Form 8-K Bristow Group Inc For: Dec 13

December 18, 2017 4:47 PM

 

 

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): December 13, 2017

 

 

Bristow Group Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-31617   72-0679819

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2103 City West Blvd.,

4th Floor

Houston, Texas

  77042
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (713) 267-7600

Former Name or Former Address, if Changed Since Last Report: NONE

 

 

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.

Underwriting Agreement and Indenture

On December 13, 2017, Bristow Group Inc. (the “Company”) and its wholly-owned subsidiaries Bristow U.S. LLC, Bristow U.S. Leasing LLC, Bristow Alaska Inc., BHNA Holdings Inc. and Bristow Helicopters Inc. (collectively, the “Guarantors”) entered into an underwriting agreement (the “Underwriting Agreement”) with Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the underwriters named therein (collectively, the “Underwriters”), pursuant to which the Company agreed to sell to the Underwriters $125,000,000 aggregate principal amount of its 4.50% Convertible Senior Notes due 2023 (the “Initial Notes”), guaranteed on a senior unsecured basis by the Guarantors. Pursuant to the Underwriting Agreement, the Company granted the Underwriters an option to purchase up to an additional $18,750,000 aggregate principal amount of the Notes to cover over-allotments (the “Additional Notes” and, together with the Initial Notes, the “Notes”), which option was exercised in full on December 14, 2017. The issuance and sale of the Notes has been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-206535), and is being made pursuant to a prospectus supplement, dated December 13, 2017, and a base prospectus, dated July 21, 2017, filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act.

The offering closed on December 18, 2017. The net proceeds from the sale of the Notes were approximately $139.8 million (after deducting underwriting discounts and commissions and estimated offering expenses). The Notes were issued pursuant to an indenture dated as of June 17, 2008 (the “Base Indenture”), among the Company, the subsidiary guarantors named therein and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the sixth supplemental indenture thereto dated as of December 18, 2017 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) among the Company, the Guarantors and the Trustee. The Notes will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The initial conversion price of the Notes is approximately $15.64 (subject to adjustment in certain circumstances), based on the initial conversion rate of 63.9488 shares of the Company’s common stock per $1,000 principal amount of Notes. The Notes will bear interest at a rate of 4.50% per year, payable semi-annually in arrears on June 1 and December 1 of each year and beginning on June 1, 2018. The Notes will mature on June 1, 2023 and may not be redeemed by the Company prior to maturity. Prior to December 1, 2022, the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date. The Notes are senior unsecured obligations of the Company.

The foregoing description of the Underwriting Agreement, the Base Indenture and the Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements, which are attached as Exhibit 1.1, Exhibit 4.1 and Exhibit 4.2, respectively, hereto. The form of the Notes issued pursuant to the Indenture is attached as an exhibit to the Supplemental Indenture and the terms and conditions thereof are incorporated by reference herein. Certain legal opinions related to the Notes are attached as Exhibit 5.1, Exhibit 5.2 and Exhibit 5.3 hereto.

As more fully described in the prospectus supplement, certain of the Underwriters and their affiliates have from time to time performed, and may in the future perform, various financial advisory, commercial banking and investment banking services for the Company and its affiliates in the ordinary course of business, for which they have received and would receive customary compensation.

A copy of the press release announcing the pricing of the offering is attached as Exhibit 99.1 hereto.

Convertible Note Hedge and Warrant Transactions

On December 13, 2017, in connection with the pricing of the Notes, the Company entered into privately negotiated convertible note hedge transactions (the “Base Note Hedge Transactions”) with each of Credit Suisse Capital LLC, Barclays Bank PLC, Citibank, N.A. and JP Morgan Chase Bank, National Association (the “Option Counterparties”). On December 14, 2017, in connection with the Underwriters’ exercise of their option to purchase the Additional Notes, the Company entered into additional privately negotiated convertible note hedge transactions with the Option Counterparties (the “Additional Note Hedge Transactions” and, together with the Base Note Hedge Transactions, the “Note Hedge Transactions”).

The Note Hedge Transactions are expected generally to reduce the potential dilution and/or offset the cash payments the Company is required to make in excess of the principal amount upon conversion of the Notes in the event that the market price of the Company’s common stock is greater than the strike price of the Note Hedge Transactions, which is initially $15.64 (subject to adjustment), corresponding approximately to the initial conversion price of the Notes.

 

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On December 13, 2017, the Company also entered into separate, privately negotiated warrant transactions with the Option Counterparties (the “Base Warrant Transactions”), and on December 14, 2017, the Company entered into additional privately negotiated warrant transactions with the Option Counterparties (the “Additional Warrant Transactions” and, together with the Base Warrant Transactions, the “Warrant Transactions”), in which it sold net-share-settled warrants to the Option Counterparties initially relating to the same number of shares of the Company’s common stock initially underlying the Notes, subject to customary anti-dilution adjustments. The strike price of the warrants will initially be approximately $20.02 per share (subject to adjustment), which is 60% above the last reported sale price of the Company’s common stock on the New York Stock Exchange on December 13, 2017. The Warrant Transactions could have a dilutive effect to the Company’s stockholders to the extent the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeds the applicable strike price of the warrants.

The Note Hedge Transactions and the Warrant Transactions are separate transactions, in each case entered into by the Company with the Option Counterparties, and are not part of the terms of the Notes and will not affect any holder’s rights under the Notes. Holders of the Notes will not have any rights with respect to the Note Hedge Transactions or the Warrant Transactions.

The foregoing description of the Note Hedge Transactions and the Warrant Transactions is qualified in its entirety by reference to the full text of the confirmations of the Note Hedge Transactions and the Warrant Transactions, which are attached as Exhibits 10.1 through 10.16 hereto.

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K with respect to the Notes and the Indenture is incorporated by reference herein.

Item 3.02. Unregistered Sale of Equity Securities.

The information set forth under the heading “Convertible Note Hedge and Warrant Transactions” in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

The warrants were issued pursuant to the exemption provided by Section 4(a)(2) of the Securities Act.

 

Item 9.01. Financial Statements and Exhibits.

(d)    Exhibits

 

Exhibit
Number

  

Description of Exhibit

1.1    Underwriting Agreement, dated December 13, 2017, among the Company, the Guarantors and the representatives of the several underwriters named therein.
4.1    Indenture, dated as of June  17, 2008, among the Company, the subsidiary guarantors named therein and U.S. Bank National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K filed on June 17, 2008 (File No. 001-31617)).
4.2    Sixth Supplemental Indenture, dated as of December 18, 2017, among the Company, the Guarantors and U.S. Bank National Association, as trustee.

 

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4.3    Form of 4.50% Senior Convertible Note due 2023 (included in Exhibit 4.2).
5.1    Opinion of Baker Botts L.L.P.
5.2    Opinion of Phelps Dunbar LLP.
5.3    Opinion of Davis Wright Tremaine LLP.
10.1    Letter Agreement, dated December 13, 2017, between Credit Suisse Capital LLC and the Company, regarding the Base Warrants.
10.2    Letter Agreement, dated December 13, 2017, between Barclays Bank PLC and the Company, regarding the Base Warrants.
10.3    Letter Agreement, dated December 13, 2017, between Citibank, N.A., and the Company, regarding the Base Warrants.
10.4    Letter Agreement, dated December 13, 2017, between JPMorgan Chase Bank, National Association, and the Company, regarding the Base Warrants.
10.5    Letter Agreement, dated December 13, 2017, between Credit Suisse Capital LLC and the Company, regarding the Base Call Option Transaction.
10.6    Letter Agreement, dated December 13, 2017, between Barclays Bank PLC and the Company, regarding the Base Call Option Transaction.
10.7    Letter Agreement, dated December 13, 2017, between Citibank, N.A., and the Company, regarding the Base Call Option Transaction.
10.8    Letter Agreement, dated December 13, 2017, between JPMorgan Chase Bank, National Association, and the Company, regarding the Base Call Option Transaction.
10.9    Letter Agreement, dated December 14, 2017, between Credit Suisse Capital LLC and the Company, regarding the Additional Warrants.
10.10    Letter Agreement, dated December 14, 2017, between Barclays Bank PLC and the Company, regarding the Additional Warrants.
10.11    Letter Agreement, dated December 14, 2017, between Citibank, N.A., and the Company, regarding the Additional Warrants.
10.12    Letter Agreement, dated December 14, 2017, between JPMorgan Chase Bank, National Association, and the Company, regarding the Additional Warrants.
10.13    Letter Agreement, dated December 14, 2017, between Credit Suisse Capital LLC and the Company, regarding the Additional Call Option Transaction.
10.14    Letter Agreement, dated December 14, 2017, between Barclays Bank PLC and the Company, regarding the Additional Call Option Transaction.
10.15    Letter Agreement, dated December 14, 2017, between Citibank, N.A., and the Company, regarding the Additional Call Option Transaction.
10.16    Letter Agreement, dated December 14, 2017, between JPMorgan Chase Bank, National Association, and the Company, regarding the Additional Call Option Transaction.

 

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12.1    Statement re Computation of Ratio of Earnings to Fixed Charges.
23.1    Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
23.2    Consent of Phelps Dunbar LLP (included in Exhibit 5.2).
23.3    Consent of Davis Wright Tremaine LLP (included in Exhibit 5.3).
99.1    Press Release announcing the pricing of the offering, dated December 13, 2017.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  BRISTOW GROUP INC.
Date: December 18, 2017   By:  

/s/ Timothy J. Knapp

    Timothy J. Knapp
   

Senior Vice President, General Counsel and

Corporate Secretary

Exhibit 1.1

Execution Version

$125,000,000

BRISTOW GROUP INC.

4.50% Convertible Senior Notes due 2023

UNDERWRITING AGREEMENT

December 13, 2017

Credit Suisse Securities (USA) LLC

Barclays Capital Inc.

Merrill Lynch, Pierce, Fenner & Smith

             Incorporated

As Representatives of the Several Underwriters,

c/o Credit Suisse Securities (USA) LLC,

Eleven Madison Avenue,

New York, N.Y. 10010-3629

Dear Sirs:

1.    Introductory. Bristow Group Inc., a Delaware corporation (“Company”), agrees with the several Underwriters named in Schedule A (“Underwriters”) to this agreement (this “Agreement”), for whom you are acting as representative (in such capacity, the “Representatives”), to issue and sell to the several Underwriters $125,000,000 principal amount (“Firm Securities”) of its 4.50% Convertible Senior Notes due 2023 (the “Notes”) and also agrees to issue and sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than $18,750,000 additional principal amount (“Optional Securities”) of its Notes as set forth below, all to be issued under an indenture, dated as of June 17, 2008, and as supplemented through the First Closing Date (“Indenture”), between the Company and U.S. Bank National Association, as Trustee. The Firm Securities and the Optional Securities, together with the related Guarantees, are herein collectively called the “Offered Securities.” The Notes will be guaranteed (the “Guarantees”) on a senior unsecured basis by the subsidiaries of the Company listed on the signature pages hereof (the “Guarantors”). The Notes and the Guarantees are herein collectively called the “Securities.”

In connection with the offering of the Firm Securities, the Company is separately entering into convertible note hedge transactions and warrant transactions with certain of the Underwriters or their respective affiliates (the “Call Spread Counterparties”), in each case pursuant to convertible note hedge confirmations (the “Base Bond Hedge Confirmations”) and warrant confirmations (the “Base Warrant Confirmations”), respectively, each dated the date hereof (the Base Bond Hedge Confirmations and the Base Warrant Confirmations, collectively, the “Base Call Spread Confirmations”), and in connection with the issuance of any Optional Securities, the Company and the Call Spread Counterparties may enter into additional convertible note hedge transactions and

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additional warrant transactions pursuant to additional convertible note hedge confirmations (the “Additional Bond Hedge Confirmations”) and additional warrant confirmations (the “Additional Warrant Confirmations” and, together with the Base Warrant Confirmations, the “Warrant Confirmations”), respectively, each to be dated the date on which the option granted to the Underwriters pursuant to Section 3 to purchase such Optional Securities is exercised (the Additional Bond Hedge Confirmations and the Additional Warrant Confirmations, collectively, the “Additional Call Spread Confirmations” and, together with the Base Call Spread Confirmations, the “Call Spread Confirmations”).

2.    Representations and Warranties of the Company. The Company and each of the Guarantors, jointly and severally, represent and warrant to, and agree with, the several Underwriters that:

(a)    Filing and Effectiveness of Registration Statement; Certain Defined Terms. The Company and the Guarantors have filed with the Commission a registration statement on Form S-3 (No. 333-206535), including a related prospectus or prospectuses, covering the registration of the Offered Securities under the Act, which has become effective. “Registration Statement” at any particular time means such registration statement in the form then filed with the Commission, including any amendment thereto, any document incorporated by reference therein and all 430B Information and all 430C Information with respect to such registration statement, that in any case has not been superseded or modified. “Registration Statement” without reference to a time means the Registration Statement as of the Effective Time. For purposes of this definition, 430B Information shall be considered to be included in the Registration Statement as of the time specified in Rule 430B.

For purposes of this Agreement:

430B Information” means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430B(e) or retroactively deemed to be a part of the Registration Statement pursuant to Rule 430B(f).

430C Information” means information included in a prospectus then deemed to be a part of the Registration Statement pursuant to Rule 430C.

Act” means the Securities Act of 1933, as amended.

Applicable Time” means 5:50 pm (Eastern time) on the date of this Agreement.

Closing Date” has the meaning defined in Section 3 hereof.

Commission” means the Securities and Exchange Commission.

Effective Time” of the Registration Statement relating to the Offered Securities means the time of the first contract of sale for the Offered Securities.

 

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Exchange Act” means the Securities Exchange Act of 1934, as amended.

Final Prospectus” means the Statutory Prospectus that discloses the public offering price, other 430B Information and other final terms of the Offered Securities and otherwise satisfies Section 10(a) of the Act.

General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being so specified in Schedule B to this Agreement.

Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Offered Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not a General Use Issuer Free Writing Prospectus.

Rules and Regulations” means the rules and regulations of the Commission.

Securities Laws” means, collectively, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), the Act, the Exchange Act, the Trust Indenture Act, the Rules and Regulations, the auditing principles, rules, standards and practices applicable to auditors of “issuers” (as defined in Sarbanes-Oxley) promulgated or approved by the Public Company Accounting Oversight Board and, as applicable, the rules of the New York Stock Exchange (“Exchange Rules”).

Statutory Prospectus” with reference to any particular time means the prospectus relating to the Offered Securities that is included in the Registration Statement immediately prior to that time, including any document incorporated by reference therein and all 430B Information and all 430C Information with respect to the Registration Statement. For purposes of the foregoing definition, 430B Information shall be considered to be included in the Statutory Prospectus only as of the actual time that form of prospectus (including a prospectus supplement) is filed with the Commission pursuant to Rule 424(b) and not retroactively.

Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

Underlying Shares” shall mean shares of common stock, par value $0.01 per share, of the Company into which the Securities are convertible.

Warrant Securities” shall mean the maximum number of shares of common stock, par value $0.01 per share, of the Company issuable upon exercise and settlement or termination of the warrants issued pursuant to the Base Call Spread Confirmations and any Additional Call Spread Confirmations.

 

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Unless otherwise specified, a reference to a “rule” is to the indicated rule under the Act.

(b)    Compliance with Securities Act Requirements. (i) (A) At the time the Registration Statement initially became effective, (B) at the time of each amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether by post effective amendment, incorporated report or form of prospectus), (C) at the Effective Time relating to the Offered Securities and (D) on the Closing Date, the Registration Statement conformed and will conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations and did not and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (ii) (A) on its date, (B) at the time of filing the Final Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus will conform in all material respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations, and will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made. The preceding sentence does not apply to statements in or omissions from any such document based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 8(b) hereof.

(c)    Shelf Registration Statement. (i) Well-Known Seasoned Issuer Status. At the time of initial filing of the Registration Statement, the Company was a “well-known seasoned issuer” as defined in Rule 405, including not having been an “ineligible issuer” as defined in Rule 405.

(ii)    Expiration of Shelf Registration Statement. The Registration Statement initially became effective within three years of the date of this Agreement. If immediately prior to the Renewal Deadline (as hereinafter defined), any of the Offered Securities remain unsold by the Underwriters, the Company will prior to the Renewal Deadline file, if it has not already done so and is eligible to do so, a new automatic shelf registration statement relating to the Offered Securities, in a form satisfactory to Credit Suisse Securities (USA) LLC (the “Lead Underwriter”). If the Company is no longer eligible to file an automatic shelf registration statement, the Company will prior to the Renewal Deadline, if it has not already done so, file a new shelf registration statement relating to the Offered Securities, in a form satisfactory to the Lead Underwriter, and will use its best efforts to cause such registration statement to be declared effective within 180 days after the Renewal Deadline. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Offered Securities to continue as contemplated in the expired registration statement relating to the

 

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Offered Securities. References herein to the Registration Statement shall include such new automatic shelf registration statement or such new shelf registration statement, as the case may be. “Renewal Deadline” means the third anniversary of the initial effective time of the Registration Statement.

(iii)    Eligibility to Use Shelf Registration Form. The Company meets (a) the eligibility criteria for use of Form S-3 under the Act and (b) the eligibility criteria for use of Form S-3 under the Act as such criteria existed prior to October 21, 1992.

(iv)    Filing Fees. The Company has paid or shall pay the required Commission filing fees relating to the Offered Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).

(d)    Ineligible Issuer Status. (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Offered Securities and (ii) at the date of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, including (x) the Company or any other subsidiary in the preceding three years not having been convicted of a felony or misdemeanor or having been made the subject of a judicial or administrative decree or order as described in Rule 405 and (y) the Company in the preceding three years not having been the subject of a bankruptcy petition or insolvency or similar proceeding, not having had a registration statement be the subject of a proceeding under Section 8 of the Act and not being the subject of a proceeding under Section 8A of the Act in connection with the offering of the Securities, all as described in Rule 405.

(e)    General Disclosure Package. As of the Applicable Time and the Closing Date, neither (i) the General Use Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time and the preliminary prospectus supplement, dated December 12, 2017, including the base prospectus, dated July 21, 2017 (which is the most recent Statutory Prospectus distributed to investors generally) and the other information, if any, stated in Schedule B to this Agreement to be included in the General Disclosure Package, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Limited Use Issuer Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.

 

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(f)    Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Offered Securities or until any earlier date that the Company notified or notifies the Representatives as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information then contained in the Registration Statement. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information then contained in the Registration Statement or as a result of which such Issuer Free Writing Prospectus, if republished immediately following such event or development, would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, (i) the Company has promptly notified or will promptly notify the Representatives and (ii) the Company has promptly amended or will promptly amend or supplement such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing two sentences do not apply to statements in or omissions from any Issuer Free Writing Prospectus in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 8(b) hereof.

(g)    Good Standing of the Company. The Company has been duly incorporated and is existing and in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the General Disclosure Package; and the Company is duly qualified to do business as a foreign corporation 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 so 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 or results of operations of the Company and its subsidiaries taken as a whole (“Material Adverse Effect”).

(h)    Subsidiaries. The entities listed on Schedule E hereto include every direct and indirect subsidiary of the Company that is a “significant subsidiary” (as such term is defined in Item 1-02(w) of Regulation S-X). Each Guarantor and each other significant subsidiary of the Company has been duly incorporated or otherwise organized and is an existing corporation, limited liability company or other business entity in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate, limited liability company and other) to own its properties and conduct its business as described in the General Disclosure Package; and each Guarantor and each other significant subsidiary of the Company is duly qualified to do business as a foreign

 

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corporation or other business 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 so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect; all of the issued and outstanding capital stock or other equity securities of each Guarantor and each other significant subsidiary of the Company have been duly authorized and validly issued and are fully paid and, in the case of corporate subsidiaries, nonassessable and the capital stock or other equity securities of each Guarantor and each other significant subsidiary owned by the Company, directly or through subsidiaries, are owned free from liens, encumbrances and defects, except to the extent such capital stock or other equity securities are subject to a lien or encumbrance in connection with the Amended and Restated Revolving Credit and Term Loan Agreement, dated November 22, 2010, among the Company, certain lenders party thereto, SunTrust Bank as administrative agent, JPMorgan Chase Bank, National Association and Bank of America, N.A. as co-syndication agents, and Wells Fargo Bank, National Association, Regions Bank and BBVA Compass as co-documentation agents (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Facility”).

(i)    Execution and Delivery of Indenture. The Indenture has been duly authorized by the Company and the Guarantors and has been duly qualified under the Trust Indenture Act; the Offered Securities have been duly authorized by the Company and the Guarantors and, when the Offered Securities are delivered and paid for pursuant to this Agreement on each Closing Date, the Indenture will have been duly executed and delivered, such Offered Securities will have been duly executed, authenticated, issued and delivered, will conform in all material respects to the information in the General Disclosure Package and to the description of such Offered Securities contained in the Final Prospectus and the Indenture and such Offered Securities will constitute valid and legally binding obligations of the Company and the Guarantors, 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, and will be entitled to the benefits of the Indenture.

(j)    Offered Securities. When the Offered Securities are delivered and paid for pursuant to this Agreement on each Closing Date, such Offered Securities will be in the form contemplated by, and convertible into the Underlying Shares of the Company in accordance with, the terms of the Indenture; the Underlying Shares initially issuable upon conversion of such Offered Securities have been duly authorized and reserved for issuance upon such conversion, conform in all material respects to the information in the General Disclosure Package and to the description of such Underlying Shares contained in the Final Prospectus; the authorized equity capitalization of the Company is as set forth in the General Disclosure Package; all outstanding shares of capital stock of the Company are, and when issued upon conversion the Underlying Shares will be, validly issued, fully paid and nonassessable; the stockholders of the Company have no

 

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preemptive rights with respect to the Offered Securities or the Underlying Shares, and none of the outstanding shares of capital stock of the Company have been issued in violation of any preemptive or similar rights of any security holder.

(k)    No Finder’s Fee. Except as disclosed in the General Disclosure Package, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder’s fee or other like payment in connection with this offering.

(l)    Call Spread Confirmations. The Base Call Spread Confirmations have been duly authorized, executed and delivered by the Company and are enforceable against the Company in accordance with their terms, and any Additional Call Spread Confirmations will, on or prior to the date such Additional Call Spread Confirmations are entered into, have been duly authorized, executed and delivered by the Company and each will be enforceable against the Company in accordance with their terms, subject in each case to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

(m)    Warrant Securities. The Warrant Securities have been duly authorized and reserved and, when issued upon exercise and settlement or termination of such the Warrant Confirmations in accordance with the terms of such Warrant Confirmations, will be validly issued, fully paid and nonassessable, and the stockholders of the Company have no preemptive rights with respect to the Warrant Securities.

(n)    Registration Rights. Except as disclosed in the General Disclosure Package, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to a Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act (collectively, “registration rights”) that have not been validly waived or satisfied prior to the date hereof.

(o)    Listing. The Underlying Shares and the Warrant Securities have been approved for listing on The New York Stock Exchange, subject to notice of issuance.

(p)    Absence of Further Requirements. No consent, approval, authorization, or order of, or filing or registration with, any person (including any governmental agency or body or any court) is required for the consummation of the transactions contemplated by this Agreement, the Call Spread Confirmations (including the issuance of the Warrant Securities) or the Indenture in connection

 

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with the offering, issuance and sale of the Offered Securities and Underlying Shares, except such as have been obtained, or made and such as may be required under state securities laws; provided, however, that a filing with the Commission pursuant to Rule 424(b) may be made after the date hereof so long as such filing is made within the time period specified in the applicable provision of such rule in accordance with the terms of this Agreement.

(q)    Title to Property. Except as disclosed in the General Disclosure Package, (i) the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, charges, encumbrances and defects that would affect the value thereof or materially interfere with the use made or to be made thereof by them and (ii) the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no terms or provisions that would interfere with the use made or to be made thereof by them, except in each case, for such liens, charges, encumbrances, defects and exceptions that would not have a Material Adverse Effect.

(r)    Absence of Defaults and Conflicts Resulting from Transaction. The execution, delivery and performance of the Indenture, the Call Spread Confirmations (including the issuance of the Warrant Securities) and this Agreement, and the issuance and sale of the Offered Securities and Underlying Shares and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company, the Guarantors or any of the Company’s other significant subsidiaries pursuant to, (i) the charter or by-laws or similar constitutive document of the Company, the Guarantors or any of the Company’s other subsidiaries, (ii) any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company, the Guarantors or any of the Company’s other subsidiaries or any of their properties, (iii) or any agreement or instrument to which the Company, the Guarantors or any of the Company’s other subsidiaries is a party or by which the Company, the Guarantors or any of the Company’s other subsidiaries is bound or to which any of the properties of the Company, the Guarantors or any of the Company’s other subsidiaries is subject except, in the case of clauses (ii) and (iii), where any such breach, violation or default would not, individually or in the aggregate, have a Material Adverse Effect or materially adversely affect consummation of the transactions contemplated hereby; a “Debt Repayment Triggering Event” means any event or condition that gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture, or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company, the Guarantors or any of the Company’s other subsidiaries.

 

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(s)    Absence of Existing Defaults and Conflicts. Neither the Company nor any of its subsidiaries is in violation of its respective charter or by-laws or similar constitutive document or in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject, except for such defaults that would not, individually or in the aggregate have a Material Adverse Effect.

(t)    Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Guarantors.

(u)    Possession of Licenses and Permits. The Company and its subsidiaries possess, and are in compliance with the terms of, adequate certificates, authorizations, franchises, licenses and permits (“Licenses”) necessary or material to the conduct of their respective businesses now conducted or proposed in the General Disclosure Package to be conducted by them, except where the lack thereof would not, individually or in the aggregate, have a Material Adverse Effect and have not received any notice of proceedings relating to the revocation or modification of any Licenses that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

(v)    Absence of Labor Dispute. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company and the Guarantors, is imminent, and the Company and the Guarantors are not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, that, in any such case, is reasonably expected to have a Material Adverse Effect.

(w)    Possession of Intellectual Property. The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, “Intellectual Property Rights”) necessary to conduct the business now operated by them, or presently employed by them, except where the failure to own, possess or acquire such Intellectual Property Rights would not, individually or in the aggregate, have a Material Adverse Effect and have not received any notice of infringement of or conflict with asserted rights of others with respect to any Intellectual Property Rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

(x)    Environmental Laws. Except as disclosed in the General Disclosure Package, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any

 

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governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any Environmental Laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and except as disclosed in the General Disclosure Package, the Company is not aware of any pending investigation which is reasonably expected to lead to such a claim.

(y)    Accurate Disclosure. The statements in the Registration Statement, the General Disclosure Package and the Final Prospectus under the headings “Material U.S. Federal Income Tax Considerations,” “Description of the Notes,” “Description of Capital Stock” and “Underwriting,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are, in all material respects, accurate and fair summaries of such legal matters, agreements, documents or proceedings.

(z)    Absence of Manipulation. The Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Offered Securities.

