]
ANNEX A
DISBURSEMENT AMOUNTS AND WARRANTS
Lender |
First Out Waterfall Loan |
Last Out Waterfall Loan |
Total Disbursement Amount |
Fraction of Total Initial Warrants |
Fraction of Total Additional Warrants |
|||||||||||||||
Deerfield Private Design Fund III, L.P. |
$ | 40,000,000 | $ | 0 | $ | 40,000,000 | 1/3 | 1/3 | ||||||||||||
Deerfield Private Design Fund IV, L.P. |
$ | 40,000,000 | $ | 0 | $ | 40,000,000 | 1/3 | 1/3 | ||||||||||||
Deerfield Partners, L.P. |
$ | 40,000,000 | $ | 40,500,000 | $ | 80,500,000 | 1/3 | 1/3 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 120,000,000 | $ | 40,500,000 | $ | 160,500,000 | 100 | % | 100 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
EXHIBIT A-1
FORM OF FIRST OUT WATERFALL NOTE
(as of Agreement Date)
[Attached]
EXHIBIT A-1
FORM OF FIRST OUT WATERFALL NOTE
THE SECURITIES REPRESENTED BY THIS NOTE (AS DEFINED BELOW) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN, FINANCING OR INDEBTEDNESS ARRANGEMENT SECURED BY THE SECURITIES.
THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO TREAS. REG. SECTION 1.1275-3: THE BORROWER (AS DEFINED BELOW) WILL MAKE AVAILABLE ON REQUEST TO HOLDER(S) OF THIS NOTE THE FOLLOWING INFORMATION: ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY. THIS NOTE IS BEING AMENDED AND RESTATED AS PART OF AND PURSUANT TO A PLAN OF RECAPITALIZATION AND REORGANIZATION OF THE BORROWER DESCRIBED IN SECTION 368(A)(1)(E) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
FIRST OUT WATERFALL NOTE
First Out Waterfall Lender: |
Original Issue Date: April 3, 2017 | |||
Principal Amount: $[ ] | [Re-Issuance Date: January 1, 2018]1 | |||
Amendment and Restatement Date: August 9, 2018 |
FOR VALUE RECEIVED, the undersigned, Endologix, Inc., a Delaware corporation (the Borrower), hereby unconditionally promises to pay to the First Out Waterfall Lender set forth above (the Lender) the Principal Amount set forth above, or, if less, the aggregate unpaid Principal (as defined below) amount of the First Out Waterfall Loan (as defined in the Facility Agreement referred to below) of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Facility Agreement.
The Borrower promises to pay interest on the outstanding Principal amount of the First Out Waterfall Loan and any overdue interest from and after the Amendment and Restatement Date (as defined below) until such outstanding Principal amount of the First Out Waterfall Loan and any overdue interest are paid in full, payable at such times and at such interest rates as are
1 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
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specified in the Facility Agreement. The Borrower promises to pay any Non-Callable Make Whole Amount, any CoC Fee and the First Out Waterfall Exit Payment (each, as defined in the Facility Agreement) that is due on the First Out Waterfall Loan in accordance with the Facility Agreement.
In lieu of making any payment of interest in cash (but not (i) interest payable pursuant to the second sentence of Section 2.6(a) of Facility Agreement, (ii) interest payable-in-kind or (iii) in connection with any Event of Default or late payment hereunder or any other interest payable pursuant to Section 2.7 of the Facility Agreement) and subject to the conditions set forth in Section 2.6 of the Facility Agreement and Exhibit 2.6 to the Facility Agreement, the Borrower may elect to satisfy all or any such payment by the issuance to the Lender of shares of Freely Tradable Common Shares (as defined in Exhibit 2.6) in accordance with the provisions of Exhibit 2.6.
This First Out Waterfall Note (this Note) was originally issued on April 3, 2017[, reissued on January 1, 2018],2 and amended and restated on August 9, 2018 (the Amendment and Restatement Date) and is one of the First Out Waterfall Notes, Loan Notes and Notes referred to in, and is entitled to the benefits of, the Amended and Restated Facility Agreement, dated as of August 9, 2018 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Facility Agreement), by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and Deerfield Private Design Fund IV, L.P., as agent for the Secured Parties, and the other Loan Documents.
The Facility Agreement, among other things, (a) provides for the making of a First Out Waterfall Loan by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such First Out Waterfall Loan being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid Principal amount of this Note upon the happening of certain stated events and also for prepayments pursuant to Section 2.3(c) or Section 5.3 of the Facility Agreement on account of the Principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
1. Definitions.
(a) Certain Defined Terms. Capitalized terms used herein without definition are used as defined in the Facility Agreement. For purposes of this Note, the following terms shall have the following meanings:
(i) Affiliate means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Lender, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Lender will be deemed to be an Affiliate of such Lender. As used in this definition of Affiliate, the term control means the possession, directly or indirectly, of the power to direct or cause the direction of the management
2 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
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and policies of a Person, whether through ownership of voting securities or partnership or other ownership interest, by contract, or otherwise.
(ii) Common Stock means the fully paid and nonassessable shares of the Borrowers common stock, $0.001 par value per share.
(iii) Conversion Amount means the Principal amount to be
converted.
(iv) Conversion Date means the date of delivery via facsimile or electronic mail of a Conversion Notice.
(v) Conversion Issuance Limit means [ ]3 shares of Common Stock, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(vi) Conversion Price means, as of any Conversion Date, ninety-six percent (96%) of the arithmetic average of the Volume Weighted Average Prices per share of Common Stock on each of the three (3) Trading Days period preceding the Conversion Date (the Measurement Period); provided, that in the event that a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares (a Stock Event) is consummated during the Measurement Period, the Volume Weighted Average Price for all Trading Days during the Measurement Period prior to the effectiveness of such Stock Event shall be appropriately adjusted to reflect such Stock Event, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(vii) Conversion Shares means fully paid and nonassessable shares of Common Stock issued in connection with the conversion of a Note.
(viii) First Amortization Cap means [ ]4 shares of Common Stock, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(ix) First Amortization Date means April 2, 2021.
(x) Market Disruption Event means, with respect to any Trading Day and any security of Borrower, (a) a failure by the Principal Market to open for trading during its entire regular trading session, (b) the occurrence or existence prior to 1:00 p.m., New York City time, on such day for such securities of Borrower 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 securities exchange or otherwise) in such securities or in any options, contracts or future contracts relating to such securities, or (c) to the extent Volume Weighted Average Price is determined in accordance
3 | To be equal to Lenders First Out Waterfall Pro Rata Share of 14,300,000 shares. |
4 | To be equal to Lenders First Out Waterfall Pro Rata Share of 9,500,000 shares. |
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with clause (b) of the definition thereof, the suspension of trading for the one-half hour period ending on the scheduled close of trading on such day (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in such securities of Borrower.
(xi) Monthly Conversion Cap means [ ]5 shares of Common Stock, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(xii) Monthly Conversion Cap Period means the period commencing on the Amendment and Restatement Date and ending on (and including) August 31, 2018, and each calendar month that begins after the Amendment and Restatement Date and prior to the Maturity Date.
(xiii) Principal means the outstanding principal amount of this Note as of any date of determination.
(xiv) Required Lenders means the Required First Out Waterfall Lenders.
(xv) Second Amortization Cap means [ ]6 shares of Common Stock, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(xvi) Second Amortization Date means April 2, 2022.
(xvii) Trading Day means any day on which the Common Stock is traded for any period on the Principal Market; provided, that for purposes of the definition of Conversion Shares, Trading Day shall not include any Trading Day on which there is a Market Disruption Event.
(xviii) Volume Weighted Average Price for any security as of any Trading Day means (a) the volume weighted average sale price of such security on the principal U.S. national or regional securities exchange on which such security is traded as reported by Bloomberg Financial Markets or an equivalent, reliable reporting service mutually acceptable to and hereinafter designated by the Required Lenders and the Borrower (Bloomberg), or (b) if no volume weighted average sale price is reported for such security, then the closing price per share of such security, or, if no closing price per share is reported for such security by Bloomberg, the average of the last bid and last ask price (or if more than one in either case, the average of the average last bid and average last ask prices) on such Trading Day as reported in the composite transactions for the principal U.S. national or regional securities exchange on which such security is traded. If the security is not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, then the Volume Weighted Average Price will be the average of the mid-point of the last bid and last ask prices of the security in the over-the-counter market on the relevant Trading Day as reported by OTC Markets Group or similar organization. If the Volume Weighted Average Price cannot be calculated for such
5 | To be equal to Lenders First Out Waterfall Pro Rata Share of 5,200,000 shares. |
6 | To be equal to Lenders First Out Waterfall Pro Rata Share of 4,800,000 shares. |
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security on such date in the manner provided above, the Volume Weighted Average Price shall be the fair market value as mutually determined by the Borrower and the Lenders holding a majority of the aggregate outstanding Principal amount of the Notes being converted for which the calculation of the Volume Weighted Average Price is required in order to determine the Conversion Price of such Notes. Volume Weighted Average Price will be determine without regard to after-hours trading or any other trading outside of the regular trading hours.
2. Conversion Rights. This Note may be converted into shares of Common Stock on the terms and conditions set forth in this Section 2 (subject to Section 2.3(a) of the Facility Agreement).
(a) Conversion at Option of the Lender. At any time during the period commencing on (and including) the Amendment and Restatement Date and ending on the close of business on the second business day immediately prior to the Maturity Date, the Lender shall be entitled to convert all or any part of the Principal into Conversion Shares in accordance with this Section 2 at the Conversion Rate (as defined in Section 2(b)). The Borrower shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, then the Borrower shall round such fraction of a share of Common Stock up or down to the nearest whole share (with 0.5 rounded up).
(b) Conversion Rate. The number of Conversion Shares issuable upon a conversion of any portion of this Note pursuant to Section 2 shall be determined according to the following formula (the Conversion Rate):
Conversion Amount
Conversion Price
(c) Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:
(i) Lenders Delivery Requirements. To convert a Conversion Amount into Conversion Shares pursuant to Section 2(a) above on any date, Lender shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to 5:00 p.m. New York City time on such date, a copy of an executed conversion notice in the form attached hereto as Exhibit A (the Conversion Notice) to the Borrower (at 2 Musick, Irvine, CA 92618, Attention: Chief Financial Officer; Email: vmahboob@endologix.com, or at such other office or agency as the Borrower may designate in writing), and (B) if required by Section 2(c)(vi), surrender to a common carrier for delivery to the Borrower, no later than three (3) Business Days after the Conversion Date, of the original Note being converted (or an indemnification undertaking in customary form with respect to this Note in the case of its loss, theft or destruction).
(ii) Borrowers Response. Upon receipt or deemed receipt by the Borrower of a copy of a Conversion Notice, the Borrower (A) shall immediately send, via facsimile, a confirmation of receipt of such Conversion Notice to the Lender and the Borrowers designated transfer agent (the Transfer Agent), which confirmation shall constitute an
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instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein, and (B) on or before the second (2nd) Business Day following the date of receipt or deemed receipt by the Borrower of such Conversion Notice (or, if earlier, the end of the standard settlement period for U.S. broker-dealer securities transactions) (the Share Delivery Date), shall credit such aggregate number of Conversion Shares to which the Lender shall be entitled to the Lenders or its designees balance account with The Depository Trust Company (DTC) through its Deposit/Withdrawal At Custodian (DWAC) system, for the number of Conversion Shares to which the Lender shall be entitled. If notwithstanding the provisions of Section 2(c)(vi), the Lender elects to physically surrender this Note for conversion and the Principal represented by this Note is greater than the Principal being converted, then the Borrower shall, as soon as practicable and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Lender a new Note representing the Principal not converted and cancel this Note. For purposes of Rule 144 under the Securities Act, any Conversion Shares issued to Lender shall be deemed to have been acquired by such Lender on April 3, 2017 (the date this Note was originally issued). Accordingly, (A) upon any conversion of this Note, the Rule 144 holding period for the Conversion Shares acquired thereupon shall be in excess of one (1) year, and (B) provided the Lender is not an Affiliate of the Borrower on the Conversion Date and has not been an Affiliate of the Borrower within the three-month period immediately preceding the Conversion Date (the Unrestricted Condition), which the Borrower shall assume and Lender hereby represents unless the Lender advises the Borrower otherwise in writing, the Conversion Shares issued to Lender will be freely transferable, without restriction or limitation (including any volume limitation) under Federal or state securities laws, pursuant to Rule 144 under the Securities Act and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof.
(iii) Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price or the arithmetic calculation of the Conversion Rate, the Borrower shall instruct the Transfer Agent to issue to the Lender the number of Conversion Shares that is not disputed and shall transmit an explanation of the disputed determinations or arithmetic calculations to the Lender via facsimile within two (2) Business Days of receipt or deemed receipt of the Lenders Conversion Notice or other date of determination. If the Lender and the Borrower are unable to agree upon the determination of the Conversion Price or arithmetic calculation of the Conversion Rate within one (1) Business Day of such disputed determination or arithmetic calculation being transmitted to the Lender, then the Borrower shall promptly (and in any event within two (2) Business Days) submit via facsimile (A) the disputed determination of the Conversion Price to an independent, reputable investment banking firm agreed to by the Borrower and the Required Lenders, or (B) the disputed arithmetic calculation of the Conversion Rate to the Borrowers independent registered public accounting firm, as the case may be. The Borrower shall direct the investment bank or the accounting firm, as the case may be, to perform the determinations or calculations and notify the Borrower and the Lender of the results no later than two (2) Business Days from the time it receives the disputed determinations or calculations. Such investment banks or accounting firms determination or calculation, as the case may be, shall be binding upon all parties absent manifest error, and the fees and expenses of such investment bank or accountant shall be paid one-half by the Borrower and one-half by the Lender. Notwithstanding the existence of a dispute contemplated by this
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paragraph, if requested by the Lender, the Borrower shall issue to the Lender the Conversion Shares not in dispute in accordance with the terms hereof.
(iv) Record Holder. The person or persons entitled to receive the Conversion Shares issuable upon a conversion of this Note shall be treated for all purposes as the legal and record holder or holders of such shares of Common Stock upon delivery by the Lender of the Conversion Notice, or in the case of Conversion Shares the issuance of which is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute.
(v) Borrowers Failure to Timely Convert.
(A) Cash Damages. If by the Share Delivery Date, the Borrower shall fail to credit the Lenders or its designees balance account with DTC with the number of Conversion Shares (free of any restrictive legend, provided the Unrestricted Condition is satisfied), then, in addition to all other available remedies that the Lender may pursue hereunder and under the Facility Agreement, the Borrower shall pay additional damages to the Lender for each day after the Share Delivery Date such conversion is not timely effected in an amount equal to one and one-half percent (1.5%) of the product of (I) the number of Conversion Shares not issued to the Lender or its designee on or prior to the Share Delivery Date and to which the Lender is entitled and (II) the Volume Weighted Average Price of the Common Stock on the Share Delivery Date. Alternatively in lieu of the foregoing damages, subject to Section 2(c)(iii), at the written election of the Lender made in the Lenders sole discretion, if, on or after the applicable Conversion Date, the Lender purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Lender of Conversion Shares that such Lender anticipated receiving from the Borrower (such purchased shares, Buy-In Shares), the Borrower shall be obligated to promptly pay to such Lender (in addition to all other available remedies that the Lender may otherwise have), 110% of the amount by which (A) such Lenders total purchase price (including brokerage commissions, if any) for such Buy-In Shares exceeds (B) the net proceeds received by such Lender from the sale of a number of shares equal to up to the number of Conversion Shares such Lender was entitled to receive but had not received on the Share Delivery Date. If the Borrower fails to pay the additional damages set forth in this Section 2(c)(v)(A) within five (5) Business Days of the date incurred, then the Lender entitled to such payments shall have the right at any time, so long as the Borrower continues to fail to make such payments, to require the Borrower, upon written notice, to immediately issue, in lieu of such cash damages, the number of shares of Common Stock equal to the quotient of (X) the aggregate amount of the damages payments described herein divided by (Y) the Conversion Price specified by the Lender in the Conversion Notice.
(B) Conversion Failure. If for any reason the Lender has not received all of the Conversion Shares it is entitled to prior to the tenth (10th) Business Day after the Share Delivery Date with respect to a conversion of this Note (a Conversion Failure), then the Lender, upon written notice to the Borrower (a Void Conversion Notice), may void its conversion with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to the Lenders Conversion Notice; provided, that the voiding of the Lenders Conversion Notice shall not affect the Borrowers obligations to make
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any payments that have accrued prior to the date of such notice pursuant to Section 2(c)(v)(A) or otherwise. A Conversion Failure shall constitute an Event of Default under the Facility Agreement and entitle the Lenders to all payments and remedies provided under the Facility Agreement upon the occurrence of an Event of Default.
(vi) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion or repayment of this Note in accordance with the terms hereof, the Lender shall not be required to physically surrender this Note to the Borrower unless all of the Principal is being converted or repaid. The Lender and the Borrower shall maintain records showing the Principal converted or repaid and the dates of such conversions or repayments or shall use such other method, reasonably satisfactory to the Lender and the Borrower, so as not to require physical surrender of this Note upon any such partial conversion or repayment. Notwithstanding the foregoing, if this Note is converted or repaid as aforesaid, the Lender may not transfer this Note unless the Lender first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Lender a new Note of like tenor, registered as the Lender may request, representing in the aggregate the remaining Principal represented by this Note. The Lender and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion or repayment of any portion of this Note, the Principal of this Note may be less than the Principal Amount stated on the face hereof.
(d) Limitations on Conversions.
(i) Beneficial Ownership. Notwithstanding anything herein to the contrary, the Borrower shall not issue to the Lender, and the Lender may not acquire, a number of shares of Common Stock upon conversion of this Note or otherwise issue any shares of Common Stock pursuant hereto or the Facility Agreement to the extent that, upon such conversion, the number of shares of Common Stock then beneficially owned by the Lender and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Lenders for purposes of Section 13(d) of the Exchange Act (including shares held by any group of which the Lender is a member, but excluding shares beneficially owned by virtue of the ownership of the Warrants or other securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed 4.985% of the total number of shares of common stock then issued and outstanding (the 4.985% Cap); provided, however, that the 4.985% Cap shall only apply to the extent that the Common Stock is deemed to constitute an equity security pursuant to Rule 13d-1(i) promulgated under the Exchange Act. For purposes hereof, group has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the SEC, and the percentage held by the Lender shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Upon the written request of the Lender, the Borrower shall, within two (2) Trading Days, confirm orally and in writing to the Lender the number of shares of Common Stock then outstanding.
(ii) Conversion Issuance Limit. Notwithstanding anything to the contrary contained herein, the Borrower shall not issue any shares of Common Stock upon conversion of this Note (including pursuant to Section 2(c)(v)(A) hereof) to the extent that the issuance of such shares of Common Stock together with any previous issuances of shares of
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Common Stock under this Note would exceed the Conversion Issuance Limit, and Section 2.5(c)(v) shall not apply in respect to any excess amount.
(iii) Other Applicable Limitations on Conversion of the Note. Notwithstanding anything to the contrary herein, this Note shall not be convertible, and the Borrower shall not issue shares of Common Stock upon conversion of this Note (a) at any time after the First Amortization Date, to the extent that the number of shares of Common Stock that would otherwise be issuable to Lender upon such conversion, together with all shares of Common Stock previously issued to Lender upon conversion of this Note after the First Amortization Date, would exceed the First Amortization Cap, or (b) at any time after the Second Amortization Date, to the extent that the number of shares of Common Stock that would otherwise be issuable to Lender upon such conversion, together with all shares of Common Stock previously issued to Lender upon conversion of this Note after the Second Amortization Date, would exceed the Second Amortization Cap, or (c) during any Monthly Conversion Cap Period, to the extent that the number of shares of Common Stock that would otherwise be issuable to Lender upon such conversion, together with all shares previously issued to Lender upon conversion of this Note during the such Monthly Conversion Cap Period, would exceed the Monthly Conversion Cap. For the avoidance of doubt, if the number of shares of Common Stock to be issued as set forth in an Conversion Notice transmitted by the Lender to the Borrower would otherwise require the Borrower to issue a number of shares in excess of the Conversion Issuance Limit, the First Amortization Cap (if after the First Amortization Date), the Second Amortization Cap (if after the Second Amortization Date) or the Monthly Share Cap, the Borrower shall issue to the Lender in accordance herewith the maximum number of shares of Common Stock issuable without exceeding any such applicable limitation, and Section 2.5(c)(v) shall not apply to any excess amount.
3. Voting Rights. Except as required by law, the Lender shall have no voting rights with respect to any of the Conversion Shares until the Conversion Date relating to the conversion of this Note upon which such Conversion Shares are issuable (or in the case of Conversion Shares the issuance of which is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute).
4. Amendment; Waiver. The provisions of this Note may only be waived or amended, restated, supplemented or otherwise modified in accordance with the Facility Agreement.
5. Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Borrower and all Lenders pursuant to the Facility Agreement and shall not be construed against any Person as the drafter hereof.
6. Failure or Indulgence Not Waiver. No delay or omission by the Lender in exercising any power or right hereunder shall impair such right or power or be construed to be a waiver of any default, nor shall any single or partial exercise of any power or right hereunder preclude the full exercise thereof or the exercise of any other power or right. No renewal or
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extension of this Note or the Facility Agreement, no delay in the enforcement of payment under this Note or the Facility Agreement, and no delay or omission in exercising any right or power under this Note or the Facility Agreement shall affect the liability of the Borrower or any endorser of this Note.
7. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with Section 6.1 of the Facility Agreement.
8. Restrictions on Transfer.
(a) Registration or Exemption Required. This Note has been issued in a transaction exempt from the registration requirements of the Securities Act. None of the Note or the Conversion Shares issued hereunder may be transferred, sold, assigned, hypothecated or otherwise disposed of except pursuant to an effective registration statement or an exemption to the registration requirements of the Securities Act and applicable state laws, including Rule 144 under the Securities Act, Section 4(a)(7) of the Securities Act or a so-called 4[(a)](1) and a half transaction.
(b) Assignment. This Note is assignable or transferable, in whole or in part, only to the extent such assignment or transfer is permitted pursuant to the terms of the Facility Agreement; provided that (i) the Lender shall deliver a written notice to the Borrower, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the Person or Persons to whom the Note shall be assigned and the respective Principal amount of the Note to be assigned to each assignee. The Borrower shall effect the assignment within three (3) business days, and shall deliver to the assignee(s) designated by the Lender a Note or Notes of like tenor and terms for the appropriate Principal amount. This Note and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Lender. The provisions of this Note are intended to be for the benefit of all Lenders from time to time of this Note, and shall be enforceable by any such Lender. This Note is not (and any rights or obligations hereunder are not) not assignable or transferable by the Borrower under any circumstance and any such prohibited assignment or transfer is absolutely void ab initio.
9. Payment of Collection, Enforcement and Other Costs. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (b) an attorney is retained to represent the Lender in any bankruptcy, reorganization, receivership of the Borrower or other proceedings affecting Borrower creditors rights and involving a claim under this Note, then the Borrower shall pay the costs incurred by the Lender for such collection, enforcement or action, including reasonable attorneys fees and disbursements. Subject to the terms of the Facility Agreement, all payments and issuances of shares of Common Stock hereunder will be free and clear of, and without deduction or withholding for, any present or future taxes. The Borrower shall pay all and any costs (administrative or otherwise) imposed by the Borrowers banks, clearing houses, or any other financial institution, in connection with making any payments and issuing any shares of Common Stock hereunder. The Borrower shall pay all costs and expenses (including attorneys fees) of the Lender incurred in connection with this Note in accordance with Section 6.3 of the Facility Agreement.
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10. Waiver of Notice. Other than those notices required to be provided by the Lender to the Borrower under the terms of the Facility Agreement, the Borrower and every endorser of this Note, or the obligations represented hereby, expressly waives diligence, presentment, protest, demand, notice of dishonor, non-payment or default, and notice of any kind with respect to this Note and the Facility Agreement or the performance of the obligations under this Note and/or the Facility Agreement.
11. Miscellaneous. This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Facility Agreement, including Sections 1.2 (Interpretation) and 6.4 (Governing Law; Venue; Jurisdiction; Service of Process; Waiver of Jury Trial) thereof.
12. Additional Interpretative Matters. Unless the context otherwise requires, (a) all references to Sections or Exhibits are to Sections or Exhibits contained in or attached to this Note, (b) each accounting term not otherwise defined in this Note has the meaning assigned to it in accordance with GAAP, (c) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter and (d) the use of the word including in this Note shall be by way of example rather than limitation. If a Stock Event occurs during any period over which an average price is being determined, then an appropriate adjustment will be made to such average to reflect such Stock Event.
13. Signatures. In the event that any signature to this Note or any amendment hereto is delivered by electronic 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 .pdf signature page were an original thereof. Notwithstanding the foregoing, the Borrower shall be obligated to deliver to the Lender an original signature to this Note. At the request of any party, each other party shall promptly re-execute an original form of this Note or any amendment hereto and deliver the same to the other party. No party hereto shall raise the use of electronic mail delivery of a .pdf format data file to deliver a signature to this Note or any amendment hereto or the fact that such signature was transmitted or communicated through the use of electronic mail delivery of a .pdf format data file as a defense to the formation or enforceability of a contract, and each party hereto forever waives any such defense.
14. This Note is an amendment and restatement of that certain Loan Note originally issued on April 3, 2017 [and re-issued on January 1, 2018],7 in the principal amount of $[ ] (the Prior Note) and evidences an extension, continuation, and renewal of the indebtedness evidenced by the Prior Note, but this Note replaces the Prior Note with the indebtedness evidenced by the Prior Note now evidenced by this Note. Such Prior Note shall be of no further force and effect upon execution of this Note. The Borrower hereby acknowledges and agrees that the indebtedness under the Prior Note has not been repaid or extinguished and that the execution hereof does not constitute a novation of the Prior Note. Moreover, this Note shall be
7 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
EX. A - 11
entitled to all security and collateral to which the Prior Note was entitled, without change or diminution in the priority of any lien or security interest granted to secure the Prior Note.
[Signature Page Follows]
EX. A - 12
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year set forth above.
ENDOLOGIX, INC., | ||
a Delaware corporation |
By: |
| |
Name: |
| |
Title: |
|
EX. A - 13
Exhibit A
CONVERSION NOTICE
Reference is made to the First Out Waterfall Note (the Note) of ENDOLOGIX, INC., a Delaware corporation (the Borrower), in the original principal amount of $[ ]. In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of common stock, par value $0.001 per share (the Common Stock), of the Borrower, as of the date specified below.
Date of Conversion:
Aggregate Conversion Amount to be converted at the Conversion Price (as defined in the Note):
Principal, applicable thereto, to be converted:
Please confirm the following information:
Conversion Price:
Number of shares of Common Stock to be issued:
Please issue the Common Stock into which the Note is being converted in the following name and to the following address:
Issue to:
Facsimile Number:
Authorization:
By:
Title:
Dated:
DTC Participant Number and Name:
Account Number:
EX. A - 14
Exhibit B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Note)
FOR VALUE RECEIVED, the undersigned holder of the attached First Out Waterfall Note (the Note) hereby sells, assigns and transfers unto the person or persons below named the right to receive the principal amount of $ from Endologix, Inc., a Delaware corporation (the Borrower), evidenced by the attached Note and does hereby irrevocably constitute and appoint attorney to transfer the said Note on the books of the Borrower, with full power of substitution in the premises.