(aa)    Statistical and Market-Related Data. Any third-party statistical and market-related data included or incorporated by reference in a Registration Statement, a Statutory Prospectus or the General Disclosure Package are based on or derived from sources that the Company believes to be reliable and accurate.

(bb)    Internal Controls and Compliance with the Sarbanes-Oxley Act. The Company, its subsidiaries and its directors (in their capacities as such) are in compliance with Sarbanes-Oxley and all applicable Exchange Rules. The Company maintains a system of internal controls, including, but not limited to, disclosure controls and procedures, internal controls over accounting matters and financial reporting, an internal audit function and legal and regulatory compliance controls (collectively, “Internal Controls”) that comply with the Securities Laws and are sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. General Accepted Accounting Principles (“GAAP”) and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences, (v) the Company has adopted and applies corporate

 

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governance guidelines and (vi) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, a Statutory Prospectus and the General Disclosure Package is prepared in accordance with the Commission’s rules and guidelines applicable thereto. The Internal Controls are overseen by the Audit Committee (the “Audit Committee”) of the Board in accordance with Exchange Rules. The Company has not publicly disclosed or reported to the Audit Committee or the Board, and the Company does not reasonably expect to publicly disclose or report to the Audit Committee or the Board within the next 90 days, a significant deficiency, material weakness or change in Internal Controls of the Company, or fraud involving management or other employees who have a significant role in Internal Controls (each, an “Internal Control Event”), other than those which would not, individually or in the aggregate, have a Material Adverse Effect.

(cc)    Disclosure Controls and Procedures. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.

(dd)    Absence of Accounting Issues. To the best of the knowledge of the executive officers of the Company and the Guarantors with reasonable diligence, the Audit Committee is not reviewing or investigating, and neither the Company’s independent auditors nor its internal auditors have recommended that the Audit Committee review or investigate, (i) adding to, deleting, changing the application of, or changing the Company’s disclosure with respect to, any of the Company’s material accounting policies, in each case in any material respect; (ii) any matter which could reasonably be expected to result in a restatement of the Company’s financial statements for any annual or interim period during the current or prior three fiscal years; or (iii) any Internal Control Event.

(ee)    Litigation. Except as disclosed in the General Disclosure Package, there are no pending actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company or the Guarantors to perform its obligations under the Indenture or this Agreement, or which are otherwise material in the context of the sale of the Offered Securities; and no such actions, suits or proceedings (including any inquiries or investigations by any court or governmental agency or body, domestic or foreign) are threatened or, to the knowledge of the Company and the Guarantors, contemplated.

 

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(ff)    Financial Statements. The financial statements included or incorporated by reference in the Registration Statement, a Statutory Prospectus and the General Disclosure Package comply in all material respects with the applicable requirements of the Act and the Exchange Act, as applicable, and present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with GAAP in the United States applied on a consistent basis. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Registration Statement, a Statutory Prospectus and the General Disclosure Package fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(gg)    Independent Registered Public Accounting Firm. KPMG LLP, who have audited certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the Securities Laws.

(hh)    No Material Adverse Change in Business. Except as disclosed in the General Disclosure Package, since the end of the period covered by the latest audited financial statements included in the General Disclosure Package (i) there has been no change, nor any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company and its subsidiaries, taken as a whole, that is material and adverse, (ii) except as disclosed in or contemplated by the General Disclosure Package, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock and (iii) except as disclosed in or contemplated by the General Disclosure Package, there has been no material adverse change in the capital stock, short-term indebtedness, long-term indebtedness, net current assets or net assets of the Company and its subsidiaries.

(ii)    Investment Company Act. The Company and the Guarantors are not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the General Disclosure Package (including the transactions contemplated by the Call Spread Confirmations), will not be an “investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).

(jj)    Ratings. No “nationally recognized statistical rating organization” as such term is defined for purposes of Section 3(a)(62) under the Exchange Act (i) has imposed (or has informed the Company that it is considering imposing) any condition (financial or otherwise) on the Company’s retaining any rating assigned to the Company or any securities of the Company or (ii) has informed the Company that it is considering any of the actions described in Section 7(c)(ii) hereof.

 

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(kk)    Anti-Corruption. Except as disclosed in the General Disclosure Package, during the past five years, neither the Company nor any of its subsidiaries or affiliates, nor any director, officer or employee thereof, nor, to the Company’s knowledge, any agent or representative of the Company or of any of its subsidiaries or affiliates, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to improperly influence official action or secure an improper advantage; and, during the past five years, the Company and its subsidiaries and affiliates have conducted their businesses in compliance with applicable anti-corruption laws. The Company and its subsidiaries and affiliates have instituted and maintain and will continue to maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.

(ll)    Anti-Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company and the Guarantors, threatened.

(mm)    Economic Sanctions. As of the date of this Agreement, (i) neither the Company nor any of its subsidiaries, nor any director, officer, or employee thereof, nor, to the Company’s knowledge, any agent, affiliate or representative of the Company or any of its subsidiaries, is an individual or entity (“Person”) that is, or is 50% or more owned, directly or indirectly, by a Person or Persons that is or are: (A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), the United Nations Security Council (UN), the European Union (EU), Her Majesty’s Treasury (UK HMT), the Swiss Secretariat of Economic Affairs (SECO), the Hong Kong Monetary Authority (HKMA), the Monetary Authority of Singapore

 

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(MAS), or other relevant sanctions authority (collectively, “Sanctions”), nor (B) located, organized or resident in a country or territory that is itself the subject of Sanctions (including, without limitation, Crimea, Cuba, Iran, North Korea and Syria).

(ii)    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: (A) in order to fund any activities or business of or with any Person or in any country or territory that, at the time of such funding, is the subject of Sanctions in a manner that is prohibited under Sanctions; or (B) in any other manner that will foreseeably result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).

(iii)    For the past five years, the Company and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions in a manner that is prohibited under Sanctions.

3.    Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements and subject to the terms and conditions set forth herein, the Company and the Guarantors agree to sell to the several Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company at a purchase price of 97.75% of the principal amount thereof plus accrued interest from December 18, 2017 to the Closing Date (as hereinafter defined), the respective principal amounts of Firm Securities set forth opposite the names of the Underwriters in Schedule A hereto.

The Company will deliver the Firm Securities to or as instructed by the Representatives for the accounts of the several Underwriters in a form reasonably acceptable to the Representatives against payment of the purchase price by the Underwriters in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Lead Underwriter drawn to the order of the Company at the office of Baker Botts L.L.P. (“Baker Botts”), 910 Louisiana, Houston, Texas 77002, at 10 A.M., New York time, on December 18, 2017, or at such other time not later than seven full business days thereafter as the Representatives and the Company determine, such time being herein referred to as the “First Closing Date.” For purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering. The Firm Securities so to be delivered or evidence of their issuance will be made available for checking at the above office of Baker Botts at least 24 hours prior to the First Closing Date.

In addition, upon written notice from the Representatives given to the Company from time to time within the 13-day period beginning on, and including, the First Closing Date, the Underwriters may purchase all or less than all of the Optional Securities at the purchase price per principal amount of Securities (including any accrued interest thereon to the related Optional Closing Date to be paid for the Firm Securities). The Company agrees to sell to the Underwriters

 

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the principal amount of Optional Securities specified in such notice and the Underwriters agree, severally and not jointly, to purchase such Optional Securities. Such Optional Securities shall be purchased for the account of each Underwriter in the same proportion as the principal amount of Firm Securities set forth opposite such Underwriter’s name bears to the total principal amount of Firm Securities (subject to adjustment by the Representatives to eliminate fractions) and may be purchased by the Underwriters only for the purpose of covering over-allotments made in connection with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by the Representatives to the Company.

Each time for the delivery of and payment for the Optional Securities, being herein referred to as an “Optional Closing Date,” which may be the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be determined by the Representatives but shall be not later than five full business days after written notice of election to purchase Optional Securities is given, nor in any event later than the last day in the 13-day period beginning on, and including, the First Closing Date. The Company will deliver the Optional Securities being purchased on each Optional Closing Date to or as instructed by the Representatives for the accounts of the several Underwriters in a form reasonably acceptable to the Representatives against payment of the purchase price therefor in Federal (same day) funds by wire transfer to an account at a bank acceptable to the Representatives drawn to the order of the Company, at the above office of Baker Botts. The Optional Securities being purchased on each Optional Closing Date or evidence of their issuance will be made available for checking at the above office of Baker Botts at a reasonable time in advance of such Optional Closing Date.

4.    Offering by Underwriters. It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public as set forth in the Final Prospectus.

5.    Certain Agreements of the Company and the Guarantors. The Company and the Guarantors, jointly and severally, agree with the several Underwriters that:

(a)    Filing of Prospectuses. The Company has filed or will file each Statutory Prospectus (including the Final Prospectus), pursuant to and in accordance with Rule 424(b) not later than the second business day following the earlier of the date it is first used or the execution and delivery of this Agreement. The Company has complied and will comply with Rule 433.

(b)    Filing of Amendments; Response to Commission Requests. The Company will promptly advise the Representatives of any proposal to amend or supplement the Registration Statement or any Statutory Prospectus at any time and will offer the Representatives a reasonable opportunity to comment on any such amendment or supplement; and the Company will also advise the Representatives promptly of (i) the filing of any such amendment or supplement, (ii) any request by the Commission or its staff for any amendment to the

 

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Registration Statement, for any supplement to any Statutory Prospectus or for any additional information, (iii) the institution by the Commission of any stop order proceedings in respect of the Registration Statement or the threatening of any proceeding for that purpose, and (iv) the receipt by the Company of any notification with respect to the suspension of the qualification of the Offered Securities in any jurisdiction or the institution or threatening of any proceedings for such purpose. The Company will use its reasonable best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.

(c)    Continued Compliance with Securities Laws. If, at any time when a prospectus relating to the Offered Securities is (or but for the exemption in Rule 172 would be) required to be delivered under the Act by any Underwriter or dealer, any event occurs as a result of which the Final Prospectus (or the General Disclosure Package if the Final Prospectus has not yet been filed under the Act) as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Registration Statement or supplement the Final Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare and file with the Commission and furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon request of the Representatives, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. If any such amendment to the Registration Statement or supplement to the Final Prospectus (or any new registration statement contemplated by Section 2(c)) is required to be filed or delivered at any time during the nine months immediately following the date that the Final Prospectus is filed with the Commission pursuant to Rule 424(b), the costs of preparing and filing such amendment or supplement (or such new registration statement), and the other costs incidental thereto, shall be at the Company’s expense; if any such amendment to the Registration Statement or supplement to the Final Prospectus (or such new registration statement) is required to be filed or delivered at any time later than nine months immediately following the date that the Final Prospectus is filed with the Commission pursuant to Rule 424(b), the costs of preparing and filing such amendment or supplement (or such new registration statement), and the other costs incidental thereto, shall be at the Underwriters’ expense. Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 7 hereof.

(d)    Rule 158. As soon as practicable, but not later than 17 months after the date of this Agreement, the Company will make generally available to its securityholders an earnings statement covering a period of at least 12 months beginning after the date of this Agreement and satisfying the provisions of Section 11(a) of the Act and Rule 158.

 

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(e)    Furnishing of Prospectuses. The Company will furnish to the Representatives copies of the Registration Statement, including all exhibits, any Statutory Prospectus, the Final Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representatives reasonably request. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.

(f)    Blue Sky Qualifications. The Company will arrange for the qualification of the Offered Securities for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Representatives designate and will continue such qualifications in effect so long as required for the distribution of the Offered Securities; provided, however, that neither the Company nor the Guarantors shall be obligated to qualify or register as a foreign corporation or as a dealer in securities or to take any action that would subject it to general service of process in any such jurisdiction or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

(g)    Reporting Requirements. During the period of five years hereafter, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report and any definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to time, such other publicly available information concerning the Company as the Representatives may reasonably request. However, so long as the Company is subject to the reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is timely filing reports with the Commission on its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”), it is not required to furnish such reports or statements to the Underwriters.

(h)    Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including but not limited to any filing fees and other expenses (including fees and disbursements of counsel to the Underwriters) incurred in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions as the Representatives designate and the preparation and printing of memoranda relating thereto, costs and expenses related to the review by the National Association of Securities Dealers, Inc. of the Offered Securities (including filing fees and the fees and expenses of counsel for the Underwriters relating to such review), costs and expenses relating to investor presentations or any “road show” in connection with the offering and sale of the Offered Securities including, without limitation, any travel expenses of the Company’s officers and employees and any other expenses of the Company including the chartering of airplanes, fees and expenses incident to listing the Underlying Shares, the Warrant Securities and the Offered Securities on the New York Stock Exchange, American Stock Exchange,

 

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NASDAQ Stock Market and other national and foreign exchanges, fees and expenses in connection with the registration of the Underlying Shares under the Exchange Act, and expenses incurred in distributing preliminary prospectuses and the Final Prospectus (including any amendments and supplements thereto) to the Underwriters and for expenses incurred for preparing, printing and distributing any Issuer Free Writing Prospectuses to investors or prospective investors, but not including travel and lodging expenses of the Underwriters.

(i)    Use of Proceeds. The Company will use the net proceeds received in connection with this offering in the manner described in the “Use of Proceeds” section of the General Disclosure Package and, except as disclosed in the General Disclosure Package, the Company does not intend to use any of the proceeds from the sale of the Offered Securities hereunder to repay any outstanding debt owed to any affiliate of any Underwriter.

(j)    Absence of Manipulation. The Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Offered Securities.

(k)    Restriction on Sale of Securities. For the period specified below (the “Lock-Up Period”), the Company will not, directly or indirectly, take any of the following actions with respect to its Securities, the Underlying Shares or any securities convertible into or exchangeable or exercisable for any of its Securities or Underlying Shares (“Lock-Up Securities”): (i) offer, sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii) offer, sell, issue, contract to sell, contract to purchase or grant any option, right or warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other agreement that transfers, in whole or in part, the economic consequences of ownership of Lock-Up Securities, (iv) establish or increase a put equivalent position or liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16 of the Exchange Act or (v) file with the Commission a registration statement under the Act relating to Lock-Up Securities other than a registration statement on Form S-8 or any successor form in connection with the registration of securities pursuant to any employee benefit plan in effect on the date hereof, or publicly disclose the intention to take any such action, without the prior written consent of Credit Suisse Securities (USA) LLC except issuances of Lock-Up Securities pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options, in each case outstanding on the date hereof, grants under director and employee stock plans in effect on the date hereof, issuances of Lock-Up Securities pursuant to the issuance, vesting or exercise of an award under any such plan including forfeiture to the Company of common stock in satisfaction of tax withholding obligations arising in connection with such issuance, vesting or exercise, the sale of any Offered Securities to the Underwriters pursuant to this Agreement and issuances of the Underlying Shares pursuant to this Agreement or

 

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the entry into, and the exercise and settlement or termination of, the transactions evidenced by the Warrant Confirmations. The initial Lock-Up Period will commence on the date hereof and continue for 60 days after the date hereof or such earlier date that the Representatives consent to in writing.

(l)    Reservation of Common Stock. The Company will reserve and keep available at all times, free of preemptive rights, shares of common stock, par value $0.01, of the Company for the purpose of enabling the Company to satisfy all obligations to issue the Underlying Shares and the maximum number of Warrant Securities issuable upon exercise and settlement or termination of the transactions evidenced by the Warrant Confirmations.

(m)    Listing. The Company will effect the listing on The New York Stock Exchange of on or prior to the Closing Date, and will use its best efforts to maintain the listing on The New York Stock Exchange of at all times, the Underlying Shares and the maximum number of Warrant Securities issuable upon exercise and settlement or termination of the warrants evidenced by the Warrant Confirmations.

6.    Free Writing Prospectuses. (a) Issuer Free Writing Prospectuses. The Company represents and agrees that, unless it obtains the prior consent of the Lead Underwriter, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company and the Lead Underwriter, it has not made and will not make any offer relating to the Offered Securities that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Company and the Lead Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required, legending and record keeping.

(b)    Term Sheets. The Company will prepare a final term sheet relating to the Offered Securities, containing only information that describes the final terms of the Offered Securities and otherwise in a form consented to by the Lead Underwriter, and will file such final term sheet within the period required by Rule 433(d)(5)(ii) following the date such final terms have been established for the offering of the Offered Securities. Any such final term sheet is an Issuer Free Writing Prospectus and a Permitted Free Writing Prospectus for purposes of this Agreement. The Company also consents to the use by any Underwriter of a free writing prospectus that contains only (i)(x) information describing the preliminary terms of the Offered Securities or their offering or (y) information that describes the final terms of the Offered Securities or their offering and that is included in the final term sheet of the Company contemplated in the first sentence of this subsection or (ii) other information that is not “issuer information,” as defined in Rule 433, it being understood that any such free writing prospectus referred to in clause (i) or (ii) above shall not be an Issuer Free Writing Prospectus for purposes of this Agreement.

 

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7.    Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the representations and warranties of the Company and the Guarantors herein (as though made on such Closing Date), to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company and the Guarantors of their respective obligations hereunder and to the following additional conditions precedent:

(a)    Accountants’ Comfort Letter. The Representatives shall have received letters, dated, respectively, the date hereof and each Closing Date, of KPMG LLP confirming that they are a registered public accounting firm and independent public accountants within the meaning of the Securities Laws and substantially in the form of Schedule C hereto (except that, in any letter dated a Closing Date, the specified date referred to in Schedule C hereto shall be a date no more than three days prior to such Closing Date).

(b)    Filing of Prospectus. The Final Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) hereof. No stop order suspending the effectiveness of the Registration Statement or of any part thereof shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or any Underwriter, shall be contemplated by the Commission.

(c)    No Material Adverse Change. Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or otherwise), results of operations, business, properties or prospects of the Company and its subsidiaries taken as a whole, other than as set forth in the General Disclosure Package, which, in the judgment of the Representatives, is material and adverse and makes it impractical or inadvisable to proceed with the offering, sale or delivery of the Offered Securities or to enforce contracts for the sale of the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company by any “nationally recognized statistical rating organization,” or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls the effect of which is such as to make it, in the judgment of the Representatives, impractical to market or to enforce contracts for the sale of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any suspension or material limitation of trading in securities generally on the New York Stock Exchange or The

 

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NASDAQ Stock Market, or any setting of minimum or maximum prices for trading on such exchange; (v) any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (vi) any banking moratorium declared by any U.S. federal New York authorities; (vii) any major disruption of settlements of securities, payment, or clearance services in the United States or any other country where such securities are listed or (viii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency is such as to make it impractical or inadvisable to proceed with the offering, sale or delivery of the Offered Securities or to enforce contracts for the sale of the Offered Securities.

(d)    Opinion of Counsel for Company. The Representatives shall have received an opinion, dated such Closing Date, of Baker Botts, counsel for the Company and the Guarantors, to the effect that:

(i)    Good Standing of the Company. The Company has been duly incorporated and is existing and in good standing under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the General Disclosure Package; and the Company is duly qualified to do business as a foreign corporation in good standing in the State of Texas;

(ii)    Indenture; Offered Securities. The Base Indenture has been duly authorized, executed and delivered by the Company and the Delaware Guarantors and the Sixth Supplemental Indenture has been duly authorized, executed and delivered by the Company and the Delaware Guarantors; the Offered Securities delivered on such Closing Date have been duly authorized and executed by the Company and the Delaware Guarantors, as applicable, and conform in all material respects to the description of such Offered Securities contained in the General Disclosure Package and the Final Prospectus; and each of the Base Indenture and the Sixth Supplemental Indenture (assuming the due authorization, execution and delivery thereof by the Trustee) and the Offered Securities delivered on such Closing Date (when authenticated by the Trustee in the manner provided in the Indenture and delivered through the facilities of The Depository Trust Company against payment of the purchase price therefore) constitute valid and legally binding obligations of the Company and the Guarantors, as applicable, 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 (regardless of whether enforcement is considered in a proceeding at equity or at law) and public policy; and the Indenture has been duly qualified under the Trust Indenture Act;

 

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(iii)    Underlying Shares. The Offered Securities delivered on such Closing Date are convertible into the Underlying Shares of the Company in accordance with the terms of the Indenture; the Underlying Shares initially issuable upon conversion of such Offered Securities have been duly authorized and reserved for issuance upon such conversion, conform as to legal matters in all material respects to the description of such Underlying Shares contained in the General Disclosure Package and the Final Prospectus; the stockholders of the Company have no preemptive rights with respect to the Underlying Shares under the Restated Certificate of Incorporation and the Amended and Restated By-laws of the Company, each as amended to date, the Delaware General Corporation Law or, to the knowledge of such counsel, any other agreements or instruments to which the Company is a party, with respect to the Offered Securities; the authorized equity capitalization of the Company is as set forth in the General Disclosure Package; when issued upon conversion of the Offered Securities, the Underlying Shares will be, validly issued, fully paid and nonassessable;

(iv)    Investment Company Act. Each of the Company and the Guarantors is not and, after giving effect to the offering and sale of the Offered Securities delivered on such Closing Date and the application of the proceeds thereof as described in the General Disclosure Package, will not be an “investment company” as defined in the Investment Company Act;

(v)    Absence of Further Requirements. No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required to be obtained or made by the Company or the Guarantors for the consummation of the transactions contemplated by this Agreement in connection with the offering, issuance and sale of the Offered Securities by the Company and the Guarantors, and the issuance of the Underlying Shares by the Company upon conversion of the Offered Securities, as applicable, except such as have been obtained or made under the Act and the Trust Indenture Act and such consents, approvals or filings as may be required by or with the Financial Industry Regulatory Authority, Inc. (“FINRA”) (as to which we have not been requested to, and do not, express any opinion) and such as may be required under state securities or “blue sky” laws or The New York Stock Exchange (as to which we have not been requested to, and do not, express any opinion);

(vi)    Absence of Defaults and Conflicts Resulting from Transaction. The execution and delivery of the Indenture and this Agreement by the Company and the Guarantors, the issuance and sale of the Offered Securities by the Company and the Guarantors, the issuance of the Underlying Shares by the Company upon conversion of the Offered Securities and compliance by the Company and the Guarantors, as applicable, with the terms and provisions thereof on such Closing Date

 

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will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company or the Delaware Guarantors pursuant to (i) the charter or by-laws or similar constitutive document of the Company or the Delaware Guarantors, (ii) the Delaware General Corporation Law, the Delaware Limited Liability Company Act and those laws and regulations of the State of New York and the federal laws, rules and regulations of the United States of America, in each case that, in the experience of such counsel, are normally applicable to transactions contemplated by this Agreement and the Indenture (provided, however, that such counsel need express no opinion with respect to compliance with any state securities or other federal or state anti-fraud statutes, rules or regulations or other securities laws or the rules and regulations of FINRA), or (iii) any agreement or instrument that is filed or incorporated by reference as an exhibit to the Registration Statement except, in the case of clauses (ii) and (iii), where any such breach, violation or default would not, individually or in the aggregate, have a Material Adverse Effect or materially adversely affect the consummation of the transactions contemplated hereby;

(vii)    Compliance with Registration Requirements; Effectiveness. The Registration Statement has become effective under the Act, the Final Prospectus was filed with the Commission pursuant to the subparagraph of Rule 424(b) specified in such opinion on the date specified therein, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement or any part thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated by the Commission under the Act;

(viii)    Description of Securities and Offering. The statements in the Registration Statement, the General Disclosure Package and the Final Prospectus under the captions “Description of the Notes,” “Description of Capital Stock” and “Underwriting” of legal matters, agreements, documents or proceedings are accurate summaries thereof in all material respects;

(ix)    Description of Tax Considerations. The statements in the Registration Statement, the General Disclosure Package and the Final Prospectus under the caption “Material U.S. Federal Income Tax Considerations” of legal matters are accurate summaries thereof in all material respects; and

(x)    Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company and the Delaware Guarantors.

 

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(e)    Such counsel shall also include, in a separate paragraph of its opinion, statements to the following effect:

Such counsel has reviewed the Registration Statement, the General Disclosure Package and the Final Prospectus and has participated in conferences with officers and other representatives of the Company and the Guarantors, with representatives of the Company’s independent registered public accounting firm and with the Underwriters’ representatives and the Underwriters’ counsel, at which the contents of the Registration Statement, the General Disclosure Package, the Final Prospectus and related matters were discussed. The purpose of such counsel’s professional engagement was not to establish or confirm factual matters set forth in the Registration Statement, the General Disclosure Package or the Final Prospectus, and such counsel has not undertaken to verify independently any of the factual matters in such documents. Moreover, many of the determinations required to be made in the preparation of the Registration Statement, the General Disclosure Package and the Final Prospectus involve matters of a non-legal nature. Accordingly, such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained or included in the Registration Statement, the General Disclosure Package or the Final Prospectus (except to the extent stated in Sections 7(d)(viii) and 7(d)(ix) above). Subject to the foregoing and on the basis of the information such counsel gained in the course of performing the services referred to above, such counsel advises the Underwriters that:

(a)    the Registration Statement, as of the latest Effective Time, the preliminary prospectus, as of the Applicable Time, and the Final Prospectus, as of its date and the Closing Date, appear on their face to be appropriately responsive in all material respects to the requirements of the Act and the Rules and Regulations; and

(b)    nothing came to such counsel’s attention that caused such counsel to believe that:

(1)    the Registration Statement, as of the latest Effective Time, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading,

(2)    the General Disclosure Package, as of the Applicable Time, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or

(3)    the Final Prospectus, as of its date or as of the Closing Date, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

it being understood that in each case such counsel has not been asked to, and does not, express any belief with respect to (a) the financial statements and schedules and other

 

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financial or accounting information contained or included or incorporated by reference therein or omitted therefrom, (b) the representations and warranties and other statements of fact contained in the exhibits to the Registration Statement or to documents incorporated by reference therein or (c) that part of the Registration Statement that constitutes the Form T-1.

(f)    Opinion of General Counsel of the Company. The Representatives shall have received an opinion, dated such Closing Date, of Timothy Knapp, Senior Vice President, General Counsel and Corporate Secretary of the Company, to the effect that:

(i)    Good Standing of the Company. The Company is duly qualified to do business as a foreign corporation in good standing in all jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect;

(ii)    Subsidiaries. Each Delaware Guarantor and each other significant subsidiary of the Company has been duly incorporated or otherwise organized and is an existing corporation, limited liability company or other business entity in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority (corporate, limited liability company and other, as applicable) to own its properties and conduct its business as described in the General Disclosure Package; and each Guarantor and each other significant subsidiary of the Company is duly qualified to do business as a foreign corporation or other business 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 so qualified or in good standing would not, individually or in the aggregate, have a Material Adverse Effect; all of the issued and outstanding capital stock or other equity securities of each Guarantor and each other significant subsidiary of the Company have been duly authorized and validly issued and are fully paid and, in the case of corporate subsidiaries, nonassessable; and the capital stock or other equity securities of each Delaware Guarantor and each other significant subsidiary owned by the Company, directly or through subsidiaries, are owned free from liens, encumbrances and defects, except to the extent such capital stock or other equity securities are subject to a lien or encumbrance in connection with the Credit Facility;

(iii)    Title to Property. Except as disclosed in the General Disclosure Package, (A) the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, charges, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them and (B) the

 

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Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no terms or provisions that would materially interfere with the use made or to be made thereof by them, except, in each case, for such liens, charges, encumbrances, defects and exceptions that would not have a Material Adverse Effect;

(iv)    Absence of Existing Defaults and Conflicts. (A) Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws or similar constitutive document and (B) to the best of such counsel’s knowledge, no default (or event which, with the giving of notice or lapse of time would be a default) has occurred in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument that is described or referred to in the Registration Statement or the General Disclosure Package or filed or incorporated by reference as an exhibit to the Registration Statement except, in the case of clause (B), for such defaults that would not, individually or in the aggregate, have a Material Adverse Effect;

(v)    Shares of the Company. All outstanding shares of capital stock of the Company and the Guarantors are validly issued, fully paid and nonassessable; and

(vi)    Legal or Governmental Proceedings. Such counsel does not know of any legal or governmental proceedings pending or threatened by or before any court or governmental agency, authority or body required to be described in a Registration Statement or the Final Prospectus which are not described as required or of any contracts or documents of a character required to be described in a Registration Statement or the Final Prospectus or to be filed as exhibits to a Registration Statement which are not described and filed as required.

(g)    Opinion of Alaska Counsel for the Company. The Representatives shall have received from Davis Wright Tremaine LLP, counsel for the Company, such opinion or opinions, dated the Closing Date, with respect to such matters with respect to the State of Alaska, as the Representatives may require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.

(h)    Opinion of Louisiana Counsel for the Company. The Representatives shall have received from Phelps Dunbar LLP, counsel for the Company, such opinion or opinions, dated the Closing Date, with respect to such matters with respect to the State of Louisiana as the Representatives may require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.

 

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(i)    Opinion of Counsel for Underwriters. The Representatives shall have received from Vinson & Elkins L.L.P., counsel for the Underwriters, such opinion or opinions, dated such Closing Date, with respect to such matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters.

(j)    Officer’s Certificate. The Representatives shall have received a certificate, dated such Closing Date, of an executive officer of the Company and the Guarantors and a principal financial or accounting officer of the Company and the Guarantors in which such officers shall state that: the representations and warranties of the Company and the Guarantors in this Agreement are true and correct; the Company and the Guarantors have complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the best of their knowledge and after reasonable investigation, are contemplated by the Commission; and, subsequent to the dates of the most recent financial statements in the General Disclosure Package, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or otherwise), results of operations, business or properties of the Company and its subsidiaries taken as a whole except as set forth in the General Disclosure Package or as described in such certificate.

(k)    Lock-up Agreements. On or prior to the date hereof, the Representatives shall have received lock-up letters substantially in the form set forth on Schedule D hereto from each of the executive officers and directors of the Company.

(l)    Listing. The Underlying Shares and the maximum number of Warrant Securities issuable upon exercise and settlement or termination of the warrants evidenced by the Warrant Confirmations shall have been approved for listing on The New York Stock Exchange, subject to notice of issuance.

The Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request. The Representatives may in its sole discretion waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or otherwise.

8.    Indemnification and Contribution. (a) Indemnification of Underwriters. The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each Underwriter, its partners, members, directors, officers, employees, agents, affiliates and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an “Indemnified Party”), against any and all losses, claims, damages or liabilities, joint or several, to which such

 

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Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of the Registration Statement at any time, any Statutory Prospectus as of any time, the Final Prospectus or any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d), or arise out of or are based upon the omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a party thereto), whether threatened or commenced, and in connection with the enforcement of this provision with respect to any of the above as such expenses are incurred; provided, however, that neither the Company nor any Guarantor will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below.

(b)    Indemnification of Company. Each Underwriter will severally and not jointly indemnify and hold harmless the Company and the Guarantors, each of its directors and each of its officers who signs a Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act (each, an “Underwriter Indemnified Party”), against any losses, claims, damages or liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any part of the Registration Statement at any time, any Statutory Prospectus as of any time, the Final Prospectus, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or the alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by such Underwriter Indemnified Party in connection with investigating or defending against any such loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto), whether threatened or commenced, based upon any such untrue statement or omission, or any such alleged untrue statement or omission as such

 

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expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Final Prospectus furnished on behalf of each Underwriter: (i) the concession figure appearing in the 4th paragraph under the caption “Underwriting” and (ii) the information contained in the 10th through 12th paragraphs under the caption “Underwriting.”

(c)    Actions against Parties; Notification. Promptly after receipt by an indemnified party under this Section 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 subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the failure to notify the indemnifying party shall not relieve it from any liability that it may have under subsection (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.

(d)    Contribution. If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault

 

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of the Company and the Guarantors on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Guarantors bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. The Company, the Guarantors and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 8(d).

9.    Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the aggregate principal amount of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Offered Securities that the Underwriters are obligated to purchase on such Closing Date, the Lead Underwriter may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate principal amount of Offered Securities with respect to which such default or defaults occur exceeds 10% of

 

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the total principal amount of Offered Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to the Lead Underwriter and the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except as provided in Section 10. As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.

10.    Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company and the Guarantors or their officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Company, the Guarantors or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If the purchase of the Offered Securities by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 hereof, the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities, and the respective obligations of the Company, the Guarantors and the Underwriters pursuant to Section 8 hereof shall remain in effect. In addition, if any Offered Securities have been purchased hereunder, the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect.

11.    Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives, c/o Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD, c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated, One Bryant Park, New York, N.Y. 10036, Attention: Syndicate Department, c/o Barclays Capital Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Syndicate Registration; or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 2103 City West Blvd., 4th Floor, Houston, Texas 77042, Attention: Timothy Knapp; provided, however, that any notice to an Underwriter pursuant to Section 8 will be mailed, delivered or telegraphed and confirmed to such Underwriter.

12.    Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 8, and no other person will have any right or obligation hereunder.

13.    Representation of Underwriters. The Representatives will act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representatives jointly will be binding upon all the Underwriters.

 

32


14.    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

15.    Absence of Fiduciary Relationship. The Company and the Guarantors acknowledge and agree that:

(a)    No Other Relationship. The Representatives have been retained solely to act as underwriters in connection with the sale of Offered Securities and that no fiduciary, advisory or agency relationship between the Company and the Guarantors, on the one hand, and the Representatives, on the other hand, has been created in respect of any of the transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether the Representatives have advised or is advising the Company or the Guarantors on other matters;

(b)    Arms’ Length Negotiations. The price of the Offered Securities set forth in this Agreement was established by the Company and the Guarantors following discussions and arms-length negotiations with the Representatives and the Company and the Guarantors are capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;

(c)    Absence of Obligation to Disclose. The Company and the Guarantors have been advised that the Representatives and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Guarantors and that the Representatives have no obligation to disclose such interests and transactions to the Company and the Guarantors by virtue of any fiduciary, advisory or agency relationship; and

(d)    Waiver. The Company and each of the Guarantors waives, to the fullest extent permitted by law, any claims it may have against the Representatives for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the Representatives shall have no liability (whether direct or indirect) to the Company or the Guarantors in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company or the Guarantors.

16.    Applicable Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

The Company and each of the Guarantors hereby submit to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company and each of the Guarantors irrevocably and unconditionally waive any objection to the laying of venue of any suit or proceeding arising out of or relating to this

 

33


Agreement or the transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The City of New York and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit or proceeding in any such court has been brought in an inconvenient forum.

[Signature Page Follows]

 

34


If the foregoing is in accordance with the Representatives’ understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement among the Company, the Guarantors and the several Underwriters in accordance with its terms.

 

Very truly yours,
BRISTOW GROUP INC.
By:  

/s/ L. Don Miller

  Name:   L. Don Miller
  Title:   Senior Vice President and Chief
    Financial Officer
BRISTOW U.S. LLC
By:  

/s/ Geoffrey L. Carpenter

  Name:   Geoffrey L. Carpenter
  Title:   Manager
BRISTOW ALASKA INC.
By:  

/s/ Robert Phillips

  Name:   Robert Phillips
  Title:   President
BRISTOW HELICOPTERS INC.
By:  

/s/ Geoffrey L. Carpenter

  Name:   Geoffrey L. Carpenter
  Title:   Vice President and Treasurer
BHNA HOLDINGS INC.
By:  

/s/ Geoffrey L. Carpenter

  Name:   Geoffrey L. Carpenter
  Title:   Vice President and Treasurer

 

[Signature page to Underwriting Agreement — Convertible Notes]


BRISTOW U.S. LEASING LLC
By:  

/s/ Geoffrey L. Carpenter

  Name:   Geoffrey L. Carpenter
  Title:   Vice President and Treasurer

 

[Signature page to Underwriting Agreement — Convertible Notes]


The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written.

 

CREDIT SUISSE SECURITIES (USA) LLC
By:  

/s/ Sean Tobin

  Name:   Sean Tobin
  Title:   Director
BARCLAYS CAPITAL INC.
By:  

/s/ Syed Rajib Imteaz

  Name:   Syed Rajib Imteaz
  Title:   Managing Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
                               INCORPORATED
By:  

/s/ Brad Hutchinson

  Name:   Brad Hutchinson
  Title:   Managing Director
Acting on behalf of themselves and as the Representatives of the several Underwriters.

 

[Signature page to Underwriting Agreement — Convertible Notes]


SCHEDULE A

Underwriters

 

Credit Suisse Securities (USA) LLC

   $ 50,000,000  

Barclays Capital Inc.

     18,750,000  

Merrill Lynch, Pierce, Fenner & Smith Incorporated

     18,750,000  

Citigroup Global Markets Inc.

     12,500,000  

J.P. Morgan Securities LLC

     12,500,000  

SunTrust Robinson Humphrey, Inc.

     12,500,000  
  

 

 

 

Total

   $ 125,000,000  
  

 

 

 

 

A-1


SCHEDULE B

 

1. General Use Free Writing Prospectuses (included in the General Disclosure Package)

“General Use Issuer Free Writing Prospectus” includes each of the following documents:

The final term sheet, attached as Annex A to this Schedule B.

 

2. Other Information Included in the General Disclosure Package

The following information is also included in the General Disclosure Package:

None

 

B-1


Annex A to Schedule B

(See attached)

 

B-2


Bristow Group Inc.

$125,000,000

aggregate principal amount of its

4.50% Convertible Senior Notes due 2023

This term sheet relates to the offering by the Issuer of the convertible senior notes described below and should be read together with the preliminary prospectus dated December 12, 2017 (the “Preliminary Prospectus”) (including the documents incorporated by reference therein) relating to the convertible senior notes before making a decision in connection with an investment in the convertible senior notes. The information in this term sheet supersedes the information in the Preliminary Prospectus to the extent that it is inconsistent therewith. Terms used but not defined herein have the meanings ascribed to them in the Preliminary Prospectus.

 

Aggregate principal amount of notes offered:    $125,000,000
Option to purchase additional notes:    13-day option to cover over-allotments, $18,750,000
Issue price:    100%, plus accrued interest, if any, from December 18, 2017
Gross proceeds:    $125,000,000 ($143,750,000 if full over-allotment option is exercised)
Underwriting discount:    2.25%
   In addition to the underwriting discounts and commissions, the Issuer has agreed to reimburse Credit Suisse Securities (USA) LLC for certain reasonable and documented out-of-pocket fees and expenses.
Proceeds to Bristow Group:    $122.2 million ($140.5 million if full over-allotment option is exercised)
Annual interest rate:    4.50% per year, accruing from December 18, 2017
Maturity date:    June 1, 2023
Interest payment dates:    June 1 and December 1 of each year, beginning June 1, 2018
Record dates:    May 15 and November 15 of each year
Closing sale price of common stock on NYSE on December 13, 2017:    $12.51
Conversion price:    Initially approximately $15.64 per share of common stock (subject to adjustment)
Conversion rate:    Initially 63.9488 shares of common stock per $1,000 principal amount of notes (subject to adjustment)
Trade date:    December 14, 2017
Settlement date:    December 18, 2017 (T+2)
CUSIP/ISIN:    110394 AF0 / US110394AF04


Use of proceeds:

   The Issuer estimates that the net proceeds from the offering will be approximately $121.4 million (or approximately $139.8 million if the underwriters exercise their over-allotment option in full) after deducting underwriting discounts and commissions and estimated offering expenses.
   The Issuer expects to use approximately $89.6 million of the net proceeds from the offering to repay a portion of the indebtedness outstanding under its term loan and approximately $8.8 million of the net proceeds from the offering to pay the cost of the convertible note hedge transactions described in the Preliminary Prospectus (after such cost is partially offset by the proceeds to the Issuer of the warrant transactions described in the Preliminary Prospectus), with the remainder of the net proceeds from the offering to be used for general corporate purposes. If the underwriters exercise their over-allotment option, the Issuer expects to sell additional warrants and use a portion of the net proceeds from the sale of the additional notes to enter into additional convertible note hedge transactions with the option counterparties, as well as use a portion of the net proceeds from the sale of such additional warrants and additional notes to make additional repayments of the indebtedness outstanding under its term loan.
Adjustment to conversion rate upon a make-whole fundamental change:   

 

Holders who convert their notes in connection with a make-whole fundamental change (as described in the Preliminary Prospectus) are entitled to a make-whole premium in the form of an increase in the conversion rate for notes surrendered for conversion in connection with such fundamental change. The following table sets forth the stock price and number of additional shares by which the conversion rate will be increased (in each case, subject to adjustment as set forth in the Preliminary Prospectus) upon a conversion in connection with a make-whole fundamental change that occurs in the corresponding period to be determined by reference to the stock price and effective date of the make-whole fundamental change:

           Number of Additional Shares
   (per $1,000 principal amount of notes)

 

     Stock Price  

Effective Date

   $12.51      $13.50      $14.50      $15.64      $17.50      $20.00      $25.00      $30.00      $35.00      $40.00      $50.00      $60.00  

December 18, 2017

     15.9872        13.9271        12.1751        10.5329        8.4381        6.4174        3.9270        2.5128        1.6407        1.0735        0.4315        0.1281  

June 1, 2018

     15.9872        13.8880        12.0998        10.4300        8.3109        6.2811        3.8052        2.4157        1.5663        1.0174        0.3999        0.1094  

June 1, 2019

     15.9872        13.8507        11.9515        10.1966        8.0007        5.9397        3.4999        2.1771        1.3884        0.8878        0.3344        0.0794  

June 1, 2020

     15.9872        13.5955        11.5551        9.6973        7.4213        5.3504        3.0137        1.8162        1.1300        0.7060        0.2476        0.0423  

June 1, 2021

     15.9872        13.1457        10.8851        8.8722        6.4884        4.4317        2.3040        1.3227        0.7981        0.4856        0.1531        0.0098  

June 1, 2022

     15.9872        12.1082        9.4620        7.2018        4.7078        2.8041        1.2189        0.6607        0.3980        0.2420        0.0625        0.0001  

June 1, 2023

     15.9872        10.1253        5.0167        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000        0.0000  

The exact stock prices and effective dates may not be set forth on the table, in which case:

 

    if the stock price is between two stock price amounts in the table above or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, based on a 365-day year, as applicable;


    if the stock price is greater than $60.00 per share of common stock (subject to adjustment in the same manner as the stock prices set forth in the first row of the table above), no additional shares will be issued upon conversion; and

 

    if the stock price is less than $12.51 per share of common stock (subject to adjustment in the same manner as the stock prices set forth in the first row of the table above), no additional shares will be issued upon conversion.

In no event will the applicable conversion rate after adjustment exceed 79.9360 per $1,000 principal amount of notes, subject to adjustments in the same manner as the conversion rate.

 

Stabilizing transactions:    Prior to purchasing the notes being offered pursuant to the Preliminary Prospectus, one of the underwriters purchased, on behalf of the syndicate, 161,627 shares of common stock at an average price of $12.5157 per share in stabilizing transactions.
Joint Book-Running Managers:    Credit Suisse Securities (USA) LLC
   Barclays Capital Inc.
  

Merrill Lynch, Pierce, Fenner & Smith

                     Incorporated

Senior Co-Managers:   

Citigroup Global Markets Inc.

J.P. Morgan Securities LLC

SunTrust Robinson Humphrey, Inc.

Additional Information:

The information under the caption “Capitalization” in the Preliminary Prospectus and each other location where it appears in the Preliminary Prospectus is hereby supplemented with the following information:

Capitalization

The amounts in the following line items under the “As adjusted” column (as of September 30, 2017) of the capitalization table are replaced as follows (in thousands):

 

    The as adjusted amount (as of September 30, 2017) of “Cash and cash equivalents” is $129,143.

 

    The as adjusted amount (as of September 30, 2017) of “Term Loan” is $61,197.

 

    The as adjusted amount (as of September 30, 2017) of “Notes offered hereby” is $89,235.

 

    The as adjusted amount (as of September 30, 2017) of “Unamortized debt issuance costs” is $(20,826).

 

    The as adjusted amount (as of September 30, 2017) of “Total debt” is $1,308,141.

 

    The as adjusted amount (as of September 30, 2017) of “Additional paid-in capital” is $851,755.

 

    The as adjusted amount (as of September 30, 2017) of “Total stockholders’ investment” is $1,268,793.

 

    The as adjusted amount (as of September 30, 2017) of “Total capitalization” is $2,576,934.

The following footnotes to the capitalization table are replaced as follows:

 

    (1) Includes $89.6 million repayment with proceeds received from this offering.

 

    (5) Includes $3.6 million in underwriting discounts and estimated costs for this offering.

The Issuer has filed a registration statement (including a prospectus and prospectus supplement) with the Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus (including the prospectus supplement) in that registration statement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at


www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and applicable prospectus supplement if you request it by calling Credit Suisse Securities (USA) LLC toll-free at 1-800-221-1037, Barclays Capital Inc. toll free at 1-800-603-5847 or Merrill Lynch, Pierce, Fenner & Smith Incorporated toll-free at 1-800-294-1322.

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.


SCHEDULE C

See attached

 

C-1


SCHEDULE D

December 13, 2017

BRISTOW GROUP INC.

2103 City West Boulevard, 4th Floor

Houston, TX 77042

Credit Suisse Securities (USA) LLC

Barclays Capital Inc.

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

As Representatives of the several Underwriters

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010-2629

Ladies and Gentlemen:

The undersigned understands that Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Representatives”) propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Bristow Group Inc., a Delaware corporation (together with any successor (by merger or otherwise) thereto, the “Company”), providing for the public offering (the “Offering”) by the several underwriters named in Schedule A thereto (the “Underwriters”) of Convertible Senior Notes due 2023 (the “Securities”). As an inducement to the Underwriters to execute the Underwriting Agreement, the undersigned hereby agrees that during the period specified in the following paragraph (the “Lock-Up Period”), the undersigned will not, directly or indirectly, take any of the following actions with respect to any Securities, shares of the Company’s common stock into which the Securities are convertible (the “Underlying Shares”) or any securities convertible into or exchangeable or exercisable for any of the Securities or Underlying Shares (collectively, the “Lock-Up Securities”): (i) offer, sell, contract to sell, pledge or otherwise dispose of Lock-Up Securities, or enter into a transaction that would have the same effect, (ii) offer, sell, contract to sell, contract to purchase any option, right or warrant to purchase Lock-Up Securities, or enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or any other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Securities, Underlying Shares or such other securities, whether any such aforementioned transaction is to be settled by delivery of the Securities, Underlying Shares or such other securities, in cash or otherwise, or (iv) publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of Credit Suisse Securities (USA) LLC on behalf of the Underwriters. In addition, the undersigned agrees that, without the prior written consent of the Representatives on behalf of the Underwriters, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any Lock-Up Securities.

 

D-1


The initial Lock-Up Period will commence on the date of this Lock-Up Agreement (this “Agreement”) and continue and include the date 60 days after the public offering date set forth on the final prospectus used to sell the Securities pursuant to the Underwriting Agreement (the “Public Offering Date”).

Any Lock-Up Securities received upon exercise of options granted to the undersigned will also be subject to this Agreement. A transfer of the Lock-Up Securities to a family member or trust, as bona fide gifts or by will or intestacy, may be made, provided the transferee agrees to be bound in writing by the terms of this Agreement prior to such transfer and no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended, shall be required or shall be voluntarily made in connection with such transfer (other than a filing on a Form 5 or voluntary report made after the expiration of the Lock-Up Period).

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of the Lock-Up Securities if such transfer would constitute a violation or breach of this Agreement.

This Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned. This Agreement shall lapse and become null and void if the Public Offering Date shall not have occurred on or before 45 days from the date of this Agreement. This agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

[Signature Page Follows]

 

D-2


Very truly yours,

 

Name: [Name of officer, director]

 

D-3


SCHEDULE E

BRISTOW GROUP INC.

Significant Subsidiaries of the Registrant

 

Company

   Place of
Incorporation
   Percentage of
Stock Owned
 

BL Holdings II C.V.

   Netherlands      100

BHNA Holdings Inc.

   Delaware      100

BL Holdings B.V.

   Netherlands      100

BL Scotia LP

   Scotland      100

BriLog Leasing Ltd.

   Cayman Islands      100

Bristow Aviation Holdings Limited

   England      49

Bristow Cayman Ltd.

   Cayman Islands      100

Bristow Helicopter Group Limited

   England      100 %* 

Bristow Helicopters Australia Pty. Ltd

   Australia      100 %* 

Bristow Helicopters Inc.

   Delaware      100

Bristow Helicopters Limited

   England      100 %* 

Bristow International Panama S. de RL

   Panama      100

Bristow Technical Services Limited

   England      100 %* 

Bristow (UK) LLP

   England      100

Bristow U.S. LLC

   Louisiana      100

Bristow Worldwide LP

   England       ** 

Caledonian Helicopters Limited

   England      100 %* 

United Helicopters Limited

   England      100 %* 

 

* Percentage owned by Bristow Aviation Holdings Limited (BAHL) or its subsidiaries.
** Bristow Worldwide LP is a partnership between Bristow (UK) LLP and BAHL. Under the Partnership Agreement 95.88% of the profits and losses of BriLog Leasing Ltd. and Bristow Cayman Ltd. and 5% of the profits and losses of Bristow Helicopter Group Limited and its subsidiaries are allocated to Bristow (UK) LLP. The remaining 4.12% of the profits and losses of BriLog Leasing Ltd. and Bristow Cayman Ltd. and 95% of the profits and losses of Bristow Helicopter Group Limited and its subsidiaries are allocated to BAHL. Bristow Group Inc. indirectly owns 49% of the ordinary shares of BAHL.

 

E-1

Exhibit 4.2

EXECUTION VERSION

 

 

 

SIXTH SUPPLEMENTAL INDENTURE

by and among

BRISTOW GROUP INC.,

THE SUBSIDIARY GUARANTORS NAMED HEREIN

and

U. S. BANK NATIONAL ASSOCIATION

as Trustee

Dated as of December 18, 2017

Supplemental to Indenture

Dated as of June 17, 2008

4.50% Convertible Senior Notes due 2023

 

 

 


Table of Contents

 

         Page  

ARTICLE 1 DEFINITIONS

 

Section 1.01

  Scope of Supplemental Indenture      2  

Section 1.02

  Definitions      2  

ARTICLE 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION

 

AND EXCHANGE OF NOTES

 

Section 2.01

  Designation and Amount; Ranking      9  

Section 2.02

  Form of Notes      9  

Section 2.03

  Date and Denomination of Notes; Payments of Interest      9  

Section 2.04

  Payments of Additional Interest      10  

Section 2.05

  Exchange and Registration of Transfer of Notes; Depositary      10  

Section 2.06

  CUSIP Numbers      12  

Section 2.07

  Additional Notes; Repurchases      12  

ARTICLE 3 PARTICULAR COVENANTS OF THE COMPANY

 

Section 3.01

  Payment of Principal, Premium and Interest      13  

Section 3.02

  Maintenance of Office or Agency      13  

Section 3.03

  Existence      13  

Section 3.04

  Additional Interest      14  

Section 3.05

  Further Instruments and Acts      14  

Section 3.06

  Reporting Obligations      14  

Section 3.07

  Future Guarantors      14  

ARTICLE 4 DEFAULTS AND REMEDIES

 

Section 4.01

  Additional Events of Default; Modifications      14  

Section 4.02

  Sole Remedy for Failure to Report      16  

Section 4.03

  Waivers of Certain Defaults      17  

ARTICLE 5 DEFEASANCE AND DISCHARGE

 

Section 5.01

  No Defeasance or Early Discharge      17  

ARTICLE 6 MODIFICATIONS AND AMENDMENTS

 

Section 6.01

  Modifications and Amendments Without Consent of Noteholders      17  

Section 6.02

  Modifications and Amendments With Consent of Noteholders      18  

ARTICLE 7 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

Section 7.01

  Company May Consolidate, Etc. on Certain Terms      19  

 

i


Table of Contents

(continued)

 

         Page  

ARTICLE 8 CONVERSION OF NOTES

 

Section 8.01

  Right to Convert      20  

Section 8.02

  Conversion Procedure; Settlement Upon Conversion      22  

Section 8.03

  Increase of Conversion Rate Upon Conversion Upon Make-Whole Fundamental Changes      26  

Section 8.04

  Adjustment of Conversion Rate      28  

Section 8.05

  Shares to Be Fully Paid      38  

Section 8.06

  Effect of Reclassification, Consolidation, Merger or Sale; Treatment of Reference Property      38  

Section 8.07

  Certain Covenants      39  

Section 8.08

  Responsibility of Trustee      39  

Section 8.09

  Notice to Holders Prior to Certain Actions      40  

Section 8.10

  Stockholder Rights Plans      41  

ARTICLE 9 REPURCHASE OF NOTES AT OPTION OF HOLDERS

 

Section 9.01

  Repurchase at Option of Holders upon a Fundamental Change      41  

Section 9.02

  Withdrawal of Fundamental Change Repurchase Notice      44  

Section 9.03

  Deposit of Fundamental Change Repurchase Price      45  

ARTICLE 10 SUBSIDIARY GUARANTEES

 

Section 10.01

  General      45  

Section 10.02

  Mergers, Etc.      46  

Section 10.03

  Release      46  

ARTICLE 11 MISCELLANEOUS PROVISIONS

 

Section 11.01

  Ratification and Incorporation of Original Indenture      46  

Section 11.02

  Governing Law      46  

Section 11.03

  Payments on Business Days      46  

Section 11.04

  No Security Interest Created      46  

Section 11.05

  Trust Indenture Act      47  

Section 11.06

  Benefits of Indenture      47  

Section 11.07

  Calculations      47  

Section 11.08

  Table of Contents, Headings, Etc      47  

Section 11.09

  Execution in Counterparts      47  

Section 11.10

  Severability      47  

EXHIBITS

 

EXHIBIT A

  Form of Note      A-1  

 

ii


Table of Contents

(continued)

 

         Page  

EXHIBIT B    

  Form of Notice of Conversion      B-1  

EXHIBIT C

  Form of Fundamental Change Repurchase Notice      C-1  

EXHIBIT D

  Form of Assignment and Transfer      D-1  

 

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SIXTH SUPPLEMENTAL INDENTURE

THIS SIXTH SUPPLEMENTAL INDENTURE dated as of December 18, 2017 (this “Supplemental Indenture”), is entered into among Bristow Group Inc., a Delaware corporation (the “Company”), the Subsidiary Guarantors signatory hereto and U.S. Bank National Association, a national banking association organized under the laws of the United States of America, as trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined have the meanings set forth in the Original Indenture (as defined below).