Dated: |
| |
Signature | ||
Fill in for new registration of Note: | ||
|
||
Name | ||
|
||
Address | ||
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||
Please print name and address of assignee (including zip code number) |
NOTICE
The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Note.
EX. A - 15
EXHIBIT A-2
FORM OF LAST OUT WATERFALL NOTE
[Attached]
EXHIBIT A-2
FORM OF LAST OUT WATERFALL NOTE
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN, FINANCING OR INDEBTEDNESS ARRANGEMENT SECURED BY THE SECURITIES.
LAST OUT WATERFALL NOTE
Last Out Waterfall Lender:
Principal Amount: $ | , 20 |
FOR VALUE RECEIVED, the undersigned, Endologix, Inc., a Delaware corporation (the Borrower), hereby unconditionally promises to pay to the Last Out Waterfall Lender set forth above (the Last Out Waterfall Lender) the Principal Amount set forth above (the Principal Amount), or, if less, the aggregate unpaid principal amount of the Last Out Waterfall Loan (as defined in the Facility Agreement referred to below) of the Last Out Waterfall Lender to the Borrower, payable at such times and in such amounts as are specified in the Facility Agreement.
The Borrower promises to pay interest on the outstanding principal amount of the Last Out Waterfall Loan and any overdue interest from and after the Agreement Date until such outstanding principal amount of the Last Out Waterfall Loan and any overdue interest are paid in full, payable at such times, in such type (such as cash or paid in-kind) and at such interest rates as are specified in the Facility Agreement. The Borrower promises to pay any Non-Callable Make Whole Amount, any CoC Fee and the Exit Payment that is due on the Last Out Waterfall Loan in accordance with the Facility Agreement. Demand, diligence, presentment, protest and notice of non-payment and protest are hereby waived by the Borrower.
Principal and interest (and any Non-Callable Make Whole Amount, any CoC Fee and the Exit Payment) are payable in Dollars (provided that the PIK Interest Payment is paid in-kind pursuant to Section 2.6(a) of the Facility Agreement) to the Last Out Waterfall Lender in the manner set forth in the Facility Agreement.
This Last Out Waterfall Note (this Last Out Waterfall Note) is one of the Last Out Waterfall Notes, Loan Notes and Notes referred to in, and is entitled to the benefits of, the Amended and Restated Facility Agreement, dated as of August 9, 2018 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the Facility Agreement), by and among the Borrower, the other Loan Parties party thereto, the Lenders (including the Last Out Waterfall Lender) party thereto and Deerfield Private Design Fund IV, L.P., as agent for the Secured Parties, and the other
EX. A-2 - 1
Loan Documents. Capitalized terms used herein without definition are used as defined in the Facility Agreement.
The Facility Agreement, among other things, (a) provides for the making of a Last Out Waterfall Loan by the Last Out Waterfall Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount, the indebtedness of the Borrower resulting from such Last Out Waterfall Loan being evidenced by this Last Out Waterfall Note and (b) contains provisions for acceleration of the maturity of the unpaid principal amount of this Last Out Waterfall Note upon the happening of certain stated events and also for prepayments pursuant to Section 2.3(c) or Section 5.3 of the Facility Agreement on account of the principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
This Last Out Waterfall Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Facility Agreement, including Sections 1.2 (Interpretation) and 6.4 (Governing Law; Venue; Jurisdiction; Service of Process; Waiver of Jury Trial) thereof.
This Last Out Waterfall Note is assignable or transferable to the extent such assignment or transfer is permitted pursuant to the terms of the Facility Agreement.
Subject to the terms of the Facility Agreement, all payments will be free and clear of, and without deduction or withholding for, any present or future taxes. The Borrower shall pay all and any costs (administrative or otherwise) imposed by the Borrowers banks, clearing houses, or any other financial institution, in connection with making any payments hereunder.
The Borrower shall pay all costs and expenses (including attorneys fees) of the Last Out Waterfall Lender incurred in connection with this Last Out Waterfall Note in accordance with Section 6.3 of the Facility Agreement.
Other than those notices required to be provided by the Last Out Waterfall Lender to the Borrower under the terms of the Facility Agreement, the Borrower and every endorser of this Last Out Waterfall Note, or the obligations represented hereby, expressly waives presentment, protest, demand, notice of dishonor or default, and notice of any kind with respect to this Last Out Waterfall Note and the Facility Agreement or the performance of the obligations under this Last Out Waterfall Note and/or the Facility Agreement. No renewal or extension of this Last Out Waterfall Note or the Facility Agreement, no delay in the enforcement of payment of this Last Out Waterfall Note or the Facility Agreement, and no delay or omission in exercising any right or power under this Last Out Waterfall Note or the Facility Agreement shall affect the liability of the Borrower or any endorser of this Last Out Waterfall Note.
No delay or omission by the Last Out Waterfall Lender in exercising any power or right hereunder shall impair such right or power or be construed to be a waiver of any default, nor shall any single or partial exercise of any power or right hereunder preclude the full exercise thereof or the exercise of any other power or right. The provisions of this Last Out Waterfall Note may be waived or amended, restated, supplemented or otherwise modified only in a writing signed by the Borrower and the Last Out Waterfall Lender.
This Last Out Waterfall Note shall be governed by, and be construed and enforced in accordance with, the laws of the State of New York applicable to contracts made and to be performed in such State.
[Signature Page Follows]
EX. A-2 - 2
IN WITNESS WHEREOF, the Borrower has caused this Last Out Waterfall Note to be executed and delivered by its duly authorized officer as of the day and year set forth above.
ENDOLOGIX, INC., | ||
a Delaware corporation |
By: |
| |
Name: |
| |
Title: |
|
EX. A-2 - 3
EXHIBIT A-3
FORM OF FIRST OUT WATERFALL NOTE
(as of Second Amendment Effective Date)
[Attached]
EXHIBIT A-3
FORM OF FIRST OUT WATERFALL NOTE
THE SECURITIES REPRESENTED BY THIS NOTE (AS DEFINED BELOW) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN, FINANCING OR INDEBTEDNESS ARRANGEMENT SECURED BY THE SECURITIES.
THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO TREAS. REG. SECTION 1.1275-3: THE BORROWER (AS DEFINED BELOW) WILL MAKE AVAILABLE ON REQUEST TO HOLDER(S) OF THIS NOTE THE FOLLOWING INFORMATION: ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY.
THIS NOTE IS BEING AMENDED AND RESTATED AS PART OF AND PURSUANT TO A PLAN OR RECAPITALIZATION AND REORGANIZATION OF THE BORROWER DESCRIBED IN SECTION 368(a)(1)(E) OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED.
FIRST OUT WATERFALL NOTE
First Out Waterfall Lender: |
Original Issue Date: April 3, 2017 | |||
Principal Amount: $[ ] | [Re-Issuance Date: January 1, 2018]1 | |||
Amendment and Restatement Date: August 9, 2018 | ||||
Second Amendment and Restatement Date: April __, 2019 |
FOR VALUE RECEIVED, the undersigned, Endologix, Inc., a Delaware corporation (the Borrower), hereby unconditionally promises to pay to the First Out Waterfall Lender set forth above (the Lender) the Principal Amount set forth above, or, if less, the aggregate unpaid Principal (as defined below) amount of the First Out Waterfall Loan (as defined in the Facility Agreement referred to below) of the Lender to the Borrower, payable at such times and in such amounts as are specified in the Facility Agreement.
1 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
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The Borrower promises to pay interest on the outstanding Principal amount of the First Out Waterfall Loan and any overdue interest from and after the Second Amendment and Restatement Date (as defined below) until such outstanding Principal amount of the First Out Waterfall Loan and any overdue interest are paid in full, payable at such times and at such interest rates as are specified in the Facility Agreement. The Borrower promises to pay any Non-Callable Make Whole Amount, any CoC Fee and the First Out Waterfall Restructuring Payment (each, as defined in the Facility Agreement) that is due on the First Out Waterfall Loan in accordance with the Facility Agreement.
This First Out Waterfall Note (this Note) was originally issued on April 3, 2017[, reissued on January 1, 2018],2 amended and restated on August 9, 2018, and again amended and restated on April , 2019 (the Second Amendment and Restatement Date) and is one of the First Out Waterfall Notes, Loan Notes and Notes referred to in, and is entitled to the benefits of, the Amended and Restated Facility Agreement, dated as of August 9, 2018 (as amended by the First Amendment thereto dated as of November 20, 2018, and the Second Amendment thereto dated as of March 31, 2019, and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the Facility Agreement), by and among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and Deerfield Private Design Fund IV, L.P., as agent for the Secured Parties, and the other Loan Documents.
The Facility Agreement, among other things, (a) provides for the making of a First Out Waterfall Loan by the Lender to the Borrower in an aggregate amount not to exceed at any time outstanding the Principal Amount set forth above, the indebtedness of the Borrower resulting from such First Out Waterfall Loan being evidenced by this Note and (b) contains provisions for acceleration of the maturity of the unpaid Principal amount of this Note upon the happening of certain stated events and also for prepayments pursuant to Section 2.3(c) or Section 5.3 of the Facility Agreement on account of the Principal hereof prior to the maturity hereof upon the terms and conditions specified therein.
1. Definitions.
(a) Certain Defined Terms. Capitalized terms used herein without definition are used as defined in the Facility Agreement. For purposes of this Note, the following terms shall have the following meanings:
(i) Affiliate means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Lender, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Lender will be deemed to be an Affiliate of such Lender. As used in this definition of Affiliate, the term control means the possession, directly or indirectly, of the power to direct or cause the
2 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
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direction of the management and policies of a Person, whether through ownership of voting securities or partnership or other ownership interest, by contract, or otherwise.
(ii) Bloomberg means Bloomberg Financial Markets or an equivalent, reliable reporting service acceptable to, and hereinafter designated by, the Required Lenders and the Borrower.
(iii) Closing Price means, as of any Trading Day, the closing (last sale) price per share of the Common Stock on the Principal Market (at the end of regular trading hours), as reported by Bloomberg.
(iv) Common Stock means the fully paid and nonassessable shares of the Borrowers common stock, $0.001 par value per share.
(v) Conversion Amount means the Principal amount to be converted.
(vi) Conversion Date means, (A) in the case of any Voluntary Conversion (as defined in Section 2(a)), the date of Lenders delivery via facsimile or electronic mail of a Conversion Notice, (B) in the case of any Mandatory Conversion (as defined in Section 2(d)), the date of the Lenders delivery via facsimile or electronic mail of a Final Mandatory Conversion Notice (as defined in Section 2(d)), and (C) in the case of any Forced Conversion (as defined in Section 2(e)), the date of the Lenders delivery via facsimile or electronic mail of a Forced Conversion Notice (as defined in Section 2(e)).
(vii) Conversion Price means, as of any Conversion Date, (A) in the case of any Elective Conversion (as defined in Section 2(a)), the greater of (I) the Fixed Conversion Price and (II) ninety-six percent (96%) of the arithmetic average of the Volume Weighted Average Prices per share of Common Stock on each of the three (3) consecutive Trading Days immediately preceding the Conversion Date (an Elective Conversion Measurement Period), (B) in the case of any Mandatory Conversion, the Fixed Conversion Price, and (C) in the case of any Discretionary Conversion or Forced Conversion (each as defined in Section 2), the greater of (I) the Fixed Conversion Price and (II) eighty-five percent (85%) of the arithmetic average of the Volume Weighted Average Prices per share of Common Stock on each of the fifteen (15) consecutive Trading Days immediately preceding the Conversion Date (a Discretionary/Forced Conversion Measurement Period; each of an Elective Conversion Measurement Period and a Discretionary/Forced Conversion Measurement Period being referred to as a Measurement Period); provided, that in the event that a Stock Event is consummated during any Measurement Period, the Volume Weighted Average Price for all Trading Days during such Measurement Period prior to the effectiveness of such Stock Event shall be appropriately adjusted to reflect such Stock Event.
(viii) Conversion Shares means fully paid and nonassessable shares of Common Stock issued in connection with the conversion of a Note.
(ix) Delisting Event means any of the following: (A) the Common Stock is not listed on a Principal Market, (B) trading in the Common Stock on the Principal Market is suspended, or (C) the Borrower has received a notice of delisting due to
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noncompliance with any material rule or regulation applicable to the trading or listing of the Common Stock on the Principal Market and such noncompliance has not been cured as set forth in a notice from the Principal Market.
(x) Discretionary/Forced Conversion Cap means {INSERT: THE LENDERS FIRST OUT WATERFALL PRO RATA SHARE OF $50,000,000}.
(xi) Discretionary Conversion means a Voluntary Conversion designated by the Lender as a Discretionary Conversion in a Conversion Notice in accordance with Section 2(c)(i).
(xii) Elective Conversion means a Voluntary Conversion designated by the Lender as an Elective Conversion in a Conversion Notice in accordance with Section 2(c)(i).
(xiii) Elective Conversion Issuance Limit means {INSERT: THE LENDERS FIRST OUT WATERFALL PRO RATA SHARE OF 1,430,000} shares of Common Stock, subject to appropriate adjustment for any Stock Event that occurs after the Amendment and Restatement Date.
(xiv) Fixed Conversion Price means $6.625; provided, that the Fixed Conversion Price shall be appropriately adjusted to reflect any Stock Event occurring after the Second Amendment Effective Date; and provided, further, that, in the event of any adjustment of the Applicable Conversion Rate of any of the 5.00% Convertible Notes pursuant to Section 14.05 (or any other provision) of either of the Exchanged Senior Notes Indentures as a result of any event or circumstance that does not constitute a Stock Event, the Fixed Conversion Price shall be proportionately (and inversely) adjusted; and following any adjustment of the Fixed Conversion Price hereunder, the Fixed Conversion Price shall mean the Fixed Conversion Price as so adjusted.
(xv) Freely Tradeable Shares means shares of Common Stock which, at the time of issuance thereof, (A) are duly authorized, validly issued, fully paid and non-assessable; (B) are eligible for resale by the Lender, without limitation or restriction (including any volume limitation or current public information requirement) under state or Federal securities laws, pursuant to Rule 144 under the Securities Act; and (C) do not bear, and are not subject to, any restrictive legend, stop transfer or similar restriction.
(xvi) Major Transaction shall have the meaning given to such term in the Warrants.
(xvii) Major Transaction Notice shall have the meaning given to such term in the Warrants.
(xviii) Mandatory Conversion Notice means an Initial Mandatory Conversion Notice or a Final Mandatory Conversion Notice (each as defined in Section 2(d)).
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(xix) Market Disruption Event means, with respect to any Trading Day and any security of Borrower, (A) a failure by the Principal Market to open for trading during its entire regular trading session, (B) the occurrence or existence prior to 1:00 p.m., New York City time, on such day for such securities of Borrower 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 securities exchange or otherwise) in such securities or in any options, contracts or future contracts relating to such securities, or (C) to the extent Volume Weighted Average Price is determined in accordance with clause (B) of the definition thereof, the suspension of trading for the one-half hour period ending on the scheduled close of trading on such day (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in such securities of Borrower.
(xx) Principal means the outstanding principal amount of this Note as of any date of determination.
(xxi) Required Lenders means the Required First Out
Waterfall Lenders.
(xxii) Stock Event means a stock split, stock combination, reclassification, payment of stock dividend, recapitalization or other similar transaction of such character that the shares of Common Stock shall be changed into or become exchangeable for a larger or small number of shares.
(xxiii) Trading Day means any day on which the Common Stock is traded for any period on the Principal Market; provided, that for purposes of the definition of Conversion Price (including the definitions of Elective Conversion Measurement Period, Discretionary/Forced Measurement Period and Measurement Period contained within such definition), the occurrence of the Initial Mandatory Conversion Trigger (as defined in Section 2(d)) or the satisfaction of the Mandatory Conversion Conditions (as defined in Section 2(d)) or the Forced Conversion Condition (as defined in Section 2(e)), Trading Day shall not include any Trading Day on which there is a Market Disruption Event.
(xxiv) Volume Weighted Average Price for any security as of any Trading Day means (A) the volume weighted average sale price of such security on the principal U.S. national or regional securities exchange on which such security is traded, as reported by Bloomberg, or (B) if no volume weighted average sale price is reported for such security, then the closing (last sale) price per share of such security, or, if no closing price per share is reported for such security by Bloomberg, the average of the last bid and last ask price (or if more than one in either case, the average of the average last bid and average last ask prices) on such Trading Day as reported in the composite transactions for the principal U.S. national or regional securities exchange on which such security is traded. If the security is not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, then the Volume Weighted Average Price will be the average of the mid-point of the last bid and last ask prices of the security in the over-the-counter market on the relevant Trading Day as reported by OTC Markets Group or similar organization. If the Volume Weighted
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Average Price cannot be calculated for such security on such date in the manner provided above, the Volume Weighted Average Price shall be the fair market value as mutually determined by the Borrower and the Lenders holding a majority of the aggregate outstanding Principal amount of the Notes being converted for which the calculation of the Volume Weighted Average Price is required in order to determine the Conversion Price of such Notes. Volume Weighted Average Price will be determine without regard to after-hours trading or any other trading outside of the regular trading hours. In the event that a Stock Event is consummated during any period for which the arithmetic average of the Volume Weighted Average Prices is to be determined (under any Section of this Note), the Volume Weighted Average Price for all Trading Days during such period prior to the effectiveness of the Stock Event shall be appropriately adjusted to reflect such Stock Event.
(xxv) Withholding Date means the first date on which the Borrower withholds or determines that it is required to withhold any Taxes as a result of any Mandatory Conversion or Forced Conversion or the issuance of any shares of Common Stock thereupon.
2. Conversion Rights. This Note may be converted into shares of Common Stock on the terms and conditions set forth in this Section 2, and any such conversion shall be applied against, and reduce, the Amortization Payments as provided in Section 2.3(f) of the Facility Agreement.
(a) Conversion at Option of the Lender. At any time during the period commencing on (and including) the Second Amendment Effective Date and ending on the close of business on the second Business Day immediately prior to the Maturity Date, the Lender shall be entitled to convert all or any part of the Principal into Conversion Shares in accordance with this Section 2 at the Conversion Rate (any such conversion at the election of the Borrower (whether an Elective Conversion or a Discretionary Conversion) being referred to as a Voluntary Conversion). The Borrower shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, then the Borrower shall round such fraction of a share of Common Stock up or down to the nearest whole share (with 0.5 rounded up).
(b) Conversion Rate. The number of Conversion Shares issuable upon a conversion of any portion of this Note pursuant to this Section 2, including a Mandatory Conversion or a Forced Conversion (each as defined below), shall be determined according to the following formula (the Conversion Rate):
Conversion Amount
Conversion Price (as applicable)
(c) Mechanics of Conversion. The conversion of this Note shall be conducted in the following manner:
(i) Lenders Delivery Requirements. To convert a Conversion Amount into Conversion Shares pursuant to Section 2(a) above on any date, the Lender shall (A) transmit by facsimile or electronic mail (or otherwise deliver), for receipt on or prior to
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5:00 p.m. New York City time on such date, a copy of an executed conversion notice in the form attached hereto as Exhibit A (the Conversion Notice) to the Borrower (at 2 Musick, Irvine, CA 92618, Attention: Chief Financial Officer; Email: vmahboob@endologix.com, or at such other office or agency as the Borrower may designate in writing), and (B) if required by Section 2(c)(vi), surrender to a common carrier for delivery to the Borrower, no later than three (3) Business Days after the Conversion Date, of the original Note being converted (or an indemnification undertaking in customary form with respect to this Note in the case of its loss, theft or destruction). Subject to the limitations set forth in Section 2(f), the Conversion Notice shall designate the Voluntary Conversion as either an Elective Conversion or a Discretionary Conversion.
(ii) Borrowers Response. Upon receipt or deemed receipt by the Borrower of a copy of a Conversion Notice, or in the case of a Mandatory Conversion or a Forced Conversion, receipt by the Borrower of the Mandatory Conversion Lender Notice (as defined in Section 2(d)) or the Forced Conversion Lender Notice (as defined in Section 2(e)) (as applicable), the Borrower (A) shall immediately send, via facsimile or electronic mail, a confirmation of receipt of such Conversion Notice to the Lender and the Borrowers designated transfer agent (the Transfer Agent), which confirmation shall constitute an instruction to the Transfer Agent to process the Voluntary Conversion, Mandatory Conversion or Forced Conversion in accordance with the terms herein, and (B) (I) in the case of a Voluntary Conversion or Forced Conversion, on or before the second (2nd) Business Day (or, if earlier, the end of the standard settlement period for U.S. broker-dealer securities transactions) following (1) the date of receipt or deemed receipt by the Borrower of the Conversion Notice or (2) the date of delivery by the Borrower of the Forced Conversion Notice (as applicable), or (II) in the case of a Mandatory Conversion, on the Mandatory Conversion Date (as defined in Section 2(d)) (the applicable date set forth in this clause (II) or the immediately preceding clause (I) being referred to as the Share Delivery Date), shall credit such aggregate number of Conversion Shares to which the Lender shall be entitled to the Lenders or its designees balance account with The Depository Trust Company (DTC) through its Deposit/Withdrawal At Custodian (DWAC) system for the number of Conversion Shares to which the Lender shall be entitled. If notwithstanding the provisions of Section 2(c)(vi), the Lender elects to physically surrender this Note for conversion and the Principal represented by this Note is greater than the Principal being converted, then the Borrower shall, as soon as practicable and in no event later than three (3) Business Days after receipt of this Note and at its own expense, issue and deliver to the Lender a new Note representing the Principal not converted and cancel this Note. For purposes of Rule 144 under the Securities Act, any Conversion Shares issued to Lender shall be deemed to have been acquired by such Lender on April 3, 2017 (the date this Note was originally issued). Accordingly, (A) upon any conversion of this Note, the Rule 144 holding period for the Conversion Shares acquired thereupon shall be in excess of one (1) year, and (B) provided the Lender is not an Affiliate of the Borrower on the Conversion Date and has not been an Affiliate of the Borrower within the three-month period immediately preceding the Conversion Date (the Unrestricted Condition), which the Borrower shall assume and Lender hereby represents unless the Lender advises the Borrower otherwise in writing, the Conversion Shares issued to Lender will be freely transferable, without restriction or limitation (including any volume limitation) under Federal or state securities laws, pursuant to
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Rule 144 under the Securities Act and will not contain or be subject to a legend or stop transfer order restricting the resale or transferability of thereof.
(iii) Dispute Resolution. In the case of a dispute as to the determination of the Conversion Price or the arithmetic calculation of the Conversion Rate, the Borrower shall instruct the Transfer Agent to issue to the Lender the number of Conversion Shares that is not disputed and shall transmit an explanation of the disputed determinations or arithmetic calculations to the Lender via facsimile within two (2) Business Days of receipt or deemed receipt of the Lenders Conversion Notice or other date of determination. If the Lender and the Borrower are unable to agree upon the determination of the Conversion Price or arithmetic calculation of the Conversion Rate within one (1) Business Day of such disputed determination or arithmetic calculation being transmitted to the Lender, then the Borrower shall promptly (and in any event within two (2) Business Days) submit via facsimile (A) the disputed determination of the Conversion Price to an independent, reputable investment banking firm agreed to by the Borrower and the Required Lenders, or (B) the disputed arithmetic calculation of the Conversion Rate to the Borrowers independent registered public accounting firm, as the case may be. The Borrower shall direct the investment bank or the accounting firm, as the case may be, to perform the determinations or calculations and notify the Borrower and the Lender of the results no later than two (2) Business Days from the time it receives the disputed determinations or calculations. Such investment banks or accounting firms determination or calculation, as the case may be, shall be binding upon all parties absent manifest error, and the fees and expenses of such investment bank or accountant shall be paid one-half by the Borrower and one-half by the Lender. Notwithstanding the existence of a dispute contemplated by this paragraph, if requested by the Lender, the Borrower shall issue to the Lender the Conversion Shares not in dispute in accordance with the terms hereof.
(iv) Record Holder. The Person or Persons entitled to receive the Conversion Shares issuable upon a conversion of this Note shall be treated for all purposes as the legal and record holder or holders of such shares of Common Stock, (A) in the case of a Voluntary Conversion, upon delivery by the Lender of the Conversion Notice, (B) in the case of a Mandatory Conversion, upon delivery by the Borrower to the Lender of the Final Mandatory Conversion Notice, (C) in the case of a Forced Conversion, upon delivery by the Lender to the Borrower the Forced Conversion Lender Notice, or (D) in the case of Conversion Shares the issuance of which (whether in connection with a Voluntary Conversion, a Mandatory Conversion or a Forced Conversion) is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute.
(v) Borrowers Failure to Timely Convert.
(A) Cash Damages. If by the Share Delivery Date, the Borrower shall fail to credit the Lenders or its designees balance account with DTC with the number of Conversion Shares (free of any restrictive legend in the case of a Mandatory Conversion or Forced Conversion or, provided the Unrestricted Condition is satisfied, in the case of a Voluntary Conversion), then, in addition to all other available remedies that the Lender may
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pursue hereunder and under the Facility Agreement, the Borrower shall pay additional damages to the Lender for each day after the Share Delivery Date such conversion is not timely effected in an amount equal to one and one-half percent (1.5%) of the product of (I) the number of Conversion Shares not issued to the Lender or its designee on or prior to the Share Delivery Date and to which the Lender is entitled and (II) the Volume Weighted Average Price of the Common Stock on the Share Delivery Date. Alternatively in lieu of the foregoing damages, subject to Section 2(c)(iii), at the written election of the Lender made in the Lenders sole discretion, if, on or after the applicable Conversion Date, the Lender purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Lender of Conversion Shares that such Lender anticipated receiving from the Borrower (such purchased shares, Buy-In Shares), the Borrower shall be obligated to promptly pay to the Lender (in addition to all other available remedies that the Lender may otherwise have), 110% of the amount by which (A) the Lenders total purchase price (including brokerage commissions, if any) for such Buy-In Shares exceeds (B) the net proceeds received by the Lender from the sale of a number of shares equal to up to the number of Conversion Shares such Lender was entitled to receive but had not received on the Share Delivery Date. If the Borrower fails to pay the additional damages set forth in this Section 2(c)(v)(A) within five (5) Business Days of the date incurred, then the Lender entitled to such payments shall have the right at any time, so long as the Borrower continues to fail to make such payments, to require the Borrower, upon written notice, to immediately issue, in lieu of such cash damages, the number of shares of Common Stock equal to the quotient of (X) the aggregate amount of the damages payments described herein divided by (Y) the Conversion Price applicable to the conversion to which the additional damages relate.
(B) Conversion Failure. If for any reason the Lender has not received all of the Conversion Shares it is entitled to prior to the tenth (10th) Business Day after the Share Delivery Date with respect to a conversion of this Note (a Conversion Failure), then the Lender, upon written notice to the Borrower (a Void Conversion Notice), may void its conversion (or, in the case of a Mandatory Conversion or a Forced Conversion, the Borrowers conversion) with respect to, and retain or have returned, as the case may be, any portion of this Note that has not been converted pursuant to the Lenders Conversion Notice (or, in the case of a Mandatory Conversion or a Forced Conversion, the Borrowers Mandatory Conversion Notice or Forced Conversion Notice); provided, that the voiding of the Lenders Conversion Notice (or the Borrowers Mandatory Conversion Notice or Forced Conversion Notice) shall not affect the Borrowers obligations to make any payments that have accrued prior to the date of such notice pursuant to Section 2(c)(v)(A) or otherwise. A Conversion Failure shall constitute an Event of Default under the Facility Agreement and entitle the Lenders to all payments and remedies provided under the Facility Agreement upon the occurrence of an Event of Default.