RECITALS

A. The Company, certain Subsidiary Guarantors and the Trustee entered into that certain Indenture, dated as of June 17, 2008 (the “Original Indenture”), pursuant to which the Company may from time to time issue its debentures, notes, bonds or other evidences of indebtedness (collectively, the “Securities”).

B. Section 9.01 of the Original Indenture provides that the Company, when authorized by a resolution of the Board of Directors of the Company, and the Trustee may, without the consent of the holders of the Securities, enter into a supplemental indenture to establish the form or terms of Securities of any series as permitted by Sections 2.01 and 2.03 of the Original Indenture.

C. The Company has duly authorized the issue of 4.50% Convertible Senior Notes due 2023 (as they may be issued from time to time under this Supplemental Indenture, including any Additional Notes, the “Notes”), and in connection therewith, the Company has duly determined to make, execute and deliver this Supplemental Indenture to set forth the terms and provisions of the Notes as required by the Original Indenture.

D. The Company has determined that this Supplemental Indenture is authorized or permitted by Section 9.01 of the Original Indenture and has delivered to the Trustee an Opinion of Counsel and Officers’ Certificate to the effect that all conditions precedent provided for in the Original Indenture to the execution and delivery of this Supplemental Indenture have been complied with.

E. The Form of Note, the Trustee’s 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 for.

F. All 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 the Original Indenture provided, the valid and legally binding obligations of the Company have been done.

G. All things necessary to make this Supplemental Indenture a valid and legally binding indenture and agreement according to its terms, and a valid and legally binding amendment of, and supplement to, the Original Indenture have been done.

 

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NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein, the parties hereto agree, subject to the terms and conditions hereinafter set forth, as follows for the benefit of the Trustee and the Noteholders:

ARTICLE 1

DEFINITIONS

Section 1.01 Scope of Supplemental Indenture. The changes, modifications and supplements to the Original Indenture affected by this Supplemental Indenture shall be applicable only with respect to, and shall only govern the terms of, the Notes, except as otherwise provided herein, and which may be issued from time to time, and shall not apply to any other Securities that may be issued under the Original Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements. The provisions of this Supplemental Indenture shall supersede any corresponding or inconsistent provisions in the Original Indenture.

Section 1.02 Definitions. The terms defined in this Section 1.02 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Supplemental Indenture and for purposes of the Original Indenture as it relates to the Notes shall have the respective meanings specified in this Section 1.02. Except as otherwise provided in this Supplemental Indenture, all words, terms and phrases defined in the Original Indenture (but not otherwise defined herein) shall have the same meaning herein as in the Original Indenture. All other terms used in this Supplemental Indenture that are defined in the Trust Indenture Act or that are by reference therein defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires) shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this Supplemental Indenture. The words “herein,” “hereof,” “hereunder” and words of similar import refer to this Supplemental 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” shall have the meaning specified in Section 4.02.

Additional Shares” shall have the meaning specified in Section 8.03(a).

Applicable Stock Price” means the price of securities that constitute Reference Property determined in a manner substantially equivalent to the definition of Daily VWAP as determined in good faith by the Company.

“Cash Settlement” shall have the meaning specified in Section 8.02(a).

“Combination Settlement” shall have the meaning specified in Section 8.02(a).

Conversion Price” on any day means a dollar amount (initially, approximately $15.64) equal to $1,000 divided by the Conversion Rate in effect on such day.

Conversion Rate” is initially 63.9488 shares of Common Stock, subject to adjustment as set forth herein.

 

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Bid Solicitation Agent” means the agent of the Company appointed to obtain quotations for the Notes as set forth under the definition of Trading Price, which agent shall at no time be an Affiliate of the Company. The Company may, from time to time, change the Bid Solicitation Agent. The Bid Solicitation Agent will initially be the Trustee.

close of business” means 5:00 p.m. (New York City time).

Commission” means the Securities and Exchange Commission.

Common Stock” means the common stock, par value $0.01 per share, of the Company, which stock is listed on the New York Stock Exchange at the date of this Supplemental Indenture, or shares of any class or classes resulting from any reclassification or reclassifications thereof and that have no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company.

Company” means Bristow Group Inc., a Delaware corporation, and subject to the provisions of Article 7 hereof and Article V of the Original Indenture, shall include its successors and assigns.

Conversion Agent” shall have the meaning specified in Section 3.02.

Conversion Date” shall have the meaning specified in Section 8.02(c).

Conversion Obligation” shall have the meaning specified in Section 8.01(a).

Custodian” means U. S. Bank National Association, as custodian for the Depositary, with respect to the Notes in global form, or any successor entity thereto.

Daily Conversion Value” means, for each of the 40 consecutive Trading Days during the Observation Period, 1/40th of the product of (a) the Conversion Rate in effect on such day and (b) the Daily VWAP on such Trading Day. For purposes of the foregoing, the Daily Conversion Value of Reference Property will be determined by reference to (a) in the case of Reference Property or part of Reference Property that is traded on a National Securities Exchange, the Applicable Stock Price of such security or common stock, (b) in the case of any other property other than cash, the value thereof as determined by two independent nationally recognized investment banks as of the effective date of the transaction and (c) in the case of cash, 100% of the amount thereof.

Daily Settlement Amount” means, for each of the 40 consecutive Trading Days during the Observation Period, (1) cash equal to the lesser of (i) the Daily Specified Dollar Amount and (ii) the Daily Conversion Value; and (2) if the Daily Conversion Value exceeds the Daily Specified Dollar Amount, a number of shares of Common Stock equal to (i) the difference between the Daily Conversion Value and the Daily Specified Dollar Amount, divided by (ii) the Daily VWAP for such Trading Day.

Daily Specified Dollar Amount” means the result obtained by dividing the Specified Dollar Amount by 40.

 

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Daily VWAP means, for each of the 40 consecutive Trading Days during the relevant Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “BRS <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 by the Company without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

Distributed Property” shall have the meaning specified in Section 8.04(c).

Effective Date” means, with respect to a Make-Whole Fundamental Change, a consolidation, merger, share exchange, sale of all or substantially all of the Company’s assets or other similar transaction, the date on which such event or transaction becomes effective.

Ex-Dividend Date” means, with respect to any issuance, dividend or distribution in which the holders of Common Stock (or other security) have the right to receive any cash, securities or other property, the first date on which the shares of the Common Stock (or other security) trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question.

Fundamental Change” means the occurrence after the original issuance of the Notes of any of the following events:

(a) a “person” or “group” within the meaning of Section 13(d)(3) of the Exchange Act becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of shares of the Common Stock representing more than 50% of the voting power of the Common Stock entitled to vote generally in the election of directors and (i) files a Schedule 13D or Schedule TO or any other schedule, form or report under the Exchange Act disclosing such beneficial ownership or (ii) the Company otherwise becomes aware of any such person or group; provided that this clause (a) shall not apply to a transaction covered in clause (d) below, including any exception thereto; or

(b) the Common Stock or shares of common stock, depositary receipts or other certificates representing common equity interests into which the Notes are then convertible cease to be listed for trading on the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market for a period of 20 consecutive Trading Days; or

(c) the Company’s shareholders approve any plan or proposal for the Company’s liquidation or dissolution; or

(d) the consummation of (i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a share split or share combination or changes solely to par value) as a result of which all of the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (ii) any share exchange, consolidation or merger of the Company pursuant to which all of the

 

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Common Stock will be converted into cash, securities or other property or assets; or (iii) 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 any Subsidiary, taken as a whole, to any person other than a Subsidiary; provided, however, that neither (x) a transaction or event or series of transactions or events described in clause (i) or (ii) in which the holders of all classes of the Company’s common equity immediately prior to such transaction or event or series of transactions or events 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 or event or series of transactions or events in substantially the same proportions as such ownership immediately prior thereto nor (y) any merger or consolidation of the Company solely for the purpose of changing the Company’s jurisdiction of incorporation that results in a reclassification, conversion or exchange of the outstanding Common Stock solely into shares of Common Stock of the surviving entity shall be a fundamental change pursuant to this clause (d).

Notwithstanding the foregoing, a Fundamental Change will be deemed not to have occurred if more than 90% of the consideration in the transaction or transactions (other than cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights) which otherwise would constitute a Fundamental Change under clause (d) above consists of shares of common stock traded or to be traded immediately following such transaction on The New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market and, as a result of the transaction or transactions, the Notes become convertible, upon satisfaction of the conditions to conversion, into such common stock (and any rights attached thereto) and other applicable consideration.

Fundamental Change Company Notice” shall have the meaning specified in Section 9.01(b).

Fundamental Change Expiration Time” shall have the meaning specified in Section 9.01(b).

Fundamental Change Repurchase Date” shall have the meaning specified in Section 9.01(a).

Fundamental Change Repurchase Notice” shall have the meaning specified in Section 9.01(a).

Fundamental Change Repurchase Price” shall have the meaning specified in Section 9.01(a).

Global Note” shall have the meaning specified in Section 2.05(b).

Indenture” means the Original Indenture, as amended and supplemented by this Supplemental Indenture and, if further amended or supplemented as herein provided, as so amended or supplemented.

interest” means, when used with reference to the Notes, any interest payable under the terms of the Notes, including (unless context otherwise requires) Additional Interest, if any.

 

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Interest Payment Date” means each June 1 and December 1 of each year, beginning on June 1, 2018.

Interest Record Date,” with respect to any Interest Payment Date, shall mean the May 15 or November 15 (whether or not such day is a Business Day) immediately preceding the applicable June 1 or December 1 Interest Payment Date, respectively.

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 listed for trading. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, then 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 the National Quotation Bureau or 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 occurs prior to June 1, 2023 and constitutes a Fundamental Change as described in clause (a) or clause (d) of the definition of Fundamental Change (but without regard to subclause (x) of the proviso in clause (d) of such definition).

Market Disruption Event means (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 June 1, 2023.

Merger Event” shall have the meaning specified in Section 8.06(a).

National Securities Exchange” means a U.S. national securities exchange, including the New York Stock Exchange, the NASDAQ Global Market and NASDAQ Global Select Market.

Noteholder” or “holder,” as applied to any Note, or other similar terms (but excluding the term “beneficial holder”), shall mean any person in whose name at the time a particular Note is registered on the Note Register.

Note Register” shall have the meaning specified in Section 2.05(a).

 

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Note Registrar” shall have the meaning specified in Section 2.05(a).

Notice of Conversion” shall have the meaning specified in Section 8.02(b).

Observation Period” means, with respect to any Note being converted, the 40 consecutive Trading Days beginning on, and including, the second Trading Day after the Conversion Date for such Note; provided that with respect to any Conversion Date that is on or after the 44th Scheduled Trading Day immediately preceding the Maturity Date, the Observation Period shall mean the 40 consecutive Trading Days beginning on, and including, the 41st Scheduled Trading Day immediately preceding the Maturity Date.

open of business” means 9:00 a.m. (New York City time).

Original Indenture” means the indenture dated as of June 17, 2008 by and among the Company, the Subsidiary Guarantors named therein and the Trustee.

Paying Agent” shall have the meaning specified in Section 3.02.

“Physical Settlement” shall have the meaning specified in Section 8.02(a).

Record Date” shall have the meaning specified in Section 8.04(f).

Reference Property” shall have the meaning specified in Section 8.06(a).

Scheduled Trading Day” means any day that is scheduled to be a Trading Day.

Settlement Amount” shall have the meaning specified in Section 8.02.

Settlement Method” shall have the meaning specified in Section 8.02.

Settlement Notice shall have the meaning specified in Section 8.02.

Specified Dollar Amount means the maximum cash amount per $1,000 principal amount of Notes to be received upon conversion as specified (or deemed specified) in the Settlement Notice related to any converted Notes.

Spin-Off” shall have the meaning specified in Section 8.04(c).

Stock Price” means (a) in the case of a Make-Whole Fundamental Change in which holders of Common Stock receive solely cash consideration in connection with such Make-Whole Fundamental Change, the amount of cash paid per share of the Common Stock and (b) in the case of all other Make-Whole Fundamental Changes, the average of the Last Reported Sale Prices per share of Common Stock over the period of five consecutive Trading Days ending on the Trading Day immediately preceding the Effective Date of such Make-Whole Fundamental Change. The Board of Directors will make appropriate adjustments, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, during such five consecutive Trading Days.

 

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“Subsidiary Guarantors” means the Subsidiaries of the Company named as such on the signature page hereto, and any other Subsidiary of the Company that provides a Guarantee of the Notes in accordance with Section 3.07 hereof or Article X of the Original Indenture, and in each case, their successors.

Trading Day” means a day during which trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange or quotation system on which the Common Stock is listed for trading and a Last Reported Sale Price for the Common Stock is available; provided that if the Common Stock is not listed for trading on a U.S. national or regional securities exchange or quotation system, “Trading Day” will mean a Business Day; and provided, further, that for purposes of determining amounts due upon conversion only, “Trading Day” means a day on which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs on The New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.

Trading Price” with respect to the Notes, on any date of determination means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $5.0 million 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 selected by the Company; provided that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used.

Trigger Event” shall have the meaning specified in Section 8.10.

Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Supplemental Indenture, except as provided in Section 8.06; 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 Supplemental Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Supplemental Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.

Unrestricted Subsidiaries” shall have the meaning specified in Section 4.01(f).

 

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ARTICLE 2

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION

AND EXCHANGE OF NOTES

Section 2.01 Designation and Amount; Ranking. The Notes shall be designated as the “4.50% Convertible Senior Notes due 2023.” The aggregate principal amount of Notes that may be authenticated and delivered under this Supplemental Indenture is initially limited to $143,750,000 aggregate principal amount subject to Section 2.07 and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes pursuant to Section 2.07, Section 8.02 and Section 9.03 hereof and Section 2.09 of the Original Indenture.

Section 2.02 Form of Notes. The Notes and the Trustee’s Certificate of Authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, which are incorporated in and made a part of this Supplemental Indenture.

Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Supplemental 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 National Securities Exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.

The Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect repurchases, conversions, transfers or exchanges permitted hereby. Any endorsement of the Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the 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 Supplemental Indenture. Payment of principal, accrued and unpaid interest and premium, if any (including any Fundamental Change Repurchase Price), on the Global Note shall be made to the holder of such Note on the date of payment, unless a record date or other means of determining holders eligible to receive payment is provided for herein.

The terms and provisions contained in the form of Note attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Supplemental Indenture.

Section 2.03 Date and Denomination of Notes; Payments of Interest. The Notes shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Note attached as Exhibit A hereto. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

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The Person in whose name any Note (or its predecessor security) is registered on the Note Register at the close of business on any Interest Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date. Interest shall be payable at the office or agency of the Company maintained by the Company for such purposes in the United States, which shall initially be the office of the Trustee at 225 Asylum Street, Hartford, CT 06103. The Company shall pay interest (a) on any Notes in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Note Register (or upon written application by such Person to the Trustee and Paying Agent (if different from the Trustee) not later than the relevant Interest Record Date, by wire transfer in immediately available funds to such Person’s account within the United States, if such Person is entitled to interest on an aggregate principal in excess of $1,000,000, which application shall remain in effect until the Noteholder notifies the Trustee and Paying Agent to the contrary) or (b) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.

Section 2.04 Payments of Additional Interest. If required by Section 4.02, each Note shall bear Additional Interest in the manner set forth herein. Whenever in this Supplemental Indenture there is mentioned, in any context, the payment of the principal of, premium, if any, or interest on, or in respect of, any Note, such mention shall be deemed to include mention of the payment of “Additional Interest” provided for in Section 4.02 to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof and express mention of the payment of Additional Interest (if applicable) in any provisions hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

Section 2.05 Exchange and Registration of Transfer of Notes; 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 3.02 being herein sometimes collectively referred to as the “Note Register,” in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and 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 appointed “Note Registrar” and shall constitute a Registrar (as such term is defined in the Original Indenture) for the purpose of registering Notes and transfers of Notes as herein provided. The Company may appoint one or more co-registrars in accordance with Section 3.02.

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 3.02. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that the Noteholder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

None of the Company, the Trustee, the Note Registrar or any co-registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 9 hereof.

 

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All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Supplemental Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Supplemental Indenture as the Notes surrendered upon such registration of transfer or exchange.

(b) The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Notes. So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, all Notes shall be represented by one or more Notes in the form of Global Securities (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 definitive Note shall be effected through the Depositary in accordance with this Supplemental Indenture and the procedures of the Depositary therefor.

Notwithstanding any other provisions of the Indenture (other than the provisions set forth in this Section 2.05(b)), 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 transfers of portions of a Global Note in certificated form made upon request of a member of, or a participant in, the Depositary (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section 2.05.

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 the Global Note. Initially, the Global Notes 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 the Depositary.

If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 calendar 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 calendar days or (iii) an Event of Default in respect of the Notes has occurred and is continuing, and any Noteholder has requested that the Notes be issued in definitive form in exchange for a Global Note, the Company will execute, and the Trustee, upon receipt of an Officers’ Certificate and a Company Order for the authentication and delivery of Notes, will authenticate and deliver Notes in definitive form to each person that the Depositary identifies as a beneficial owner of the related Notes (or a portion thereof) in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, and upon delivery of the Global Note to the Trustee such Global Note shall be canceled.

 

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Definitive Notes issued in exchange for all or a part of a Global Note pursuant to this Section 2.05(b) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such definitive Notes to the Persons in whose names such definitive Notes are so registered.

At such time as all interests in a Global Note have been converted, canceled, redeemed, repurchased or transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Note is exchanged for definitive Notes, converted, canceled, repurchased or transferred to a transferee who receives definitive Notes therefor or any definitive 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, nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Section 2.06 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 Noteholders as a convenience to holders of the Notes; 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 will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

Section 2.07 Additional Notes; Repurchases. The Company may, without the consent of the Noteholders and notwithstanding Section 2.01, reopen this Supplemental Indenture and issue additional Notes hereunder with the same terms and with the same CUSIP number as the Notes initially issued hereunder in an unlimited aggregate principal amount, which will form the same series with the Notes initially issued hereunder; provided that no such additional Notes will be treated as part of the same series as the Notes unless such additional Notes will be part of the same issue as the Notes initially issued hereunder for U.S. federal income tax purposes. 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 11.05 of the Original Indenture, as the Trustee shall reasonably request. The Company may also from time to time repurchase the Notes in open market purchases or negotiated transactions without prior notice to Noteholders.

 

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ARTICLE 3

PARTICULAR COVENANTS OF THE COMPANY

Section 3.01 Payment of Principal, Premium and Interest. The Company covenants and agrees that it will cause to be paid the principal of and premium, if any (including the Fundamental Change Repurchase Price), and accrued and unpaid interest on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes. Each installment of interest on the Notes, may be paid by mailing checks for the amount payable to Noteholders entitled thereto as they shall appear on the registry books of the Company; provided that, with respect to any Noteholder with an aggregate principal amount in excess of $1,000,000, at the application of such holder in writing to the Trustee and Paying Agent (if different from the Trustee) not later than the relevant Interest Record Date, interest on such holder’s Notes shall be paid by wire transfer in immediately available funds to such holder’s account in the United States, which application shall remain in effect until the Noteholder notifies the Trustee and Paying Agent to the contrary; provided further that payment of interest made to the Depositary shall be paid by wire transfer in immediately available funds in accordance with such wire transfer instructions and other procedures provided by the Depositary from time to time.

Section 3.02 Maintenance of Office or Agency. The Company will maintain in the 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”) and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the corporate trust office or the office or agency of the Trustee.

The Company may also from time to time designate as co-registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the 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, Bid Solicitation Agent and Conversion Agent and the corporate trust office and the office or agency of the Trustee each shall be considered as one such office or agency of the Company for each of the aforesaid purposes; provided that the Trustee may appoint an agent, reasonably acceptable to the Company, to perform the duties of the Bid Solicitation Agent.

Section 3.03 Existence. Except as permitted by Section 7.01 or Article V of the Original Indenture, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

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Section 3.04 Additional Interest. If Additional Interest is payable by the Company, the Company shall deliver to the Trustee an Officers’ Certificate to that effect stating (a) the amount of such Additional Interest that is payable and (b) the date on which such interest is payable. Unless and until a Responsible Officer of the Trustee receives at the corporate trust office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable.

Section 3.05 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 Supplemental Indenture.

Section 3.06 Reporting Obligations. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the Commission (unless the Commission will not accept such a filing) within the time periods specified in the Exchange Act and, within 15 days of filing, or attempting to file, the same with the Commission, furnish to the Trustee and the holders of the outstanding Notes:

(a) all quarterly and annual financial and other information with respect to the Company and its subsidiaries that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report thereon by the Company’s certified independent accountants; and

(b) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports.

So long as the Company is required to file periodic reports under Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, the Company’s obligation to deliver the information referred to above shall be deemed satisfied upon the filing of such information in the EDGAR system and the giving of notice to the Trustee as to the public availability of such information from such source.

Section 3.07 Future Guarantors. If any Subsidiary of the Company that is not a Subsidiary Guarantor guarantees or becomes a co-obligor with respect to any indebtedness for money borrowed for which the Company or another Subsidiary Guarantor is the borrower, then such Subsidiary shall, within 30 calendar days thereof, execute a supplement to the Indenture under which it shall become a Subsidiary Guarantor with respect to the Notes in accordance with the terms of Article 10 hereof and Article X of the Original Indenture.

ARTICLE 4

DEFAULTS AND REMEDIES

Section 4.01 Additional Events of Default; Modifications. In addition to those Events of Default set forth in Section 6.01 of the Original Indenture, the following events shall be Events of Default with respect to the Notes and the terms of the Original Indenture shall be modified as set forth below:

 

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(a) failure by the Company to issue a notice with respect to a Fundamental Change when such notice becomes due in accordance with Sections 8.03(d) or 9.01(b);

(b) failure by the Company to comply with its obligations to repurchase the Notes as required under Article 9;

(c) failure by the Company to deliver when due of all cash and any shares of Common Stock or other consideration payable upon conversion with respect to the Notes, which failure continues for 10 days;

(d) failure by the Company to comply with Section 7.01 hereof upon receipt of notice of such Default from the Trustee or from holders of not less than 25% in aggregate principal amount of the Notes then outstanding, and the failure to cure (or obtain a waiver of) such Default within 30 days after receipt of such notice;

(e) failure by any Subsidiary Guarantor to perform any covenant set forth in its Guarantee;

(f) a default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or any of its Subsidiaries, other than any Subsidiary that is designated an “Unrestricted Subsidiary” under the supplemental indenture governing the Company’s 6  14% senior notes due 2022 or any other indenture or supplemental indenture containing substantially similar provisions related to unrestricted subsidiaries or similar concepts (collectively, “Unrestricted Subsidiaries”) (or the payment of which is guaranteed by the Company or any of its Subsidiaries (other than Unrestricted Subsidiaries)), which default is caused by a failure to pay principal of or premium or interest on such indebtedness prior to the expiration of any grace period provided in such indebtedness, including any extension thereof (a “payment default”), or results in the acceleration of such indebtedness prior to its stated maturity and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates in excess of $50.0 million (or the foreign currency equivalent thereof) and provided, further, that if any such default is cured or waived or any such acceleration rescinded, or such indebtedness is repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be, such Event of Default and any consequential acceleration of the Notes shall be automatically rescinded, so long as such rescission does not conflict with any judgment or decree;

(g) a final judgment for the payment of $50.0 million (or the foreign currency equivalent thereof) or more (excluding amounts covered by insurance) is rendered against us or any Significant Subsidiary (other than Unrestricted Subsidiaries), which judgment is not discharged or stayed within 60 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;

 

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(h) Numbered clauses (5) and (6) of Section 6.01 of the Original Indenture are hereby amended and restated in its entirety as follows:

“(5) the Company, any Subsidiary Guarantor, or any Significant Subsidiary (other than Unrestricted Subsidiaries), pursuant to or within the meaning of any Bankruptcy Law:

(A) commences a voluntary case,

(B) consents to the entry of an order for relief against it in an involuntary case,

(C) consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or

(D) makes a general assignment for the benefit of its creditors;

(6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:

(A) is for relief against the Company, any Subsidiary Guarantor, or a Significant Subsidiary (other than Unrestricted Subsidiaries), as debtor in an involuntary case,

(B) appoints a Bankruptcy Custodian of the Company, any Subsidiary Guarantor, or a Significant Subsidiary (other than Unrestricted Subsidiaries), or a Bankruptcy Custodian for all or substantially all of the property of the Company, any Subsidiary Guarantor, or a Significant Subsidiary (other than Unrestricted Subsidiaries), or

(C) orders the liquidation of the Company, any Subsidiary Guarantor, or a Significant Subsidiary (other than Unrestricted Subsidiaries); or”; and

(i) The final paragraph of Section 6.01 of the Original Indenture is hereby amended and restated in its entirety as follows: “A Default under clause (4) of this Section 6.01 is not an Event of Default until the Trustee notifies the Company and the Subsidiary Guarantors, or the Holders of at least 25% in principal amount of the then outstanding Notes notify the Company, the Subsidiary Guarantors and the Trustee, of the Default, and the Company or the applicable Subsidiary Guarantor, as the case may be, fails to cure (or obtain a waiver of) the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.””

Section 4.02 Sole Remedy for Failure to Report. Notwithstanding any other provision of the Indenture, if the Company so elects, the sole remedy for an Event of Default relating to the failure to comply with the reporting obligations under Section 3.06 will, for the 180 days beginning on and including the day on which the Event of Default occurs, 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 (the “Additional Interest”) for each day during the 180-day period during which the Event of Default relating to the reporting obligations is continuing and neither waived nor cured (but not including the date on which the Event of Default relating to the reporting obligations shall have been cured or waived). This Additional Interest will be payable

 

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in the same manner and on the same dates as the stated interest payable on the Notes. On the 180th calendar day after the commencement of such Additional Interest (if such violation is not cured or waived prior to such 180th calendar day), the Notes will be subject to acceleration upon written notice from the Trustee or holders of 25% of the outstanding principal amount of the Notes, in accordance with Section 6.02 of the Original Indenture.