(vi) Book-Entry. Notwithstanding anything to the contrary set forth herein, upon conversion or repayment of this Note in accordance with the terms hereof, the Lender shall not be required to physically surrender this Note to the Borrower unless all of the Principal is being converted or repaid. The Lender and the Borrower shall maintain records showing the Principal converted or repaid and the dates of such conversions or repayments or shall use such other method, reasonably satisfactory to the Lender and the Borrower, so as not to require physical surrender of this Note upon any such partial conversion or repayment. Notwithstanding the foregoing, if this Note is converted or repaid as aforesaid, the Lender
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may not transfer this Note unless the Lender first physically surrenders this Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Lender a new Note of like tenor, registered as the Lender may request, representing in the aggregate the remaining Principal represented by this Note. The Lender and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion or repayment of any portion of this Note, the Principal of this Note may be less than the Principal Amount stated on the face hereof.
(vii) Taxes. Without limiting Section 10, the Borrower shall pay any and all taxes (excluding income taxes, franchise taxes or other taxes levied on gross earnings, profits or the like of the Lender) that may be payable with respect to the issuance and delivery of Conversion Shares upon the conversion of this Note.
(d) Mandatory Conversion.
(i) Subject to the terms and conditions of this Section 2, including the Mandatory/Forced Conversion Conditions (as defined below) and the limitations set forth in Section 2(f), in the event that, in any calendar month during the period commencing on April 1, 2019 and ending on June 30, 2020 (the Mandatory Conversion Period), (A) each of (I) the arithmetic average of the Volume Weighted Average Prices on the five (5) consecutive Trading Days ending on (and including) the fifteenth (15th) day of such calendar month (or if such day is not a Trading Day, the first Trading Day thereafter) (the Mandatory Conversion Measurement Date) and (II) the Closing Price on the Mandatory Conversion Measurement Date is greater than the Fixed Conversion Price, and (B) the Initial Mandatory Conversion Trigger shall have occurred in such calendar month (together, the Mandatory Conversion Conditions), the Borrower shall cause the conversion into Conversion Shares (a Mandatory Conversion) of the lesser of (X) {INSERT: THE LENDERS PRO RATA SHARE OF $1,666,666 and (Y) the then outstanding Principal. (ii) In the event that, in any calendar month during the Mandatory Conversion Period, each of (A) the arithmetic average of the Volume Weighted Average Prices on the five (5) consecutive Trading Days ending on (and including the third (3rd) Trading Day (the Initial Mandatory Conversion Measurement Date) immediately prior to the Mandatory Conversion Measurement Date in such calendar month and (B) the Closing Price on the Initial Conversion Measurement Date is greater than the Fixed Conversion Price (together, an Initial Mandatory Conversion Trigger), the Borrower shall send a written notice via electronic mail to the Lender (an Initial Mandatory Conversion Notice) at any time between 8:00 a.m. and 4:00 p.m., New York City time on the first Trading Day following the Initial Mandatory Conversion Measurement Date, certifying that an Initial Mandatory Conversion Trigger has occurred (with reasonable supporting information), stating the Principal amount hereunder to be converted on the Mandatory Conversion Date and stating the number of Conversion Shares to be issued to the Lender (subject to Section 2(d)(iii) and the other terms and conditions of this Section 2(d)). For the avoidance of doubt, (X) simultaneously with delivery of an Initial Mandatory Conversion Notice hereunder, the Borrower shall send an Initial Mandatory Conversion Notice under all other First Out Waterfall Notes. Notwithstanding the delivery of an Initial Mandatory Conversion Notice, a Mandatory Conversion shall not be effected unless all of the Mandatory Conversion
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Conditions and the other applicable conditions set forth in this Section 2 (including the Borrowers delivery of a Final Mandatory Conversion Notice) are satisfied.
(iii) By no later than 5:00 p.m., New York City time on the first Trading Day following the date of an Initial Mandatory Conversion Notice, the Lender shall confirm to the Borrower via electronic mail whether the 4.985% Cap (as hereinafter defined) will reduce the number of Shares that may be issued pursuant to such Mandatory Conversion (a Mandatory Conversion Lender Notice). If the 4.985% Cap will so reduce the number of Shares that may be issued pursuant to the Mandatory Conversion (subject to the terms and conditions of this Section 2(d)), such notice shall also set forth the maximum number of Conversion Shares that may be issued to the Lender (and the corresponding Principal amount hereunder that may be converted) without exceeding the maximum number of shares that such Lender may receive under the 4.985% Cap (the Mandatory Conversion Maximum Share Amount), which shall be conclusive and binding upon the Borrower and the Lender. The number of Conversion Shares issuable pursuant to the Mandatory Conversion shall equal the number of Conversion Shares set forth in the Initial Mandatory Conversion Notice; provided, however, that, if the issuance of the number of Conversion Shares set forth in the Initial Mandatory Conversion Notice would violate the 4.985% Cap, the number of Conversion Shares issuable pursuant to the Mandatory Conversion shall instead equal the Mandatory Conversion Maximum Share Amount (and the Principal amount hereunder to be converted on the Mandatory Conversion Date shall be correspondingly reduced).
(iv) In the event that all of the Mandatory Conversion Conditions have been satisfied as of the Mandatory Conversion Measurement Date, the Borrower shall send a written notice via electronic mail to the Lender (a Final Mandatory Conversion Notice) at any time between 4:00 p.m. and 5:00 p.m., New York City time on the Mandatory Conversion Date certifying that the Mandatory Conversion Conditions and the other applicable conditions set forth in this Section 2 have been satisfied (including reasonable supporting documentation) and specifying the number of Conversion Shares to be issued to the Lender. For the avoidance of doubt, simultaneously with delivery of a Final Mandatory Conversion Notice hereunder, the Borrower shall send a Final Mandatory Conversion Notice under all other Notes.
(v) The Conversion Shares issuable pursuant to a Mandatory Conversion shall be delivered on the Trading Day immediately following the Mandatory Conversion Measurement Date (such Trading Day, the Mandatory Conversion Date) and in accordance with Section 2(c)(ii) above.
(e) Forced Conversion.
(i) Subject to the terms and conditions of this Section 2, including the Mandatory/Forced Conversion Conditions (as defined below) and the limitations set forth in Section 2(f), in the event that the arithmetic average of the Volume Weighted Average Prices on any fifteen (15) consecutive Trading Days commencing on or after the first Trading Day after the Second Amendment Effective Date and ending on or prior to the second Business Day immediately prior to the Maturity Date, is greater than 175% of the Fixed Conversion Price (the Forced Conversion Condition), the Borrower may cause the conversion into Conversion Shares (a Forced Conversion) of the outstanding Principal amount of this Note
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set forth in the Forced Conversion Notice (as defined below); provided that such Principal amount (A) shall not exceed the result of (I) the Discretionary/Forced Conversion Cap, minus (II) the aggregate Principal of this Note converted into Conversion Shares pursuant to Discretionary Conversions after the Second Amendment Effective Date and prior to the Forced Conversion (the Maximum Forced Conversion Amount), and (B) shall not be less than the least of (1) the Maximum Forced Conversion Amount, (2) the then outstanding Principal, and (3) $1,000,000. The Borrower shall effect Forced Conversions under each of the First Out Waterfall Notes on a pro rata basis, based upon the respective outstanding Principal amounts thereof.
(ii) To effect a Forced Conversion, the Borrower shall send a written notice via electronic mail to the Lender (a Forced Conversion Notice) at any time between 4:00 p.m. and 5:00 p.m., New York City time on the Trading Day on which the Forced Conversion Condition is satisfied. The Forced Conversion Notice shall certify that the Forced Conversion Condition and the other applicable conditions set forth in this Section 2 have satisfied (including reasonable supporting information), shall state the Principal amount hereunder that the Borrower shall cause to be converted on the Forced Conversion Date and shall state the number of Conversion Shares to be issued to the Lender (subject to Section 2(e)(iii) and the other terms and conditions of this Section 2(e)). Simultaneously with delivery of a Forced Conversion Notice hereunder, the Borrower shall send a Forced Conversion Notice with respect to a pro rata portion of the Principal of each other First Out Waterfall Notes. Notwithstanding the foregoing, in no event shall the Borrower send any Forced Conversion Notice to the Lender within fourteen (14) days of any other Forced Conversion Notice sent by the Borrower to the Lender.
(iii) By no later than 5:00 p.m., New York City time on the first Trading Day following the date of the Forced Conversion Notice, the Lender shall confirm to Borrower via electronic mail whether the 4.985% Cap (as defined below) will reduce the number of Shares that may be issued pursuant to such Forced Conversion (the Forced Conversion Lender Notice). If the 4.985% Cap will so reduce the number of Shares that may be issued pursuant to the Forced Conversion (subject to the terms and conditions of this Section 2(d)), the Forced Conversion Lender Notice shall also set forth the maximum number of Conversion Shares that may be issued to the Lender (and the corresponding Principal amount hereunder that may be converted) without exceeding the maximum number of shares that such Lender may receive under the 4.985% Cap (the Forced Conversion Maximum Share Amount). The number of Conversion Shares issuable pursuant to the Forced Conversion shall equal the number of Conversion Shares set forth in the Forced Conversion Notice; provided, however, that, if the issuance of the number of Conversion Shares set forth in the Forced Conversion Notice would violate the 4.985% Cap, the number of Conversion Shares issuable pursuant to the Forced Conversion shall instead equal the Forced Conversion Maximum Share Amount (and the Principal amount hereunder to be converted on the applicable Conversion Date shall be correspondingly reduced).
(iv) The Conversion Shares issuable pursuant to a Forced Conversion shall be delivered within the timeframe and in accordance with Section 2(c)(ii) above.
(f) Limitations on Conversions.
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(i) Beneficial Ownership. Notwithstanding anything herein to the contrary, the Borrower shall not issue to the Lender, and the Lender may not acquire, a number of shares of Common Stock upon any conversion of this Note (whether a Voluntary Conversion, a Mandatory Conversion or a Forced Conversion) or otherwise issue any shares of Common Stock pursuant hereto or the Facility Agreement to the extent that, upon such conversion, the number of shares of Common Stock then beneficially owned by the Lender and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Lenders for purposes of Section 13(d) of the Exchange Act (including shares held by any group of which the Lender is a member, but excluding shares beneficially owned by virtue of the ownership of the Warrants or other securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth herein) would exceed 4.985% of the total number of shares of common stock then issued and outstanding (the 4.985% Cap); provided, however, that the 4.985% Cap shall only apply to the extent that the Common Stock is deemed to constitute an equity security pursuant to Rule 13d-1(i) promulgated under the Exchange Act. For purposes hereof, group has the meaning set forth in Section 13(d) of the Exchange Act and applicable regulations of the SEC, and the percentage held by the Lender shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Upon the written request of the Lender, the Borrower shall, within two (2) Trading Days, confirm orally and in writing to the Lender the number of shares of Common Stock then outstanding. Without limiting the foregoing, in no event shall the number of shares issued to the Lender pursuant to a Mandatory Conversion exceed the Lenders Mandatory Conversion Maximum Share Amount (if any), as applicable to such Mandatory Conversion, and in no event shall the number of shares issued to the Lender pursuant to a Forced Conversion exceed the Lenders Forced Conversion Maximum Share Amount (if any), as applicable to the Forced Conversion
(ii) Elective Conversion Issuance Limit. Notwithstanding anything to the contrary contained herein, this Note shall not be convertible pursuant to an Elective Conversion, and the Borrower shall not issue Conversion Shares upon any Elective Conversion of this Note, to the extent that the issuance of shares of Common Stock upon such Elective Conversion, together with any issuances of shares of Common Stock under this Note pursuant to Elective Conversions after the Second Amendment Effective Date and prior to such Elective Conversion, would exceed the Elective Conversion Issuance Limit (provided, for the avoidance of doubt, that upon any Elective Conversion of this Note, the Borrower shall convert the maximum portion of Principal set forth in the applicable Conversion Notice that may be converted into shares of Common Stock without so exceeding the Elective Conversion Issuance Limit, subject to the 4.985% Cap). For the avoidance of doubt, the limitation set forth in this Section 2(f)(ii) shall not apply to any Discretionary Conversion, Mandatory Conversion or Forced Conversion.
(iii) Discretionary/Forced Conversion Issuance Cap. Notwithstanding anything to the contrary contained herein, this Note shall not be convertible pursuant to a Discretionary Conversion or a Forced Conversion, and the Borrower shall not issue Conversion Shares upon any Discretionary Conversion or Forced Conversion of this Note, to the extent that the aggregate Principal of this Note that would otherwise be converted pursuant to the applicable Discretionary Notice or Forced Conversion Notice, together with the aggregate Principal of this Note converted into Conversion Shares after the Second
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Amendment Effective Date and prior to such Discretionary Conversion or Forced Conversion, would exceed the Discretionary/Forced Conversion Cap (provided, for the avoidance of doubt, that upon any Discretionary Conversion of this Note, the Borrower shall convert the maximum portion of Principal set forth in the applicable Conversion Notice that may be converted into shares of Common Stock without so exceeding the Discretionary/Forced Conversion Cap, subject to the 4.985% Cap). For the avoidance of doubt, the limitation set forth in this Section 2(f)(iii) shall not apply to any Elective Conversion or Mandatory Conversion.
(iv) Other Applicable Restrictions on Conversion of the Note. Notwithstanding anything to the contrary contained herein, the Borrower shall not deliver a Mandatory Conversion Notice or a Forced Conversion Notice, and the Borrower shall not effect a Mandatory Conversion or a Forced Conversion, (A) during the occurrence of a Delisting Event, (b) at any time following such time as the Borrower has delivered (or is obligated to deliver) a Major Transaction Notice in respect of a Major Transaction, (c) at any time following the occurrence, and during the continuance, of an Event of Default or a Default, (d) from and after a Withholding Date, (e) unless all material information regarding the Borrower (including any material information that may be included in, or reflected by, the Mandatory Conversion Notice or Forced Conversion Notice, but excluding any material information relating to the Borrowers operating results for the fiscal quarter in which the Mandatory Conversion Notice or Forced Conversion Notice is delivered other than operating results that would trigger non-compliance with a covenant under the Facility Agreement or the ABL Credit Facility) has been publicly disclosed in a report filed pursuant to the Exchange Act or has been otherwise publicly disclosed in a manner calculated to reach the securities marketplace through one of the Borrowers recognized channels of distribution, (h) unless all shares of Common Stock issuable pursuant to the Mandatory Conversion or Forced Conversion will constitute Freely Tradeable Shares, (i) unless the Borrower is in compliance with the current public information requirement of Rule 144(c) under the Securities Act, (j) if the transfer agent for the Common Stock is not participating in DTCs Fast Automated Securities Transfer Program, or (k) if any Lender, after consultation with counsel of its choosing, advises the Borrower that the receipt or resale of Common Stock issued or issuable hereunder would result in such Lender being deemed an underwriter within the meaning of Section 2(11) under the Securities Act (collectively, the Mandatory/Forced Conversion Conditions), except to the extent the Lender has waived any such Mandatory/Forced Conversion Condition by written notice to the Borrower. If any of the Mandatory/Forced Conversion Conditions is not satisfied at any time following the delivery of a Mandatory Conversion Notice or Forced Conversion Notice and prior to the Share Issuance Date in respect of the Mandatory Conversion or Forced Conversion (as applicable), the Borrower shall immediately notify the Lender of such failure and, unless the Lender waives such Mandatory/Forced Conversion Condition by written notice to the Borrower, the Mandatory Conversion Notice or Forced Conversion Notice (as applicable) shall be voided and the Mandatory Conversion or Forced Conversion (as applicable) shall not be effected. For the avoidance of doubt, the Mandatory/Forced Conversion Conditions shall not apply to any Voluntary Conversion.
(g) Borrower Disclosure. Without limiting clause (e) of the Mandatory/Forced Conversion Conditions or Section 5.1(q) of the Facility Agreement, the
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Borrower hereby acknowledges and agrees that (i) no Mandatory Conversion Notice, Mandatory Conversion Lender Notice, Forced Conversion Notice or Forced Conversion Lender Notice shall constitute or contain any material non-public information with respect to the Borrower or its securities, and (ii) the Lender shall not have any duty of trust or confidence with respect to, nor any obligation not to trade in any securities on the basis of, any information contained in any Mandatory Conversion Notice, Mandatory Conversion Lender Notice, Forced Conversion Notice or Forced Conversion Lender Notice.
3. Reservation of Shares. The Borrower shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting conversions of this Note, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of the entire Principal convertible under this Note (without giving effect to the 4.985% Cap), assuming that any conversions will be at the Fixed Conversion Price; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the entire Principal convertible under this Note, the Borrower will use reasonable best efforts to take such corporate action as may, upon the advice of the Borrowers counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. The Company covenants and agrees that, upon any conversion of this Note, all shares of Common Stock issued upon such conversion shall be duly and validly issued, fully paid and nonassessable and not subject to preemptive rights, rights of first refusal or similar rights of any Person.
4. Voting Rights. Except as required by law, the Lender shall have no voting rights with respect to any of the Conversion Shares until the Conversion Date relating to the conversion of this Note upon which such Conversion Shares are issuable (or in the case of Conversion Shares the issuance of which is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 2(c)(iii), the first Business Day after the resolution of such bona fide dispute).
5. Amendment; Waiver. The provisions of this Note may only be waived or amended, restated, supplemented or otherwise modified in accordance with the Facility Agreement.
6. Specific Shall Not Limit General; Construction. No specific provision contained in this Note shall limit or modify any more general provision contained herein. This Note shall be deemed to be jointly drafted by the Borrower and all Lenders pursuant to the Facility Agreement and shall not be construed against any Person as the drafter hereof.
7. Failure or Indulgence Not Waiver. No delay or omission by the Lender in exercising any power or right hereunder shall impair such right or power or be construed to be a waiver of any default, nor shall any single or partial exercise of any power or right hereunder preclude the full exercise thereof or the exercise of any other power or right. No renewal or extension of this Note or the Facility Agreement, no delay in the enforcement of payment under this Note or the Facility Agreement, and no delay or omission in exercising any right or power under this Note or the Facility Agreement shall affect the liability of the Borrower or any endorser of this Note.
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8. Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given in accordance with Section 6.1 of the Facility Agreement.
9. Restrictions on Transfer.
(a) Registration or Exemption Required. This Note has been issued in a transaction exempt from the registration requirements of the Securities Act. None of the Note or the Conversion Shares issued hereunder may be transferred, sold, assigned, hypothecated or otherwise disposed of except pursuant to an effective registration statement or an exemption to the registration requirements of the Securities Act and applicable state laws, including Rule 144 under the Securities Act, Section 4(a)(7) of the Securities Act or a so-called 4[(a)](1) and a half transaction.
(b) Assignment. This Note is assignable or transferable, in whole or in part, only to the extent such assignment or transfer is permitted pursuant to the terms of the Facility Agreement; provided that (i) the Lender shall deliver a written notice to the Borrower, substantially in the form of the Assignment attached hereto as Exhibit B, indicating the Person or Persons to whom the Note shall be assigned and the respective Principal amount of the Note to be assigned to each assignee. The Borrower shall effect the assignment within three (3) business days, and shall deliver to the assignee(s) designated by the Lender a Note or Notes of like tenor and terms for the appropriate Principal amount. This Note and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Lender. The provisions of this Note are intended to be for the benefit of all Lenders from time to time of this Note, and shall be enforceable by any such Lender. This Note is not (and any rights or obligations hereunder are not) not assignable or transferable by the Borrower under any circumstance, and any such prohibited assignment or transfer is absolutely void ab initio.
10. Payment of Collection, Enforcement and Other Costs. If (a) this Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding; or (b) an attorney is retained to represent the Lender in any bankruptcy, reorganization, receivership of the Borrower or other proceedings affecting Borrower creditors rights and involving a claim under this Note, then the Borrower shall pay the costs incurred by the Lender for such collection, enforcement or action, including reasonable attorneys fees and disbursements. Subject to the terms of the Facility Agreement, all payments and issuances of shares of Common Stock hereunder will be free and clear of, and without deduction or withholding for, any present or future taxes. The Borrower shall pay all and any costs (administrative or otherwise) imposed by the Borrowers banks, clearing houses, or any other financial institution, in connection with making any payments and issuing any shares of Common Stock hereunder. The Borrower shall pay all costs and expenses (including attorneys fees) of the Lender incurred in connection with this Note in accordance with Section 6.3 of the Facility Agreement.
11. Waiver of Notice. Other than those notices required to be provided by the Lender to the Borrower under the terms of the Facility Agreement, the Borrower and every endorser of this Note, or the obligations represented hereby, expressly waives diligence, presentment, protest, demand, notice of dishonor, non-payment or default, and notice of any kind with respect
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to this Note and the Facility Agreement or the performance of the obligations under this Note and/or the Facility Agreement.
12. Miscellaneous. This Note is a Loan Document, is entitled to the benefits of the Loan Documents and is subject to certain provisions of the Facility Agreement, including Sections 1.2 (Interpretation) and 6.4 (Governing Law; Venue; Jurisdiction; Service of Process; Waiver of Jury Trial) thereof.
13. Additional Interpretative Matters. Unless the context otherwise requires, (a) all references to Sections or Exhibits are to Sections or Exhibits contained in or attached to this Note, (b) each accounting term not otherwise defined in this Note has the meaning assigned to it in accordance with GAAP, (c) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter and (d) the use of the word including in this Note shall be by way of example rather than limitation.
14. Signatures. In the event that any signature to this Note or any amendment hereto is delivered by electronic 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 .pdf signature page were an original thereof. Notwithstanding the foregoing, the Borrower shall be obligated to deliver to the Lender an original signature to this Note. At the request of any party, each other party shall promptly re-execute an original form of this Note or any amendment hereto and deliver the same to the other party. No party hereto shall raise the use of electronic mail delivery of a .pdf format data file to deliver a signature to this Note or any amendment hereto or the fact that such signature was transmitted or communicated through the use of electronic mail delivery of a .pdf format data file as a defense to the formation or enforceability of a contract, and each party hereto forever waives any such defense.
15. No Novation. This Note is an amendment and restatement of that certain Loan Note originally issued on April 3, 2017 [and re-issued on January 1, 2018],3 and first amended and restated on August 9 2018, in the principal amount of $[ ] (the Prior Note) and evidences an extension, continuation, and renewal of the indebtedness evidenced by the Prior Note, but this Note replaces the Prior Note with the indebtedness evidenced by the Prior Note now evidenced by this Note. Such Prior Note shall be of no further force and effect upon execution of this Note. The Borrower hereby acknowledges and agrees that the indebtedness under the Prior Note has not been repaid or extinguished and that the execution hereof does not constitute a novation of the Prior Note. Moreover, this Note shall be entitled to all security and collateral to which the Prior Note was entitled, without change or diminution in the priority of any lien or security interest granted to secure the Prior Note.
[Signature Page Follows]
3 | NTD: Only to be included for the note that was re-issued on January 1, 2018 in connection with its transfer to Deerfield Partners. |
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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and delivered by its duly authorized officer as of the day and year set forth above.
ENDOLOGIX, INC., | ||
a Delaware corporation |
By: |
| |
Name: |
| |
Title: |
|
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Exhibit A
CONVERSION NOTICE
Reference is made to the First Out Waterfall Note (the Note) of ENDOLOGIX, INC., a Delaware corporation (the Borrower), in the original principal amount of $[ ]. In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of common stock, par value $0.001 per share (the Common Stock), of the Borrower, as of the date specified below.
Date of Conversion:
Principal Amount to be converted at the Conversion Price (as defined in the Note):
Conversion is designated as (check one):
☐ | Elective Conversion |
☐ | Discretionary Conversion |
Please confirm the following information:
Conversion Price:
Number of shares of Common Stock to be issued:
Please issue the Common Stock into which the Note is being converted in the following name and to the following address:
Issue to:
Facsimile Number:
Authorization:
By:
Title:
Dated:
DTC Participant Number and Name:
A - 19
Account Number:
A - 20
Exhibit B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Note)
FOR VALUE RECEIVED, the undersigned holder of the attached First Out Waterfall Note (the Note) hereby sells, assigns and transfers unto the person or persons below named the right to receive the principal amount of $ from Endologix, Inc., a Delaware corporation (the Borrower), evidenced by the attached Note and does hereby irrevocably constitute and appoint attorney to transfer the said Note on the books of the Borrower, with full power of substitution in the premises.
Dated: | ||
Signature | ||
Fill in for new registration of Note: | ||
|
||
Name | ||
|
||
Address
|
||
Please print name and address of assignee (including zip code number) |
NOTICE
The signature to the foregoing Assignment must correspond to the name as written upon the face of the attached Note.
A - 21
EXHIBIT B
FORM OF PERFECTION CERTIFICATE
[Attached]
EXHIBIT B
FORM OF PERFECTION CERTIFICATE
[__]
Each of the parties signatory hereto hereby represents and warrants to (i) the Agent (as defined in the Facility Agreement defined below) and the Lenders (as defined in the Facility Agreement defined below) with reference to that certain Amended and Restated Facility Agreement dated as of the date hereof, by and among the Loan Parties (as defined in the Facility Agreement defined below), the Lenders (as defined in the Facility Agreement defined below) party thereto, and Deerfield Private Design Fund IV, L.P., as the Agent (as amended, restated, supplemented or otherwise modified, the Facility Agreement), and (ii) the Agent (as defined in the Credit Agreement defined below) and the Lenders (as defined in the Credit Agreement defined below) with reference to that certain Credit Agreement dated as of the date hereof, by and among the Borrowers (as defined in the Credit Agreement defined below; such Borrowers, collectively with the Loan Parties under the Facility Agreement, are referred to as the Loan Parties herein except in clause (i) above), the Lenders (as defined in the Credit Agreement defined below) party thereto, and Deerfield ELGX Revolver, LLC, as the Agent (as amended, restated, supplemented or otherwise modified, the Credit Agreement) (terms that are not defined herein but are defined in such Facility Agreement and/or such Credit Agreement have the same meanings herein as specified therein, as applicable), as follows:
1. NAMES AND OTHER ORGANIZATIONAL RELATED INFORMATION OF LOAN PARTIES AND THEIR SUBSIDIARIES
a. The name of each Loan Party and each of its Subsidiaries, as it appears in such Loan Partys or Subsidiarys current Certificate of Incorporation, Certificate of Formation or similar organizational document as in effect on this date, is:
Entity Name |
Parent/Subsidiary | |
Sub ☐ Parent ☐ of ________________ | ||
Sub ☐ Parent ☐ of ________________ | ||
Sub ☐ Parent ☐ of ________________ |
b. The federal employer identification number of each Loan Party and each of its Subsidiaries is:
Loan Party/Subsidiary |
Federal Employer Identification Number |
1
c. The Loan Parties and their Subsidiaries, respectively, are formed under the laws of the following jurisdictions:
Loan Party/Subsidiary |
State/Country |
d. The organizational identification number of each Loan Party issued by its respective jurisdiction of formation is:
Loan Party |
Organizational Identification Number |
e. Each Loan Party, respectively, transacts business in the following jurisdictions (list jurisdictions other than jurisdictions of formation):
Loan Party |
Jurisdiction(s) |
f. Each Loan Party, respectively, is duly qualified to transact business as a foreign entity in the following jurisdictions (list jurisdictions other than jurisdictions of formation):
Loan Party |
Jurisdiction(s) |
g. The following is a list of all other names (including fictitious names, d/b/as, trade names or similar names and including former legal names (as defined in Section 9-503(a) of the UCC)) currently used by a Loan Party or any of its Subsidiaries or used by a Loan Party or any of its Subsidiaries within the past five years:
Loan Party/Subsidiary |
Name |
Period of Use |
2
h. The following are the names of all entities which have been merged into any Loan Party or any of its Subsidiaries during the past five years:
Loan Party/Subsidiary |
Name of Merged Entity |
Year of Merger |
i. The following are the names and addresses of all entities from whom any Loan Party or any of its Subsidiaries has acquired any personal property in a transaction not in the ordinary course of business during the past five years, together with the date of such acquisition and the type of personal property acquired (e.g., equipment, inventory, etc.):
Name |
Address |
Date of Acquisition |
Type of Property |
2. LOCATIONS OF LOAN PARTIES AND THEIR SUBSIDIARIES
a. The chief executive offices of each Loan Party and each of the Loan Parties Subsidiaries, respectively, are presently located at the following addresses:
Complete Street and Mailing Address, including County and Zip Code |
Loan Party/Subsidiary |
b. The books and records of each Loan Party and those of their Subsidiaries, respectively, are located at the following additional addresses (complete this clause b only if different from clause a above):
Complete Street and Mailing Address, including Zip Code |
Loan Party/Subsidiary |
c. The following are all the locations where a Loan Party or any of the Loan Parties Subsidiaries, respectively, owns or leases, or occupies any real property:
Complete Mailing Address, including Zip Code |
Leased/ Owned/ Occupied |
Loan Party/Subsidiary |
3
d. The following are all of the locations where a Loan Party or any of the Loan Parties Subsidiaries, respectively, maintains any inventory, equipment or other property:
Complete Address |
Loan Party/Subsidiary |
e. The following are the names and addresses of all warehousemen, bailees, or other third-parties who have possession of any of the Loan Parties inventory or equipment or the inventory or equipment of any of the Loan Parties Subsidiaries:
Name |
Complete Street and Mailing Address, including |
Loan Party/Subsidiary |
f. The following is a complete list of all other offices or other facilities (other than those described above) where a Loan Party or any of the Loan Parties Subsidiaries has done business in the past 5 years.
Complete Address |
Loan Party/Subsidiary |
3. INTELLECTUAL PROPERTY
a. Set forth below is a list of all patents, copyrights, trademarks, trade names and service marks registered or for which applications are pending in the name of a Loan Party or any of the Loan Parties Subsidiaries, excluding those that are expired or abandoned to the extent permitted pursuant to clause (f) of the definition of Permitted Dispositions in each of the Facility Agreement and the Credit Agreement. Please include the name of such intellectual property, the grant date or application date, as applicable, the registration or application number, as applicable, and the country of such registration or application.
Loan Party/ Subsidiary |
Name of Intellectual Property |
Registered/ Application Pending |
Grant/ Application Date |
Registration/ Application Number |
Country of Registration/ Application |
4
b. Set forth below is a list of all licenses, franchise or other agreements relating to trademarks, patents, copyrights and other know-how to which a Loan Party or any of the Loan Parties Subsidiaries is a party and that require annual payments in excess of $25,000 individually.
4. INVESTMENT PROPERTY; INSTRUMENTS; ACCOUNTS
a. The following is a complete list of all stocks, bonds, debentures, notes, commodity contracts and other securities (as defined in Article 8 of the Uniform Commercial Code), owned by a Loan Party or any of the Loan Parties Subsidiaries:
Name of Issuer |
Description and Value of Security |
Loan Party/Subsidiary |
b. The following are all banks and other financial institutions, securities intermediary or commodity intermediary at which any Loan Party or any of the Loan Parties Subsidiaries maintains deposit, securities, commodities or similar accounts, which correctly identifies the name, address and any other relevant contact information with respect to each depository or intermediary, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor:
Bank Name |
Address and Other Contact Information |
Name in Which Account is Held |
Purpose of Account |
Complete Account Number |
c. The following are all securities or commodity intermediaries at which a Loan Party or any of the Loan Parties Subsidiaries maintains securities accounts or commodities accounts:
5
Securities or Commodities Intermediary Name |
Address and Other Contact Information |
Name in Which Account is Held |
Purpose of Account |
Complete Account Number |
d. Does any Loan Party or any of the Loan Parties Subsidiaries or is it contemplated that any Loan Party or any of the Loan Parties Subsidiaries will regularly receive letters of credit from customers or other third parties to secure payments of sums owed to such company?
e. The following is a list of letters of credit naming a Loan Party or any of the Loan Parties Subsidiaries as beneficiary thereunder:
LC Number |
Name of LC Issuer |
LC Applicant |
Loan Party/Subsidiary |
f. The approximate aggregate total amount of funds, amounts, and other assets of any kind in the Account is $ .
5. INDEBTEDNESS
Set forth below is a list and attached hereto are copies of, all agreements, promissory notes, indentures and other documents relating to any indebtedness for borrowed money of a Loan Party or any of the Loan Parties Subsidiaries, including without limitation loan agreements, note indentures, letters of credit, reimbursement agreements, mortgages and guaranties of the indebtedness for borrowed money of others.
Debtor |
Creditor |
Amount of Indebtedness Outstanding |
Maturity Date |
6. ENCUMBRANCES
Other than the Liens already described in Section 1.j. above, the property of the Loan Parties and/or any of the Loan Parties Subsidiaries is subject to the following Liens or encumbrances:
Loan Party/Subsidiary |
Name of Holder of Lien |
Description of Property Encumbered |
6
7. LITIGATION; COMMERCIAL TORT CLAIMS
a. The following is a complete list of pending and threatened litigation or claims involving amounts claimed against a Loan Party or any of the Loan Parties Subsidiaries in an indefinite amount or in excess of $25,000 in each case:
b. The following are the only claims (including, without limitation, commercial tort claims) which a Loan Party or any of the Loan Parties Subsidiaries has against others (other than claims on accounts receivable), which such Loan Party or Subsidiary is asserting or intends to assert, and in which the potential recovery exceeds $25,000:
8. TAXES
The following tax assessments against any of the Loan Parties or any of the Loan Parties Subsidiaries are currently outstanding and unpaid:
Assessing Authority |
Amount and Description |
9. INSURANCE BROKER
The following brokers handle the Loan Parties and the Loan Parties Subsidiaries property and liability insurance:
Broker |
Contact |
Telephone |
Fax |
|
[remainder of page intentionally left blank]
7
The Loan Parties agree to advise you of any change or modification to any of the foregoing information or any supplemental information provided on any continuation pages attached hereto, and, until such notice is received by you, you shall be entitled to rely upon such information and presume it is correct. The Loan Parties acknowledge that your acceptance of this Perfection Certificate and any continuation pages does not imply any commitment on your part to enter into a loan transaction with the Loan Parties, and that any such commitment may only be made by an express written loan commitment, signed by one of your authorized officers. The Loan Parties agree that this Perfection Certificate shall constitute a Loan Document under the Facility Agreement and a Loan Document under the Credit Agreement.
Dated as of the date first written above
LOAN PARTIES: |
ENDOLOGIX, INC., a Delaware corporation | |||||
By: |
| |||||
Name: |
||||||
Title: |
||||||
CVD/RMS ACQUISITION CORP., a Delaware corporation | ||||||
By: |
| |||||
Name: |
||||||
Title: |
||||||
NELLIX, INC., a Delaware corporation | ||||||
By: |
| |||||
Name: |
||||||
Title: |
||||||
TRIVASCULAR TECHNOLOGIES, INC., a Delaware corporation | ||||||
By: |
| |||||
Name: |
||||||
Title: |
[Signature Page to Perfection Certificate]
LOAN PARTIES CONTINUED: |
TRIVASCULAR, INC., a California corporation | |||||
By: |
| |||||
Name: |
||||||
Title: |
||||||
ENDOLOGIX CANADA, LLC, | ||||||
a Delaware limited liability company | ||||||
By: |
| |||||
Name: |
||||||
Title: |
||||||
TRIVASCULAR SALES LLC, a Texas limited liability company | ||||||
By: |
| |||||
Name: |
||||||
Title: |
||||||
RMS/ENDOLOGIX SIDEWAYS MERGER CORP., a Delaware corporation | ||||||
By: |
| |||||
Name: |
||||||
Title: |
[Signature Page to Perfection Certificate]
EXHIBIT C-1
FORM OF INITIAL WARRANT
[Attached]
Filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K filed April 5, 2017
EXHIBIT C-2
FORM OF ADDITIONAL WARRANT
[Attached]
Filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K filed August 10, 2018
EXHIBIT C-3
FORM OF AMENDED AND RESTATED INITIAL WARRANT
[Attached]
Filed as Exhibit 4.2 to this Current Report
EXHIBIT C-4
FORM OF AMENDED AND RESTATED ADDITIONAL WARRANT
[Attached]
Filed as Exhibit 4.3 to this Current Report
EXHIBIT D
CLOSING CHECKLIST
[Attached]
EXHIBIT D
DEERFIELD / ENDOLOGIX
CLOSING CHECKLIST
Facility Agreement Parties:
Term Borrower | Endologix, Inc., a Delaware corporation | |
Term Guarantors (collectively with the Term Borrower, the Loan Parties) | See attached Schedule A | |
Term Lenders | Deerfield Private Design Fund IV, L.P.; Deerfield Partners, L.P.; and Deerfield Private Design Fund III, L.P. | |
Term Agent | Deerfield Private Design Fund IV, L.P. | |
Katten | Katten Muchin Rosenman LLP, Counsel to Term Agent | |
DLA | DLA Piper LLP (US), Counsel to the Loan Parties | |
ABL Agreement Parties: | ||
ABL Borrowers (also referred to as the Credit Parties) | Endologix, Inc., a Delaware corporation, and as listed on attached Schedule A | |
ABL Lenders | Deerfield Private Design Fund IV, L.P.; Deerfield Partners, L.P.; and Deerfield Private Design Fund III, L.P. | |
ABL Agent | Deerfield ELGX Revolver, LLC | |
Katten | Katten Muchin Rosenman LLP, Counsel to ABL Agent | |
DLA | DLA Piper LLP (US), Counsel to the Credit Parties |
FACILITY AGREEMENT DOCUMENTS AND DELIVERABLES:
Document |
Responsible Party |
Signatures |
Status | |||||
A. |
DEBT DOCUMENTS AGREEMENTS |
|||||||
1. |
Amended and Restated Facility Agreement | Katten | ☒ Term Borrower ☒ Term Guarantors ☒ Term Agent ☒ Term Lenders |
Katten revised draft 8/8 | ||||
Annexes to Amended and Restated Facility Agreement | ||||||||
Disbursement Amount and Warrants |
Katten | N/A | ||||||
Schedules to Amended and Restated Facility Agreement | Final | |||||||
Schedule P-1Existing Investments |
Loan Parties/DLA |
N/A |
Document |
Responsible Party |
Signatures |
Status | |||||
Schedule 2.4List of Agreement Date Lenders and Such Lenders Wire Instructions and Information for Notices |
Katten/Agent | N/A | ||||||
Schedule 3.1(d)Existing Liens |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(f)Existing Indebtedness |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(h)Litigation |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(j)Authorizations |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(m)Real Estate |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(n)Intellectual Property |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(x)Borrowers Subsidiaries |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(z)Borrowers Outstanding Shares of Stock, Options and Warrants |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(aa)Material Contracts |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(dd)Environmental |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(ff)Labor Relations |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(gg)Jurisdiction of Organization, Legal Name, Organizational Identification Number and Chief Executive Office |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(jjj)Stock of the Subsidiaries of the Loan Parties |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(hh)Inventory Locations |
Loan Parties/DLA | N/A | ||||||
Schedule 3.1(uu) FDA/Governmental Notices |
Loan Parties/DLA | N/A | ||||||
Schedule 5.1(q)Other Loan Documents to Be Form 8-K Exhibits |
Katten | N/A | ||||||
Schedule 5.2(iv)Contingent Obligations |
Loan Parties/DLA | N/A | ||||||
Schedule 5.2(vii)Transactions with Affiliates |
Loan Parties/DLA | N/A | ||||||
Exhibits to Amended and Restated Facility Agreement |
||||||||
Exhibit A-1Form of First Out Waterfall Note |
Katten | N/A | Final | |||||
Exhibit A-2Form of Last Out Waterfall Note |
Katten | N/A | Final | |||||
Exhibit BForm of Perfection Certificate |
Katten | N/A | Final | |||||
Exhibit C-1Form of Initial Warrant |
Katten | N/A | Final |
Document |
Responsible Party |
Signatures |
Status | |||||
Exhibit C-2Form of Additional Warrant |
Katten | N/A | Final | |||||
Exhibit DClosing Checklist |
Katten | N/A | Final | |||||
Exhibit EForm of Amended and Restated Registration Rights Agreement |
Katten | N/A | Final | |||||
Exhibit FForm of Compliance Certificate |
Katten | N/A | Final | |||||
Exhibit 2.6Share Payment Provisions |
Katten | N/A | Final | |||||
2. |
First Out Waterfall Notes in favor of each Term Lender | Katten | ☒ Term Borrower | Executed | ||||
3. |
Last Out Waterfall Note for Deerfield Partners, L.P. | Katten | ☒ Term Borrower | Executed | ||||
4. |
Amended and Restated Guaranty and Security Agreement | Katten | ☒ Term Borrower ☒ Term Guarantors ☒ Term Agent |
Executed | ||||
Schedules to Amended and Restated Guaranty and Security Agreement |
DLA | Final | ||||||
Schedule 1Pledged Equity and Pledged Debt Instruments |
Loan Parties/DLA | N/A | ||||||
Schedule 1APledged Investment Property |
Loan Parties/DLA | N/A | ||||||
Schedule 2Filings and Perfection |
Loan Parties/DLA | N/A | ||||||
Schedule 3Grantor Information |
Loan Parties/DLA | N/A | ||||||
Schedule 4Places of Business/Location of Collateral |
Loan Parties/DLA | N/A | ||||||
Schedule 5Commercial Tort Claims |
Loan Parties/DLA | N/A | ||||||
Schedule 6Accounts |
Loan Parties/DLA | N/A | ||||||
Schedule 7Real Property |
Loan Parties/DLA | N/A | ||||||
Schedule 8Copyrights |
Loan Parties/DLA | N/A | ||||||
Schedule 9Intellectual Property Licenses |
Loan Parties/DLA | N/A | ||||||
Schedule 10Patents |
Loan Parties/DLA | N/A | ||||||
Schedule 11Trademarks |
Loan Parties/DLA | N/A | ||||||
5. |
Perfection Certificate | Katten (form)/Loan Parties/DLA (substance) |
☒ Term Borrower ☒ Term Guarantors |
Executed | ||||
6. |
UCC-1 Financing Statements for Endologix Canada, LLC | Katten | N/A | Recorded | ||||
7. |
UCC-3 Financing Statement for Endologix Canada, LLC | Katten | N/A | Recorded |
Document |
Responsible Party |
Signatures |
Status | |||||
8. |
Original Warrants in favor of each Term Lender | Katten | ☒ Term Borrower | Executed | ||||
9. |
Amended and Restated Registration Rights Agreement | Katten | ☒ Term Borrower ☒ Term Lenders |
Executed | ||||
10. |
Reaffirmation Agreement | Katten | ☒ Term Borrower ☒ Term Guarantors ☒ Term Agent |
Executed | ||||
11. |
First Supplement to Patent Security Agreement(s) | Katten | ☒ Applicable Term Borrower/Guarantor(s) ☒ Term Agent |
Executed | ||||
Schedule to First Supplement to Patent Security Agreement(s) | DLA | Final | ||||||
12. |
First Supplement to Trademark Security Agreement(s) | Katten | ☒ Applicable Term Borrower/Guarantor(s) ☒ Term Agent |
Executed | ||||
Schedule to First Supplement to Trademark Security Agreement(s) | DLA | Final | ||||||
13. |
Executed Insurance Certificates of the Loan Parties and their Subsidiaries evidencing liability and casualty insurance, naming Term Agent on behalf of the Secured Parties as additional insured (liability insurance) or lenders loss payee (casualty insurance) and providing for 30 days prior written notice before any such policy may be modified or cancelled (or 10 days prior written notice in the case of failure to pay any premiums thereunder) | DLA | ☒ Insurance Broker (for insurance certificates) | Final (revised versions to come post-closing removing Trivascular Canada) | ||||
14. |
Intercreditor Agreement | Katten | ☒Term Borrower ☒ ABL Borrowers ☒ Term Agent ☒ ABL Agent |
Executed | ||||
15. |
Limited Waiver Letter | Katten | ☒ Term Agent ☒Term Lenders ☒ Term Borrower ☒ Term Guarantors |
Executed | ||||
16. |
Irrevocable Proxies | Katten | ☒ Applicable Term Guarantors | Executed | ||||
17. |
8,677 Shares of Series A Preferred Stock in Cianna Medical, Inc. (with corresponding Stock Power) | DLA | ☒ Term Borrower | Executed |
Document |
Responsible Party |
Signatures |
Status | |||||
18. |
Intercompany Subordination Agreement |
Katten |
☒ Term Borrower ☒ Term Guarantors ☒ Term Agent |
Executed | ||||
B. CERTIFICATES AND MISCELLANEOUS |
||||||||
19. |
Lien Searches and IP Searches for Loan Parties | Katten | N/A | Final | ||||
20. |
Secretarys Certificate of each Loan Party, attaching Organization Documents, resolutions, incumbency and good standings | DLA | ☒ Term Guarantors | Executed | ||||
A. Certificate of Incorporation or Formation |
DLA | See attached Schedule A | See attached Schedule A | |||||
B. Bylaws or Operating Agreement |
DLA | See attached Schedule A | See attached Schedule A | |||||
C. Resolutions |
DLA | See attached Schedule A | See attached Schedule A | |||||
D. Incumbency |
DLA | See attached Schedule A | See attached Schedule A | |||||
E. Good Standings |
DLA | See attached Schedule A | See attached Schedule A | |||||
Agreement Date Officers Certificate from an Authorized Officer of Endologix, Inc. certifying to each of the following: | DLA | ☒ Term Borrower ☒ Term Guarantors |
||||||
a) The conditions set forth in Section 2.2(a) have been satisfied and the terms set forth in Section 2.2(a) have been completely complied with |
||||||||
21. |
b) No Default or Event of Default shall have occurred or would result from the Disbursement or the use of the proceeds therefrom
c) All of the representations and warranties in the Loan Documents are true and correct
d) All conditions set forth in Section 4.1 of the Facility Agreement have been satisfied |
Executed | ||||||
22. |
Solvency Certificate |
DLA |
☒ Term Borrower ☒ Term Guarantors |
Executed | ||||
23. |
Legal Opinion of the Loan Parties | DLA | ☒ DLA | Executed | ||||
24. |
Transfer Agent Letter as to shares outstanding | Loan Parties | ☒ Transfer Agent | Executed |