In order to exercise the extension right and elect to pay the Additional Interest as the sole remedy following the occurrence of any Event of Default relating to the failure to comply with Section 3.06 in accordance with the preceding paragraph, the Company must notify all Noteholders and the Trustee and Paying Agent of such election on or before the date on which such Event of Default relating to such failure to report otherwise would occur (or, if such date is not a Business Day, on the first Business Day thereafter). Upon the Company’s failure to timely give such notice, the Notes will be subject to acceleration as provided above.

For the avoidance of doubt, the provisions of this Section 4.02 will not affect the rights of Noteholders in the event of the occurrence of any other Event of Default.

Section 4.03 Waivers of Certain Defaults. Section 6.04 of the Original Indenture is amended, for purposes of the Notes, to add after numbered clause (2) in the first sentence thereof, the following “or (3) a continuing Default or Event of Default in the delivery of cash, Common Stock or other consideration due upon conversion of any Security.”

ARTICLE 5

DEFEASANCE AND DISCHARGE

Section 5.01 No Defeasance or Early Discharge. Sections 8.01(b) and 8.01(c) of the Original Indenture shall not apply to the Notes. Section 8.01(a)(1)(B) of the Original Indenture shall be amended and restated with respect to the Notes to read as follows:

(B) all outstanding Notes not theretofore delivered to the Trustee for cancellation shall have become due and payable, whether at the Maturity Date or a Fundamental Change Repurchase Date and the Company shall have deposited with the Trustee, the Paying Agent or the Conversion Agent, if applicable, cash and shares of Common Stock or other consideration deliverable upon conversion of the Notes sufficient to pay and deliver all principal, interest and conversion consideration due with respect to all outstanding Notes; or

ARTICLE 6

MODIFICATIONS AND AMENDMENTS

Section 6.01 Modifications and Amendments Without Consent of Noteholders. With respect to the Notes, the numbered paragraphs (1) through (11) in the first paragraph of Section 9.01 of the Original Indenture shall be replaced in their entirety with the following:

(a) to evidence a successor to the Company and the assumption by that successor of the Company’s obligations under the Indenture and the Notes;

 

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(b) to add to the Company’s covenants for the benefit of the holders of the Notes or to surrender any right or power conferred upon the Company;

(c) to secure the Company’s obligations in respect of the Notes or to add a guarantor of the Notes or to release any Subsidiary Guarantor from its Subsidiary Guarantee in accordance with the terms of the Indenture;

(d) to evidence and provide the acceptance of the appointment of a successor Trustee under the Indenture;

(e) to comply with the requirements of the Commission in order to effect or maintain qualification of the Indenture under the Trust Indenture Act, as contemplated by the Indenture or otherwise;

(f) to provide for conversion rights of holders if any reclassification or change of Common Stock or any consolidation, merger or sale of all or substantially all of the Company’s property and assets occurs in accordance with the Indenture or otherwise comply with the provisions of the Indenture in the event of such a transaction;

(g) to adjust the Conversion Rate in accordance with the terms of this Supplemental Indenture;

(h) to cure any ambiguity, omission, defect or inconsistency in the Indenture;

(i) to conform the provisions hereof to any provision of the “Description of the Notes” section in the preliminary prospectus supplement, dated December 12, 2017, filed with the Securities and Exchange Commission in connection with the initial issuance of the Notes, as supplemented by the related pricing term sheet; or

(j) to make any change that does not adversely affect the rights of the holders of the Notes in any material respect.

Section 6.02 Modifications and Amendments With Consent of Noteholders. With respect to the Notes, the fifth paragraph of Section 9.02 of the Original Indenture shall be replaced in its entirety with the following:

“However, without the consent of the holder of each Note affected, an amendment, supplement or waiver under this Section 9.02 may not:

(a) alter the manner of calculation or rate of accrual of interest on the Note or change the time of payment of any installment of interest;

(b) make the Note payable in money or securities other than that stated in the Note;

(c) change the stated maturity of the Note or provisions relating to redemption of the Note;

 

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(d) reduce the principal amount or Fundamental Change Repurchase Price with respect to the Note, or change any provisions with respect to redemption of the Notes;

(e) make any change that adversely affects the rights of a holder to convert the Note or changes the consideration to be received upon any such conversion, except in accordance with the terms of this Supplemental Indenture;

(f) make any change that adversely affects the right to require the Company to purchase the Note;

(g) impair the right to institute suit for the enforcement of any payment with respect to the Note or with respect to conversion of the Note; or

(h) change the provisions in the Indenture that relate to modifying or amending the Indenture or waiving any past defaults in the payment of principal, premium, if any, or interest on the Notes.”

ARTICLE 7

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 7.01 Company May Consolidate, Etc. on Certain Terms. Notwithstanding anything to the contrary in Section 5.01 of the Original Indenture, the Company shall not consolidate with or merge into any other Person or convey, transfer or lease all or substantially all of the Company’s properties and assets to any successor Person in a single transaction or series of related transactions, unless:

(a) either:

(i) the resulting, continuing, surviving or transferee Person is the Company; or

(ii) the resulting, continuing, surviving or transferee Person, if other than the Company, is organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of the Company under the Notes and the Indenture;

(b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and

(c) the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the transaction and such supplemental indenture comply with the Indenture.

Any reference in the Original Indenture to Section 5.01 therein shall, for the Notes, be deemed a reference to this Section 7.01.

 

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ARTICLE 8

CONVERSION OF NOTES

Section 8.01 Right to Convert. Subject to the provisions of this Article 8, on or prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, the Noteholders shall have the right, at such holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such holder’s Note into cash, shares of Common Stock, or a combination of cash and shares of Common Stock (subject to, and in accordance with, the settlement provisions of Section 8.02 hereof). The obligation of the Company to convert the Notes is referred to as the “Conversion Obligation.” The delivery to the Noteholder of the Settlement Amount together with any cash payment for such holder’s fractional shares, will be deemed to satisfy the Company’s obligation to pay the principal amount of the Notes and to satisfy the Company’s obligation to pay accrued and unpaid interest through the Conversion Date, except as provided in Section 8.02(h). Holders of Common Stock issued upon conversion, if any, will not be entitled to receive any dividends payable to holders of Common Stock as of a record date before the applicable Conversion Date (in the case of Physical Settlement) or before the last Trading Day of the applicable Observation Period (in the case of Combination Settlement).

Subject to the foregoing, prior to December 1, 2022, the Notes are convertible only in the circumstances described below in clauses (i)-(iii). On or after December 1, 2022, a Noteholder may surrender Notes for conversion at any time prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date without regard to such conditions.

(i) Conversion Upon Satisfaction of Common Stock Price Condition. Notes may be converted during any calendar quarter commencing after January 1, 2018, and only during such quarter, if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days during the period of 30 consecutive Trading Days ending on the last Trading Day of the quarter immediately preceding such quarter (appropriately adjusted to take into account the occurrence, during such 30 consecutive Trading Days, of any event requiring adjustment of the Conversion Price under this Indenture) is more than 130% of the Conversion Price on such last Trading Day.

(ii) Conversion Upon Satisfaction of Trading Price Condition. Notes may be converted during the five consecutive Business Days after any five consecutive Trading Days on which the Trading Price of $1,000 principal amount of Notes, as determined by the Bid Solicitation Agent following a request by the Company in accordance with the procedures described below in Section 8.01(c), for each Trading Day of such five Trading Days was less than 98% of the product of the Last Reported Sale Price of the Common Stock for such Trading Day and the Conversion Rate in effect on such day.

(iii) Conversion Upon Specified Corporate Transactions.

 

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A Note may be converted during the applicable time period specified below if:

(A) the Company elects to make a distribution to all or substantially all holders of Common Stock of rights, warrants or options entitling them (for a period commencing no earlier than the date of distribution and expiring not more than 45 calendar days after the Record Date of the distribution) to subscribe for or purchase shares of Common Stock at a price per share less than the average Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Days immediately preceding the date such distribution was first publicly announced;

(B) the Company elects to make a distribution to all or substantially all holders of Common Stock, of cash or other assets, debt securities, or rights or warrants to purchase the Company’s securities (other than those described in Section 8.04(a) or (b)), where the fair market value of such distribution per share of Common Stock (as determined by the Board of Directors, whose determination shall be conclusive evidence of such fair market value) exceeds 10% of the average of the Last Reported Sale Prices of the Common Stock for the ten consecutive Trading Days immediately preceding the date such distribution was first publicly announced;

(C) the Company is party to a consolidation, merger, share exchange, sale of all or substantially all of its assets or other similar transaction (in each case other than with one of the Company’s wholly-owned Subsidiaries), in each case pursuant to which the Common Stock would be converted into (or holders of Common Stock would be entitled to receive) cash, securities or other property; or

(D) a Fundamental Change or a Make-Whole Fundamental Change occurs.

In the event of a distribution described in Sections 8.01(a)(iii)(A) and (B), the Company shall cause a written notice of such distribution to be given to the Trustee and the Conversion Agent and to be mailed to each Noteholder no later than 45 Trading Days prior to the Ex-Dividend Date for such distribution. Once the Company has given such notice, Noteholders may surrender their Notes for conversion to the Conversion Agent at any time thereafter until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date or the Company’s announcement that such distribution will not take place, even if the Notes are not otherwise convertible at such time. No adjustment to the ability of Noteholders to convert will be made if the Noteholders are entitled to participate in a distribution without conversion.

In the event of a transaction described in Section 8.01(a)(iii)(C), the Company shall cause a written notice of such transaction to be given to the Trustee and the Conversion Agent and to each Noteholder no later than the date on which such transaction becomes effective. Once the Company has given such notice, Noteholders may surrender their Notes for conversion at any time from and including the Effective Date of such transaction until and including the date that is 30 calendar days after the Effective Date of such transaction.

In the event of a Fundamental Change or a Make-Whole Fundamental Change, the Company shall give notice to the Trustee, the Conversion Agent and the Noteholders in accordance with the provisions of Section 8.03(d). Once the Company has given such notice,

 

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Noteholders may surrender their Notes for conversion at any time from and including the Effective Date of such transaction until and including the Business Day immediately preceding the Fundamental Change Repurchase Date with respect to such transaction (or with respect to an event that is a Make-Whole Fundamental Change but is not a Fundamental Change, the 35th Trading Day immediately following the effective date of such Make-Whole Fundamental Change).

(b) For each fiscal quarter of the Company commencing prior to December 1, 2022, the Company shall determine, on the first Business Day following the last Trading Day of the immediately preceding quarter, whether the Notes are convertible pursuant to clause (i) of Section 8.01(a). If the conditions set forth in clause (i) of Section 8.01(a) have been met, the Company shall so notify the Trustee and mail to each Noteholder a written notice. 

(c) The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes pursuant to clause (ii) of Section 8.01(a) unless the Company has requested such determination in writing; and the Company shall have no obligation to make such request unless a Noteholder who holds at least $2,000,000 principal amount of Notes provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes is reasonably likely to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate in effect on such day. If a Noteholder provides such evidence or if the Company otherwise elects to require such determination, the Company shall instruct the Bid Solicitation Agent to solicit bid quotations, and the Company shall select three independent nationally recognized securities dealers and instruct such dealers to provide bids to the Bid Solicitation Agent. The Company will determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price of the Notes is greater than or equal to 98% of the product of the Last Reported Sale price of the Common Stock and the Conversion Rate in effect on such day. The Bid Solicitation Agent shall promptly notify the Company of its determination on each such day. If the condition set forth in clause (ii) of Section 8.01(a) has been met, the Company shall so notify the Noteholders.

(d) For purposes of clause (ii) of Section 8.01(a), if the Bid Solicitation Agent cannot reasonably obtain at least one bid for $5.0 million principal amount of Notes from an independent nationally recognized securities dealer on a Trading Day, then the Trading Price of Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate in effect on such Trading Day.

Section 8.02 Conversion Procedure; Settlement Upon Conversion.

(a) Upon conversion of any Note, the Company shall pay or deliver, as the case may be, to the converting holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”), shares of Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 8.02 (“Physical Settlement”) or a combination of cash and shares of Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 8.02 (“Combination Settlement”), at its election, as set forth in this Section 8.02.

 

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The Company shall, from time to time, make an election with respect to the method of settlement described above (each, a “Settlement Method”) and the Specified Dollar Amount, if applicable, that the Company shall use to satisfy its Conversion Obligation, which election will be effective until we provide notice of a different Settlement Method or specified Dollar Amount, as applicable. However, the Company shall always use the same Settlement Method and Specified Dollar Amount, if applicable, for all conversions occurring on any given Conversion Date. The Company shall initially be deemed to have elected Combination Settlement and a Specified Dollar Amount equal to $1,000. If the Company elects a different Settlement Method, the Company shall deliver a notice (the “Settlement Notice”) of the relevant Settlement Method and/or Specified Dollar Amount, as applicable, and the effective date of such Settlement Method and/or Specified Dollar Amount to all holders of the Notes, the Trustee and the Conversion Agent; provided that the effective date of such Settlement Method and/or Specified Dollar Amount shall be no earlier than the Trading Day preceding the date on which the Settlement Notice is delivered. If the Company elects to use Combination Settlement and fails to specify a Specified Dollar Amount in the Settlement Notice relating to its election of Combination Settlement, the Company shall be deemed to have elected a Specified Dollar Amount equal to $1,000. Concurrent with providing Settlement Notice, the Company shall issue a press release containing information regarding its election of Settlement Method and make such information available on its website. The Company shall not have the right to change the Settlement Method or the Specified Dollar Amount after the 84th Scheduled Trading Day preceding the Maturity Date. Prior to such date, the Company shall have the right to irrevocably elect a Settlement Method and Specified Dollar Amount by delivering the Settlement Notice to all holders of the Notes, the Trustee and the Conversion Agent and issuing a press release containing information regarding its election of Settlement Method and making such information available on its website.

(i) The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:

(A) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting holder in respect of each $1,000 principal amount of Notes being converted a number of shares of Common Stock equal to the Conversion Rate in effect on the Conversion Date;

(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 40 consecutive Trading Days during the related Observation Period; and

(C) if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Combination Settlement, the Company shall pay or deliver, as the case may be, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 40 consecutive Trading Days during the related Observation Period,

 

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plus in the case of Physical Settlement or Combination Settlement, cash in lieu of fractional shares as provided in Section 8.02(j).

(ii) 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.

(iii) Except as otherwise provided herein, the Company shall deliver the Settlement Amount to the Noteholders who have surrendered Notes for conversion on the second Business Day immediately following the relevant Conversion Date, if the Company elects Physical Settlement (provided that with respect to any Conversion Date occurring on or after the regular Record Date immediately preceding the Maturity Date, the Company will settle any such conversion on the Maturity Date), or on the second Business Day immediately following the last Trading Day of the Observation Period, in the case of any other Settlement Method.

(b) Before any holder of a Note shall be entitled to convert the same 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 8.02(h) and, if required, all transfer or similar taxes, if any, as set forth Section 8.02(e) and (ii) in the case of a Note issued in certificated form, (1) complete and manually sign and deliver an irrevocable notice to the Conversion Agent in the form on the reverse of such certificated Note (or a facsimile thereof) (Exhibit B hereto) (a “Notice of Conversion”) at the office of the Conversion Agent and shall 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 the 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, at the office of the Conversion Agent, (3) 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 8.02(h), (4) if required, furnish appropriate endorsements and transfer documents, and (5) if required, pay all transfer or similar taxes, if any, as set forth in Section 8.02(e). The Trustee (and if different, the relevant Conversion Agent) shall notify the Company of any conversion pursuant to this Article 8 on the date of 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 not validly withdrawn such Fundamental Change Repurchase Notice in accordance with Section 9.02.

 

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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, if any, that shall be payable upon conversion 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) Each conversion shall be deemed to have been effected as to any Notes surrendered for conversion on the date that the holder of such Notes has complied with the requirements set forth in Section 8.02(b) above (the “Conversion Date”); provided, however, that the person in whose name any shares of Common Stock shall be issuable upon such conversion will be treated as the holder of record of such shares as of the close of business on the Conversion Date (in the case of Physical Settlement) or as of the last trading day of the relevant Observation Period (in the case of Combination Settlement). Upon conversion of Notes, such person shall no longer be a Noteholder.

(d) In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the holder of the Note so surrendered, without charge to such holder, a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note.

(e) If a holder submits a Note for conversion, the Company shall pay all documentary, stamp or similar issue or transfer tax, if any, that may be imposed by the United States or any political subdivision thereof or taxing authority thereof or therein with respect to the issuance of shares of Common Stock, upon the conversion. However, the holder shall pay any such tax that is due because the holder requests any such shares of Common Stock to be issued in a name other than the holder’s name. The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the holder’s name until the Trustee receives a sum sufficient to pay any tax that will be due because the shares are to be issued in a name other than the holder’s name. Nothing herein shall preclude any tax withholding required by law or regulations.

(f) Except as provided in Section 8.04, no adjustment shall be made for dividends on any shares issued upon the conversion of any Note with a record date after the Conversion Date.

(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) If Notes are converted after the close of business on a Interest Record Date but prior to the open of business on the immediately following Interest Payment Date, holders of such Notes as of the close of business on the Interest Record Date will receive the interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes, upon surrender for conversion during the period from the close of business on any Interest Record Date but prior to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of the interest payable on the Notes so converted; provided, however, that no such payment shall be required (1) if the

 

25


Company has specified a Fundamental Change Repurchase Date that is after an Interest Record Date but on or prior to the Business Day immediately following the related Interest Payment Date, (2) to the extent of any overdue interest, if any, existing at the time of conversion with respect to such Note or (3) if the Notes are surrendered for conversion after the close of business on the Interest Record Date immediately preceding the Maturity Date and before the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date. Except as described above, no payment or adjustment will be made for accrued and unpaid interest on converted Notes.

(i) [Reserved].

(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. For purposes of the foregoing, fractional shares arising from the calculation of the Daily Settlement Amount for any day in the Observation Period shall be aggregated with fractional shares for all other days in such period in determining the Settlement Amount, and any whole shares resulting therefrom shall be issued and any remaining fractional shares shall be paid in cash as provided herein. If more than one Note shall be surrendered for conversion at one time by the same holder, the number of full shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof) so surrendered.

Section 8.03 Increase of Conversion Rate Upon Conversion Upon Make-Whole Fundamental Changes.

(a) If a Noteholder elects to convert Notes in connection with a Make-Whole Fundamental Change, then the Conversion Rate of the Notes being converted by such Noteholder shall be increased by an additional number of shares of Common Stock (the “Additional Shares”) if any, as described herein. For purposes of this Section 8.03, any conversion of the Notes by a Noteholder will be deemed to be “in connection with” such Make-Whole Fundamental Change if it occurs during the period that begins on the Effective Date of such Make-Whole Fundamental Change and ends on (and includes) the Business Day prior to the Fundamental Change Repurchase Date relating to such Make-Whole Fundamental Change (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for subclause (x) of the proviso in clause (d) of the definition thereof, the 35th trading day immediately following the effective date of such Make-Whole Fundamental Change).

The increase in the Conversion Rate in connection with a Make-Whole Fundamental Change, expressed as a number of Additional Shares, will be determined by the Company by reference to the table and adjustments thereto in Section 8.03(b), based on the Effective Date of the Make-Whole Fundamental Change and the applicable Stock Price.

 

26


(b) The following tables set forth the Effective Date and number of Additional Shares by which the Conversion Rate will be increased upon a conversion in connection with a Make-Whole Fundamental Change that occurs in the corresponding period to be determined by reference to the Stock Price and Effective Date of the Make-Whole Fundamental Change:

Number of Additional Shares

(per $1,000 principal amount of Notes)

 

    Stock Price  

Effective Date

  $12.51     $13.50     $14.50     $15.64     $17.50     $20.00     $25.00     $30.00     $35.00     $40.00     $50.00     $60.00  

December 18, 2017

    15.9872       13.9271       12.1751       10.5329       8.4381       6.4174       3.9270       2.5128       1.6407       1.0735       0.4315       0.1281  

June 1, 2018

    15.9872       13.8880       12.0998       10.4300       8.3109       6.2811       3.8052       2.4157       1.5663       1.0174       0.3999       0.1094  

June 1, 2019

    15.9872       13.8507       11.9515       10.1966       8.0007       5.9397       3.4999       2.1771       1.3884       0.8878       0.3344       0.0794  

June 1, 2020

    15.9872       13.5955       11.5551       9.6973       7.4213       5.3504       3.0137       1.8162       1.1300       0.7060       0.2476       0.0423  

June 1, 2021

    15.9872       13.1457       10.8851       8.8722       6.4884       4.4317       2.3040       1.3227       0.7981       0.4856       0.1531       0.0098  

June 1, 2022

    15.9872       12.1082       9.4620       7.2018       4.7078       2.8041       1.2189       0.6607       0.3980       0.2420       0.0625       0.0001  

June 1, 2023

    15.9872       10.1253       5.0167       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000       0.0000  

provided, however, that:

(i) if the actual Stock Price of such Make-Whole Fundamental Change is between two Stock Prices listed in the tables above under the column titled “Stock Price,” or if the actual Effective Date of such Make-Whole Fundamental Change is between two Effective Dates listed in the tables above in the row immediately below the title “Effective Date,” then the number of Additional Shares for such Make-Whole Fundamental Change shall be determined by the Company by a straight-line interpolation between the number of Additional Shares set forth for such higher and lower Stock Prices, or for such earlier and later Effective Dates based on a 365 day year, as applicable;

(ii) if the actual Stock Price of such Make-Whole Fundamental Change is greater than $60.00 per share (subject to adjustment in the same manner as the Stock Price as provided in clause (iii) below), or if the actual Stock Price of such Make-Whole Fundamental Change is less than $12.51 per share (subject to adjustment in the same manner as the Stock Price as provided in clause (iii) below), then the number of Additional Shares shall be equal to zero and this Section 8.03 shall not require the Company to increase the Conversion Rate with respect to such Make-Whole Fundamental Change;

(iii) if an event occurs that requires, pursuant to Section 8.04, an adjustment to the Conversion Rate, then, on the date and at the time such adjustment is so required to be made, each price set forth in the tables above under the row titled “Stock Price” shall be adjusted so that such Stock Price, at and after such time, shall be equal to the product of (1) such Stock Price as in effect immediately before such adjustment to such Stock

 

27


Price and (2) a fraction whose numerator is the Conversion Rate in effect immediately before such adjustment to the Conversion Rate and whose denominator is the Conversion Rate to be in effect, in accordance with Section 8.04, immediately after such adjustment to the Conversion Rate; and

(iv) each number of Additional Shares set forth in the tables above shall be adjusted in the same manner in which, and for the same events for which, the Conversion Rate is to be adjusted pursuant to Section 8.04.

In no event will the Conversion Rate after adjustment described in this Section 8.03(b) exceed 79.9360 per $1,000 principal amount of Notes, subject to adjustments as set forth in Section 8.04.

(c) For the avoidance of doubt, the increases provided for in Section 8.03 shall only be made with respect to the Notes being converted in connection with such Make-Whole Fundamental Change and shall not be effective as to any Notes not so converted.

(d) As soon as practicable after the Company determines the anticipated Effective Date of any proposed Make-Whole Fundamental Change and no later than (i) the 15th Scheduled Trading Day prior to the date on which such Make-Whole Fundamental Change is anticipated to become effective in the case of a Make-Whole Fundamental Change described in clause (d) of the definition of Fundamental Change, or (ii) two Business Days after the Company learns of a Make-Whole Fundamental Change described in clause (a) of the definition of Fundamental Change, the Company shall provide written notice of such anticipated Effective Date to the Trustee and the Conversion Agent and mail a notice to each Noteholder, and shall issue a press release indicating, and publicly announce, through a public medium that is customary for such announcements, and publish on the Company’s website, the anticipated Effective Date of such proposed Make-Whole Fundamental Change. Each such notice, press release notice, announcement and publication shall also state that in connection with such Make-Whole Fundamental Change, the Company shall increase, in accordance herewith, the Conversion Rate applicable to Notes entitled as provided herein to such increase (along with a description of how such increase shall be calculated and the time periods during which Notes must be surrendered in order to be entitled to such increase). No later than the actual Effective Date of each Make-Whole Fundamental Change, the Company shall provide written notice to the Trustee and the Conversion Agent and mail a notice to each Noteholder, and shall issue a press release indicating, and publicly announce, through a public medium that is customary for such announcements, and publish on the Company’s website, such Effective Date and the amount by which the Conversion Rate has been so increased.

Section 8.04 Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company as follows:

(a) In case the Company shall issue shares of Common Stock as a dividend or distribution on shares of Common Stock to all holders of the outstanding shares of Common Stock, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:

 

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LOGO

where,

 

CR0    =    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be;
CR’    =    the new Conversion Rate in effect 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 of such share split or share combination, as the case may be;
OS0    =    the number of outstanding shares of Common Stock immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be; and
OS’    =    the number of outstanding shares of Common Stock immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as the case may be, assuming, for this purpose only, the completion of such dividend, distribution, share split or share combination, as the case may be, immediately prior to the open of business on such date.

Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or the effective date for such share split or share combination. If any dividend or distribution of the type described in this Section 8.04(a) is declared but not so paid or made, or any split or combination of the type described in this Section 8.04(a) is announced but the outstanding shares of Common Stock are not split or combined, as the case may be, the new Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, or split or combine the outstanding shares of Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or such share split or share combination had not been announced.

(b) In case the Company shall distribute to all or substantially all holders of its Common Stock any rights or warrants entitling them for a period of not more than 45 calendar days after the Record Date of such distribution to subscribe for or purchase shares of the Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock on the 10 consecutive Trading Days immediately preceding the date that such distribution was first publicly announced, the Conversion Rate shall be adjusted based on the following formula:

 

29


LOGO

where,

 

CR0    =    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;
CR’    =    the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such distribution;
OS0    =    the number of outstanding shares of the Common Stock immediately prior to the open of business on the Ex-Dividend Date for such distribution;
X    =    the total number of shares of the Common Stock issuable pursuant to such rights or warrants; and
Y    =    the number of shares of the Common Stock equal to the aggregate price payable to exercise such rights or warrants, divided by the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Days ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution of such rights or warrants.

Such adjustment shall be successively made whenever any such rights or warrants are distributed and shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. To the extent that shares of the Common Stock are not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such distribution had not been declared.

In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at less than the applicable Last Reported Sale Price of the Common Stock, and in determining the aggregate exercise price payable for such Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable upon exercise thereof, with the value of such consideration, if other than cash, to be determined by the Board of Directors. In no event shall the Conversion Rate be decreased pursuant to this Section 8.04(b), except for readjustments described above.