Document |
Responsible Party |
Signatures |
Status | |||||
Landlord/Bailee Waivers
A. 2 Musick and 35 Hammond, Irvine, County of Orange, CA 92618 U.S.A.
B. 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. |
Loan Parties/DLA | ☒ Applicable Loan Parties ☐ Applicable Landlord ☒ Term Agent ☒ ABL Agent |
A. Executed B. Executed C. Katten comments 8/6 (to be finalized post-closing) | |||||
25. |
C. UPS Warehouse Lien Agreement |
|||||||
378 Commercial Street, Malden, MA 02148 |
||||||||
165 Chubb Avenue, Lyndhurst, NJ 07071 |
||||||||
1130 Commerce Blvd, Swedesboro, NJ 08085 |
||||||||
2250 Outerloop Drive, Louisville, KY 40219 |
||||||||
Account Control Agreements | Loan Parties/DLA | ☒ Applicable Loan | ||||||
A. Wells Fargo |
Parties | A. Executed | ||||||
26. |
B. Bank of America (with Activation) |
☒ Applicable Bank ☒ Term Agent |
B. Executed C. Executed | |||||
C. Bank of America (without Activation) |
☒ ABL Agent | D. Executed | ||||||
D. Silicon Valley Bank (amendment) |
||||||||
Executed Insurance Endorsements of the Loan Parties and their Subsidiaries evidencing liability and casualty insurance, naming Term Agent on behalf of the Secured Parties as additional | DLA | ☐ Insurance Carriers (for insurance endorsements) | To come post-closing, adding Endologix Canada, LLC and removing ACF Finco | |||||
27. |
insured (liability insurance) or lenders loss payee (casualty insurance) and providing for 30 days prior written notice before any such policy may be modified or cancelled (or 10 days prior written notice in the case of failure to pay any premiums thereunder) | |||||||
ABL AGREEMENT DOCUMENTS AND DELIVERABLES | ||||||||
Document |
Responsible Party |
Signatures |
Status | |||||
A. |
DEBT DOCUMENTS AGREEMENTS | |||||||
1. |
Credit Agreement | Katten | ☒ ABL Borrowers ☒ ABL Agent ☒ ABL Lender |
Executed | ||||
Schedules to Credit Agreement | Final |
. | Document |
Responsible Party |
Signatures |
Status | ||||
Schedule A-1 Agents Account | Credit Parties/DLA | N/A | ||||||
Schedule A-2 Authorized Person | Credit Parties/DLA | N/A | ||||||
Schedule C-1 Commitments | Credit Parties/DLA | N/A | ||||||
Schedule D-1 Designated Account | Credit Parties/DLA | N/A | ||||||
Schedule E-1 Approved Account Debtor | Credit Parties/DLA | N/A | ||||||
Schedule P-1 Existing Investments | Credit Parties/DLA | N/A | ||||||
Schedule 4.01(d) Existing Liens | Credit Parties/DLA | N/A | ||||||
Schedule 4.01(f) Existing Indebtedness | Credit Parties/DLA | N/A | ||||||
Schedule 4.03 Litigation | Credit Parties/DLA | N/A | ||||||
Schedule 4.06 Real Estate | Credit Parties/DLA | N/A | ||||||
Schedule 4.07 Intellectual Property | Credit Parties/DLA | N/A | ||||||
Schedule 4.15 Borrowers Subsidiaries | Credit Parties/DLA | N/A | ||||||
Schedule 4.17 Borrowers Outstanding Shares of Stock, Options and Warrants |
Credit Parties/DLA | N/A | ||||||
Schedule 4.18 Material Contracts | Credit Parties/DLA | N/A | ||||||
Schedule 4.20 Environmental | Credit Parties/DLA | N/A | ||||||
Schedule 4.22 Labor Relations | Credit Parties/DLA | N/A | ||||||
Schedule 4.23 Jurisdiction of Organization, Legal Name, Organizational Identification Number and Chief Executive Office |
Credit Parties/DLA | N/A | ||||||
Schedule 4.33(a) FDA/ Governmental Notices | Credit Parties/DLA | N/A | ||||||
Schedule 4.41 Stock of the Subsidiaries of the Loan Parties |
Credit Parties/DLA | N/A | ||||||
Schedule 4.45 Inventory Location | Credit Parties/DLA | N/A | ||||||
Schedule 6.05 Contingent Obligations | Credit Parties/DLA | N/A | ||||||
Schedule 6.07 Transactions with Affiliates | Credit Parties/DLA | N/A | ||||||
Exhibits to Credit Agreement | ||||||||
Exhibit A -1 Form of Assignment and Acceptance |
Katten | N/A | Final | |||||
Exhibit B-1 Form of Borrowing Base Certificate (Agent) |
Katten | N/A | Final |
. | Document |
Responsible Party |
Signatures |
Status | ||||
Exhibit B-2 Form of Borrowing Base Certificate (Third Party Agent) |
Katten | N/A | Final | |||||
Exhibit C-1 Form of Compliance Certificate |
Katten | N/A | Final | |||||
Exhibit P-1 Form of Perfection Certificate |
Katten | N/A | Final | |||||
2. |
Original Notes in favor of each ABL Lender | Katten | ☒ ABL Borrower | Executed | ||||
3. |
Guaranty and Security Agreement | Katten | ☒ ABL Borrowers | Executed | ||||
☒ ABL Agent | ||||||||
Schedules to Guaranty and Security Agreement | DLA | |||||||
Schedule 1 Pledged Equity and Pledged Debt Instruments |
||||||||
Schedule 1A Pledged Investment Property |
||||||||
Schedule 2 Filings and Perfection |
||||||||
Schedule 3 Grantor Information |
||||||||
Schedule 4 Places of Business / Location of Collateral |
||||||||
Schedule 5 Commercial Tort Claims |
||||||||
Schedule 6 - Accounts |
||||||||
Schedule 7 Real Property |
||||||||
Schedule 8 - Copyrights |
||||||||
Schedule 9 Intellectual Property Licenses |
||||||||
Schedule 10 - Patents |
||||||||
Schedule 11 - Trademarks |
||||||||
Annexes to Guaranty and Security Agreement | ||||||||
Annex I Form of Joinder and Security Agreement |
||||||||
4. |
Perfection Certificate | Katten (form)/Credit Parties/DLA (substance) | See above | See above | ||||
5. |
UCC-1 Financing Statements for each Credit Party | Katten | N/A | Agreed |
. | Document |
Responsible Party |
Signatures |
Status | ||||
6. |
Executed Insurance Certificates of the Credit Parties and their Subsidiaries evidencing liability and casualty insurance, naming the ABL Agent on behalf of the Secured Parties as additional insured (liability insurance) or lenders loss payee (casualty insurance) and providing for 30 days prior written notice before any such policy may be modified or cancelled (or 10 days prior written notice in the case of failure to pay any premiums thereunder) | DLA | ☒ Insurance Broker | Final (revised versions to come post-closing removing Trivascular Canada) | ||||
7. |
Intercreditor Agreement | Katten | See above | See above | ||||
8. |
Intercompany Subordination Agreement | DLA/Katten | ☒ ABL Borrowers ☒ ABL Agent |
Executed | ||||
9. |
Patent Security Agreement(s) | Katten | ☒ Applicable ABL Borrower(s) ☒ ABL Agent |
Executed | ||||
Schedule to Patent Security Agreement(s) | DLA | Final | ||||||
10. |
Trademark Security Agreement(s) | Katten | ☒ Applicable ABL Borrower(s) ☒ ABL Agent |
Executed | ||||
Schedule to Trademark Security Agreement(s) | DLA | Final | ||||||
B. |
CERTIFICATES AND MISCELLANEOUS | |||||||
11. |
Lien Searches and IP Searches for Credit Parties | DLA | N/A | See above | ||||
12. |
Secretarys Certificate of each Credit Party, attaching Organization Documents, resolutions, incumbency and good standings | DLA | ☒ ABL Borrowers | |||||
A. Certificate of Incorporation or Formation |
DLA | See attached Schedule A | See attached Schedule A | |||||
B. Bylaws or Operating Agreement |
DLA | See attached Schedule A | See attached Schedule A | |||||
C. Resolutions |
DLA | See attached Schedule A | See attached Schedule A | |||||
D. Incumbency |
DLA | See attached Schedule A | See attached Schedule A | |||||
E. Good Standings |
DLA | See attached Schedule A | See attached Schedule A | |||||
13. |
Agreement Date Officers Certificate from an Authorized | DLA | ☒ ABL Borrowers | Executed |
. | Document |
Responsible Party |
Signatures |
Status | ||||
Officer of Endologix, Inc. | ||||||||
certifying to each of the following: | ||||||||
a) Since December 31, 2017, the absence of any MAE | ||||||||
b) The representations and warranties of each Credit Party contained in the Financing Documents are true, correct and complete on and as of the Closing Date, except to the extent that any such representation or warranty relates to a specific date in which case such representation or warranty is true and correct as of such earlier date | ||||||||
c) All conditions set forth in Section 7.1 of the Facility Agreement have been satisfied | ||||||||
d) Immediately after such borrowing and after application of the proceeds thereof or after such issuance, the Revolving Loan Outstandings will not exceed the Revolving Loan Limit | ||||||||
e) Immediately before and after such advance or issuance, no Default or Event of Default shall have occurred and be continuing | ||||||||
14. |
Solvency Certificate | DLA |
☒ ABL Borrower |
Executed | ||||
15. |
Borrowing Base Certificate | DLA |
☒ ABL Borrower |
Final | ||||
16. |
Legal Opinion of the Credit Parties | DLA |
☒ DLA |
Executed | ||||
17. |
Receipt by the ABL Agent and the ABL Lender of any fees, costs and expenses required to be paid on or before the Closing Date | Credit Parties |
N/A |
Final | ||||
18. |
Receipt by ABL Agent and ABL Lender at least 3 Business Days prior to the Agreement Date all KYC and anti-money laundering rules and regulations | Credit Parties |
☒ Credit Parties |
Final |
. | Document |
Responsible Party |
Signatures |
Status | ||||
19. |
Cortland Administrative Services Agreement | ABL Agent | ☒ Deerfield ELGX Revolver, LLC (Customer) ☒ Cortland Capital Market Services LLC (Administrator) |
Executed | ||||
20. |
Cortland Fee Proposal | ABL Agent | Agreed | |||||
21. |
Landlord/Bailee Waivers | Credit Parties/DLA | See above | See above | ||||
22. |
Account Control Agreements | Credit Parties/DLA | See above | See above | ||||
Executed Insurance Endorsements of the Credit Parties and their Subsidiaries evidencing liability and casualty insurance, naming the ABL Agent on behalf of the Secured Parties as additional insured (liability insurance) or | DLA | ☐ Insurance Carriers | To come post-closing, adding | |||||
23. |
lenders loss payee (casualty insurance) and providing for 30 days prior written notice before any such policy may be modified or cancelled (or 10 days prior written notice in the case of failure to pay any premiums thereunder) | Endologix Canada, LLC and removing ACF Finco |
Schedule A
Secretarys Certificates
Borrower/Guarantor |
Certificate of | |||||||||||||
Facility |
ABL Agreement |
Loan Party/Credit Party |
Formation / Articles of Organization |
Operating Agreement / Bylaws |
Resolutions | Incumbency | Good Standings | |||||||
Borrower | Borrower | Endologix, Inc., a Delaware corporation | Recd | Recd | Executed | Executed | Recd CA, DE | |||||||
Guarantor | Borrower | CVD/RMS Acquisition Corp., a Delaware corporation | Recd | Recd | Executed | Executed | Recd DE | |||||||
Guarantor | Borrower | Nellix, Inc., a Delaware corporation | Recd | Recd | Executed | Executed | Recd DE | |||||||
Guarantor | Borrower | TriVascular Technologies, Inc., a Delaware corporation | Recd | Recd | Executed | Executed | Recd CA, DE | |||||||
Guarantor | Borrower | TriVascular, Inc., a California corporation | Recd | Recd | Executed | Executed | Recd CA | |||||||
Guarantor | Borrower | Endologix Canada, LLC, a Delaware limited liability company (f/k/a Trivascular Canada, LLC) | Recd | Recd | Executed | Executed | Recd CA, DE | |||||||
Guarantor | Borrower | TriVascular Sales LLC, a Texas limited liability company | Recd | Recd | Executed | Executed | Recd TX | |||||||
Guarantor | Borrower | RMS/Endologix Sideways Merger Corp., a Delaware corporation | Recd | Recd | Executed | Executed | Recd DE |
EXHIBIT E
FORM OF REGISTRATION RIGHTS AGREEMENT
[To be attached]Reserved]
EXHIBIT A-II
Amended and Restated Schedules to Amended Facility Agreement
[Attached]
Schedule P-1
Existing Investments
Name of Issuer |
Description and Value of Security |
Loan Party/Subsidiary | ||
Cianna Medical, Inc. |
8,677 Shares of Series A Preferred Stock |
Endologix, Inc. |
WEST\285787151.3
Schedule 2.4
List of Agreement Date Lenders and Such Lenders Wire Instructions and Information for Notices
Name of Lender |
Wire Instructions/ Address for Payments to Lender |
Information for Notices | ||
Deerfield Partners, |
Citibank, N.A. New York |
Deerfield Partners, L.P. | ||
L.P. |
ABA # 021-000-089 |
c/o Deerfield Management Company, | ||
A/C Morgan Stanley & Co. NY |
L.P. | |||
A/C # 38890774 |
780 Third Avenue, 37th Floor | |||
Sub A/C Deerfield Partners, L.P. |
New York, NY 10017 | |||
Sub A/C # 038-036208 |
Facsimile: 212-599-3075 | |||
E-mail: dclark@deerfield.com | ||||
Attn: David J. Clark, Esq. | ||||
With a copy to (which shall not be | ||||
deemed to constitute notice): | ||||
Katten Muchin Rosenman LLP | ||||
575 Madison Avenue | ||||
New York NY 10022-2585 | ||||
Facsimile: (212) 894-5877 | ||||
E-mail: mark.fisher@kattenlaw.com | ||||
and mark.wood@kattenlaw.com | ||||
Attn: Mark I. Fisher, Esq. | ||||
Attn: Mark D. Wood, Esq. |
Name of Lender |
Wire Instructions/ Address for Payments to Lender |
Information for Notices | ||
Deerfield Private |
Citibank, N.A. New York |
Deerfield Private Design Fund III, | ||
Design Fund III, L.P. |
ABA # 021-000-089 |
L.P. | ||
A/C Morgan Stanley & Co. NY |
c/o Deerfield Management Company, | |||
A/C # 38890774 |
L.P. | |||
Sub A/C Deerfield Private Design |
780 Third Avenue, 37th Floor | |||
Fund III, L.P. |
New York, NY 10017 | |||
Sub A/C # 038CDKGC9 |
Facsimile: 212-599-3075 | |||
E-mail: dclark@deerfield.com | ||||
Attn: David J. Clark, Esq. | ||||
With a copy to (which shall not be | ||||
deemed to constitute notice): | ||||
Katten Muchin Rosenman LLP | ||||
575 Madison Avenue | ||||
New York NY 10022-2585 | ||||
Facsimile: (212) 894-5877 | ||||
E-mail: mark.fisher@kattenlaw.com | ||||
and mark.wood@kattenlaw.com | ||||
Attn: Mark I. Fisher, Esq. | ||||
Attn: Mark D. Wood, Esq. | ||||
Deerfield Private |
Citibank, N.A. New York |
Deerfield Private Design Fund IV, | ||
Design Fund IV, L.P. |
ABA # 021-000-089 |
L.P. | ||
A/C Morgan Stanley & Co. NY |
c/o Deerfield Management Company, | |||
A/C # 38890774 |
L.P. | |||
Sub A/C Deerfield Private Design |
780 Third Avenue, 37th Floor | |||
Fund IV, L.P. |
New York, NY 10017 | |||
Sub A/C # 038CDNH16 |
Facsimile: 212-599-3075 | |||
E-mail: dclark@deerfield.com | ||||
Attn: David J. Clark, Esq. | ||||
With a copy to (which shall not be | ||||
deemed to constitute notice): | ||||
Katten Muchin Rosenman LLP | ||||
575 Madison Avenue | ||||
New York NY 10022-2585 | ||||
Facsimile: (212) 894-5877 | ||||
E-mail: mark.fisher@kattenlaw.com | ||||
and mark.wood@kattenlaw.com | ||||
Attn: Mark I. Fisher, Esq. | ||||
Attn: Mark D. Wood, Esq. |
Schedule 3.1(d)
Existing Liens
None.
Schedule 3.1(f)
Existing Indebtedness
None.
Schedule 3.1(h)
Litigation
Vicky Nguyen v. Endologix, Inc., et al.: (Filed January 3, 2017 in the United States District Court, Central District of California; Case No. 2:17-cv-00017). A putative shareholder class action pending in the U.S. District Court for the Central District of California. Lead plaintiff in Nguyen asserts multiple causes of action for securities fraud based on allegations that Borrower and two of its executives, John McDermott, former Chief Executive Officer of Borrower, and Vaseem Mahboob, Chief Financial Officer of Borrower misled investors by opining optimistically about Borrowers prospects for FDA pre-market approval of the Nellix EVAS System. On March 15, 2019, lead plaintiff filed an appeal of the District Courts September 2018 dismissal with prejudice of lead plaintiffs Second Amended Complaint. Borrower continues to believe that lead plaintiffs complaints are meritless. On December 5, 2017, the District Court granted Borrowers motion to dismiss lead plaintiffs First Amended Complaint, with leave to amend. On January 9, 2018, lead plaintiff filed a Second Amended Complaint. Borrowers motion for dismissal of the Second Amended Complaint with prejudice was granted on September 6, 2018. On October 6. 2018, lead plaintiff filed a notice of appeal of the District Courts decision, and on March 15, 2019, lead plaintiff filed its appeal.
Derivative Lawsuits: As of June 11, 2017, four shareholders have filed derivative lawsuits on behalf of Borrower, the nominal plaintiff, based on allegations substantially similar to those alleged by lead plaintiff in Nguyen. Those actions consist of: Sindlinger v. McDermott et al., Case No. BC662280 (Los Angeles Superior Court); Abraham v. McDermott et al., Case No. 30-2018-00968971-CU-BT-CSC (Orange County Superior Court); and Green v. McDermott et al., Case No. 8:17-cv-01155-AB (PLAx), consolidated with Cocco v. McDermott et al., Case No. 8:17-cv-01183-AB (PLAx) (U.S. District Court for the Central District of California). Plaintiffs in the Sindlinger, Abraham and Green derivative actions have agreed to stay litigation pending resolution of the Nguyen action. A related case, Ahmed v. Endologix, Inc., et al. (Filed January 11, 2017 in the United States District Court, Central District of California; Case No. 8:17-cv-00061) was consolidated into Nguyen v. Endologix, Inc.
Certain Notices: The Loan Parties have received three unrelated notices from individuals claiming that certain of our products read on certain issued patents held by such individuals. The Loan Parties, after consultation with independent patent counsel, strongly disagree with these claims; however, it is possible that should these claims proceed to litigation, that Borrowers aggregate liability arising for monetary judgements or other reliefs arising out of these matters could exceed $2,000,000. Since it is presently not possible to determine the outcome of any future discussions with these individuals in regard to their patents, and whether or not litigation will ensue, or the outcomes associated with potential litigation, no provision has been made in Borrowers financial statements for the ultimate resolution.
Schedule 3.1(j)
Authorizations
Borrower is required to file a Listing of Additional Shares notification with Nasdaq to cover the shares of Common Stock underlying the Warrants, and any shares issuable pursuant to the conversion rights set forth in the First Out Waterfall Notes.
Schedule 3.1(m)
Real Estate
Owned Real Property:
Loan Party or Subsidiary |
Complete street and mailing address, including zip code | |
N.A. |
||
Leased Real Property: |
Loan Party or Subsidiary |
Complete street and mailing address, including zip code |
Landlord name and contact information | ||
Endologix, Inc. | 2 Musick, Irvine, County of Orange, California 92618 U.S.A.; 33 and 35 Hammond, Irvine, County of Orange, California 92618 U.S.A. | The Northwestern Mutual Life Insurance Company | ||
Endologix International Holdings B.V. | Burgemeester Burgerslaan 40, 5245 NH Rosmalen, The Netherlands | N.A. | ||
TriVascular Technologies, Inc. | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Sonoma Airport Properties LLC | ||
Endologix Singapore Private Limited | 10 Anson Road #21-04 & #21-04A International Plaza Singapore 079903 | Stamcorp International Pte Ltd. | ||
Endologix International B.V. | Rahmannstraße 11, 65760 Eschborn, Germany | N.A. | ||
Subleased Real Property: |
Loan Party or Subsidiary |
Complete street and mailing address, including zip code |
Landlord and sublandlord name and contact information | ||
Other Real Property Operated or Occupied: |
Loan Party or Subsidiary |
Complete street and mailing address, including zip code |
Nature of use | ||
ELGX South Korea Ltd. | A-311, M-Sate, 114 Beopwon-ro, Songpa-gu, Seoul, South Korea | Office |
Schedule 3.1(n)
Intellectual Property
The items disclosed in Schedule 3.1(h) with the lead-in Certain Notices.
On May 7, 2018, Borrower received notice from Medtronic, Inc. (Medtronic) that Medtronic believes Borrowers Ovation product appears to use one or more claims of certain Medtronic patents. Borrower has assessed, this claim. Borrower has a robust patent portfolio at its disposal, and after conducting analysis believes that one or more of Medtronics products appears to use one or more claims of Borrowers patents. Borrower has commenced discussions with Medtronic regarding potential cross-licenses of the parties respective patents. Since it is presently not possible to determine the outcome of any future discussions with Medtronic in regard to the respective parties patents, and whether or not litigation will ensue, or the outcomes associated with potential litigation, no provision has been made in Borrowers financial statements for the ultimate resolution.
Schedule 3.1(x)
Borrowers Subsidiaries
Parent |
Percentage ownership |
Name of Subsidiary | Jurisdiction of Subsidiary |
Date of formation of Subsidiary |
Federal employer |
Organizational identification no. of Subsidiary | ||||||
Endologix, Inc. | 100% | Nellix, Inc. | Delaware | 03/20/2001 | 94-3398416 | 3359980 | ||||||
Endologix, Inc. | 100% | CVD/RMS Acquisition Corp. |
Delaware | 12/13/1998 | 33-0928438 | 2955166 | ||||||
Endologix, Inc. | 100% | RMS/Endologix Sideways Merger Corp. |
Delaware | 05/30/2002 | 03-0512974 | 3530477 | ||||||
Endologix, Inc. | 100% | Endologix Singapore Private Limited |
Singapore | 01/13/2015 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | ELGX International Holdings GP |
Cayman Islands |
07/05/2011 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | Endologix New Zealand Co. |
New Zealand |
05/31/2012 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | ELGX South Korea Ltd. |
South Korea |
12/07/2017 | N.A. | N.A. | ||||||
Endologix, Inc. ELGX International Holdings GP | 99% 1% |
Endologix Bermuda L.P. |
Bermuda | 07/24/2012 | N.A. | N.A. | ||||||
Endologix International Holdings B.V. | 100% | Endologix Poland spolkda z ograniczona odpowiedzialnoscia |
Poland | 03/26/2015 | N.A. | N.A. | ||||||
Endologix Bermuda L.P. | 100% | Endologix International Holdings B.V. |
The Netherlands |
08/22/2011 | N.A. | N.A. | ||||||
Endologix International Holdings B.V. | 100% | Endologix Italia S.r.l. |
Italy | 06/04/2012 | N.A. | N.A. | ||||||
Endologix International holdings B.V. | 100% | Endologix International B.V. |
The Netherlands |
08/22/2011 | N.A. | N.A. | ||||||
Endologix, Inc. | 100% | TriVascular Technologies, Inc. |
Delaware | 07/11/2007 | 87-0807313 | 4387054 | ||||||
TriVascular Technologies, Inc. | 100% | TriVascular, Inc. | California | 01/05/1998 | 68-0402620 | C2065374 | ||||||
TriVascular, Inc. | 100% | TriVascular Sales, LLC |
Texas | 08/23/2012 | 46-0859179 | 0801644988 |
Parent |
Percentage ownership |
Name of Subsidiary | Jurisdiction of Subsidiary |
Date of formation of Subsidiary |
Federal employer |
Organizational identification no. of Subsidiary | ||||||
TriVascular, Inc. | 100% | Endologix Canada, LLC | Delaware | 11/25/2014 | N.A. | 5647226 | ||||||
TriVascular, Inc. | 100% | TriVascular Germany GmbH |
Germany | 05/14/2012 | N.A. | N.A. | ||||||
TriVascular, Inc. | 100% | TriVascular Switzerland Sarl |
Switzerland | 04/30/2010 | N.A. | N.A. | ||||||
TriVascular, Inc. | 100% | TriVascular Italia S.R.L. |
Italy | 04/08/2010 | N.A. | N.A. |
Schedule 3.1(z)
Borrowers Outstanding Shares of Stock, Options and Warrants
Name of Issuer |
Authorized Securities |
Issued and Outstanding Securities |
Certificated (Yes or No) |
Loan Party/Subsidiary Owner | ||||
170,000,000 Shares of Common Stock, $0.001 par value | 10,390,631 Shares of Common Stock Issued and 10,347,913 Outstanding1 | Yes | N.A. | |||||
Endologix, Inc. | 5,000,000 Shares of Preferred Stock, $0.001 par value, undesignated | Zero Shares of Preferred Stock | Yes, when issued | N.A. | ||||
Nellix, Inc. | 1,000 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
CVD/RMS Acquisition Corp. | 100 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
ELGX South Korea, Ltd. | 20,000 Contribution Units, KRW 5,000 par value | 20,000 Contribution Units | No | Endologix, Inc. | ||||
RMS/Endologix Sideways Merger Corp. | 100 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
TriVascular Technologies, Inc. | 1,000 Shares of Common Stock, $0.001 par value | 100 Shares of Common Stock | Yes | Endologix, Inc. | ||||
ELGX International Holdings GP | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | No | Endologix, Inc. | ||||
Endologix Bermuda, L.P. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | No | Endologix, Inc. | ||||
Endologix Singapore Private Limited | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix, Inc. | ||||
Endologix New Zealand Co. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix, Inc. |
1 | As of March 25, 2019, any material changes to such amount as of the Second Amendment Effective Date are de minimis. |
Name of Issuer |
Authorized Securities |
Issued and Outstanding Securities |
Certificated (Yes or No) |
Loan Party/Subsidiary Owner | ||||
TriVascular, Inc. | 100 Shares of Common stock, $0.01 par value | 100 Shares of Common Stock | No | TriVascular Technologies, Inc. | ||||
Endologix International Holdings B.V. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix Bermuda, L.P. | ||||
Endologix Poland spolkda z ograniczona odpowiedzialnos cia | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix International Holdings B.V. | ||||
Endologix International B.V. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix International Holdings B.V. | ||||
Endologix Italia S.r.l | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | Endologix International Holdings B.V. | ||||
TriVascular Sales LLC | 1,000 Units of Membership Interests | 1,000 Units of Membership Interests | No | TriVascular, Inc. | ||||
Endologix Canada, LLC | 1,000 Units of Membership Interests | 1,000 Units of Membership Interests | No | TriVascular, Inc. | ||||
TriVascular Italia Sarl | Unspecified Number of Company Interests | Unspecified Number of Company Interests | No | TriVascular, Inc. | ||||
TriVascular Germany GmbH | Unspecified number of Company Interests | Unspecified number of Company Interests | No | TriVascular, Inc. | ||||
TriVascular Switzerland Sárl | Unspecified number of Company Interests | Unspecified number of Company Interests | No | TriVascular, Inc. |
Options and Equity Incentive/Compensation Plans:
Equity Awards: Borrowers 2015 Stock Incentive Plan as amended (the 2015 Plan) authorizes the grant of equity awards to purchase up to 1.63 million shares of Common Stock. As of March 25, 2019, approximately 1.22 million shares were reserved for issuance under outstanding stock options, including stock options granted under equity compensation plans preceding the 2015 Plan, and approximately 490,000 shares were subject to unvested restricted stock awards. The outstanding stock options have exercise prices ranging from $5.80 to $175.80 and a weighted average exercise price of $50.81. Any changes to the items discussed in this paragraph as of the Second Amendment Effective Date are de minimis.
Amended and Restated 2006 Employee Stock Purchase Plan (the ESPP): As of March 25, 2019, approximately 40,000 shares of Common Stock were available for issuance under the ESPP. Any changes to such amount as of the Second Amendment Effective Date are de minimis.
2017 Inducement Stock Incentive Plan: The Board has reserved 400,000 shares of Borrowers Common Stock for issuance pursuant to awards granted under the 2017 Inducement Stock Incentive Plan. As of March 25, 2019, approximately 80,000 shares of Common Stock were available for issuance under this plan. Any changes to such amount as of the Second Amendment Effective Date are de minimis.
Non-Plan Inducement Grants: In connection with its merger with TriVascular Technologies, Inc., on February 4, 2016 Borrower issued non-plan inducement stock options to purchase 140,000 shares of Common Stock at an exercise price of $75.30 per share, and non-plan inducement restricted stock units for approximately 8,000 shares of Common Stock.
Warrants:
In connection with its merger with TriVascular Technologies, Inc. on February 3, 2016, Borrower assumed unexercised out-of-the-money warrants of TriVascular Technologies, Inc., which converted into warrants to purchase 3,508 shares of Common Stock, 2,426 at an exercise price of $125.80 per share and 1,082 at an exercise price of $282.10 per share.
Borrower has previously issued warrants to Lenders to purchase an aggregate of (i) 647,001 shares of Common Stock of Borrower at an exercise price of $92.30 per share, and (ii) 875,001 shares of Common Stock of Borrower at an exercise price of $47.10 per share. The number of shares of Common Stock of Borrower into which the warrants are exercisable and the exercise price of the warrants were adjusted pursuant to the 1-for-10 reverse stock split effected by Borrower in early March 2019, and will be further adjusted to reflect any future stock splits, recapitalizations or similar adjustments in the number of outstanding shares of Common Stock of Borrower.
Convertible Notes:
3.25% Convertible Notes; 5.0% Convertible Senior Notes: On November 2, 2015, Borrower issued $125.0 million aggregate principal amount of 3.25% Convertible Notes. The initial conversion rate of the 3.25% Convertible Notes is 8.9431 shares of Common Stock per $1,000 principal amount of 3.25% Convertible Notes, which represents an initial conversion price of approximately $111.82 per share. Pursuant to the terms of the Facility Agreement with Deerfield, $40.5 million of the aggregate principal amount of the 3.25% Convertible Notes was cancelled; $84.5 million aggregate principal amount of 3.25% Convertible Notes were thereafter outstanding. As of the Second Amendment Effective Date, approximately $73.36 million of the remaining $84.5 million of 3.25% Convertible Notes have been exchanged for new 5.0% Convertible Senior Notes due 2024.
Pursuant to this Agreement the Borrower may issue Conversion Shares upon exercise under the Notes by Lenders.
Other Rights to Securities of Borrower:
In connection with its merger with Nellix, Inc. (Nellix), Borrower agreed to issue shares of Common Stock to the former stockholders of Nellix upon Borrowers receipt of FDA approval to
sell its Nellix EVAS System in the United States (the PMA Milestone). The number of shares of Common Stock issuable to the former stockholders of Nellix upon achievement of the PMA Milestone shall equal the quotient obtained by dividing $15.0 million by the average per share closing price of Common Stock on The Nasdaq Global Select Market for each of the 30 consecutive trading days ending with the fifth trading day immediately preceding the date of Borrowers receipt of FDA approval to sell its Nellix EVAS System in the United States, subject to a stock price floor of $45.00 per share, but not subject to a stock price ceiling.
In June 2018, Borrower received the approval of its stockholders to conduct an exchange program (the Existing Exchange Program) in which eligible employee stock option holders would have the ability to exchange certain out-of-the-money stock options for restricted stock units (RSUs) of Borrower pursuant to fixed exchange ratios. . The material terms of the Exchange Program are as set forth in proposal 6 of the Companys definitive proxy statement in respect of its annual meeting of stockholders held on June 14, 2018.
Registration Rights
Amended and Restated Registration Rights Agreement dated as of August 9, 2018, as amended by the [Amendment], by and among the Borrower the Lenders and Agent.
Agreement and Plan of Merger and Reorganization, dated October 27, 2010, by and among Borrowerthe, Nepal Acquisition Corporation, Nellix, Inc., certain of Nellix, Inc.s stockholders listed therein and Essex Woodlands Health Ventures, Inc., as representative of Nellix, Inc.s stockholders (Section 6.12 contains registration obligation)
At-the-Market Equity Offering Sales Agreement, dated May 31, 2018, by and between Borrower and Stifel, Nicolaus & Company, Incorporated pursuant to which Stifel has agreed to use commercially reasonable efforts to sell on the Companys behalf up to $50,000,000 in aggregate gross process of the Companys common stock pursuant to the terms instructed by the Company. The Company is obligated to pay Stifel at a fixed commission rate of up to 3.0% of the gross sales price of its common stock sold pursuant to the agreement.
Schedule 3.1(aa)
Material Contracts
| Cross License Agreement dated as of October 26, 2011, by and between Borrower and Bard Peripheral Vascular, Inc. |
| Settlement Agreement, dated October 16, 2012 by and among Borrower, Cook Incorporated, Cook Group and Cook Medical, Inc. |
| Standard Industrial/Commercial Multi-Tenant LeaseNet, for 2 Musick, Irvine, California and 33 & 35 Hammond, Irvine, dated June 12, 2013, by and between Borrower and The Northwestern Mutual Life Insurance Company. |
| Lease for Santa Rosa facility for the building located at 3910 Brickway Boulevard, Santa Rosa, California as set forth in the Third Amendment to Lease, by and between Trivascular, Inc. and Sonoma Airport Properties LLC and the earlier agreements described herein. |
Schedule 3.1(dd)
Environmental
None.
Schedule 3.1(ff)
Labor Relations
None.
Schedule 3.1(gg)
Jurisdiction of Organization, Legal Name, Organizational Identification Number and Chief Executive Office
Loan Party |
Jurisdiction of organization |
All other of organization of Loan Party for 5 years preceding the Agreement |
Legal name |
All other |
Organizational no. |
Location of chief executive | ||||||
Endologix, Inc. |
Delaware |
N.A. |
Same as loan party name at left |
N.A. |
2338745 |
2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
Endologix, Inc. |
Delaware | N.A. | Same as loan party name at left | N.A. | 2338745 | 33 and 35 Hammond, Irvine, County of Orange, California 92618 U.S.A. | ||||||
Nellix, Inc. |
Delaware | N.A. | Same as loan party name at left | N.A. | 3359980 | 2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
CVD/RMS Acquisition Corp. |
Delaware | N.A. | Same as loan party name at left | N.A. | 2955166 | 2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
TriVascular Technologies, Inc. |
Delaware | N.A. | Same as loan party name at left | N.A. | 4387054 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A | ||||||
TriVascular, Inc. |
California | N.A. | Same as loan party name at left | N.A. | C2065374 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A | ||||||
Endologix Canada, LLC |
Delaware | N.A. | Same as loan party name at left | Trivascular Canada LLC | 5647226 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A |
RMS/Endologix Sideways Merger Corp. | Delaware | N.A. | Same as loan party name at left | N.A. | 3530477 | 2 Musick, Irvine, County of Orange, California 92618 U.S.A. | ||||||
Trivascular Sales LLC | Texas | N.A. | Same as loan party name at left | N.A. | 801644988 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A |
Schedule 3.1(hh)
Inventory Location
The following are all of the locations where a Loan Party or any of the Loan Parties Subsidiaries, respectively, maintains Inventory and Equipment:
Complete Address |
Loan Party/Subsidiary | |
2 Musick, Irvine, County of Orange, CA 92618 U.S.A. |
Endologix, Inc. | |
33 & 35 Hammond, Irvine, County of Orange, CA 92618 U.S.A |
Endologix, Inc. | |
3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. |
TriVascular Technologies, Inc. | |
TriVascular, Inc. | ||
10 Anson Road #21-04 & #21-04A |
Endologix, Inc. | |
International Plaza Singapore 079903 | ||
A-311, M-Sate, 114 Beopwon-ro, Songpa-gu, Seoul, South Korea |
Endologix, Inc. | |
Burgemeester Burgerslaan 40, 5245 NH Rosmalen, The Netherlands |
Endologix International Holdings B.V. | |
Rahmannstraße 11, 65760 Eschborn, Germany |
Endologix International B.V. |
The following are the names and addresses of all warehousemen, bailees, or other third parties who have possession of any of the Loan Parties Inventory or the Inventory of any of the Loan Parties Subsidiaries:
Name |
Complete Street and Mailing Address, including Zip Code |
Loan Party/Subsidiary | ||
UPS |
378 Commercial Street, Malden, MA 02148 |
Endologix, Inc. | ||
165 Chubb Avenue, Lyndhurst, NJ 07071 |
||||
1130 Commerce Blvd, Swedesboro, NJ 08085 | ||||
2250 Outerloop Drive, Louisville, KY 40219 | ||||
205 Kelsey Lane, Suite D, Tampa, FL 33619 |
Name |
Complete Street and Mailing Address, including Zip Code |
Loan Party/Subsidiary | ||
2850 South Roosevelt Street, Ste 103, Tempe, AZ 85282 | AZ 85282 | |||
Rhenus | Doctor Paul Janssenweg 150, 5026 RH Tilburg, The Netherlands | Endologix International Holdings B.V. | ||
STOK UK Limited | One Fleet Place, London EC4M 7Ws | Endologix International B.V. | ||
Flexential | 3330 E Lone Mountain Road, North Las Vegas, NV 89081 | Endologix, Inc. | ||
TNT Express Korea | 54 Yangcheon-ro, Gangseo-gu, Seoul 07522 | Endologix, Inc. |
In addition to the foregoing:
| In the Ordinary Course of Business, the Loan Party or any of the Loan Parties Subsidiaries sales representatives hold Trunk Inventory in their possession for sales calls and procedures, which Trunk Inventory is not held at a specific location or locations. |
| Certain Inventory of the Loan Party or any of the Loan Parties Subsidiaries is held by numerous third parties on a consignment basis at various locations. |
Schedule 3.1 (jjj)
See above Schedule 3.1(z).
Schedule 5.1(q)
Other Loan Documents to Be Form 8-K Exhibits
Each of the following agreements, instruments and documents, including the schedules, exhibits and annexes thereto:
| the Agreement |
| the Notes; |
| the Security Agreement; |
| the Intercompany Subordination Agreement; |
| the Intercreditor Agreement; |
| the Reaffirmation Agreement; |
| the Warrants; |
| the Registration Rights Agreement; |
| the Patent Security Agreement; and |
| the Trademark Security Agreement. |
Schedule 5.2(iv)
Contingent Obligations
None.
Schedule 5.2(vii)
Transactions with Affiliates
Investments of Inventory pursuant to clause (j) of the definition of Permitted Investments
EXHIBIT A-III
Amended and Restated Schedules to Security Agreement
[Attached]
SCHEDULE 1
PLEDGED EQUITY AND PLEDGED DEBT INSTRUMENTS
Pledged Equity:
Grantor (owner of Record of such Pledged Equity) |
Issuer |
Par Value |
No. of Shares, Units or Interests Owned |
Total Shares, Units or Interests Authorized and Outstanding |
Percentage of Shares, Units or Interests Owned |
Certificate | ||||||
Endologix, Inc. | Nellix, Inc. | $ 0.001 | 100 Shares | 1,000 Shares Authorized; 100 Shares Outstanding | 100% | 65 | ||||||
Endologix, Inc. | CVD/RMS Acquisition Corp. | $ 0.001 | 100 Shares | 100 Shares Authorized and Outstanding | 100% | 4 | ||||||
Endologix, Inc. | RMS/Endologix Sideways Merger Corp. | $ 0.001 | 100 Shares | 100 Shares Authorized and Outstanding | 100% | Com-1 | ||||||
Endologix, Inc. | TriVascular Technologies, Inc. | $ 0.001 | 100 Shares | 1,000 Shares Authorized; 100 Shares Outstanding | 100% | 60 | ||||||
Endologix, Inc. | ELGX International Holdings GP | N.A. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | 100% | N.A. | ||||||
Endologix, Inc. | Endologix Bermuda L.P. | N.A. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | 99% | N.A. |
Grantor (owner of Record of such Pledged Equity) |
Issuer |
Par Value |
No. of Shares, Units or Interests Owned |
Total Shares, Units or Interests Authorized and Outstanding |
Percentage of Shares, Units or Interests Owned |
Certificate | ||||||
ELGX International Holdings GP | Endologix Bermuda L.P. | N.A. | Unspecified Number of Partnership Interests | Unspecified Number of Partnership Interests | 1% | N.A. | ||||||
Endologix, Inc. | Endologix Singapore Private Limited | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix, Inc. | Endologix New Zealand Co. | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix, Inc. | ELGX South Korea Ltd | 5,000 KRW | 20,000 Contribution Units | 20,000 Contribution Units Authorized and Outstanding | 100% | N.A. | ||||||
TriVascular Technologies, Inc. | TriVascular, Inc. | $0.01 | 100 Shares | 100 Shares Authorized and Outstanding | 100% | CS-4 | ||||||
TriVascular, Inc. | TriVascular Sales LLC | N.A. | 1,000 Units of Membership Interests | 1,000 Units of Membersh ip Interests | 100% | N.A. | ||||||
TriVascular, Inc. | TriVascular Germany GmbH | N.A. | Unspecified number of Company Interests | Unspecified number of Company Interests | 100% | N.A. | ||||||
TriVascular, Inc. | TriVascular Switzerland Sarl | N.A. | Unspecified number of Company Interests | Unspecified number of Company Interests | 100% | N.A. |
Grantor (owner of Record of such Pledged Equity) |
Issuer |
Par Value |
No. of Shares, Units or Interests Owned |
Total Shares, Units or Interests Authorized and Outstanding |
Percentage of Shares, Units or Interests Owned |
Certificate | ||||||
TriVascular, Inc. | Endologix Canada, LLC | N.A. | 1,000 Units of Membership Interests | 1,000 Units of Membersh ip Interests | 100% | N.A. | ||||||
TriVascular, Inc. | TriVascular, Inc. Italia Sarl | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix Bermuda L.P. | Endologix International Holdings B.V. | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix International Holdings B.V. | Endologix Poland spolkda z ograniczona odpowiedzialnos cia | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix International Holdings B.V. | Endologix Italia Sarl | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. | ||||||
Endologix International Holdings B.V. | Endologix International B.V. | N.A. | Unspecified Number of Company Interests | Unspecified Number of Company Interests | 100% | N.A. |
Pledged Debt Instruments:
Grantor (owner of Record of such Pledged Debt Instrument) |
Issuer |
Description of Debt |
Final Maturity |
Principal Amount |
Certificate (Indicate No.) | |||||
N.A. |
SCHEDULE 1A
PLEDGED INVESTMENT PROPERTY
Name of Issuer |
Description and Value of Security |
Loan Party/Subsidiary | ||
Cianna Medical, Inc. |
8,677 Shares of Series A Preferred Stock |
Endologix, Inc. | ||
See Schedule 1. |
SCHEDULE 2
FILINGS AND PERFECTION
To be attached.
SCHEDULE 3
GRANTOR INFORMATION
GRANTOR (exact legal name) |
STATE/COUNTRY OF ORGANIZATION |
FEDERAL EMPLOYER |
CHIEF EXECUTIVE OFFICE |
ORGANIZATIONAL | ||||
Endologix, Inc. | Delaware | 68-0328265 | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | 2338745 | ||||
CVD/RMS Acquisition Corp. | Delaware | 33-0928438 | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | 2955166 | ||||
RMS/Endologix Sideways Merger Corp | Delaware | 03-0512974 | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | 3530477 | ||||
Nellix, Inc. | Delaware | 94-3398416 | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | 3359980 | ||||
TriVascular Technologies, Inc. | Delaware | 87-0807313 | 3910 Brickway Blvd., County of Santa Rosa, Sonoma, CA 95403 U.S.A. | 4387054 | ||||
TriVascular, Inc. | California | 68-0402620 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | C2065374 | ||||
Endologix Canada, LLC | Delaware | 47-2442872 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | 5647226 | ||||
TriVascular Sales LLC | Texas | 46-0859179 | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | 801644988 |
SCHEDULE 4
PLACES OF BUSINESS / LOCATION OF COLLATERAL
Grantor |
Location |
Specify Whether Location Has (i) Inventory and/or Equipment, (ii) Books and Records, or (iii) Both |
Interest |
Lessor/Property Owner/Lessee | ||||
Endologix, Inc. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Both | Lease | The Northwestern Mutual Life Insurance Company, att: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
Endologix, Inc. | 33 & 35 Hammond, Irvine, County of Orange, CA 92618 U.S.A | Inventory and/or Equipment | Lease | The Northwestern Mutual Life Insurance Company, att: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
Endologix, Inc. | 378 Commercial Street, Malden, MA 02148 | Inventory and/or Equipment | Third Party Warehouse | UPS | ||||
165 Chubb Avenue, | ||||||||
Lyndhurst, NJ 07071 | ||||||||
1130 Commerce | ||||||||
Blvd, Swedesboro, NJ | ||||||||
08085 | ||||||||
2250 Outerloop | ||||||||
Drive, Louisville, | ||||||||
KY 40219 | ||||||||
205 Kelsey Lane, | ||||||||
Suite D, Tampa, FL | ||||||||
33619 | ||||||||
2850 South | ||||||||
Roosevelt Street, | ||||||||
Ste 103, Tempe, AZ |
Grantor |
Location |
Specify Whether Location Has (i) Inventory and/or Equipment, (ii) Books and Records, or (iii) Both |
Interest |
Lessor/Property Owner/Lessee | ||||
85282 | ||||||||
Endologix, Inc. | 3330 E Lone Mountain Road, North Las Vegas, NV 89081 | Inventory and/or Equipment | Data Center Co-Location | Flexential | ||||
Endologix, Inc. | 54 Yangcheon-ro, Gangseo-gu, Seoul 07522 | Inventory and/or Equipment (no other Collateral is located at this location) | Third Party Warehouse | TNT Express Korea | ||||
Endologix, Inc. | 10 Anson Road #21-04 & #21-04A International Plaza Singapore 079903 | Inventory and/or Equipment (no other Collateral is located at this location) | Occupied | Endologix Singapore Private Limited | ||||
Endologix, Inc. | A-311, M-Sate, 114 Beopwon-ro, Songpa-gu, Seoul, South Korea | Inventory and/or Equipment (no other Collateral is located at this location) | Occupied | N.A. | ||||
Endologix, Inc. | Grantor and each | Inventory | N.A. | N.A. | ||||
Guarantors sales | and/or | |||||||
representatives hold | Equipment (no other | |||||||
Trunk Inventory in | Collateral is located | |||||||
their possession for | at this location) | |||||||
sales calls and | ||||||||
procedures, which | ||||||||
Trunk Inventory is not | ||||||||
held at a specific | ||||||||
location or locations. | ||||||||
Certain Inventory of | ||||||||
the Grantor and each | N.A. | N.A. | ||||||
Guarantor is held by | ||||||||
numerous third parties | Inventory | |||||||
on a consignment | and/or | |||||||
basis at various | Equipment (no other | |||||||
locations. | Collateral is located | |||||||
at this location) |
Grantor |
Location |
Specify Whether Location Has (i) Inventory and/or Equipment, (ii) Books and Records, or (iii) Both |
Interest |
Lessor/Property Owner/Lessee | ||||
CVD/RMS Acquisition Corp. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Books and Records | Occupied | The Northwestern Mutual Life Insurance Company, attn: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
Nellix, Inc. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Books and Records | Occupied | The Northwestern Mutual Life Insurance Company, attn: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
RMS/Endologix Sideways Merger Corp. | 2 Musick, Irvine, County of Orange, CA 92618 U.S.A. | Books and Records | Occupied | The Northwestern Mutual Life Insurance Company, attn: William A. Budge, 19 Hammond, Suite 501, Irvine, California 92618 | ||||
TriVascular Technologies, Inc. | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Books and Records | Occupied | Sonoma Airport Properties LLC | ||||
TriVascular, Inc. | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Both | Lease | Sonoma Airport Properties LLC | ||||
TriVascular Sales LLC | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Books and Records | Occupied | Sonoma Airport Properties LLC | ||||
Endologix Canada, LLC | 3910 Brickway Blvd., Santa Rosa, County of Sonoma, CA 95403 U.S.A. | Books and Records | Occupied | Sonoma Airport Properties LLC |
SCHEDULE 5
COMMERCIAL TORT CLAIMS
None.
SCHEDULE 6
ACCOUNTS
ENTITY | COUNTRY | ACCT | CURR | BANK | USE | |||||
Endologix Inc | US | XXXXX1702 | USD | Bank of America | Operating account | |||||
Endologix Inc | US | XXXXX1689 | USD | Bank of America | Payroll account | |||||
Endologix Inc | US | XXXXX5279 | USD | Wells Fargo | Old Operating account | |||||
Endologix Inc | US | XXXXX5311 | USD | Wells Fargo | Old payroll account | |||||
Endologix Inc | US | XXXXX3910 | USD | Bank of America | Lockbox account | |||||
Endologix Inc | US | XXXXX4066 | USD | Bank of America | Credit Card Cash Collateral account | |||||
Trivascular Inc | US | XXXXX5539 | USD | Silicon Valley Bank | Operating account | |||||
Trivascular Inc | The Netherlands | XXXXX8640 | EUR | KBC Bank NV Nederland | Currency account | |||||
Trivascular Inc | UK London | XXXXX8709 | GBP | National Westminster Bank | Currency account | |||||
Trivascular Sales LLC | US | XXXXX7400 | USD | Silicon Valley Bank | Payroll account | |||||
Endologix Canada LLC | Canada | XXXXX7912 | CAD | Bank of Montreal | Operating account | |||||
Endologix Inc | US | XXXXX1317 | USD | Stifel | Security account |
SCHEDULE 7
REAL PROPERTY
None.
SCHEDULE 8
COPYRIGHTS
None.
SCHEDULE 9
INTELLECTUAL PROPERTY LICENSES
1. | Inbound License Agreement, dated as of February 22, 2006, by and between Incept LLC and Nellix, Inc. |
2. | Inbound Amendment No. 1. to License Agreement, dated as of April 30, 2012, by and between Incept LLC and Nellix, Inc. |
3. | Inbound Amendment No. 2 to License Agreement, dated as of December 3, 2014, by and between Incept LLC and Nellix, Inc. |
4. | Inbound Master License Agreement, dated as of May 5, 2008, by and between SurModics, Inc. and Endologix, Inc. |
5. | Inbound Development and OEM Device Supply Agreement, dated as of August 5, 2015, by and between Bard Peripheral Vascular, Inc. and Endologix, Inc. |
6. | Inbound License Agreement, dated as of June 22, 2011, by and between NorMedix, LLC and Endologix, Inc. |
7. | Inbound Settlement and Patent License Agreement, dated as of March 17, 2016, by and between LifePort Sciences, LLC and Endologix, Inc. |
8. | Inbound License Agreement, dated as of July 23, 2013, by and between Thomas L. Fogarty and Endologix, Inc. |
9. | Inbound License Agreement, dated as of March 28, 2008, by and between Trivascular, Inc. (formerly Trivascular 2, Inc.) and Boston Scientific Scimed, Inc. and Endovascular Technologies, Inc. |
SCHEDULE 10
PATENTS
See attached.
PATENT SCHEDULE
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
US | Stent graft | US9757262B2 | US13943246A | 2013-07-16 | |||||
ENDOLOGIX INC. |
US | Catheter system and methods of using same | US9700701B2 | US13544426A | 2012-07-09 | |||||
ENDOLOGIX INC. |
US | Catheter system and methods of using same | US9687374B2 | US15379268A | 2016-12-14 | |||||
ENDOLOGIX INC. |
US | Percutaneous method and device to treat dissections | US9579103B2 | US12771711A | 2010-04-30 | |||||
ENDOLOGIX INC. |
US | Catheter system and methods of using same | US9549835B2 | US14462485A | 2014-08-18 | |||||
ENDOLOGIX INC. |
US | Method and system for treating aneurysms | US9415195B2 | US13441762A | 2012-04-06 | |||||
ENDOLOGIX INC. |
US |
Devices and methods to treat vascular dissections |
US9393100B2 | US13988175A | 2013-05-17 |
Endologix, Inc. |
-1- | Updated: March 19, 2019 |
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
US | Method for forming materials in situ within a medical device | US9289536B2 | US14201332A | 2014-03-07 | |||||
ENDOLOGIX INC. |
US | Apparatus and method of placement of a graft or graft system | US9149381B2 | US14172126A | 2014-02-04 | |||||
ENDOLOGIX INC. |
US | Stent graft | US8821564B2 | US13397952A | 2012-02-16 | |||||
ENDOLOGIX INC. |
US | Apparatus and methods for repairing aneurysms | US8814928B2 | US12616928A | 2009-11-12 | |||||
ENDOLOGIX INC. |
US | Catheter system and methods of using same | US8808350B2 | US13408952A | 2012-02-29 | |||||
ENDOLOGIX INC. |
US | Graft systems having semi-permeable filling structures and methods for their use | US8801768B2 | US13355705A | 2012-01-23 | |||||
ENDOLOGIX INC |
US | Bifurcated graft deployment systems and methods | US8764812B2 | US13745682A | 2013-01-18 |
-2-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
US | Apparatus and method of placement of a graft or graft system | US8672989B2 | US13546950A | 2012-07-11 | |||||
ENDOLOGIX INC. |
US | Graft deployment system | US8568466B2 | US13269332A | 2011-10-07 | |||||
ENDOLOGIX INC. |
US | Dual concentric guidewire and methods of bifurcated graft deployment | US8523931B2 | US11623022A | 2007-01-12 | |||||
ENDOLOGIX INC. |
US | Stent graft | US8491646B2 | US12837398A | 2010-07-15 | |||||
ENDOLOGIX INC. |
US | Endolumenal vascular prosthesis with neointima inhibiting polymeric sleeve | US8377110B2 | US10820455A | 2004-04-08 | |||||
ENDOLOGIX INC. |
US | Bifurcated graft deployment systems and methods | US8357192B2 | US13046541A | 2011-03-11 | |||||
ENDOLOGIX INC. |
US | Bifurcated graft deployment systems and methods | US8236040B2 | US12101863A | 2008-04-11 |
-3-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
US | Catheter system and methods of using same | US8216295B2 | US12496446A | 2009-07-01 | |||||
ENDOLOGIX INC. |
US | Apparatus and method of placement of a graft or graft system | US8221494B2 | US12390346A | 2009-02-20 | |||||
ENDOLOGIX INC. |
US | Methods and systems for endovascular aneurysm treatment | US8182525B2 | US12421297A | 2009-04-09 | |||||
ENDOLOGIX INC. |
US | Single puncture bifurcation graft deployment system | US8167925B2 | US12732095A | 2010-03-25 | |||||
ENDOLOGIX INC. |
US | Bifurcation graft deployment catheter | US8147535B2 | US11189101A | 2005-07-25 | |||||
ENDOLOGIX INC. |
US | Material for creating multi-layered films and methods for making the same | US8133559B2 | US13100483A | 2011-05-04 | |||||
ENDOLOGIX INC. |
US | Stent graft | US8118856B2 | US12844266A | 2010-07-27 |
-4-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
US | Graft systems having filling structures supported by scaffolds and methods for their use | US8048145B2 | US11413460A | 2006-04-28 | |||||
ENDOLOGIX INC. |
US | Graft deployment system | US8034100B2 | US10722367A | 2003-11-25 | |||||
ENDOLOGIX INC. |
US | Material for creating multi-layered films and methods for making the same | US7951448B2 | US12858274A | 2010-08-17 | |||||
ENDOLOGIX INC |
US | Self expanding bifurcated endovascular prosthesis | US7892277B2 | US11417883A | 2006-05-03 | |||||
ENDOLOGIX INC. |
US | Material for creating multi-layered films and methods for making the same | US7790273B2 | US11752750A | 2007-05-23 | |||||
ENDOLOGIX INC. |
US | Devices for repairing aneurysms | US7682383B2 | US10481386A | 2004-06-14 | |||||
ENDOLOGIX INC. |
US | System and methods for endovascular aneurysm treatment | US7666220B2 | US11482503A | 2006-07-07 |
-5-
Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
US | Methods and systems for endovascular aneurysm treatment | US7530988B2 | US11187471A | 2005-07-22 | |||||
ENDOLOGIX INC |
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EP | PTFE LAYERS AND METHODS OF MANUFACTURING 1 PTFE-LAGEN UND HERSTELLUNGSVERFAHREN 1 COUCHES DE PTFE ET PROCEDES DE FABRICATION | EP1888318B1 | EP2006740124A | 2006-03-30 | |||||
TRIVASCULAR INC. |
EP | ADVANCED ENDOVASCULAR GRAFT 1 FORTSCHRITTLICHES ENDOVASKULARES TRANSPLANTAT 1 GREFFON ENDOVASCULAIRE EVOLUE | EP1467679B1 | EP2002796047A | 2002-12-20 | |||||
TRIVASCULAR INC. |
EP | Non-degradable low swelling, water soluble radiopaque hydrogels 1 Nicht abbaubares, schwach anschwellendes,wasserlosliches rontgendichtes Hydrogelpolymer 1 Polymere absorbant leau, radiopaque, soluble | EP2332590B1 | EP2010194236A | 2006-03-28 |
-72-
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Country |
Patent |
Publication/Patent No. |
Application Number |
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dans leau, a faible gonflement et non degradable | ||||||||||
TRIVASCULAR INC. |
EP | Endovascular graft 1 Endovaskulares Transplantat 1 Greffe endovasculaire | EP2147658B1 | EP200913660A | 1999-02-09 | |||||
TRIVASCULAR INC. |
EP | Kink resistant endovascular graft 1 Knickbestandiges Stentimplantat 1 Stent a greffer resistant au pliage | EP2319456B1 | EP2010183146A | 2004-03-05 | |||||
TRIVASCULAR INC. |
EP | Delivery system for graft 1 Abgabesystem fur Graft 1 Systeme de mise en place pour prothese | EP2145607B1 | EP2009175398A | 2004-10-15 | |||||
TRIVASCULAR INC. |
EP | DELIVERY SYSTEM FOR BIFURCATED GRAFT 1 VORRICHTUNG ZUR PLATZIERUNG VON ZWEIGETEILTEN ENDOPROTHESEN 1 SYSTEME DE MISE EN PLACE DUN GREFFON A BIFURCATION | EP1377234B1 | EP2002725639A | 2002-04-11 | |||||
TRIVASCULAR INC. |
EP | Advanced endovascular graft 1 Erweitertes endovaskulares Transplantat 1 Greffe endovasculaire evoluee | EP2135583B1 | EP20099090A | 2002-12-20 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
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TRIVASCULAR INC. |
EP | KINK RESISTANT ENDOVASCULAR GRAFT 1 KNICKFESTES ENDOVASKULARES IMPLANTAT 1 IMPLANT ENDOVASCULAIRE RESISTANT A LA DEFORMATION | EP1601314B1 | EP2004718097A | 2004-03-05 | |||||
TRIVASCULAR INC. |
EP | NON-DEGRADABLE LOW SWELLING, WATER SOLUBLE RADIOPAQUE HYDROGELS 1 NICHT- ABBAUBARE WENIG QUELLENDE WASSERLOSLICHE RONTGENDICHTE HYDROGELS 1 HYDROGEL RADIOPAQUE, SOLUBLE DANS LEAU, NON DEGRADABLE ET A FAIBLE GONFLEMENT | EP1874370B1 | EP2006739747A | 2006-03-28 | |||||
TRIVASCULAR INC. |
EP | INFLATABLE INTRALUMINAL GRAFT 1 AUFBLASBARER INTRALUMINALER PFROPFEN 1 GREFFON INTRALUMINAL GONFLABLE | EP1176926B1 | EP2000907760A | 2000-03-03 | |||||
TRIVASCULAR INC. |
EP | ENDOVASCULAR GRAFT I ENDOVASKULARES IMPLANTAT I GREFFON ENDOVASCULAIRE | EP1054648B1 | EP1999906812A | 1999-02-09 | |||||
TRIVASCULAR INC. |
EP | STENT GRAFT DELIVERY SYSTEM WITH ACCESS CONDUIT I STENTGRAFTEINFUHRUNGSSY STEM MIT ZUGANGSKANAL I | EP3209249A1 | EP2015852460A | 2015-10-22 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