(c) In case the Company shall distribute to all or substantially all holders of its Common Stock shares of its capital stock, evidences of its indebtedness, other of its assets or property or rights, options or warrants, excluding (i) dividends or distributions covered by Section 8.04(a) or Section 8.04(b), (ii) dividends or distributions paid exclusively in cash, as to which the provisions in Section 8.04(d) shall apply, (iii) distributions solely of Reference

 

30


Property in exchange for Common Stock in connection with a transaction described under Section 8.06 and (iv) Spin-Offs to which the provisions set forth below in this Section 8.04(c) shall apply (any of such shares of capital stock, indebtedness, other asset or property or rights, options or warrants hereinafter in this Section 8.04(c) called the “Distributed Property”), to all or substantially all holders of its Common Stock, then, in each such case, the Conversion Rate shall be adjusted based on the following formula:

 

LOGO

where,

 

CR0    =    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution;
CR’    =    the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such distribution;
SP0    =    the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Days ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and
FMV    =    the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to one share of the Common Stock on the Ex-Dividend Date for such distribution.

Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution; provided that if “FMV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Noteholder shall receive on the date on which the Distributed Property is distributed to holders of the Common Stock, for each $1,000 principal amount of Notes upon conversion, the amount of Distributed Property such holder would have received had such holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Record Date for such distribution. Except as provided below, if the Board of Directors determines “FMV” for purposes of this Section 8.04(c) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Days ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution.

In lieu of the foregoing, with respect to an adjustment pursuant to this Section 8.04(c) where there has been 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, which will be listed for trading on the National Securities Exchange (a “Spin-Off”), the Conversion Rate will be increased based on the following formula:

 

31


LOGO

where,

 

CR0    =    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of the Spin-Off;
CR’    =    the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date of the Spin-Off;
FMV    =    the average of the last reported sale prices of the capital stock or similar equity interest distributed to holders of the Common Stock on its principal trading market applicable to one share of the Common Stock over the 10 consecutive Trading Days immediately following, and including, the Ex-Dividend Date of the Spin-Off (the “Spin-Off Valuation Period”); and
MP0       the average of the Last Reported Sale Prices of the Common Stock over the Spin-Off Valuation Period.

The adjustment to the Conversion Rate under the preceding paragraph will be determined on the last Trading Day of the Spin-Off Valuation Period but will be given effect at the open of business on the Ex-Dividend Date for such Spin-Off. Notwithstanding the foregoing, (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the Spin-Off Valuation Period, references in the preceding paragraph with respect to 10 consecutive Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, but excluding, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the valuation period, references in the preceding paragraph with respect to 10 consecutive Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such spin-off to, but excluding, such Trading Day in determining the Conversion Rate as of such Trading Day. If the Ex-Dividend Date for the Spin-Off is less than 10 Trading Days prior to, and including, the end of the Observation Period in respect of any conversion, references in the preceding paragraph to 10 consecutive Trading Days will be deemed to be replaced, solely in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for the Spin-Off to, and including, the last Trading Day of such Observation Period.

If any distribution referred to above is declared but not paid or made, the Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

32


(d) If the Company pays any cash dividend to all or substantially all holders of the Common Stock, the Conversion Rate shall be adjusted based on the following formula:

 

LOGO

where,

 

CR0    =    the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution;
CR’    =    the new Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution;
SP0    =    the average of the Last Reported Sale Prices of the Common Stock over the ten Trading Days immediately preceding the Ex-Dividend Date for such dividend or distribution; and
C    =    the amount of such cash dividend applicable to one share of Common Stock.

Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; provided that if the portion of the cash so distributed applicable to one share of the Common Stock is equal to or greater than SP0 as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Noteholder shall have the right to receive on the date on which the relevant cash dividend or distribution is distributed to holders of Common Stock, for each $1,000 principal amount of Notes upon conversion, the amount of cash such holder would have received had such holder owned a number of shares equal to the Conversion Rate in effect on the Record Date for such distribution. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for the Common Stock and the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:

 

LOGO

 

33


where,

 

CR0    =    the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day succeeding the date such tender or exchange offer expires;
CR’    =    the new Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day succeeding the date such tender or exchange offer expires;
AC    =    the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer;
OS0    =    the number of outstanding shares of Common Stock immediately prior to the date such tender or exchange offer expires;
OS’    =    the number of outstanding shares of Common Stock immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares accepted for purchase or exchange pursuant to such tender offer or exchange offer); and
SP’    =    the average of the Last Reported Sale Prices of Common Stock over the10 consecutive Trading Days commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires,

such adjustment to become effective 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. Notwithstanding the foregoing, (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references in this Section 8.04(e) with respect to 10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the expiration date of such tender or exchange offer and the Conversion Date in determining the 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 in this Section 8.04(e) with respect to 10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the expiration date of such tender or exchange offer and such Trading Day in determining the conversion rate as of such Trading Day. In addition, if the Trading Day next succeeding the expiration date is less than 10 Trading Days prior to, and including, the end of the Observation Period (if applicable) in respect of any conversion, references in this Section 8.04(e) to 10 consecutive Trading Days shall be deemed to be replaced, solely in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the expiration date to, and including, the last Trading Day of such Observation Period. If the Company or one of its Subsidiaries is obligated to purchase shares of Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any or all or any portion of such purchases or all such purchases are rescinded, the new Conversion Rate shall be readjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had been made only in respect of the purchases that had been effected. In no event shall the Conversion Rate be decreased pursuant to this Section 8.04(e), except with respect to readjustment described above.

 

34


(f) For purposes of this Section 8.04, the term “Record Date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other security) have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

Notwithstanding the foregoing, if a Conversion Rate adjustment becomes effective on any Ex-Dividend Date as described herein, and a holder that has converted its Notes on or after such Ex-Dividend Date and on or prior to the related Record Date would be treated as the record holder of shares of Common Stock as of the related Conversion Date based on an adjusted conversion rate for such ex-dividend date in accordance with Section 8.02, then, notwithstanding the foregoing Conversion Rate adjustment provisions, the Conversion Rate adjustment relating to such Ex-Dividend Date will not be made for such converting holder. Instead, such holder will be treated as if such holder were the record owner of the shares of Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

If:

 

  (i) the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation through Combination Settlement and shares of Common Stock are deliverable to settle the Daily Settlement Amount for a given Trading Day within the Observation Period applicable to Notes converted by a Noteholder,

 

  (ii) any distribution or transaction described above in this Section 8.04 has not yet resulted in an adjustment to the Conversion Rate on the Trading Day in question, and

 

  (iii) the shares a Noteholder will receive in respect of such Trading Day are not entitled to participate in the relevant distribution or transaction (because such shares were not held on a related Record Date or otherwise),

then the Company will adjust the number of shares that the Company will deliver to such Noteholder in respect of the relevant Trading Day in a commercially reasonable manner to reflect the relevant distribution or transaction.

If:

 

  (i) the Company elects to satisfy (or is otherwise required to satisfy) its Conversion Obligation solely in shares of Common Stock (other than cash in lieu of any fractional share),

 

  (ii) any distribution or transaction described above in this Section 8.04 has not yet resulted in an adjustment to the Conversion Rate on a given Conversion Date, and

 

  (iii) the shares a Noteholder will receive on settlement of the related conversion are not entitled to participate in the relevant distribution or transaction (because such shares were not held on a related Record Date or otherwise),                

 

35


then the Company will adjust the number of shares that the Company will deliver to such Noteholder in respect of such conversion of Notes in a commercially reasonable manner to reflect the relevant distribution or transaction.

(g) Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of its Common Stock or any securities convertible into or exchangeable for shares of its Common Stock or the right to purchase shares of its Common Stock or such convertible or exchangeable securities.

(h) In addition to those required by clauses Section 8.04(a), (b), (c), (d) and (e) of this Section 8.04, and to the extent permitted by applicable law and subject to the applicable rules of the National Securities Exchange, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days. In addition, the Company may also (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with any dividend or distribution of shares (or rights to acquire shares) or similar event. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the holder of each Note at its last address appearing on the Note Register provided for in Section 2.05 a notice of the increase at least 15 calendar days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(i) The Conversion Rate will not be adjusted:

(i) upon the issuance of any shares of the Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of the Common Stock under any plan;

(ii) upon the issuance of any shares of the Common Stock or restricted stock units or options or rights (including stockholder appreciation rights) to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries;

(iii) upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes were first issued;

(iv) upon the repurchase of any of the Common Stock pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the nature described in this Section 8.04;

(v) for a change in the par value of the Common Stock;

(vi) for accrued and unpaid interest; or

 

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(vii) for any transactions described in this Section 8.04, if Noteholders participate (as a result of holding the Notes, and at the same time as holders of Common Stock participate) in such transactions as if such Noteholders held a number of shares of Common Stock equal to the Conversion Rate in effect on the date of such adjustment, multiplied by the principal amount (expressed in thousands) of Notes held by such Noteholder, without having to convert their Notes.

(j) All calculations and other determinations under this Article 8 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

(k) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a responsible officer of the Trustee shall have received such Officers’ Certificate, the Trustee and Conversion Agent shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the holder of each Note at its last address appearing on the Note Register provided for in Section 2.05, within 10 calendar days of the effective date of such adjustment. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(l) For purposes of this Section 8.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

(m) The Board of Directors will make appropriate adjustments, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, during any consecutive Trading Day period used for the measurement of any adjustment required under this Section 8.04. In addition, if the effective date of any adjustment event described in this 8.04 occurs during an Observation Period for any Notes, then the Company will make proportional adjustments to the number of deliverable shares for each Trading Day during the portion of the Observation Period preceding the effective date of such adjustment event.

Whenever any provision of the 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 Stock Price for purposes of a Make-Whole Fundamental Change), the Company will make any adjustments to each that it reasonably determines to be appropriate to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date or expiration date of the event occurs, at any time during the period when such Last Reported Sale Prices, Daily VWAPs, Daily Conversion Values or Daily Settlement Amounts are to be calculated, without duplication of any adjustment made pursuant to this Section 8.04.

 

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Section 8.05 Shares to Be Fully Paid. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion.

Section 8.06 Effect of Reclassification, Consolidation, Merger or Sale; Treatment of Reference Property.

(a) Upon the occurrence of (i) any reclassification of the Common Stock (other than a change only in par value, or from par value to no par value, or from no par value to par value, or a change as a result of a subdivision or combination of Common Stock), (ii) any consolidation, merger or combination involving the Company, or (iii) any sale or conveyance to another Person of all or substantially all of the property and assets of the Company, and pursuant to such reclassification, consolidation, merger, combination, sale or conveyance, the Common Stock is converted into or exchanged for stock, other securities, other property or assets (including cash) or any combination thereof (any such event a “Merger Event”), then at the effective time of the Merger Event, the right to convert each $1,000 principal amount of Notes based on a number of shares of Common Stock equal to the Conversion Rate will be changed into the right to convert such principal amount of Notes based on the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) (the “Reference Property”) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive upon such transaction, and the Company or issuer of Reference Property, or such successor or surviving, purchasing or transferee Person or issuer of Reference Property, as the case may be, shall, as a condition precedent to such Merger Event, execute and deliver to the Trustee a supplemental indenture providing for the foregoing. At and after the effective time of the Merger Event, (i) the Company shall continue to have the right to determine the form of consideration to be paid and delivered, as the case may be, upon conversion of the notes, in accordance with Section 8.02 hereof and (ii)(x) any amount payable in cash upon conversion of the Notes as set forth under Section 8.02 hereof will continue to be payable in cash, (y) any shares of Common Stock that the Company would have been required to deliver upon conversion of the Notes as set forth under Section 8.02 hereof will instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have received in such transaction and (z) the Daily VWAP will be calculated based on the value of the amount and kind of Reference Property that a holder of one share of Common Stock would have received in such transaction. If the transaction causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the amount and type of Reference Property that a holder of one or more shares would have been entitled to receive in such transaction (and into which the Notes will be convertible) will be deemed to be (x) based on 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. The Company shall notify holders, the Trustee and the Conversion Agent of the weighted average as soon as

 

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practicable after such determination is made. If the holders receive only cash in such transaction, then for all conversions that occur after the effective date of such transaction, (i) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date, multiplied by the price paid per share of Common Stock in such transaction and (ii) the Company shall satisfy its Conversion Obligation by paying cash to converting holders on the second Business Day immediately following the Conversion Date. The Company shall not be a party in any Merger Event unless the terms thereof are consistent with this Section 8.06(a).

In the event the Company shall execute a supplemental indenture in accordance herewith, the Company shall promptly give the Trustee an Officers’ Certificate briefly stating the reasons therefore, the kind or amount of cash, securities or property or asset that will comprise the Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Noteholders. The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Noteholder, at its address appearing on the Note Register provided for in this Sixth Supplemental Indenture, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

(b) None of the foregoing provisions shall affect the right of a Noteholder to convert its Notes in accordance with the provisions of this Article 8 prior to the effective date of such Merger Event. The provisions of this Section 8.06 shall similarly apply to successive Merger Events.

Section 8.07 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 may be validly issued upon conversion, the Company shall, 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 shall, if permitted by the rules of the relevant exchange or automated quotation system, 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 8.08 Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Noteholder to determine the Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Conversion Rate, or with respect to the nature or

 

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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 8.06 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Noteholders upon the conversion of their Notes after any event referred to in such Section 8.06 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.01 of the Original Indenture, 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.

Section 8.09 Notice to Holders Prior to Certain Actions. In case:

(a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 8.04; or

(b) the Company shall authorize the granting to all of the holders of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section 8.04; or

(c) of any reclassification of the Common Stock (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

the Company shall give to the Trustee and to mail to each Noteholder at its address appearing on the Note Register or publicly announce, unless another notice of such event is specified elsewhere in this Supplemental Indenture, at least 15 calendar 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 dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up is expected to become effective or occur,

 

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and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.

Section 8.10 Stockholder Rights Plans.

(a) To the extent the Company adopts a stockholder rights plan after the issuance of the Notes, then upon conversion of the Notes, in addition to shares of the Common Stock, if any, holders will receive the rights under the rights plan, unless prior to any conversion, the stockholder rights plan expires or terminates or a Trigger Event (as described below) occurs.

(b) In the event that the Company distributes rights or warrants pursuant to any stockholder rights plan to all holders of its Common Stock entitling the holders thereof to subscribe for or purchase shares of the Company’s capital stock, including Common Stock (either initially or under certain circumstances), which rights 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, then such rights or warrants shall be deemed not to have been distributed for purposes of Section 8.04(c) (and no adjustment to the Conversion Rate under Section 8.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under Section 8.04(c). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under Section 8.04(c) was made, (1) in the case of any such rights or warrants that shall all have been repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such repurchase, and (2) in the case of such rights or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued (subject to the proviso in Section 8.10(a)).

ARTICLE 9

REPURCHASE OF NOTES AT OPTION OF HOLDERS

Section 9.01 Repurchase at Option of Holders upon a Fundamental Change.

(a) In the event a Fundamental Change shall occur at any time when any Notes remain outstanding, each Noteholder shall have the right, at such holder’s option, to require the Company to purchase all of such holders’ Notes or any portion of the principal amount thereof

 

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that is equal to $1,000 or an integral multiple thereof on a date specified by the Company (the “Fundamental Change Repurchase Date”) that is not less than 20 nor more than 35 Business Days (or any longer period required by law) after the date on which the Company gives the notice of such Fundamental Change pursuant to clause (b) below, at a purchase price in cash equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”). If such Fundamental Change Repurchase Date falls after a Interest Record Date and on or prior to the corresponding Interest Payment Date, the Company shall instead pay the principal amount to the Noteholders surrendering the Notes for repurchase pursuant to this Section 9.01, and pay the full amount of accrued and unpaid interest payable on such Interest Payment Date to the holder of record on the close of business on the corresponding Interest Record Date. Repurchases of Notes under this Section 9.01 shall be made on the Fundamental Change Repurchase Date, at the option of the holder thereof, upon:

(i) delivery to the Paying Agent by a holder of a duly completed notice in the form set forth on the reverse of the Note as Exhibit C thereto (the “Fundamental Change Repurchase Notice”) on or prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date; and

(ii) delivery or book-entry transfer of the Notes to the Paying Agent at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements) at the corporate trust office of the Paying Agent in the United States, such book-entry transfer or delivery being a condition to receipt by the holder of the Fundamental Change Repurchase Price therefor; provided that such Fundamental Change Repurchase Price shall be so paid pursuant to this Section 9.01 only if the Note so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Fundamental Change Repurchase Notice.

The Fundamental Change Repurchase Notice shall state:

(A) if certificated, the certificate numbers of Notes to be delivered for repurchase;

(B) the portion of the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and

(C) that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Supplemental Indenture;

provided, however, that if the Notes are not in certificated form, the Fundamental Change Repurchase Notice must comply with appropriate Depositary procedures.

Any repurchase by the Company contemplated pursuant to the provisions of this Section 9.01 shall be consummated by the payment of the Fundamental Change Repurchase Price promptly following the later of the Business Day following the Fundamental Change Repurchase Date and the time of the book-entry transfer or delivery of the Note as described in Section 9.01(a).

 

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Notwithstanding anything herein to the contrary, any holder delivering to the Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 9.01 shall have the right to withdraw, in whole or in part, such Fundamental Change Repurchase Notice at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 9.02 below.

The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.

(b) Within 15 Business Days after the occurrence of a Fundamental Change, the Company shall give to the Trustee, the Paying Agent and the Conversion Agent and provide or cause to be provided to all holders of record of the Notes a written notice (the “Fundamental Change Company Notice”) of the occurrence of the Effective Date of the Fundamental Change and of the repurchase right at the option of the holders arising as a result thereof. Simultaneously with the providing of such notice, the Company will also publish a notice containing the information set forth in the Fundamental Change Company Notice in a newspaper of general circulation in The City of New York or publish such information on the Company’s website or through such other public medium as the Company may use at that time.

Each Fundamental Change Company Notice shall specify:

(i) the events causing the Fundamental Change;

(ii) the effective date of the Fundamental Change;

(iii) the last date on which a holder may exercise the repurchase right set forth in this Section 9.01;

(iv) the Fundamental Change Repurchase Price;

(v) the Fundamental Change Repurchase Date;

(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;

(vii) the Conversion Rate, and if applicable, any adjustments to the Conversion Rate;

(viii) if applicable, 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 the Indenture;

(ix) that the holder must exercise the repurchase right set forth in this Section 9.01 on or prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date (the “Fundamental Change Expiration Time”);

 

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(x) that the holder shall have the right to withdraw any Notes surrendered prior to the Fundamental Change Expiration Time; and

(xi) 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 Noteholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 9.01.

(c) Notwithstanding the foregoing, no Notes may be repurchased by the Company 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 the Fundamental Change Repurchase 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).

(d) In connection with any purchase offer, the Company will, to the extent applicable:

(i) comply with the provisions of Rule 13e-4, Rule 14e-1 and any other applicable tender offer rules under the Exchange Act;

(ii) file a Schedule TO or any successor or similar schedule, if required under the Exchange Act; and

(iii) otherwise comply with all applicable U.S. federal and state securities laws in connection with any offer by the Company to purchase the Notes.

Section 9.02 Withdrawal of Fundamental Change Repurchase Notice.

(a) A Fundamental Change Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the corporate trust office of the Paying Agent in accordance with the Fundamental Change Repurchase Notice, as the case may be, at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date, as the case may be, specifying:

(i) the certificate number, if any, of the Note in respect of which such notice of withdrawal is being submitted, or the appropriate Depositary information if the Note in respect of which such notice of withdrawal is being submitted is represented by a Global Note;

(ii) the principal amount of the Note with respect to 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 $1,000 or an integral multiple of $1,000;

 

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provided, however, that if the Notes are not in certificated form, the notice must comply with appropriate procedures of the Depositary.

Section 9.03 Deposit of Fundamental Change Repurchase Price.

(a) The Company will deposit with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04 of the Original Indenture) on or prior to 11:00 a.m., New York City time, on the Business Day following the Fundamental Change Repurchase Date an amount of money sufficient to repurchase all of the Notes to be repurchased at the appropriate Fundamental Change Repurchase Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn prior to the Fundamental Change Expiration Time) will be made on the later of (i) the Business Day following the Fundamental Change Repurchase Date with respect to such Note and (ii) the time of book-entry transfer or the delivery of such Note to the Trustee (or other Paying Agent appointed by the Company) by the holder thereof in the manner required by Section 9.01, as applicable, by mailing checks for the amount payable to the holders of such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee 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 Business Day following the Fundamental Change Date, as the case may be, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased, then (i) such Notes will cease to be outstanding and interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (ii) all other rights of the holders of such Notes will terminate (other than the right to receive the Fundamental Change Repurchase Price upon delivery or transfer of the Notes).

(c) Upon surrender of a Note that is to be repurchased in part pursuant to Section 9.01, the Company shall execute and the Trustee shall authenticate and deliver to the holder a new Note in an authorized denomination equal in principal amount to the unrepurchased portion of the Note surrendered.

ARTICLE 10

SUBSIDIARY GUARANTEES

Section 10.01 General. Each Subsidiary Guarantor hereby agrees, by entering into this Supplemental Indenture, that the Notes shall be entitled to the benefits of the Guarantee of the Subsidiary Guarantor in accordance with Article X of the Original Indenture, and that it shall be a “Subsidiary Gurantor” with respect to the Notes for all purposes of the Original Indenture. For purposes of Section 10.02 of the Original Indenture, the notation of guarantee shall be in substantially the form set forth in Exhibit A hereto.

 

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Section 10.02 Mergers, Etc. No Subsidiary Guarantor may consolidate with or merge with or into (whether or not such Subsidiary Guarantor is the surviving Person) another Person (other than the Company or another Subsidiary Guarantor), whether or not affiliated with such Subsidiary Guarantor, unless

(a) subject to the provisions of Section 10.04 of the Original Indenture (as amended by Section 10.03 below), the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) shall execute a supplement to the Indenture providing for a Guarantee and deliver an Opinion of Counsel satisfactory to the Trustee to the effect that such transaction is permitted; and

(b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.

Section 10.03 Release. Clause (ii) of the second sentence of Section 10.04(a) of the Original Indenture is, with respect to the Notes, amended to read in its entirety as follows:

(ii) following delivery of an Officers Certificate and an Opinion of Counsel by the Company to the Trustee to the effect that such Subsidiary Guarantor has ceased to guarantee or be a co-obligor with respect to any indebtedness for borrowed money for which the Company or another Subsidiary Guarantor is the borrower, other than the Notes, provided that if the foregoing release condition is no longer satisfied, the Company shall cause such Guarantee to be reinstated by delivering an appropriate supplement to the Indenture satisfactory to the Trustee.

ARTICLE 11

MISCELLANEOUS PROVISIONS

Section 11.01 Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Supplemental Indenture shall be read, taken and construed as one and the same instrument.

Section 11.02 Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.

Section 11.03 Payments on Business Days. The following provision shall apply to the Notes in lieu of Section 11.07 of the Original Indenture. In any case where any scheduled Interest Payment Date, Maturity Date or Fundamental Change Repurchase Date is not a Business Day, then the required payment or delivery will be made on the next succeeding Business Day with the same force and effect as if made on such date, and no interest shall accrue for the period from and after such date to that next succeeding Business Day.

Section 11.04 No Security Interest Created. Nothing in this Supplemental 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 11.05 Trust Indenture Act.    This Supplemental Indenture is hereby made subject to, and shall be governed by, the provisions of the Trust Indenture Act required to be part of and to govern indentures qualified under the Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in an indenture qualified under the Trust Indenture Act, such required provision shall control.

Section 11.06 Benefits of Indenture. Nothing in this Supplemental Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder or the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.

Section 11.07 Calculations. Except as otherwise provided herein, the Company will be responsible for making all calculations called for under this Supplemental Indenture and the Notes (including any determinations of the Last Reported Sale Price of the Common Stock, the Applicable Stock Price, Daily Settlement Amounts, Daily Conversion Values, accrued interest payable on the Notes, Daily VWAPs, the Conversion Rate and the Settlement Amounts). The Company shall make all such calculations in good faith and, absent manifest error; its calculations will be final and binding on Noteholders. The Company upon request shall provide a schedule of its calculations to each of the Trustee, the Paying Agent and the Conversion Agent, and each of the Trustee, the Paying Agent and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee shall deliver a copy of such schedule to any Noteholder upon the written request of such Noteholder.

Section 11.08 Table of Contents, Headings, Etc. The table of contents and the titles and headings of the articles and sections of this Supplemental 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 11.09 Execution in Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

Section 11.10 Severability. In the event any provision of this Supplemental 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.

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be signed on their behalf by their duly authorized representatives as of the date first above written.

 

THE COMPANY:
BRISTOW GROUP INC.
By:  

/s/ L. Don Miller

  Name: L. Don Miller
 

Title:   Senior Vice President and Chief

            Financial Officer

SUBSIDIARY GUARANTORS:
BRISTOW U.S. LLC
By:  

/s/ Geoffrey L. Carpenter

  Name: Geoffrey L. Carpenter
  Title:   Manager
BRISTOW ALASKA INC.
By:  

/s/ Robert Phillips

  Name: Robert Phillips
  Title:   President
BRISTOW HELICOPTERS INC.
By:  

/s/ Geoffrey L. Carpenter

  Name: Geoffrey L. Carpenter
  Title:   Vice President and Treasurer

Signature Page to Sixth Supplemental Indenture


BHNA HOLDINGS INC.
By:  

/s/ Geoffrey L. Carpenter

  Name: Geoffrey L. Carpenter
  Title:   Vice President and Treasurer
BRISTOW U.S. LEASING LLC
By:  

/s/ Geoffrey L. Carpenter

  Name: Geoffrey L. Carpenter
  Title:   Vice President and Treasurer

Signature Page to Sixth Supplemental Indenture


TRUSTEE:
U. S. BANK NATIONAL ASSOCIATION, as Trustee
By:  

/s/ Susan C. Chadbourne

  Name: Susan C. Chadbourne
  Title:   Vice President

Signature Page to Sixth Supplemental Indenture


EXHIBIT A

[FORM OF FACE OF NOTE]

[UNLESS AND UNTIL THIS GLOBAL SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

BRISTOW GROUP INC.

4.50% Convertible Senior Note due 2023

 

No. __

   $ __________  

CUSIP No. _______

Bristow Group Inc., a corporation duly organized and validly existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor corporation or other entity under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to             , or registered assigns, the principal sum of             Dollars (which amount may from time to time be increased or decreased to such other principal amounts by adjustments made on the records of the Trustee or the Custodian of the Depositary as set forth in Schedule A hereto, in accordance with the rules and procedures of the Depositary) on June 1, 2023.

This Note shall bear interest on the outstanding principal amount at the rate of 4.50% per year (subject to increase as set forth in Section 4.02 of the Supplemental Indenture) from December 18, 2017, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date. Interest is payable semi-annually in arrears on each June 1 and December 1, commencing June 1, 2018, to holders of record at the close of business on the preceding May 15 and November 15 (whether or not such day is a Business Day), respectively.