SYSTEME DE POSE DE GREFFE ET PROTHESE ENDOVASCULAIRE AVEC CONDUIT DACCES | ||||||||||
TRIVASCULAR INC. |
EP | INTERNAL ILIAC PRESERVATION DEVICES AND METHODS I VORRICHTUNGEN UND VERFAHREN ZUR INTERNEN BECKENKONSERVIERUNG I DISPOSITIFS ET PROCEDES DE PRESERVATION DE LILIAQUE INTERNE | EP3226814A1 | EP2015816618A | 2015-12-03 | |||||
TRIVASCULAR INC. |
EP | INFLATABLE OCCLUSION WIRE-BALLOON FOR AORTIC APPLICATIONS I AUFBLASBARER OKKLUSIONSDRAHTBALLON FUR ANWENDUNGEN IN DER AORTA I BALLONNET DE FIL DOCCLUSION GONFLABLE POUR APPLICATIONS AORTIQUES | EP3116439A1 | EP2015711020A | 2015-03-10 | |||||
TRIVASCULAR INC. |
EP | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES I SYSTEME FUR FUHRUNGSDRAHTUB ERGANG FUR VERZWEIGTE PROTHESEN I SYSTEMES POUR UN CROISEMENT DE FIL-GUIDE POUR DES PROTHESES BIFURQUEES | EP3091944A1 | EP2014752969A | 2014-07-30 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC. |
Germany | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3091944 | 14752969.7 | 7/18/2018 | |||||
TRIVASCULAR INC. |
UK | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3091944 | 14752969.7 | 7/18/2018 | |||||
TRIVASCULAR INC. |
IT | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3091944 | 14752969.7 | 7/18/2018 | |||||
TRIVASCULAR INC. |
EP | SYSTEMS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES | 3409243 | 18183721.2 | 2018-07-16 | |||||
TRIVASCULAR INC. |
EP | TANDEM MODULAR ENDOGRAFT 1 MODULARES TANDEM-ENDOGRAFT 1 ENDOGREFFE MODULAIRE EN TANDEM | EP3049021A1 | EP2014782021A | 2014-09-23 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC. |
EP | DURABLE STENT GRAFT WITH TAPERED STRUTS AND STABLE DELIVERY METHODS AND DEVICES 1 DAUERHAFTES STENTIMPLANTAT MIT KONISCHEN STREBEN UND STABILE FREISETZUNGSVERFAHREN SOWIE VORRICHTUNGEN 1 ENDOPROTHESE VASCULAIRE DURABLE AVEC ENTRETOISES CONIQUES ET PROCEDES ET DISPOSITIFS DE DELIVRANCE STABLES | EP2833830A4 | EP2013772199A | 2013-03-29 | |||||
TRIVASCULAR INC. |
EP | ENDOVASCULAR DELIVERY SYSTEM WITH AN IMPROVED RADIOPAQUE MARKER SCHEME 1 ENDOVASKULARES FREISETZUNGSSYSTEM MIT VERBESSERTEM RONTGENMARKERSCHEMA 1 SYSTEME DE POSE ENDOVASCULAIRE AYANT UNE TECHNIQUE DE MARQUEUR RADIO-OPAQUE AMELIOREE | EP2861189A1 | EP2013733113A | 2013-05-31 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC. |
EP | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG 1 GEGABELTE ENDOVASKULARE PROTHESE MIT ANGEBUNDENEM KONTRALATERALEM BEIN 1 PROTHESE ENDOVASCULAIRE BIFURQUEE POSSEDANT UNE JAMBE CONTROLATERALE AVEC ATTACHE | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. |
DE | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. |
GB | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. |
IT | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | EP2861183A1 | EP2013733115A | 2013-05-31 | |||||
TRIVASCULAR INC. |
EP | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG | | 18209876.4 | 2018-12-03 | ||||||
TRIVASCULAR INC. |
EP | LOW PROFILE STENT GRAFT AND DELIVERY SYSTEM | FLACHES STENTTRANSPLANTAT UND FREISETZUNGSSYSTEM 1 | EP2833829A1 | EP2013717893A | 2013-03-21 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOPROTHESE VASCULAIRE A PROFIL BAS ET SYSTEME DE DELIVRANCE | ||||||||||
TRIVASCULAR INC |
EP | ALIGNMENT STENT APPARATUS AND METHOD | VORRICHTUNG UND VERFAHREN ZUR STENTAUSRICHTUNG 1 APPAREIL DENDOPROTHESE DALIGNEMENT ET PROCEDE | EP2194919A4 | EP2008834027A | 2008-09-25 | |||||
TRIVASCULAR INC |
EP | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | MODULARER GEFASSERSATZ FUR PERKUTANE FREISETZUNG MIT NIEDRIGEM PROFIL | GREFFON VASCULAIRE MODULAIRE POUR ADMINISTRATION PERCUTANEE A PROFIL REDUIT | EP2194921A4 | EP2008835032A | 2008-10-03 | |||||
TRIVASCULAR INC |
EP | METHOD AND APPARATUS FOR MANUFACTURING AN ENDOVASCULAR GRAFT SECTION | VERFAHREN UND VORRICHTUNG ZUR HERSTELLUNG EINES ENDOVASKULAREN TRANSPLANTATABSCHNITTS | PROCEDE ET APPAREIL DE | EP1465685A4 | EP2002805657A | 2002-12-20 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
FABRICATION DUNE SECTION DE GREFFON ENDOCORONAIRE | ||||||||||
TRIVASCULAR INC |
WO | ENDOLUMINAL PROSTHESIS DEPLOYMENT DEVICES AND METHODS 1 DISPOSITIFS ET PROCEDES DE DEPLOIEMENT DE PROTHESE ENDOLUMINALE | WO2017019913A1 | WO2016US44583A | 2016-07-28 | |||||
TRIVASCULAR INC |
WO | STENT-GRAFT WITH IMPROVED FLEXIBILITY 1 GREFFON DE STENT A FLEXIBILITE AMELIOREE | WO2016183128A1 | WO2016US31728A | 2016-05-11 | |||||
TRIVASCULAR INC |
WO | BALLOON ASSISTED ENDOLUMINAL PROSTHESIS DEPLOYMENT 1 DEPLOIEMENT DE PROTHESE ENDOLUMINALE ASSISTE PAR BALLONNET | WO2016191602A1 | WO2016US34427A | 2016-05-26 | |||||
TRIVASCULAR INC |
WO | INTERNAL ILIAC PRESERVATION DEVICES AND METHODS 1 DISPOSITIFS ET PROCEDES DE PRESERVATION DE LILIAQUE INTERNE | WO2016090112A1 | WO2015US63686A | 2015-12-03 | |||||
TRIVASCULAR INC |
WO | STENT GRAFT DELIVERY SYSTEM WITH ACCESS CONDUIT 1 SYSTEME DE POSE DE GREFFE ET PROTHESE ENDOVASCULAIRE AVEC CONDUIT DACCES | WO2016065208A1 | WO2015US57016A | 2015-10-22 |
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TRIVASCULAR INC |
WO | INFLATABLE OCCLUSION WIRE-BALLOON FOR AORTIC APPLICATIONS 1 BALLONNET DE FIL DOCCLUSION GONFLABLE POUR APPLICATIONS AORTIQUES | WO2015138402A1 | WO2015US19626A | 2015-03-10 | |||||
TRIVASCULAR INC |
WO | SYSTEMS AND METHODS FOR GUIDEWIRE CROSSOVER FOR BIFURCATED PROSTHESES 1 SYSTEMES ET PROCEDES POUR UN CROISEMENT DE FIL-GUIDE POUR DES PROTHESES BIFURQUEES | WO2015105530A1 | WO2014US48769A | 2014-07-30 | |||||
TRIVASCULAR INC |
WO | TANDEM MODULAR ENDOGRAFT 1 ENDOGREFFE MODULAIRE EN TANDEM | WO2015048004A1 | WO2014US56953A | 2014-09-23 | |||||
TRIVASCULAR INC |
WO | ENDOVASCULAR GRAFT FOR ANEURYSMS INVOLVING MAJOR BRANCH VESSELS 1 GREFFON ENDOVASCULAIRE POUR ANEVRISMES METTANT EN JEU DES VAISSEAUX RAMIFIES PRINCIPAUX | WO2014059114A3 | WO2013US64290A | 2013-10-10 | |||||
TRIVASCULAR INC |
WO | SAC LINER FOR ANEURYSM REPAIR 1 REVETEMENT SAC POUR REPARATION DANEVRISME | WO2014110231A3 | WO2014US10828A | 2014-01-09 |
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TRIVASCULAR INC |
WO | GATE WIRE FOR CONTRALATERAL LEG ACCESS 1 FIL GUIDE POUR PERMETTRE UN ACCES A UN JAMBAGE CONTROLATERAL | WO2014110254A1 | WO2014US10870A | 2014-01-09 | |||||
TRIVASCULAR INC |
WO | BIFURCATED ENDOVASCULAR PROSTHESIS HAVING TETHERED CONTRALATERAL LEG 1 PROTHESE ENDOVASCULAIRE BIFURQUEE POSSEDANT UNE JAMBE CONTROLATERALE AVEC ATTACHE | WO2013188134A1 | WO2013US43630A | 2013-05-31 | |||||
TRIVASCULAR INC |
WO | ENDOVASCULAR DELIVERY SYSTEM WITH AN IMPROVED RADIOPAQUE MARKER SCHEME 1 SYSTEME DE POSE ENDOVASCULAIRE AYANT UNE TECHNIQUE DE MARQUEUR RADIO-OPAQUE AMELIOREE | WO2013188132A1 | WO2013US43615A | 2013-05-31 | |||||
TRIVASCULAR INC |
WO | ENDOVASCULAR DELIVERY SYSTEM WITH FLEXIBLE AND TORQUEABLE HYPOTUBE 1 SYSTEME DE POSE ENDOVASCULAIRE POURVU DUN HYPOTUBE FLEXIBLE ET POUVANT ETRE SOUMIS A UN COUPLE DE TORSION | WO2013188133A1 | WO2013US43623A | 2013-05-31 |
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Country |
Patent |
Publication/Patent No. |
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TRIVASCULAR INC |
WO | DELIVERY CATHETER FOR ENDOVASCULAR DEVICE 1 CATHETER DE DELIVRANCE POUR DISPOSITIF ENDOVASCULAIRE | WO2013151924A1 | WO2013US34787A | 2013-04-01 | |||||
TRIVASCULAR INC |
WO | DURABLE STENT GRAFT WITH TAPERED STRUTS AND STABLE DELIVERY METHODS AND DEVICES 1 ENDOPROTHESE VASCULAIRE DURABLE AVEC ENTRETOISES CONIQUES ET PROCEDES ET DISPOSITIFS DE DELIVRANCE STABLES | WO2013151896A1 | WO2013US34654A | 2013-03-29 | |||||
TRIVASCULAR INC |
WO | LOW PROFILE STENT GRAFT AND DELIVERY SYSTEM 1 ENDOPROTHESE VASCULAIRE A PROFIL BAS ET SYSTEME DE DELIVRANCE | WO2013151793A1 | WO2013US33250A | 2013-03-21 | |||||
TRIVASCULAR INC |
WO | ADVANCED KINK-RESISTANT STENT GRAFT 1 ENDOPROTHESE EVOLUEE RESISTANT AU PLIAGE | WO2013151794A3 | WO2013US33252A | 2013-03-21 | |||||
TRIVASCULAR INC |
WO | ADVANCED ENDOVASCULAR GRAFT AND DELIVERY SYSTEM | GREFFE ENDOVASCULAIRE AVANCEE ET SYSTEME DE POSE ASSOCIE | WO2012068175A3 | WO2011US60873A | 2011-11-15 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
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TRIVASCULAR INC |
WO | FILL TUBE MANIFOLD AND DELIVERY METHODS FOR ENDOVASCULAR GRAFT | COLLECTEUR DE TUBE DE REMPLISSAGE ET PROCEDES DE POSE DE GREFFON ENDOVASCULAIRE | WO2011100367A3 | WO2011US24248A | 2011-02-09 | |||||
TRIVASCULAR INC |
DE | ENDOVASKULARES IMPLANTAT | DE69918272T2 | DE69918272A | 1999-02-09 | |||||
TRIVASCULAR INC |
CA | VIRTUAL PROTOTYPING AND TESTING FOR MEDICAL DEVICE DEVELOPMENT 1 ESSAI ET PROTOTYPAGE VIRTUELS DE MISE AU POINT DE DISPOSITIFS MEDICAUX | CA2424252C | CA2424252A | 2001-09-28 | |||||
TRIVASCULAR INC |
CA | DELIVERY SYSTEM AND METHOD FOR BIFURCATED GRAFT | METHODE ET SYSTEME DE MISE EN PLACE DUN GREFFON A BIFURCATION | CA2443104C | CA2443104A | 2002-04-11 | |||||
TRIVASCULAR INC |
CA | ENDOVASCULAR GRAFT 1 GREFFON ENDOVASCULAIRE | CA2501892C | CA2501892A | 1999-02-09 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
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TRIVASCULAR INC |
CA | INFLATABLE INTRALUMINAL GRAFT | GREFFON INTRALUMINAL GONFLABLE | CA2640263C | CA2640263A | 2000-03-03 | |||||
TRIVASCULAR INC |
CA | INFLATABLE INTRALUMINAL GRAFT 1 GREFFON INTRALUMINAL GONFLABLE | CA2376253C | CA2376253A | 2000-03-03 | |||||
TRIVASCULAR INC |
CA | ENDOVASCULAR GRAFT 1 GREFFON ENDOVASCULAIRE | CA2319052C | CA2319052A | 1999-02-09 | |||||
TRIVASCULAR INC |
AU | Modular vascular graft for low profile percutaneous delivery | AU2008308474B2 | AU2008308474A | 2008-10-03 | |||||
TRIVASCULAR INC |
AU | Advanced endovascular graft | AU2009230748B2 | AU2009230748A | 2009-10-26 | |||||
TRIVASCULAR INC |
AU | Advanced endovascular graft | AU2009201682B2 | AU2009201682A | 2009-04-28 | |||||
TRIVASCULAR INC |
AU | Method and apparatus for manufacturing an endovascular graft section | AU2008258148B2 | AU2008258148A | 2008-12-17 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC |
AU | Advanced endovascular graft | AU2002360765C1 | AU2002360765A | 2002-12-20 | |||||
TRIVASCULAR INC |
AU | Method and apparatus for manufacturing an endovascular graft section | AU2002366805B8 | AU2002366805A | 2002-12-20 | |||||
TRIVASCULAR INC |
AU | Virtual prototyping and testing for medical device development | AU2001293179A1 | AU2001293179A | 2001-09-28 | |||||
TRIVASCULAR INC |
AU | Delivery system and method for expandable intracorporeal device | AU200133250A | AU200133250A | 2001-02-01 | |||||
TRIVASCULAR, INC. |
DE | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | 2194921 | 08835032.7 | 2018-08-29 | |||||
TRIVASCULAR, INC. |
GB | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | 2194921 | 08835032.7 | 2018-08-29 | |||||
TRIVASCULAR, INC. |
IT | MODULAR VASCULAR GRAFT FOR LOW PROFILE PERCUTANEOUS DELIVERY | 2194921 | 08835032.7 | 2018-08-29 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
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TRIVASCULAR INC |
JP | ADVANCED KINK-RESISTANT STENT GRAFT | 6297023 | 2015-504610 | 3/2/2018 | |||||
TRIVASCULAR INC |
UK | INFLATABLE OCCLUSION WIRE- BALLOON FOR AORTIC APPLICATIONS | 15711020.6 | 3116439 | 2/7/2018 | |||||
TRIVASCULAR INC |
UK | PASSIVE HEMOSTATIC SHEATH VALVE | 04780128.7 | 1651135 | 2/28/2018 | |||||
TRIVASCULAR INC |
CN | MODULAR STENT GRAFT SYSTEMS AND METHODS WITH INFLATABLE FILL STRUCTURES | 201810370663.0 | 2015-5-5 | ||||||
ENDOLOGIX, INC. |
CN | CATHETER SYSTEM AND METHODS OF USING SAME | ZL201510649289.4 | 201510649289.4 | 2018-6-8 | |||||
ENDOLOGIX, INC. |
JP | CATHETER SYSTEM AND METHODS OF USING SAME | 6294669 | 2013-556828 | 2018-2-23 | |||||
TRIVASCULAR INC |
Germany | PASSIVE HEMOSTATIC SHEATH VALVE | 1651135 | 04780128.7 | 2018-2-28 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
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ENDOLOGIX, INC. |
JP | BALLOON ASSISTED ENDOLUMINAL PROSTHESIS DEPLOYMENT | 2017-560952 | 5/26/2016 | ||||||
ENDOLOGIX, Inc. |
EP | SYSTEMS AND METHODS WITH FENESTRATED GRAFT AND FILLING STRUCTURE | 3397199 | 16882476.1 | 12/23/2016 | |||||
Grantor |
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Date | ||||||||||
ENDOLOGIX, Inc. |
JP | SYSTEMS AND METHODS WITH FENESTRATED GRAFT AND FILLING STRUCTURE | 2019-500168 | 2018-534852 | 12/23/2016 | |||||
ENDOLOGIX INC. |
US | STENT GRAFT SYSTEMS WITH RESTRAINTS IN CIRCUMFERENTIAL CHANNELS AND METHODS THEREOF | 62/678961 | 5/31/2018 | ||||||
ENDOLOGIX INC. |
US | PERCUTANEOUS METHOD AND DEVICE TO TREAT DISSECTIONS | 15/429090 | 2/9/2017 | ||||||
NELLIX, INC. |
US | SYSTEM AND METHODS FOR ENDOVASCULAR ANEURYSM TREATMENT | 2018-0064566 | 15/682414 | 8/21/2017 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
TRIVASCULAR INC. |
US | ENDOVASCULAR DELIVERY SYSTEM WITH AN IMPROVED RADIOPAQUE MARKER SCHEME | US20180344491A1 | 16/049560 | 7/30/2018 | |||||
ENDOLOGIX INC. |
PCT | SINGLE PUNCTURE BIFURCATION GRAFT DEPLOYMENT SYSTEM | WO2000053251 | PCT/US2000/006070 | 3/7/2000 | |||||
ENDOLOGIX INC. |
PCT | GRAFT DEPLOYMENT SYSTEM | WO2004047885 | PCT/US2003/37685 | 11/25/2003 | |||||
ENDOLOGIX INC. |
PCT | DUAL CONCENTRIC GUIDEWIRE AND METHODS OF BIFURCATED GRAFT DEPLOYMENT | WO2008089097 | PCT/US2008/050915 | 1/11/2008 | |||||
ENDOLOGIX INC. |
PCT | ENDOLUMENAL VASCULAR PROSTHESIS WITH NEOINTIMA INHIBITING POLYMERIC SLEEVE | WO2005096997 | PCT/US2005/11522 | 4/6/2005 | |||||
ENDOLOGIX INC. |
PCT | IMPLANTABLE VASCULAR GRAFT | WO2002039888 | PCT/US2001/47028 | 11/8/2001 | |||||
ENDOLOGIX INC. |
PCT | DUAL WIRE PLACEMENT CATHETER | WO2001003762 | PCT/US2000/016352 | 6/14/2000 |
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Grantor |
Country |
Patent |
Publication/Patent No. |
Application Number |
Application Date | |||||
ENDOLOGIX INC. |
PCT | MULTI-SEGMENTED GRAFT DEPLOYMENT SYSTEM | WO2008034106 | PCT/US2007/78565 | 9/14/2007 | |||||
ENDOLOGIX INC. |
PCT | METHOD AND APPARATUS FOR DECOMPRESSING ANEURYSMS | WO2005099807 | PCT/US2005/12306 | 4/12/2005 | |||||
TRIVASCULAR INC. |
EP | ENDOLUMINAL PROSTHESIS DEPLOYMENT DEVICES AND METHODS | 3328326 | 16831382.3 | 7/28/2016 | |||||
TRIVASCULAR INC. |
EP | BALLOON ASSISTED ENDOLUMINAL PROSTHESIS DEPLOYMENT | 3302356 | 16800744.1 | 5/26/2016 | |||||
TRIVASCULAR INC. |
EP | STENT-GRAFT WITH IMPROVED FLEXIBILITY | 3294210 | 16793394.4 | 5/11/2016 | |||||
TRIVASCULAR INC. |
EP | PTFE LAYERS AND METHODS OF MANUFACTURING | 3095585 | 16171681.6 | 3/30/2006 |
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SCHEDULE 11
TRADEMARKS
See attached.
Trademarks
Grantor |
Country |
Mark |
Application No. |
Application Date |
Registration No. |
Registration Date | ||||||
Endologix, Inc. | U.S. | 86/854470 | 12/18/15 | |||||||||
Endologix, Inc. | U.S. | ACTIVESEAL | 85/518,608 | 01/17/12 | 5396605 | 02/06/18 | ||||||
Endologix, Inc. | U.S. | AFX | 85/069,068 | 06/22/10 | 4214460 | 09/25/12 | ||||||
Endologix, Inc. | U.S. | ANGIOTIP | 85/767055 | 10/30/12 | 5205176 | 05/16/17 | ||||||
Endologix, Inc. | U.S. | DURAPLY | 86/362822 | 08/11/14 | 5433696 | 3/27/18 | ||||||
Endologix, Inc. | U.S. | ENDOLOGIX | 75/323,314 | 07/11/97 | 2257799 | 06/29/99 | ||||||
Endologix, Inc. | U.S. | EVAS FORWARD | 86/116940 | 11/12/13 | 5306786 | 10/10/17 | ||||||
Endologix, Inc. | U.S. | INNOVATION TAKING SHAPE | 85/369,728 | 07/12/11 | 4220343 | 10/09/12 | ||||||
Endologix, Inc. | U.S. | INNOVATION THAT EMPOWERS | 85/514516 | 01/11/12 | 4841631 | 10/27/15 | ||||||
Endologix, Inc. | U.S. | INTELIX | 86/316249 | 06/20/14 | 5059968 | 10/11/16 | ||||||
Endologix, Inc. | U.S. | INTUITRAK | 77/494,729 | 06/09/08 | 3649757 | 07/07/09 |
Endologix, Inc. |
-1- | Updated: March 18, 2019 |
Endologix, Inc. | U.S. | INTUITRAK DELIVERY SYSTEM | 77/520,529 | 07/11/08 | 3649866 | 07/07/09 | ||||||
Endologix, Inc. | U.S. | NELLIX | 77/090544 | 01/24/07 | 3880178 | 11/23/10 | ||||||
Endologix, Inc. | U.S. | POWERLINK | 75/658,969 | 03/12/99 | 2456038 | 05/29/01 | ||||||
Endologix, Inc. | U.S. | POWERLINK XL | 78/718,728 | 09/22/05 | 3573999 | 02/10/09 | ||||||
Endologix, Inc. | U.S. | SUREPASS | 78/965,443 | 08/31/06 | 3593259 | 03/17/09 | ||||||
Endologix, Inc. | U.S. | VELA | 85/857988 | 02/22/13 | 5296578 | 09/26/17 | ||||||
Endologix, Inc. | Argentina | 3514846 | 06/16/16 | 2888199 | 05/19/17 | |||||||
Endologix, Inc. | Argentina | 3514844 | 06/16/16 | 2888198 | 05/19/17 | |||||||
Endologix, Inc. | Argentina | 3514844 | 06/16/16 | |||||||||
Endologix, Inc. | Argentina | 3514842 | 06/16/16 | 2888196 | 05/19/17 |
Endologix, Inc. |
-2- | Updated: March 18, 2019 |
Endologix, Inc. |
Argentina | AFX | 3064304 | 01/27/11 | 2496722 | 04/04/12 | ||||||
Endologix, Inc. |
Argentina | DURAPLY | 3386456 | 02/11/15 | 2773735 | 12/09/15 | ||||||
Endologix, Inc. |
Argentina | INTELIX | 3375648 | 12/19/14 | 2766285 | 12/04/15 | ||||||
Endologix, Inc. |
Argentina | INTELIX | 3375649 | 12/19/14 | 2766286 | 11/04/15 | ||||||
Endologix, Inc. |
Argentina | INTELIX | 3375650 | 12/19/14 | 2766287 | 11/04/15 | ||||||
Endologix, Inc. |
Argentina | NELLIX | 3243024 | 05/02/13 | 2658594 | 06/26/14 | ||||||
Endologix, Inc. |
Argentina | VELA | 3271551 | 08/22/13 | 2808433 | 06/03/16 | ||||||
Endologix, Inc. |
Argentina | XPAND | 3072929 | 03/16/11 | 2506706 | 06/01/12 | ||||||
Endologix, Inc. |
Australia | 1326557 | 06/14/16 | 1326557 | 04/24/17 | |||||||
Endologix, Inc. |
Australia | DURAPLY | 1710503 | 02/10/15 | 1710503 | 11/04/15 | ||||||
Endologix, Inc. |
Australia | INTELIX | 1247823 | 12/19/14 | 1247823 | 11/25/16 | ||||||
Endologix, Inc. |
Brazil | 911.201.521 | 06/17/16 | 911.201.521 | 06/19/18 |
Endologix, Inc. |
-3- | Updated: March 18, 2019 |
Endologix, Inc. |
Brazil | 911.201.572 | 06/17/16 | 911.201.572 | 06/19/18 | |||||||
Endologix, Inc. |
Brazil | 911.201.599 | 06/17/16 | 911.201.599 | 06/19/18 | |||||||
Endologix, Inc. |
Brazil | 911.201.602 | 06/17/16 | 911.201.602 | 06/19/18 | |||||||
Endologix, Inc. |
Brazil | ACTIVESEAL | 909861684 | 08/20/15 | 909861684 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | AFX | 912186283 | 01/19/17 | 912186283 | 10/16/18 | ||||||
Endologix, Inc. |
Brazil | DURAPLY | 909861722 | 08/20/15 | 909861722 | 06/19/18 | ||||||
Endologix, Inc. |
Brazil | INTELIX | 909861749 | 08/20/15 | 909861749 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | INTELIX | 909861765 | 08/20/15 | 909861765 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | INTELIX | 909861773 | 08/20/15 | 909861773 | 01/02/18 | ||||||
Endologix, Inc. |
Brazil | NELLIX | 840506538 | 05/06/13 | 840506538 | 02/16/16 | ||||||
Endologix, Inc. |
Brazil | VELA | 840618530 | 08/22/13 | ||||||||
Endologix, Inc. |
Canada | DURAPLY | 1714718 | 02/10/15 |
Endologix, Inc. |
-4- | Updated: March 18, 2019 |
Endologix, Inc. |
Canada | INTELIX | 1707569 | 12/17/14 | ||||||||
Endologix, Inc. |
Canada | VELA | 1640416 | 08/21/13 | ||||||||
Endologix, Inc. |
Chile | XPAND | 1137099 | 12/30/14 | 1187135 | 11/27/15 | ||||||
Endologix, Inc. |
China | 1326551 | 06/14/16 | |||||||||
Endologix, Inc. |
China | DURAPLY | 1257411 | 02/10/15 | 1257411 | 02/10/15 | ||||||
Endologix, Inc. |
China | INTELIX | 1247823 | 12/19/14 | 1247823 | 12/19/14 | ||||||
Endologix, Inc. |
Colombia | AFX | 16-133051 | 05/11/16 | ||||||||
Endologix, Inc. |
Colombia | ENDOLOGIX | 16-121402 | 05/11/16 | 582446 | 11/17/17 | ||||||
Endologix, Inc. |
Colombia | XPAND | 1246435 | 12/26/14 | 1246435 | 12/26/14 | ||||||
Endologix, Inc. |
European Community | AFX | 009609884 | 12/20/10 | 009609884 | 12/01/11 | ||||||
Endologix, Inc. |
European Community | ANGIOTIP | 011780129 | 04/30/13 | 011780129 | 09/24/13 | ||||||
Endologix, Inc. |
European Community | CLASSICAL REMODELING | 4598728 | 08/19/05 | 4598728 | 08/02/06 | ||||||
Endologix, Inc. |
European Community | DURAPLY | 1257411 | 02/10/15 | 1257411 | 02/10/15 | ||||||
Endologix, Inc. |
European Community | ENDOLOGIX, INC. | 720649 | 01/12/98 | 720649 | 01/12/98 |
Endologix, Inc. |
-5- | Updated: March 18, 2019 |
Endologix, Inc. |
European Community | INTELIX | 13361399 | 10/15/14 | 13361399 | 08/20/18 | ||||||
Endologix, Inc. |
European Community | INTUITRAK | 7453401 | 11/28/08 | 7453401 | 09/21/09 | ||||||
Endologix, Inc. |
European Community | INTUITRAK DELIVERY SYSTEM | 7513302 | 12/23/08 | 7513302 | 07/21/09 | ||||||
Endologix, Inc. |
European Community | NELLIX | 011771011 | 04/26/13 | 011771011 | 09/18/13 | ||||||
Endologix, Inc. |
European Community | POWERLINK XL | 5002977 | 03/22/06 | 5002977 | 04/11/07 | ||||||
Endologix, Inc. |
European Community | VISIFLEX DELIVERY SYSTEM | 5075528 | 04/24/06 | 5075528 | 04/16/07 | ||||||
Endologix, Inc. |
European Community | VISIFLEX SURE PASS | 5749338 | 02/28/07 | 5749338 | 01/31/08 | ||||||
Endologix, Inc. |
European Union | 1326551 | 06/14/16 | 1326551 | 06/12/17 | |||||||
Endologix, Inc. |
France | POWERLINK | 043299490 | 09/13/99 | 043299490 | 12/31/04 | ||||||
Endologix, Inc. |
Hong Kong | DURAPLY | 303301280 | 02/15/15 | 303301280 | 10/05/15 | ||||||
Endologix, Inc. |
Hong Kong | INTELIX | 303240954 | 12/18/14 | 303240954 | 09/07/16 | ||||||
Endologix, Inc. |
Italy | POWERLINK | 001724 | 09/13/99 | 0001376420 | 02/27/08 |
Endologix, Inc. |
-6- | Updated: March 18, 2019 |
Endologix, Inc. |
Japan | 1326551 | 06/14/16 | 1326551 | 05/02/17 | |||||||
Endologix, Inc. |
Japan | ACTIVESEAL | 2015-078597 | 08/17/15 | 5857166 | 06/10/16 | ||||||
Endologix, Inc. |
Japan | AFX | 2015-078596 | 08/17/15 | 5824704 | 02/05/16 | ||||||
Endologix, Inc. |
Japan | DURAPLY | 1257411 | 02/10/15 | 1257411 | 01/19/16 | ||||||
Endologix, Inc. |
Japan | ENDOLOGIX, INC. | 1155/1998 | 01/12/98 | 4352035 | 01/14/00 | ||||||
Endologix, Inc. |
Japan | INTELIX | 1247823 | 12/19/14 | 1247823 | 10/27/15 | ||||||
Endologix, Inc. |
Japan | NELLIX | 2013-031634 | 04/25/13 | 5613989 | 09/06/13 | ||||||
Endologix, Inc. |
Japan | VELA | 2013-6/4901 | 08/21/13 | 6101928 | 11/30/18 | ||||||
Endologix, Inc. |
Japan | VISIFLEX DELIVERY SYSTEM | 2006-035170 | 04/17/06 | 4974084 | 07/28/06 | ||||||
Endologix, Inc. |
Japan | VISIFLEX SURE PASS | 2007-017236 | 02/28/07 | 5066349 | 07/27/07 | ||||||
Endologix, Inc. |
Korea | DURAPLY | 1257411 | 02/10/15 | 1257411 | 02/10/15 | ||||||
Endologix, Inc. |
Korea | INTELIX | 1247823 | 12/19/14 | 1247823 | 06/13/16 | ||||||
Endologix, Inc. |
Malaysia | DURAPLY | 2015052019 | 02/11/15 | 2015052019 | 12/29/16 |
Endologix, Inc. |
-7- | Updated: March 18, 2019 |
Endologix, Inc. |
Malaysia | INTELIX | 2014069128 | 12/18/14 | 2014069128 | 04/22/16 | ||||||
Endologix, Inc. |
Malaysia | INTELIX | 2014069135 | 12/18/14 | 2014069135 | 05/10/16 | ||||||
Endologix, Inc. |
Mexico | XPAND | 1246435 | 12/26/14 | 1246435 | 07/26/16 | ||||||
Endologix, Inc. |
New Zealand | DURAPLY | 1024501 | 02/10/15 | 1024501 | 12/02/15 | ||||||
Endologix, Inc. |
New Zealand | INTELIX | 1247823 | 12/19/14 | 1019974 | 09/27/16 | ||||||
Endologix, Inc. |
Peru | XPAND | 601318 | 12/29/14 | 00223114 | 04/22/15 | ||||||
Endologix, Inc. |
Singapore | DURAPLY | 40201513229 | 02/10/15 | 40201513229 | 01/06/16 | ||||||
Endologix, Inc. |
Singapore | INTELIX | 40201508694 | 12/19/14 | 40201508694 | 11/11/15 | ||||||
Endologix, Inc. |
Taiwan | DURAPLY | 104008448 | 02/11/15 | 1764288 | 04/16/16 | ||||||
Endologix, Inc. |
Taiwan | INTELIX | 103072703 | 12/18/14 | 1740066 | 11/16/15 | ||||||
Endologix, Inc. |
Thailand | DURAPLY | 973443 | 02/11/15 | 171110590 | 09/28/17 | ||||||
Endologix, Inc. |
Thailand | INTELIX | 966979 | 12/19/14 | ||||||||
Endologix, Inc. |
Thailand | INTELIX | 966980 | 12/19/14 | ||||||||
Endologix, Inc. |
United Kingdom | POWERLINK | 2369587 | 09/13/99 | 2369587 | 12/09/05 | ||||||
Endologix, Inc. |
Venezuela | XPAND | 20754-14 | 12/30/14 | P352404 | 06/07/16 |
Endologix, Inc. |
-8- | Updated: March 18, 2019 |
Endologix, Inc. |
Vietnam | DURAPLY | 1257411 | 02/10/15 | 1257411 | 11/03/16 | ||||||
Endologix, Inc. |
Vietnam | INTELIX | 1247823 | 12/19/14 | 1247823 | 05/21/15 | ||||||
Endologix, Inc. |
U.S. | ALTO | 87/906,099 | 5/3/2018 | ||||||||
Endologix, Inc. |
U.S. | VERTA | 87/116,482 | 7/26/2016 | ||||||||
TriVascular, Inc. |
U.S. | ALLEGRO | 86/758,465 | 9/16/2015 | ||||||||
TriVascular, Inc. |
U.S. | CUSTOMSEAL | 86/047,875 | 8/26/2013 | 4,732,342 | 5/5/2015 | ||||||
TriVascular, Inc. |
U.S. | OVATION | 77/941,535 | 2/22/2010 | 4,440,468 | 11/26/2013 | ||||||
TriVascular, Inc. |
U.S. | OVATION ALTO | 86/047,894 | 8/26/2013 | 5,195,890 | 5/2/2017 | ||||||
TriVascular, Inc. |
U.S. | OVATION PRIME | 85/900,037 | 4/10/2013 | 4,452,625 | 12/17/2013 | ||||||
TriVascular, Inc. |
U.S. | 85/832,445 | 1/25/2013 | 4,449,077 | 12/10/2013 | |||||||
TriVascular, Inc. |
U.S. | TRIVASCULAR | 75/879,907 | 12/21/1999 | 2,867,015 | 7/27/2004 | ||||||
TriVascular, Inc. |
U.S. | 85/831,355 | 1/24/2013 | 4,395,789 | 9/3/2013 | |||||||
TriVascular, Inc. |
Australia | CUSTOMSEAL | 1608471 | 2/27/2014 | 1608471 | 1/21/2015 | ||||||
TriVascular, Inc. |
Australia | OVATION | 1379343 | 8/20/2010 | 1379343 | 1/10/2011 | ||||||
TriVascular, Inc. |
Australia | OVATION ALTO | 1608211 | 2/26/2014 | 1608211 | 5/28/2014 |
Endologix, Inc. |
-9- | Updated: March 18, 2019 |
TriVascular, Inc. |
Australia | OVATION PRIME | 1583683 | 10/2/2013 | 1583683 | 1/7/2014 | ||||||
TriVascular, Inc. |
Australia | 1537921 | 1/29/2013 | 1537921 | 7/31/2013 | |||||||
TriVascular, Inc. |
Australia | TRIVASCULAR | 888603 | 9/7/2001 | 888603 | 9/7/2001 | ||||||
TriVascular, Inc. |
Australia | 983475 | 12/30/2003 | 983475 | 8/16/2004 | |||||||
TriVascular, Inc. |
Brazil | CUSTOMSEAL | 840.803.346 | 2/26/2014 | 840803346 | 10/18/2016 | ||||||
TriVascular, Inc. |
Brazil | OVATION | 830727035 | 8/20/2010 | 830727035 | 1/6/2015 | ||||||
TriVascular, Inc. |
Brazil | OVATION ALTO | 840.803.419 | 2/26/2014 | 840.803.419 | 3/20/2018 | ||||||
TriVascular, Inc. |
Brazil | OVATION PRIME | 840.666.152 | 10/4/2013 | 840666152 | 8/23/2016 | ||||||
TriVascular, Inc. |
Brazil | 830854487 | 11/24/2010 | 830854487 | 6/3/2014 | |||||||
TriVascular, Inc. |
Canada | CUSTOMSEAL | 1,665,277 | 2/25/2014 | ||||||||
TriVascular, Inc. |
Canada | OVATION | 1493184 | 8/20/2010 | TMA858,759 | 8/28/2013 | ||||||
TriVascular, Inc. |
Canada | OVATION ALTO | 1,665,276 | 2/25/2014 | ||||||||
TriVascular, Inc. |
Canada | OVATION PRIME | 1,645,991 | 10/2/2013 | ||||||||
TriVascular, Inc. |
Canada | 1,611,335 | 1/25/2013 | TMA934,553 | 4/12/2016 | |||||||
TriVascular, Inc. |
Canada | TRIVASCULAR | 1,612,136 | 1/31/2013 | TMA882,992 | 7/29/2014 |
Endologix, Inc. |
-10- | Updated: March 18, 2019 |
TriVascular, Inc. |
Canada | 1200748 | 12/30/2003 | TMA825955 | 6/8/2012 | |||||||
TriVascular, Inc. |
China | CUSTOMSEAL | 14075157 | 2/26/2014 | 14075157 | 4/28/2015 | ||||||
TriVascular, Inc. |
China | OVATION | 8598413 | 8/23/2010 | 8598413 | 11/7/2011 | ||||||
TriVascular, Inc. |
China | OVATION ALTO | 14075158 | 2/26/2014 | 14075158 | 4/28/2015 | ||||||
TriVascular, Inc. |
China | OVATION PRIME | 13321289 | 10/8/2013 | 13321289 | 6/21/2015 | ||||||
TriVascular, Inc. |
China | 8898103 | 11/30/2010 | 8898103 | 12/14/2011 | |||||||
TriVascular, Inc. |
EUTM | OVATION | 009325234 | 8/20/2010 | 009325234 | 2/3/2011 | ||||||
TriVascular, Inc. |
EUTM | OVATION ALTO | 012636908 | 2/25/2014 | 012636908 | 7/16/2014 | ||||||
TriVascular, Inc. |
EUTM | OVATION PRIME | 012189148 | 10/2/2013 | 012189148 | 2/26/2014 | ||||||
TriVascular, Inc. |
EUTM | 011523305 | 1/28/2013 | 011523305 | 6/24/2013 | |||||||
TriVascular, Inc. |
EUTM | TRIVASCULAR | 002374593 | 9/13/2001 | 002374593 | 3/12/2003 | ||||||
TriVascular, Inc. |
EUTM | 003598836 | 12/31/2003 | 003598836 | 4/29/2005 | |||||||
TriVascular, Inc. |
India | OVATION | 2012141 | 8/20/2010 | 2012141 | 8/23/2016 | ||||||
TriVascular, Inc. |
India | 2060383 | 11/29/2010 | 2060383 | 11/29/2010 | |||||||
TriVascular, Inc. |
Japan | CUSTOMSEAL | 2014-14237 | 2/26/2014 | 5672406 | 5/23/2014 |
Endologix, Inc. |
-11- | Updated: March 18, 2019 |
TriVascular, Inc. |
Japan | OVATION | 2010-065871 | 8/20/2010 | 5614976 | 9/13/2013 | ||||||
TriVascular, Inc. |
Japan | OVATION ALTO | 2014-14238 | 2/26/2014 | 5672407 | 5/23/2014 | ||||||
TriVascular, Inc. |
Japan | OVATION PRIME | 2013-024875 | 4/4/2013 | 5613251 | 9/6/2013 | ||||||
TriVascular, Inc. |
Japan | 2013-5504 | 1/30/2013 | 5643434 | 1/17/2014 | |||||||
TriVascular, Inc. |
Japan | TRIVASCULAR | 2001-115594 | 12/27/2001 | 4731627 | 12/5/2003 | ||||||
TriVascular, Inc. |
Japan | 2004-030615 | 3/18/2004 | 4778040 | 6/11/2004 | |||||||
TriVascular, Inc. |
Mexico | OVATION | 1113689 | 8/20/2010 | 1235645 | 8/20/2010 | ||||||
TriVascular, Inc. |
Mexico | 1139285 | 12/2/2010 | 1213946 | 4/27/2011 |
Endologix, Inc. |
-12- | Updated: March 18, 2019 |
EXHIBIT B
ABL Amendment
[Attached]
Filed as Exhibit 10.3 to this Current Report
EXHIBIT C
Equity Financing Documents
[Attached]
Filed as Exhibit 10.1 to this Current Report
EXHIBIT D
Convertible Debenture Restructuring Documents
[Attached]
Filed as Exhibit 10.2 to this Current Report
Exhibit 99.1
INVESTOR CONTACT:
Endologix, Inc.
Vaseem Mahboob, CFO
(949) 595-7200
Endologix Announces Equity Financing of $52 Million and Debt Restructuring Addressing 2020 Maturities and Financial Covenants
| The Company reports preliminary revenue for the first quarter ending March 31, 2019 of at least $35 million |
| The Company reiterates financial guidance for 2019 |
| Transactions expected to close on or about April 3rd |
| Endologix management to host conference call today at 8:30 a.m. ET |
IRVINE, California, April 1, 2019 -
Endologix, Inc. (Nasdaq: ELGX) (the Company), a developer and marketer of innovative treatments for aortic disorders, today announced that it has entered into a definitive agreement to raise approximately $52 million gross cash proceeds through the issuance of approximately 7.9 million new shares of the Companys common stock at a purchase price of $6.61 per share. The Companys net proceeds, after payment of estimated financial advisor fees but before other transaction expenses, is expected to be approximately $49 million. The primary use of this capital will be for working capital and general corporate purposes.
In a separate transaction, the Company also entered into an exchange agreement with two holders of the Companys 3.25% Senior Convertible Notes due 2020 (the 3.25% Notes), pursuant to which these investors exchanged an aggregate of approximately $73 million of 3.25% Notes plus accrued interest for approximately $67 million of 5.0% Convertible Senior Notes due 2024 (the 5.0% Notes) at the rate of $900 principal amount of 5.0% Notes for every $1000 principal amount of 3.25% Notes. This agreement will replace the Companys existing 3.25% Convertible Senior Notes due 2020 for those investors.
The Company and Deerfield also agreed to amend their existing facility agreement and credit agreement to, among other things, extend near-term mandatory amortization payments, provide for certain conversion rights and obligations pertaining to the Companys debt to Deerfield, and provide Endologix with certain covenant relief with respect to certain of its existing revenue and global excess liquidity covenants.
Todays announcement represents another step forward for Endologix. The transactions announced today will allow us to focus our efforts on continued execution while investing in bringing evidence-driven products to market, said John Onopchenko, Chief Executive Officer of Endologix, Inc. Our supportive partners worked diligently with us to structure these transactions, and I am proud of our teams persistence in getting this agreement finalized, ensuring that we can continue to deliver innovation to patients in need.
Vaseem Mahboob, Chief Financial Officer of Endologix, Inc., commented, The financing announced today will strengthen our balance sheet and provide us with a clear path to achieving operating cash flow breakeven in 2021. We are excited to continue working towards re-establishing durable, predictable growth in the markets we serve. We will remain focused on managing operating expenses while increasing commercial productivity and strategically investing in innovative therapies and related clinical studies for the treatment of AAA.
DLA Piper and Jefferies LLC served as legal counsel and financial advisor to the Company, respectively.
The Company is reporting preliminary revenue for the first quarter ending March 31, 2019 of at least $35 million. The Company is reiterating its previously communicated full-year 2019 revenue guidance of at least $140 million.
The Companys management will be hosting a conference call today at 8:30 a.m. ET to discuss the financing transactions. Details on the conference call are provided below.
Equity Financing
March 31, 2019, the Company, Inc. entered into a purchase agreement with select institutional investors and certain other accredited investors, including members of the Companys management and board of directors, whereby the Company agreed to issue and sell to the investors, and the investors agreed to purchase, an aggregate of 7,889,552 shares of the Companys common stock at a price per share of $6.61, for an aggregate cash purchase price of approximately $52.15 million. For any investor whose purchase of the equity shares would result in its beneficially owning in excess of 19.99% of the shares of the common stock outstanding immediately after giving effect to the issuance, in lieu of issuing the blocked shares which such investor would have received, the Company will issue to such investor a pre-paid warrant to purchase shares of common stock equal to the number of blocked shares that would have been received for the equity offering price per share. Each pre-paid warrant will be exercisable upon issuance, provided that such exercise does not result in the issuance of blocked shares, and will expire ten years from the date of issuance. The Company currently expects the conditions to closing contemplated by the purchase agreement to be satisfied, and the closing contemplated thereunder, to take place on or about April 3, 2019.
Convertible Note Exchange
On March 31, 2019, the Company and two investors holding $73.355 million of the principal amount of the Companys 3.25% Convertible Senior Notes due 2020 entered into an exchange agreement providing for the exchange of the holders existing notes for new 5.00% Voluntary Convertible Senior Notes due 2024 and new 5.00% Mandatory Convertible Senior Notes due 2024. The exchanging holders will receive $900 principal amount of new notes for every $1000 principal amount of existing notes plus accrued interest exchanged pursuant to the exchange agreement. The Company will issue $25.0 million of principal amount of the new mandatory notes and $42.02 million of principal amount of the new voluntary notes to the holders. The Company currently expects the conditions to closing contemplated by the exchange agreement to be satisfied, and the closing contemplated thereunder to take place, on or about April 3, 2019.
The new voluntary notes and new mandatory notes will be governed by separate indentures, each dated as of the closing of the exchange, by and between the Company and Wilmington Trust, National Association, as trustee. The new notes will accrue interest at a rate of 5.00% per year, payable semi-annually in arrears on April 1 and October 1 of each year, commencing October 1, 2019. The new notes will mature on the anniversary of the closing date in 2024, unless earlier purchased, redeemed or converted in accordance with the terms of the indenture.
The new voluntary notes will be convertible at the option of each holder into shares of common stock at any time on or after July 1, 2020, but prior to the close of business on the business day immediately preceding January 1, 2024, provided that, except if the Company undergoes a fundamental change (as defined in the new voluntary notes Indenture) and for certain other customary circumstances of conversion, each holder may not convert more than 30% the initial aggregate principal amount of his or her outstanding new voluntary notes per calendar quarter. Thereafter, until the close of business on the business day immediately preceding the maturity date, the new voluntary notes will be convertible at the option of the holder at any time regardless of the conditions described in this paragraph. The initial conversion rate of the new voluntary notes in a voluntary conversion is 0.12103 shares of the Companys common stock per $1.00 principal amount of the new notes, which is equivalent to an initial conversion price per share equal to 125% of the equity offering price. The conversion rate is subject to adjustment upon the occurrence of certain specified events. Except if the Company undergoes a fundamental change (as defined in the new voluntary notes indenture) and for certain other customary circumstances of conversion, in no event prior to the close of business on the business day immediately preceding January 1, 2024 may the new voluntary notes be converted in a calendar quarter unless the closing sale price of the Companys common stock for at least twenty trading days during the period of thirty consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 110% of the equity offering (subject to adjustment upon the occurrence of certain specified events).
The new mandatory notes provide for the mandatory conversion of $1,666,666 of the aggregate principal amount each calendar month for fifteen consecutive months beginning on the calendar month beginning with May 1, 2019, if and only if at the end of the prior calendar month the trailing average volume weighted average price (VWAP) of the last five trading days of the prior calendar month is greater than 100% of the equity offering Price. In the event of a mandatory conversion, $1,666,666 of the new mandatory notes would mandatorily convert at a conversion rate of 0.15129 shares of the Companys common stock per $1.00 principal amount of the new notes, which is equivalent to a price per share equal to the equity offering price. The new mandatory notes will be convertible at the option of each holder into shares of common stock at the voluntary conversion price at any time prior to the close of business on the business day immediately preceding January 1, 2024, provided that, except if the Company undergoes a fundamental change (as defined in the new mandatory notes indenture) and for certain other customary circumstances of conversion, each holder may not convert more than 30% of the initial aggregate principal amount of his or her outstanding new mandatory note per calendar quarter, and provided further, that (i) voluntary conversions may be effected only if the voluntary conversion threshold has been achieved and (ii) a voluntary conversion may not take place in the same calendar quarter as a mandatory conversion. Thereafter, until the close of business on the business day immediately preceding the maturity date, the new mandatory notes will be convertible at the option of the holder at any time regardless of the conditions described in this paragraph.
The indentures will provide that in no event may a holder convert, whether in a voluntarily conversion or a mandatory conversion or otherwise, into shares of common stock if such conversion would result in the holder beneficially owning more that 9.5% of the Companys outstanding common stock.
Amendment to Deerfield Facility Agreement
On March 31, 2019, the Company entered into a second amendment to Amended and Restated Facility Agreement and First Amendment to Amended and Restated Guaranty and Security Agreement with Deerfield Private Design Fund IV, L.P. and certain of its related funds and affiliates, dated August 9,
2018, as amended by that certain First Amendment to Amended and Restated Facility Agreement, dated November 20, 2018. The facility amendment provides for, among other things, the reduction in the global excess liquidity covenant from $22.5 million to $17.5 million and the reduction of the minimum net revenue financial covenants. In addition, the percentage of the $120.0 million of first out waterfall loans due on April 2, 2021 decreased from 33.33% to 16.67% of the first out waterfall loans outstanding on such date, while the percentage of the remainder of the first out waterfall loans due on April 2, 2022 remained at 50% of the first out waterfall loans outstanding on such date.
The facility agreement provides for the exchange of the existing notes representing the first out waterfall loans for amended notes that provide that in the event that, in any calendar month beginning April 1, 2019 and ending June 30, 2020, if (A)(i) the arithmetic mean of the volume weighted average prices of the Companys common stock (VWAP) on the five consecutive trading days ending on the 15th calendar day (or, if not a trading day, the first trading day thereafter) and (ii) the closing price for the Companys common stock on the mandatory conversion measurement date, both exceed $6.625 (as may be adjusted to reflect certain events) and (B)(i) the VWAP on the five consecutive trading days ending on (and including) the third trading day immediately prior to the mandatory conversion measurement date and (ii) the closing price for the Companys common stock on the initial mandatory conversion measurement date both exceed the fixed conversion price, Deerfield shall be obligated to convert $1,666,666 of the principal amount of the loan into shares of common stock at a fixed conversion price of $6.625, up to a maximum aggregate amount of $25.0 million over the mandatory conversion period.
Deerfield also has the option to convert up to an additional $50.0 million of the Companys outstanding debt at the greater of the fixed conversion price and 85% of the arithmetic average of the volume weighted average price of the Companys common stock on each of the fifteen consecutive trading days prior to the conversion date. The Company has the option to require conversion of the voluntary conversion amount (less the amount of prior voluntary conversions) if the Companys 15-day VWAP is greater than 175% of the fixed conversion price. The first amendment waterfall notes also provide that in no event may Deerfield convert, whether voluntarily or mandatorily, into shares of common stock if such conversion would result in Deerfield beneficially owning more that 4.985% of the Companys outstanding
common stock. The first out waterfall notes also revises Deerfields existing right to convert a portion of the outstanding principal amount of the first-out waterfall loan into a maximum of 1,430,000 shares of the Companys common stock from the current conversion price of 96% of the arithmetic average of the volume weighted average price of the Companys common stock on each of the three consecutive trading days prior to the conversion date to the greater of (i) the fixed conversion price or (ii) the 96% VWAP price.
Further, the facility amendment also provides, upon the effectiveness, for an increase of $5,000,000 in the amounts payable to the holders of the first out waterfall notes as a fee upon termination (or reduction, or required reduction, of the outstanding amounts under the first out waterfall notes to less than $10,000,000) under the facility agreement and to reimburse Deerfield for all expenses incurred by Deerfield in connection with the negotiation and documentation of the facility amendment. Also, the existing right of the Company to satisfy interest payments on the first out waterfall loans with up to 250,000 shares of its common stock has been removed.
The facility amendment is conditioned upon completion of the financing with gross proceeds to the Company of at least $40.0 million and the closing of the transactions contemplated by the exchange agreement, amongst other conditions. Accordingy, it is expected to become effective on or about April 3, 2019.
In connection with entry into the facility amendment, the Company is amending warrants to purchase 647,001 shares of common stock previously issued to Deerfield pursuant to the Companys prior facility agreement with Deerfield dated, April 3, 2017 and warrants to purchase 875,001 shares of common stock previously issued in August 2018 to Deerfield pursuant to the facility agreement in order to reduce the exercise price of the warrants to the equity offering price. All other material terms and conditions of the warrants will remain the same.
Amendment to Deerfield Credit Agreement
On March 31, 2019, the Company entered into a Second Amendment to Credit Agreement and First Amendment to Guaranty and Security Agreement with Deerfield ELGX Revolver, LLC and certain of its affiliates, dated August 9, 2018, as amended by that certain first amendment to credit agreement, dated November 20, 2018. The credit amendment includes conforming revisions to reflect the changes in the facility amendment. In addition, the credit amendment extends the maturity date of the credit agreement to the earlier of (i) April 2, 2023 or (ii) the date the loans pursuant to the facility agreement have been repaid in full.
Conference Call Information
The Companys management will host a conference call today at 8:30 a.m. ET (5:30 a.m. PT) to discuss the financing transactions.
To participate in the conference call, dial 877-407-9716 (domestic) or 201-493-6779 (international) and enter the passcode 13689366.
This conference call will also be webcast and can be accessed from the Investors section of the Companys website at www.endologix.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.
A recording of this call will also be available from 11:30 a.m. ET on Monday, April 1, 2019, until 11:59 p.m. ET on Monday, April 8, 2019. To hear this recording, dial 844-512-2921 (domestic) or 412-317-6671 (international) and enter the passcode 13689366.
About Endologix, Inc.
The Company develops and manufactures minimally invasive treatments for aortic disorders. The Companys focus is in endovascular stent grafts for the treatment of abdominal aortic aneurysms (AAA).
AAA is a weakening of the wall of the aorta, the largest artery in the body, resulting in a balloon-like enlargement. Once an AAA develops, it continues to enlarge and, if left untreated, becomes increasingly susceptible to rupture. The overall patient mortality rate for ruptured AAA is approximately 80%, making it a leading cause of death in the U.S. For more information, visit www.endologix.com.
The Nellix® EndoVascular Aneurysm Sealing System and Ovation Alto® Abdominal Stent Graft System, the Companys next generation Ovation system device, are approved only as investigational devices and are not currently approved for commercial purposes in any market.
Forward Looking Statements
This press release contains certain forward-looking information about Endologix, Inc. that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are not historical facts. Words such as expect(s), feel(s), believe(s), will, may, anticipate(s) and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to, statements about the Companys expectations regarding its capital raising efforts, including the closing of the equity offering, the convertible note exchange, and the amendments to the Companys credit facility and related guaranty and security and the Companys intended use of proceeds. All such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, which could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to, risks related to continued market acceptance of the Companys products; the success of the Companys restructuring and strategic initiatives; the success of clinical trials relating to the Companys products; the Companys product research and development efforts; uncertainty in the process of obtaining and maintaining regulatory approval for the Companys
products; the Companys ability to protect its intellectual property rights and proprietary technologies; and other economic, business, competitive and regulatory factors. Please refer to the Companys filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2018, for more detailed information regarding these risks and uncertainties, as well as other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this press release. Endologix undertakes no obligation to update or review any forward- looking statements in this press release to reflect new information, events or circumstances after the date they are made, or to reflect the occurrence of unanticipated events.
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