Payment of the principal of and premium, if any, and accrued and unpaid interest on this Note shall be made at the office or agency of the Company maintained for that purpose in the United States, in such lawful money of the United States of America as at the time of payment

 

A-1


shall be legal tender for the payment of public and private debts. Each installment of interest may be paid by check mailed to such holder’s address as it appears in the Note Register; provided, however, that, with respect to any Noteholder with an aggregate principal amount in excess of $1,000,000, at the application of such holder in writing to the Trustee and Paying Agent (if different from the Trustee) not later than the relevant Interest Record Date, accrued and unpaid interest on such holder’s Notes shall be paid by wire transfer in immediately available funds to such holder’s account in the United States, which application shall remain in effect until the Noteholder notifies the Trustee and Paying Agent to the contrary; provided that any payment to the Depositary or its nominee shall be paid by wire transfer in immediately available funds in accordance with the wire transfer instructions supplied by the Depositary or its nominee from time to time to the Trustee and Paying Agent (if different from Trustee).

Interest on this Note will be paid on the basis of a 360-day year composed of twelve 30-day months.

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 and Common Stock, if any, on the terms set forth in the Indenture.

This Note shall be governed by the laws of the State of New York.

This Note shall not be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

[Remainder of page intentionally left blank]

 

A-2


IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

 

BRISTOW GROUP INC.
By:  

 

  Name: L. Don Miller
 

Title:   Senior Vice President and Chief

            Financial Officer

Dated:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.

 

U. S. BANK NATIONAL ASSOCIATION
By:  

 

  Authorized Signatory

 

A-3


[FORM OF REVERSE OF NOTE]

BRISTOW GROUP INC.

4.50% Convertible Senior Note due 2023

This Note is one of a duly authorized issue of Securities of the Company, designated as its 4.50% Convertible Senior Notes due 2023 (herein called the “Notes”), issued or to be issued under and pursuant to an Indenture dated as of June 17, 2008 by and among the Company, certain subsidiaries of the Company named therein and U.S. Bank National Association (herein called the “Trustee”) (herein called the “Original Indenture”), as supplemented by the Sixth Supplemental Indenture dated as of December 18, 2017 by and among the Company, the Trustee and the Subsidiary Guarantors named therein (herein called the “Sixth Supplemental Indenture” and the Original Indenture, as supplemented by the Sixth Supplemental Indenture, the “Indenture”) to which Indenture 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.

In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, except as set forth in Section 4.02 of the Supplemental Indenture, the principal of, premium, if any, and interest on all Notes may be declared, by either the Trustee or Noteholders of not less than 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Fundamental Change Repurchase Price 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 other circumstances, with the consent of the holders of not less than a majority of outstanding principal amount of the Notes, 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 of outstanding principal amount of the Notes may on behalf of the holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and accrued and unpaid interest on this Note at the place, at the respective times, at the rate and in the lawful money herein prescribed.

 

A-4


The Notes are issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any tax, assessments or other governmental charges that may be imposed in connection therewith as a result of the name of the Noteholder of the new Notes issued upon such exchange of Notes being different from the name of the Noteholder of the old Notes surrendered for such exchange.

The Notes are not subject to redemption at the option of the Company.

The Notes are not subject to any sinking fund.

Upon the occurrence of a Fundamental Change, the holder has the right, at such holder’s option, to require the Company to repurchase all of such holder’s Notes or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) at the price specified in the Indenture.

Subject to the provisions of the Indenture, the holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or an integral multiple thereof, into cash, shares of Common Stock, or a combination thereof, based on the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.

The Notes are guaranteed by the Subsidiary Guarantors as described in the Indenture.

Terms used in this Note and defined in the Indenture are used herein as therein defined.

 

A-5


ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM — as tenants in common    UNIF GIFT MIN ACT
   _________________________________Custodian
                       (Cust)
TEN ENT — as tenants by the entireties   
                                                                      
  

                     (Minor)

JT TEN — as joint tenants with right

of survivorship and not as tenants in common

  
   Uniform Gifts to Minors Act _________(State)

Additional abbreviations may also be used

though not in the above list.

 

A-6


NOTATION OF GUARANTEE

Each of the Subsidiary Guarantors (which term includes any successor Person under the Indenture) has fully, unconditionally and absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Notes and all other amounts due and payable under the Indenture and the Notes by the Company.

The obligations of the Subsidiary Guarantors to the Holders of Notes and to the Trustee pursuant to the Guarantees and the Indenture are expressly set forth in Article X of the Original Indenture and Article 10 of the Sixth Supplemental Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantees.

 

[NAME OF SUBSIDIARY GUARANTOR]
By:  

 

Name:  

 

Title:  

 

 

A-7


SCHEDULE A

BRISTOW GROUP INC.

4.50% Convertible Senior Notes due 2023

The initial principal amount of this Global Note is $            . 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

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

           

 

  

 

  

 

  

 

  

 

 

A-8


EXHIBIT B

[FORM OF NOTICE OF CONVERSION]

To: Bristow Group Inc.

The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1,000 principal amount or an integral multiple thereof) below designated, into cash and, if applicable, shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and directs that the cash and shares of Common Stock issuable and deliverable upon such conversion, together with any cash in lieu of fractional shares, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If any shares of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Any amount required to be paid to the undersigned on account of interest accompanies this Note.

 

Dated:______________________      

 

     

 

     

Signature(s)

 

 

Signature Guarantee

   
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or Notes are to be delivered, other than to and in the name of the registered holder.    

Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder:

 

   

 

(Name)

   

 

(Street Address)

   

 

B-1


 

 

(City, State and Zip Code)

Please print name and address

 

Principal amount to be converted (if less than all): $    ,000

 

NOTICE: The above signature(s) of the holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

 

 

Social Security or Other

Taxpayer Identification Number

 

B-2


EXHIBIT C

[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

To: Bristow Group Inc.

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Bristow Group 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 repay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the period after a Interest Record Date and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest thereon to, but excluding, such Fundamental Change Repurchase Date.

In the case of certificated Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

 

Dated:                           

 

      Signature(s)
     

 

      Social Security or Other Taxpayer Identification Number
      Principal amount to be 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.

 

C-1


EXHIBIT D

[FORM OF ASSIGNMENT AND TRANSFER]

For value received                      hereby sell(s), assign(s) and transfer(s) unto                      (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints                      attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

 

Dated:                     

 

Signature(s)

 

Signature Guarantee
Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Notes are to be delivered, other than to and in the name of the registered holder.

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.

 

D-1

Exhibit 5.1

 

 

LOGO

 

ONE SHELL PLAZA

910 LOUISIANA

HOUSTON, TEXAS

77002-4995

 

TEL +1 713.229.1234

FAX +1 713.229.1522

BakerBotts.com

  

AUSTIN

BEIJING

BRUSSELS

DALLAS

DUBAI

HONG KONG

HOUSTON

  

LONDON

MOSCOW

NEW YORK

PALO ALTO

RIYADH

SAN FRANCISCO

WASHINGTON

December 18, 2017    

Bristow Group Inc.

2103 City West Blvd., 4th Floor

Houston, Texas 77042

Ladies and Gentlemen:

In connection with the issuance by Bristow Group Inc., a Delaware corporation (the “Company”), of an aggregate of $143,750,000 principal amount of the Company’s 4.50% Senior Convertible Notes due 2023 (the “Notes”), together with the related guarantees (the “Guarantees” and, together with the Notes, the “Securities”) on a senior unsecured basis by Bristow U.S. LLC, a Louisiana limited liability company (“BUS LLC”), Bristow Alaska Inc., an Alaska corporation (“Alaska Inc.”), Bristow Helicopters Inc., a Delaware corporation (“Helicopters Inc.”), BHNA Holdings Inc., a Delaware corporation (“BHNA”), and Bristow U.S. Leasing LLC, a Delaware limited liability company (“Leasing LLC” and, together with BUS LLC, Alaska Inc., Helicopters Inc. and BHNA, the “Guarantors”), pursuant to (i) the Registration Statement on Form S-3 (Registration No. 333-206535), as amended (the “Registration Statement”), which was filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”), and (ii) the related prospectus dated July 21, 2017, as supplemented by the prospectus supplement relating to the sale of the Notes dated December 13, 2017 (as so supplemented, the “Prospectus”), as filed by the Company with the Commission pursuant to Rule 424(b) under the Act, certain legal matters with respect to the Notes are being passed upon for the Company by us. At your request, this letter is being furnished to you for filing as Exhibit 5.1 to the Company’s Current Report on Form 8-K to be filed with the Commission on the date hereof (the “Form 8-K”).

The Registration Statement has been filed with the Commission and has been declared effective under the Act. The Prospectus has been filed by the Company with the Commission pursuant to Rule 424(b) under the Act, including all documents incorporated by reference therein. On December 13, 2017, the Company and the Guarantors entered into an Underwriting Agreement (the “Underwriting Agreement”) with the underwriters named therein (the “Underwriters”) providing for the issuance and sale by the Company to the Underwriters of the Securities.

The opinions set forth herein relate only to certain matters regarding the Securities. In our capacity as your counsel in the connection referred to above, we have examined originals, or copies certified or otherwise identified, of (i) the Restated Certificate of Incorporation and the Amended and Restated By-laws of the Company, each as amended to date; (ii) the Articles of Incorporation, Certificate of Incorporation or Certificate of Formation, as applicable, and Bylaws or Limited Liability Company Agreement, as applicable, of each of Helicopters Inc., BHNA and Leasing LLC, each as amended to date; (iii) the Underwriting Agreement, filed as an


LOGO      
Bristow Group, Inc.    - 2 -    December 18, 2017

 

exhibit to this Form 8-K; (iv) the Indenture, dated June 17, 2008 (the “Base Indenture”), among the Company, as issuer, BUS LLC, Alaska Inc. and Helicopter Inc., as subsidiary guarantors, and U.S. Bank National Association, as trustee (the “Trustee”), filed as Exhibit 4.1 to the Registration Statement pursuant to which senior debt securities may be issued; (v) the Sixth Supplemental Indenture, dated the date hereof, among the Company, the Guarantors and the Trustee, as described in the Prospectus, filed as an exhibit to this Form 8-K (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), pursuant to which the Securities will be issued; (vi) corporate records of the Company and the Guarantors, (vii) certificates of public officials and of representatives of the Company and the Guarantors and (viii) statutes and other instruments and documents as a basis for the opinions hereinafter expressed.

In giving such opinions, we have relied on certificates of officers of the Company and the Guarantors and of public officials with respect to the accuracy of the material factual matters contained in such certificates and we have assumed, without independent investigation, that all signatures on documents examined by us are genuine, all documents submitted to us as originals are authentic and complete, all documents submitted to us as certified or photostatic copies conformd with the originals of such documents and all information submitted to us was accurate and complete. We have also assumed that the Notes will be offered and sold in compliance with applicable federal and state securities laws and in the manner described in the applicable Prospectus and in accordance with the terms of the Underwriting Agreement. We have also assumed that BUS LLC is a limited liability company that is validly existing and in good standing and has the limited liability company power to execute, deliver and perform, and has taken all limited liability company action necessary to authorize the execution, delivery and performance of, its obligations under the Indenture, including the Guarantees, under the laws of the State of Louisiana. We have also assumed that Alaska Inc. is a corporation formed under Alaska law and is validly existing and in good standing and has the power to execute, deliver and perform, and has taken all corporate action necessary to authorize the execution, delivery and performance of, its obligations under the Indenture, including the Guarantees, under the laws of the State of Alaska. We have also assumed that the Base Indenture has been duly authorized, executed and delivered by the Trustee and represents a valid and legally binding obligation of the Trustee and the Supplemental Indenture has been or will be duly authorized, executed and delivered by the Trustee and will represent a valid and legally binding obligation of the Trustee.

On the basis of the foregoing, and subject to the assumptions, limitations and qualifications set forth herein, we are of the opinion that:

1. The Notes, when they have been duly authorized, executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and duly purchased and paid for in accordance with the terms of the Underwriting Agreement, will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be subject to (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights, (ii) general principles of equity and public policy (regardless of whether enforcement is sought in a proceeding at law or in equity), (iii) to the discretion of the court before which any proceeding may be brought, or (iv) any implied covenants of good faith and fair dealing.


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Bristow Group, Inc.    - 3 -    December 18, 2017

 

2. When the Notes have been duly authorized, executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and duly purchased and paid for in accordance with the terms of the Underwriting Agreement, the Guarantees of the Notes included in the Indenture will constitute legal, valid and binding obligations of the Guarantors, enforceable against the Guarantors in accordance with the terms of the Indenture, except as the enforceability thereof may be subject to (i) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other laws of general applicability relating to or affecting creditors’ rights, (ii) general principles of equity and public policy (regardless of whether enforcement is sought in a proceeding at law or in equity), (iii) to the discretion of the court before which any proceeding may be brought, or (iv) any implied covenants of good faith and fair dealing.

The opinions set forth above are limited in all respects to the contract law of the State of New York, the laws of the State of Texas, the General Corporation Law of the State of Delaware, the Delaware Limited Liability Company Act and the applicable federal laws of the United States, in each case as in effect on the date hereof.

We hereby consent to the filing of this letter with the Commission as Exhibit 5.1 to the Form 8-K. We also consent to the reference to us under the heading “Legal Matters” in the Prospectus. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

 

Very truly yours,
/s/ Baker Botts L.L.P.

Exhibit 5.2

December 18, 2017

 

Bristow Group Inc.    27362-20

2103 City West Blvd.

4th Floor

Houston, Texas 77042

Ladies and Gentlemen:

We have acted as special counsel to Bristow U.S. LLC, a Louisiana limited liability company (the “Company”), in connection with the issuance and sale by Bristow Group Inc., a Delaware corporation (“Bristow”), of $143,750,000 aggregate principal amount of its 4.50% Convertible Senior Notes due 2023 (the “Convertible Notes”), together with, pursuant to the exercise of the option of the Underwriters (as defined below), an aggregate of $18,750,000 additional principal amount of its Convertible Notes, issued pursuant to (i) the Registration Statement on Form S-3 (Registration No. 333-206535), as amended (the “Registration Statement”), which was filed by Bristow with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), (ii) the related prospectus dated July 21, 2017 (the “Base Prospectus”), as supplemented by the prospectus supplement relating to the Convertible Notes dated December 13, 2017 (the “Prospectus Supplement”; the Base Prospectus and the Prospectus Supplement are referred to herein collectively as the “Prospectus”), and (iii) an Indenture dated as of June 17, 2008 (the “Base Indenture”) among Bristow, the potential subsidiary guarantors named therein and U.S. Bank National Association, as trustee (the “Trustee”), as amended and supplemented by the Sixth Supplemental Indenture dated as of the date hereof (the “Sixth Supplemental Indenture”) among Bristow, the Guarantors (as defined below) and the Trustee, pursuant to which the Convertible Notes will be issued. The Convertible Notes have been guaranteed (the “Guarantees”) on a senior unsecured basis by the Company and certain other wholly-owned subsidiaries of Bristow (the Company and such other subsidiaries of Bristow are referred to herein collectively as the “Guarantors”). In connection with the foregoing, Bristow and the Guarantors have entered into the Underwriting Agreement dated as of December 13, 2017 (the “Underwriting Agreement”) with Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named in Schedule A thereto (the “Underwriters”).

In rendering this opinion, we have examined and relied upon the original, or a copy certified or otherwise identified as accurate, of (i) the Registration Statement, the Prospectus, the Base Indenture, the Sixth Supplemental Indenture and the Underwriting Agreement, (ii) the articles of organization and amended and restated operating agreement of the Company, each as amended through the date hereof and certified to our satisfaction, (iii) the unanimous written consent of the managers of the Company relating to, among other things, the Underwriting Agreement, the Sixth Supplemental Indenture and the Guarantees and (iv) such other records of the Company and such certificates of the managers, member and representatives of the Company and such other documents as we have deemed relevant and necessary for the purposes of the opinions set forth below.

 

   COUNSELORS AT LAW       
         
Canal Place | 365 Canal Street, Suite 2000 | New Orleans, Louisiana 70130-6534 | 504-566-1311 | 504-568-9130 Fax | phelpsdunbar.com


Bristow Group Inc.

December 18, 2017

Page 2

 

In addition, in connection with opinion paragraph 1 below, we have examined and relied upon a Good Standing Certificate dated December 15, 2017 issued by the Louisiana Secretary of State’s office with respect to the Company. We have not reviewed any document (other than the documents listed in this paragraph) that is referred to in or incorporated by reference into any document reviewed by us. Further, we have not undertaken any independent investigation, examination or inquiry to determine the existence or absence of any facts (and have not caused the review of any court file or indices or disclosures pursuant to any federal or state securities laws), and no inference as to our knowledge concerning any facts should be drawn as a result of the limited representation undertaken by us.

For purposes of this opinion, we have assumed (i) the genuineness of all signatures appearing on all documents, (ii) the legal capacity of all natural persons, (iii) the authenticity of all documents submitted to us as originals, (iv) the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies, (v) the accuracy and completeness of all limited liability company records made available to us by the Company, and the truth and accuracy of all facts set forth in all certificates provided to or examined by us, (vi) that there are no proceedings pending or contemplated for the merger, consolidation, conversion, dissolution, liquidation or termination of the Company, (vii) that there has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue influence and (viii) that there are no documents, agreements or understandings, written or oral, between or among the parties to the documents reviewed by us which alter or are inconsistent with the provisions of such documents and which would have an effect on the opinions expressed in this opinion letter.

We have further assumed that (i) the Sixth Supplemental Indenture will have been (A) duly authorized by Bristow and the other parties thereto (other than the Company) and (B) duly executed and delivered by Bristow and the other parties thereto (other than the Company), (ii) the notation of guarantee to be endorsed upon the Convertible Notes will be in the form and on the terms dictated by the Base Indenture and the Sixth Supplemental Indenture, (iii) the Registration Statement will remain effective during the entire period when the Convertible Notes are offered and sold and the Guarantees issued in connection therewith, (iv) the Guarantees will be in compliance with all applicable federal and state securities laws and in conformity with the Underwriting Agreement, the Sixth Supplemental Indenture and the Guarantees as contemplated by the unanimous written consent of the managers of the Company referred to above, and (v) the Guarantees will comply with all restrictions, if any, applicable to the Company whether imposed by any agreement or instrument to which the Company is a party or by which it is bound or by any court or other governmental or regulatory body having jurisdiction over the Company or otherwise.

Based on the foregoing and subject to the qualifications, limitations, exceptions and assumptions set forth below, we are of the opinion that:

1. The Company is a limited liability company that has been duly organized and is in good standing under the laws of the State of Louisiana.

2. The Company has the limited liability company power to execute, deliver and perform, and has taken all limited liability company action necessary to authorize the execution, delivery and performance of, its obligations under the Base Indenture, as amended by the Sixth Supplemental Indenture, including the Guarantees.


Bristow Group Inc.

December 18, 2017

Page 3

 

The opinion expressed above in opinion paragraph 1 does not extend to, and we express no opinion as to, whether the Company is in “tax good standing” as to the payment of or filings related to Louisiana taxes (as opposed to filings relating to its entity status with the Louisiana Secretary of State).

The foregoing opinions are limited to matters involving the internal laws of the State of Louisiana, and we do not express any opinion as to matters governed by the laws of any other jurisdiction, federal laws or municipal laws. Furthermore, no opinion is expressed herein as to the effect of any future acts of the parties or changes in existing law. We undertake no responsibility to advise you of any changes after the date hereof in the law or the facts presently in effect that would alter the scope or substance of the opinions herein expressed. This letter expresses our legal opinion as to the foregoing matters based on our professional judgment at this time; it is not, however, to be construed as a guaranty, nor is it a warranty that a court considering such matters would not rule in a manner contrary to the opinions set forth above.

We hereby consent to the filing of this opinion with the Commission as an exhibit to Bristow’s Current Report on Form 8-K being filed on the date hereof and incorporated by reference into the Registration Statement pursuant to Item 16 of Form S-3 and Item 601(b)(5) of Regulation S-K promulgated under the Securities Act. We also consent to being named under the heading “Legal Matters” in the Prospectus. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 and Section 11 of the Securities Act and the General Rules and Regulations of the Commission thereunder.

Very truly yours,

/s/ Phelps Dunbar, L.L.P.

Exhibit 5.3

 

LOGO

   

Suite 1100

188 West Northern Lights

Blvd.

Anchorage, AK 99503-3985

 

(907) 257-5300 tel

(907) 257-5399 fax

 

www.dwt.com

December 18, 2017

Bristow Group, Inc.

2103 City West Blvd., 4th Floor

Houston, Texas 77042

Ladies and Gentlemen:

We have acted as special counsel to Bristow Alaska Inc., an Alaska corporation formerly known as Air Logistics of Alaska, Incorporated (the “Company”), in connection with the issuance by Bristow Group Inc., a Delaware corporation (“Bristow Group”), on the date hereof of registered debt securities (the “Securities”) guaranteed (the “Guarantees”) by certain subsidiaries of Bristow Group (the “Subsidiary Guarantors”), under that certain Indenture, dated June 17, 2008 (the “Base Indenture”), among Bristow Group, the Company and the other potential guarantors from time to time party thereto and U.S. Bank National Association, as trustee (the “Trustee”), as amended and supplemented by that certain Sixth Supplemental Indenture, dated December 18, 2017, among the Company, Bristow Group, the other Subsidiary Guarantors and the Trustee (the “Sixth Supplemental Indenture”). The Company and the Subsidiary Guarantors have filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-3 (No. 333-206535) (the “Registration Statement”), including a related prospectus or prospectuses, dated July 21, 2017 (the “Prospectus”), covering the registration of the Securities under the Securities Act of 1933, as amended (the “Act”).

I.

We have assumed the authenticity of all records, documents and instruments submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all records, documents and instruments submitted to us as copies. We have based our opinion upon our review of the following records, documents, instruments and certificates and such additional certificates relating to factual matters as we have deemed necessary or appropriate for our opinion:

 

  a. The Registration Statement.

 

  b. The Preliminary Prospectus Supplement, dated December 12, 2017 to the Prospectus.

 

  c. The Base Indenture, but not the exhibits thereto.


Bristow Group, Inc.

December 18, 2017

Page 2 of 4

 

  d. The Sixth Supplemental Indenture, but not the exhibits thereto.

 

  e. The Underwriting Agreement, dated December 13, 2017 (the “Underwriting Agreement”), among Bristow Group, the Company, the other Subsidiary Guarantors, and Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several underwriters named therein, but not the exhibits thereto.

 

  f. The restated articles of incorporation of the Company, as amended to date, certified to us by an officer of the Company as being complete and in full force and effect as of the date of this letter.

 

  g. The amended and restated bylaws of the Company, as amended to date, certified to us by an officer of the Company as being complete and in full force and effect as of the date of this letter.

 

  h. Resolutions adopted by the board of directors (the “Board”) of the Company, certified to us in the Opinion Certificate (as defined below) by an officer of the Company as of December 18, 2017, constituting the records of proceedings and actions of the Board, as applicable, of the Company relevant to this opinion and set forth in this letter.

 

  i. Certificate of Compliance for the Company, dated December 13, 2017, issued by the State of Alaska Department of Commerce, Community and Economic Development, (the “Public Authority Document”).

 

  j. A certificate of an officer of the Company, dated December 18, 2017, as to certain factual matters relevant to this letter (the “Opinion Certificate”).

II.

In rendering the opinions expressed below, we have assumed:

(i) The genuineness of all signatures.

(ii) The authenticity of the originals of the documents submitted to us.

(iii) The conformity to authentic originals of any documents submitted to us as copies.

(iv) As to matters of fact, the truthfulness of the representations made or otherwise incorporated in the Registration Statement and representations and statements made in certificates of public officials and officers of the Company.

(v) That the Guarantee by the Company of Bristow Group’s Securities registered under the Registration Statement as issued and delivered, will comply with all restrictions, if any, applicable to the Company whether imposed by any agreement or instrument to which the Company is a party or by which it is bound or any court or other governmental or regulatory body having jurisdiction over the Company or otherwise.


Bristow Group, Inc.

December 18, 2017

Page 3 of 4

 

(vi) At the time of execution and delivery of the Base Indenture and at all times relevant to those documents thereafter: (A) the Company was duly organized, validly existing and in good standing as a corporation under the laws of Alaska, and (B) the Base Indenture constitutes the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

We have not independently established the validity of the foregoing assumptions.

III.

Based upon the foregoing, and subject to the qualifications and limitations herein set forth, we are of the opinion that:

1. The Company is a corporation formed under Alaska law and is validly existing and in good standing under the laws of the State of Alaska.

2. The Company has the power to execute, deliver and perform, and has taken all corporate action necessary to authorize the execution, delivery and performance of, its obligations under the Guarantee.

The opinions set forth above are subject to the following qualifications and exceptions:

(a) Our opinions are limited to the Alaska Corporations Code, Alaska Stat. 10.06.005 et. seq.

(b) With respect to our opinion in paragraph 1, we have relied exclusively upon the Public Authority Document.

This opinion letter is rendered to you in connection with the transactions contemplated by the Registration Statement. We consent to the filing of this opinion with the Commission in connection with the filing of the Prospectus. We also consent to the reference to our firm under the caption “Legal Matters” in the Prospectus. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 and Section 11 of the Act or the rules and regulations of the Commission thereunder.

This opinion letter has been prepared, and is to be understood, in accordance with customary practice of lawyers who give and lawyers who regularly advise recipients regarding opinions of this kind, is limited to the matters expressly stated herein and is provided solely for purposes of complying with the requirements of the Underwriting Agreement, and no opinions may be inferred or implied beyond the matters expressly stated herein. The opinions expressed herein are rendered and speak only as of the date hereof and we specifically disclaim any responsibility to update such opinions subsequent to the date hereof or to advise you of subsequent developments affecting such opinions.


Bristow Group, Inc.

December 18, 2017

Page 4 of 4

 

Very truly yours,

/s/ Davis Wright Tremaine LLP

Exhibit 10.1

EXECUTION VERSION

Opening Transaction

 

To:   

Bristow Group Inc.

2103 City West Blvd., 4th Floor

Houston, Texas 77042

A/C:    21AXD0
From:   

Credit Suisse Capital LLC

c/o Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010

Re:    Base Issuer Warrant Transaction
Ref. No:    60991548
Date:    December 13, 2017

 

 

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Credit Suisse Capital LLC (“Dealer”), represented by Credit Suisse Securities (USA) LLC (“Agent”) as its agent, and Bristow Group Inc. (“Issuer”). This communication constitutes a “Confirmation” as referred to in the Agreement specified below.

1. This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern. For purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a reference to a Call Option or an Option, as context requires.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement, as published by ISDA, as if Dealer and Issuer had executed an agreement in such form on the date hereof (but without any Schedule except for the election of US Dollars (“USD”) as the Termination Currency. The Transaction shall be the only Transaction under the Agreement.

 

1


All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.

2. The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:

 

Trade Date:

   December 13, 2017

Effective Date:

   December 18, 2017, subject to Section 8(q).

Components:

   The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.

Warrant Style:

   European

Warrant Type:

   Call

Seller:

   Issuer

Buyer:

   Dealer

Shares:

   The Common Stock of Issuer, par value USD0.01 per share (Ticker Symbol: “BRS”).

Number of Warrants:

   For each Component, as provided in Annex A to this Confirmation.

Warrant Entitlement:

   One Share per Warrant

Maximum Number of Shares:

   For any Settlement Date, 7,037,718 Shares (the “Aggregate Maximum Number of Shares”) multiplied by the Applicable Percentage, minus the aggregate number of Shares delivered prior to such day pursuant to (i) this Confirmation and (ii) any other substantially similar confirmation for Warrants sold by Issuer to Dealer with a trade date within 30 days of the Trade Date and with expiration dates the same as the Expiration Dates hereunder.
   Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Maximum Number of Shares be subject to adjustment, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with a Potential Adjustment Event (as defined in Section 11.2(e) of the Equity Definitions and without any amendment thereto pursuant to the terms of this Confirmation)).

 

2


Applicable Percentage:

   20%

Strike Price:

   USD20.016

Premium:

   USD5,262,500

Premium Payment Date:

   The Effective Date

Exchange:

   New York Stock Exchange

Related Exchange:

   All Exchanges
Procedures for Exercise:   

In respect of any Component:

  

Expiration Time:

   Valuation Time

Expiration Date:

   As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction). “Final Disruption Date” means January 8, 2024. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent, acting in good faith and in its commercially reasonable discretion, may determine that such Expiration Date is a Disrupted Day only in part, in which case (i) the Calculation Agent shall make adjustments to the Number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component and (ii) the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent, acting in good faith and in its commercially reasonable discretion, based on transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended. For the avoidance of doubt, any day on which the Exchange is scheduled to close prior to its normal closing time shall not be considered a Disrupted Day in whole or in part. If a Market Disruption Event occurs on the Expiration Date for any Component, the Calculation Agent, in its good faith and

 

3


   commercially reasonable discretion, may determine the VWAP Price for such Expiration Date using its commercially reasonable estimate of the value of the Shares on such Expiration Date based on the volume, historical trading patterns and price of the Shares and such other commercially reasonable factors (such as the market for the Shares; volatility, expected dividends, stock loan rate or liquidity relevant to the Shares; other commercially reasonable option pricing inputs; and the ability to maintain a commercially reasonable hedge position relating to the Shares) as it deems appropriate. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.

Market Disruption Events:

   The first sentence of Section 6.3(a) of the Equity Definitions is hereby amended (A) by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” in the third, fourth and fifth lines thereof, and (B) by replacing the words “or (iii) an Early Closure.” by “(iii) an Early Closure, or (iv) a Regulatory Disruption.”
   Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.

Regulatory Disruption:

   Any event that Dealer, in its reasonable discretion, based on advice of counsel, determines makes it appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner), and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M), for Dealer to refrain from or decrease any market activity in connection with the Transaction. Dealer shall notify Issuer as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.

Automatic Exercise:

   Applicable; and means that the Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date unless Buyer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date.

 

4


Issuer’s Telephone Number and Telex and/or Facsimile Numberand Contact Details for purpose of Giving Notice:

   To:    Bristow Group Inc.
   Attn:    Geoffrey L. Carpenter
   Telephone:    (713) 430-7717
   Facsimile:    (713) 267-7620
   With a copy to:   
   Attn:    General Counsel
   Facsimile:    (713) 267-7670
Settlement Terms:      

In respect of any Component:

     

Settlement Currency:

   USD

Settlement Method:

   Net Share Settlement

Net Share Settlement:

   On each Settlement Date, Issuer shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to the account specified by Dealer and cash in lieu of any fractional Shares valued at the Relevant Price on the Valuation Date corresponding to such Settlement Date. If, in the reasonable judgment of Dealer, for any reason, the Shares deliverable upon Net Share Settlement would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), then Dealer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(b) below apply.
   The Number of Shares to be Delivered shall be delivered by Issuer to Dealer no later than 5:00 P.M. (local time in New York City) on the relevant Settlement Date.

Number of Shares to be Delivered:

   In respect of any Settlement Date, subject to the last sentence of Section 9.5 of the Equity Definitions, the product of (i) the Number of Warrants exercised or deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation Date occurring on such Exercise Date over the Strike Price (or, if no such excess, zero) divided by (B) such VWAP Price; provided that in no event shall the Number of Shares to be Delivered for any Settlement Date exceed the Maximum Number of Shares for such Settlement Date.

 

5


VWAP Price:

   For any Valuation Date, the Rule 10b-18 dollar volume weighted average price per Share for such Exchange Business Day based on transactions executed during such Exchange Business Day, as reported on Bloomberg Page “BRS <Equity> AQR SEC” (or any successor thereto) or, in the event such price is not so reported on such Exchange Business Day for any reason or is, in the reasonable determination of the Calculation Agent, manifestly incorrect, as commercially reasonably determined by the Calculation Agent using a volume-weighted method.

Other Applicable Provisions:

   The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Seller is the issuer of the Shares) and Section 9.12 of the Equity Definitions will be applicable, as if “Physical Settlement” applied to the Transaction.
Adjustments:   

In respect of any Component:

  

Method of Adjustment:

   Calculation Agent Adjustment
Extraordinary Events:   

Consequences of Merger Events:

  

(a) Share-for-Share:

   Modified Calculation Agent Adjustment.

(b) Share-for-Other:

   Cancellation and Payment (Calculation Agent Determination).

(c) Share-for-Combined:

   Component Adjustment.

Tender Offer:

   Applicable

Consequences of Tender Offers:

  

(a) Share-for-Share:

   Modified Calculation Agent Adjustment.

(b) Share-for-Other:

   Modified Calculation Agent Adjustment.

(c) Share-for-Combined:

   Modified Calculation Agent Adjustment.

Announcement Event:

   If an Announcement Event has occurred, the Calculation Agent shall determine the economic effect of the Announcement Event on the theoretical value of the Transaction (including without limitation any change in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction) (i) at a time that it deems appropriate, in good faith and in its commercially reasonable discretion, from the Announcement Date to the date of such determination (a “Determination Date”), and (ii) on the earlier to occur of (x) the relevant Merger Date or Tender Offer Date, as the case may be, or the date on which the transaction described in the relevant

 

6


   Announcement Event is cancelled, withdrawn, discontinued or otherwise terminated, as applicable, and (y) the Expiration Date, date on which a payment amount is determined pursuant to Sections 12.7 or 12.8 of the Equity Definitions or other date of cancellation or termination in respect of the Transaction or any Component (such earlier date, a “Final Determination Date”), from the Announcement Date or the Determination Date, as applicable, to such Final Determination Date. If any such economic effect is deemed to be material in the Calculation Agent’s commercially reasonable discretion, the Calculation Agent shall adjust the terms of the Transaction to reflect such economic effect, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event. “Announcement Event” shall mean the occurrence of an Announcement Date pursuant to Section 12.1(l)(i), (ii) and/or (vii) of the Equity Definitions (as modified pursuant to this Confirmation).

Announcement Date:

   The definition of “Announcement Date” in Section 12.1(l) of the Equity Definitions shall be amended by (i) replacing the word “leads to the” in the third and the fifth lines thereof with the words “that is reasonably likely to be completed (as commercially reasonably determined by the Calculation Agent taking into account the market price of the Shares, volatility with respect to the Shares, the fair value of the Transaction and such other factors as the Calculation Agent deems relevant in its commercially reasonable discretion) and, if completed, would result in a”, (ii) replacing the words “voting shares” in the fifth line thereof with the word “Shares”, (iii) inserting the words “by an entity with direct knowledge” after the word “announcement” in the second and the fourth lines thereof, (iv) replacing the words “firm intention” in the second and fourth lines thereof with the words “bona fide intention (as commercially reasonably determined by the Calculation Agent taking into account the market price of the Shares, volatility with respect to the Shares, the fair value of the Transaction and such other factors (such as the market for the Shares; volatility, expected dividends, stock loan rate or liquidity relevant to the Shares; other commercially reasonable option pricing inputs; and the ability to maintain a commercially reasonable hedge position relating to the Shares) as the Calculation Agent deems relevant in its commercially reasonable discretion)”, (v) deleting the parenthetical in the third and the fifth line thereof, (vi) adding immediately after the words “Merger Event” in the third line thereof “, and any publicly announced change or

 

7


   amendment to such an announcement (including the announcement of an abandonment of such intention)”, (vii) adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)”, (viii) deleting the word “and” immediately preceding clause (vi) and (ix) inserting a new clause (vii) immediately following the end of clause (vi) thereof as follows: “and (vii) the public announcement by Issuer and/or its subsidiaries of any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 50% of the market capitalization of Issuer as of the date of such announcement, or any intention to enter into such a transaction”.

New Shares:

   In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors)”.

Modified Calculation Agent Adjustment:

   With respect to any Merger Event to which Modified Calculation Agent Adjustment applies, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Dealer, the Issuer of the Affected Shares and the entity that will be the Issuer of the New Shares shall, on or prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as Dealer has determined, in its reasonable discretion based on advice of counsel, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner), and if such conditions are not met or if the Calculation Agent determines, acting in good faith and in its commercially reasonable discretion, that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.

 

8


Reference Markets:

   For the avoidance of doubt, and without limiting the generality of the foregoing provisions, any adjustment effected by the Calculation Agent pursuant to Section 12.2(e) and/or Section 12.3(d) of the Equity Definitions may be determined by reference to the adjustment(s) made in respect of Merger Events or Tender Offers, as the case may be, in the convertible bond market (to the extent such adjustments are based on a commercially reasonable Hedge Position), as determined by the Calculation Agent acting in good faith and in its commercially reasonable discretion.

Nationalization, Insolvencyor Delisting:

   Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:

  

(a) Change in Law:

   Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by Dealer on the Trade Date”; provided further that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty

 

9


   provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

(b) Insolvency Filing:

   Applicable

(c) Hedging Disruption:

   Applicable; provided that:
   (i) Section 12.9(a)(v) of the Equity Definitions is hereby modified by inserting the following two phrases at the end of such Section:
   “For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms.”
   (ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.

(d) Increased Cost of Hedging:

   Not Applicable

(e) Loss of Stock Borrow:

   Applicable

Maximum Stock Loan Rate:

   2.00% per annum

(f) Increased Cost of Stock Borrow:

   Applicable

Initial Stock Loan Rate:

   0.00% per annum until June 1, 2023 and 0.25% per annum thereafter.

Hedging Party:

   Dealer

Determining Party:

   Dealer for all applicable Additional Disruption Events

Non-Reliance:

   Applicable

Agreements and Acknowledgments

  

Regarding Hedging Activities:

   Applicable

Additional Acknowledgments:

   Applicable

 

10


3. Calculation Agent:

   Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner; provided that, following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Issuer of such failure, Issuer shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default, as the Calculation Agent. Following any determination or calculation by the Calculation Agent hereunder, upon a request by Issuer, the Calculation Agent shall promptly (but in any event within five Scheduled Trading Days) provide to Issuer by e-mail to the e-mail address provided by Issuer in such request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any assumptions used in making such determination or calculation), it being understood that the Calculation Agent shall not be obligated to disclose any proprietary or confidential models or other proprietary or confidential information used by it for such determination or calculation.

4. Account Details:

  

Dealer Payment Instructions:

The Bank of New York, NY

SWIFT: IRVTUS3N

ABA Code: 021 000 018

Account Name: Credit Suisse Capital LLC

Account No.: 890-1148-822

BIC CSFBUS3L

Issuer Payment Instructions:

 

Bank:    Wells Fargo Bank
SWIFT:    WFBIUS6S
ABA:    121000248
Acct Name:    Bristow Group Inc.
Acct Number:    4000073916

 

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5. Offices:

The Office of Dealer for the Transaction is:

Credit Suisse Capital LLC

c/o Credit Suisse Secuirities (USA) LLC

Eleven Madison Avenue

New York, NY 10010

The Office of Issuer for the Transaction is:

Inapplicable, Issuer is not a Multibranch Party.

6. Notices: For purposes of this Confirmation:

(a) Address for notices or communications to Issuer:

 

To:    Bristow Group Inc.
Attn:    Geoffrey L. Carpenter
Telephone:    (713) 430-7717
Facsimile:    (713) 267-7620
With a copy to:   
Attn:    General Counsel
Facsimile:    (713) 267-7670

(b) Address for notices or communications to Dealer:

Credit Suisse International

c/o Credit Suisse Securities (USA) LLC

11 Madison Avenue, 5th Floor

New York, NY 10010

Attention: Tucker Martin

Telephone: (212) 325-9182

Facsimile: (212) 743-3661

Email: tucker.martin@credit-suisse.com; list.elo-equ-der@credit-suisse.com

With a copy to:

Credit Suisse Securities (USA) LLC

1 Madison Avenue, 9th Floor

New York, New York 10010

Attn: Senior Legal Officer

Telephone: (212) 538-2616

Facsimile: (212) 325-8036

Email: stephen.gray@credit-suisse.com

7. Representations, Warranties and Agreements:

(a) In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

(i) On the Trade Date and the Premium Payment Date, (A) Issuer is not aware of any material nonpublic information regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

 

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(ii) Without limiting the generality of Section 13.1 of the Equity Definitions, Issuer acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

(iii) A number of Shares equal to the Aggregate Maximum Number of Shares as of the Trade Date (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Issuer. The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.

(iv) Issuer is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act.

(v) Issuer is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vi) On the Trade Date and the Premium Payment Date (A) the assets of Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is adequate to conduct the business of Issuer and (C) Issuer has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(vii) Issuer shall not take any action to decrease the number of Available Shares (as defined below) below the Aggregate Maximum Number of Shares.

(viii) The representations and warranties of Issuer set forth in Section 3 of the Agreement and Section 2 of the Underwriting Agreement dated as of December 13, 2017 between Issuer and Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the Underwriters party thereto (the “Underwriting Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.

(ix) Issuer understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency.

(x) [Reserved].

(xi) [Reserved].

(xii) [Reserved].

(xiii) Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Issuer hereunder will (i) conflict with or result in a breach of any agreement or instrument to which Issuer or any of its subsidiaries is a party or by which Issuer or any of its subsidiaries is bound or to which Issuer or any of its subsidiaries is subject, which agreement or instrument was filed as an exhibit to Issuer’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017, as updated by any subsequent filings, except for any such conflict that would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of Issuer

 

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and its subsidiaries taken as a whole or on the performance by Issuer of its obligations under the Transaction (“Material Adverse Effect”) or (ii) constitute a default under, or result in the creation of any lien under, any such agreement or instrument, except for any such default or lien that would not, individually or in the aggregate, have a Material Adverse Effect.

(xiv) Assuming compliance by Dealer and its affiliates with the covenant set forth in Section 8(v), no provision in the Restated Certificate of Incorporation of Issuer or the Amended and Restated By-laws of Issuer (each, as amended from time to time) applicable to the Shares, and no state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares, would give rise to any reporting, consent, registration, or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares.

(xv) Issuer (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million.

(b) Each of Dealer and Issuer agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended.

(c) Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Issuer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

(d) Each of Dealer and Issuer agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

(e) Each party acknowledges and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory Authority applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

(f) On or prior to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s board of directors authorizing the Transaction.

 

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(g) Issuer shall deliver to Dealer one or more opinions of counsel, dated as of the Effective Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Sections 3(a)(i), (ii), (iii) and (iv) of the Agreement and Section 7(a)(iii) of this Confirmation; provided that any such opinion of counsel may contain customary exceptions and qualifications, including, without limitation, exceptions and qualifications relating to indemnification provisions.

(h) Issuer is not entering into the Transaction in anticipation of, in connection with, or to facilitate, a self-tender offer or a third-party tender offer, in each case, in violation of the Exchange Act.

8. Other Provisions:

(a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Issuer’s control, or (iii) an Event of Default in which Issuer is the Defaulting Party or a Termination Event in which Issuer is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Issuer’s control), and if Issuer would owe any amount to Dealer pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment Obligation”), then Issuer shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Issuer gives irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) Issuer remakes the representation set forth in Section 7(a)(i) as of the date of such election and (c) Dealer agrees, in its sole discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.

 

Share Termination Alternative:    If applicable, means that Issuer shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, in satisfaction of the Payment Obligation.
Share Termination Delivery   
Property:    A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.
Share Termination Unit Price:    The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Issuer at the time of notification of the Payment Obligation.
Share Termination Delivery Unit:    In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to

 

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   pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
Failure to Deliver:    Applicable
Other applicable provisions:    If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”. If, in the reasonable judgment of Dealer, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(a) would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) accept delivery of such securities notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(b) below apply.

Notwithstanding anything to the contrary in this Confirmation, any Payment Obligation under this Confirmation shall, for all purposes, be calculated as if the Maximum Number of Shares were equal to 1.5 times the Number of Shares (without regard to the limitations on adjustment set forth in the second paragraph opposite the caption “Maximum Number of Shares” in Section 2) but any deliveries under this Section 8(a) shall be limited to the Maximum Number of Shares as defined in Section 2 hereof.

(b) Registration/Private Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above opposite the caption “Net Share Settlement” in Section 2 or in paragraph (a) of this Section 8. If so applicable, then, at the election of Issuer by notice to Buyer within one Exchange Business Day after the relevant delivery obligation arises, but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares or Share Termination Delivery Units, as the case may be, delivered by Issuer to Buyer shall be, at the time of such delivery, covered by an effective registration statement of Issuer for immediate resale by Buyer (such registration statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and content commercially reasonably satisfactory to Buyer) or (B) Issuer shall deliver additional Shares or Share Termination Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”); provided that, if requested by Dealer, Issuer shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates no later than one Exchange Business Day prior to the first Expiration Date, and the applicable procedures described below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the context shall require.)

(ii) If Issuer makes the election described in clause (b)(i)(A) above:

(A) Buyer (or an affiliate of Buyer designated by Buyer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with respect to Issuer that is customary in scope for underwritten offerings of equity securities of similar size and that yields results that are satisfactory to Buyer or such affiliate, as the case may be, in its discretion; and

 

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(B) Buyer (or an affiliate of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case may be, by Buyer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities of similar size, in form and substance commercially reasonably satisfactory to Buyer or such affiliate and Issuer, which Registration Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the indemnification of, and contribution in connection with the liability of, Buyer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all registration costs and all fees and expenses of counsel for Buyer, and shall provide for the delivery of opinions of counsel and accountants’ “comfort letters” with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus to Buyer or such affiliate.

(iii) If Issuer makes the election described in clause (b)(i)(B) above:

(A) Buyer (or an affiliate of Buyer designated by Buyer) and any potential institutional purchaser of any such Shares or Share Termination Delivery Units, as the case may be, from Buyer or such affiliate identified by Buyer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation in compliance with applicable law with respect to Issuer customary in scope for private placements of equity securities of similar size (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients of customary confidentiality agreements reasonably acceptable to Issuer;

(B) Buyer (or an affiliate of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the case may be, by Issuer to Buyer or such affiliate and the private resale of such shares by Buyer or such affiliate, substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance commercially reasonably satisfactory to Buyer and Issuer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability of, Buyer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all fees and expenses of counsel for Buyer, shall contain representations, warranties and agreements of Issuer reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall provide for the delivery of opinions of counsel and accountants’ “comfort letters” with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Shares to Buyer or such affiliate; and

(C) Issuer agrees that any Shares or Share Termination Delivery Units so delivered to Dealer (i) may be transferred by and among Dealer and its affiliates, and Issuer shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities issued by Issuer comprising such Share Termination Delivery Units, Issuer shall promptly remove, or cause the transfer agent for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities upon delivery by Dealer (or such affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s representation letters customarily delivered by Dealer in connection with resales of restricted securities pursuant to Rule 144 under the Securities Act, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer).

 

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(D) Issuer shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).

(iv) If the private placement settlement or the registration settlement shall not be effected as set forth in Section (8)(b)(ii) or Section (8)(b)(iii) of this Confirmation, as applicable, then failure to effect such private placement settlement or such registration settlement shall constitute an Event of Default with respect to which Issuer shall be the Defaulting Party.

(c) Make-whole Shares. If Issuer makes the election described in clause (i)(B) of paragraph (b) of this Section 8, then Dealer or its affiliate may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer completes the sale of all such Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery Units to Issuer. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares (“Make-whole Shares”) in an amount that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(c). This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(e).

(d) Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Buyer be entitled to receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares, (i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Buyer or any affiliate of Buyer subject to aggregation with Buyer under such Section 13 and rules or any “group”, as such term is used in such Section 13 and rules, of which Buyer or any such affiliate of Buyer is a member or may be deemed to be a member (collectively, “Buyer Group”) would be equal to or greater than 9% or more of the outstanding Shares or (ii) Buyer, Buyer Group or any person whose ownership position would be aggregated with that of Buyer or Buyer Group (Buyer, Buyer Group or any such person, a “Buyer Person”) under any state or federal bank holding company or banking laws, or other federal, state or local regulations or regulatory orders or any organizational documents or contracts of Issuer that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Buyer Person under Applicable Restrictions and with respect to which such requirements have not been met or the relevant approval has not been received minus (y) 1% of the number of Shares outstanding on the date of determination (either such condition described in clause (i) or (ii), an “Excess Ownership Position”). If any delivery owed to Buyer hereunder is not made, in whole or in part, as a result of this provision, Issuer’s obligation to make such delivery shall not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Buyer gives notice to Issuer that such delivery would not result in the existence of an Excess Ownership Position.

(e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection with the Transaction on any date in excess of the Maximum Number of Shares on such date. Issuer represents and

 

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warrants to Dealer (which representation and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Aggregate Maximum Number of Shares is equal to or less than the number of authorized but unissued Shares of Issuer that are not reserved for future issuance in connection with transactions in the Shares (other than the Transaction) on the date of the determination of the Aggregate Maximum Number of Shares (such Shares, the “Available Shares”). In the event Issuer shall not have delivered the full number of Shares otherwise deliverable as a result of this Section 8(e) because Issuer has insufficient authorized but unissued Shares that are not reserved for other transactions (the resulting deficit, the “Deficit Shares”), Issuer shall be continually obligated to deliver, from time to time until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (iii) Issuer additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Issuer deliver any Shares to Dealer pursuant to this Section 8(e) to the extent that such delivery would cause the aggregate number of Shares delivered to Dealer to exceed the Maximum Number of Shares. Issuer shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

(f) Amendments to Equity Definitions. The following amendments shall be made to the Equity Definitions:

(i) Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “a material”, (y) adding the phrase “or Warrants” after the words “the relevant Shares” in the same sentence and (z) deleting the phrase “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing it with the phrase “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares);

(ii) Each of Section 11.2(a) and Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative” and replacing them with the words “a material”, and adding the phrase “or Warrants” at the end of the sentence;

(iii) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer”;

(iv) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (x) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and (y) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and

(v) Section 12.9(b)(v) of the Equity Definitions is hereby amended by (x) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (y) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”.

(g) Additional Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which the Transaction shall be the sole Affected Transaction and Issuer shall be the sole Affected Party; provided that with respect to any Additional Termination Event, the Calculation Agent may choose, in good faith and its commercially reasonable discretion, to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

 

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(i) Dealer, despite using commercially reasonable efforts, is unable or reasonably determines, based on advice of counsel, that it is impractical or illegal, to hedge its obligations pursuant to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Buyer in light of legal, regulatory, or self-regulatory concerns, provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner).

(ii) Any Person (as defined below) becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Issuer’s common stock representing more than 50% of the voting power of Issuer’s common stock entitled to vote generally in the election of directors and (x) files a Schedule 13D or Schedule TO or any other schedule, form or report under the Exchange Act disclosing such beneficial ownership or (y) Issuer otherwise becomes aware of any such Person; provided that this clause (ii) shall not apply to a transaction covered in clause (iii) below, including any exception thereto.

(iii) The consummation of (A) any recapitalization, reclassification or change of Issuer’s common stock (other than changes resulting from a share split or share combination or changes solely to par value) as a result of which all of Issuer’s common stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of Issuer pursuant to which all of Issuer’s 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 Issuer and its subsidiaries, taken as a whole, to any person other than one of Issuer’s subsidiaries; provided, however, that any merger or consolidation of Issuer solely for the purpose of changing its jurisdiction of incorporation that results in a reclassification, conversion or exchange of its outstanding common stock solely into shares of common stock of the surviving entity shall not constitute an Additional Termination Event pursuant to this clause (iii).

(iv) On any day during the period from and including the Trade Date, to and including the final Expiration Date, (I) the Notional Unwind Shares (as defined below) as of such day exceeds a number of Shares equal to 75% of the Maximum Number of Shares, or (II) Issuer makes a public announcement of any transaction or event that, in the commercially reasonable opinion of Calculation Agent would, upon consummation of such transaction or upon the occurrence of such event, as applicable, and after giving effect to any applicable adjustments hereunder, cause the Notional Unwind Shares immediately following the consummation of such transaction or the occurrence of such event to exceed a number of Shares equal to 75% of the Maximum Number of Shares. The “Notional Unwind Shares” as of any day is a number of Shares equal to (1) the amount that would be payable pursuant to Section 6 of the Agreement (determined as of such day as if an Early Termination Date had been designated in respect of the Transaction and as if Issuer were the sole Affected Party and the Transaction were the sole Affected Transaction), divided by (2) the Relevant Price (determined as if such day were a Valuation Date).

(v) A default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by Issuer or any of Issuer’s subsidiaries, other than any subsidiary that is designated an “Unrestricted Subsidiary” under the supplemental indenture governing Issuer’s 6  14% senior notes due 2022 or any other indenture or supplemental indenture containing substantially similar provisions related to unrestricted subsidiaries or similar concepts (collectively, “Unrestricted Subsidiaries”) (or the payment of which is guaranteed by Issuer or any of Issuer’s subsidiaries (other than Unrestricted Subsidiaries)), which default is caused by a failure to pay principal of or premium or interest on such indebtedness prior to the expiration of any grace period provided in such indebtedness,

 

20


including any extension thereof (a “Payment Default”), or results in the acceleration of such indebtedness prior to its stated maturity and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $50.0 million (or the foreign currency equivalent thereof), such default is not cured or waived or such acceleration is not rescinded, as applicable, and such indebtedness is not repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be.

(vi) a final judgment for the payment of $50.0 million (or the foreign currency equivalent thereof) or more (excluding amounts covered by insurance) is rendered against Issuer or any of its significant subsidiaries (as defined in Regulation S-X under the Securities Act) (other than Unrestricted Subsidiaries), which judgment is not paid, discharged or stayed within 60 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.

Notwithstanding the foregoing, a transaction set forth in clause (ii) or (iii) above will not constitute an Additional Termination Event if (x) more than 90% of the consideration in the transaction or transactions (other than cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights) which otherwise would constitute an Additional Termination Event under clause (iii) above consists of shares of common stock traded or to be traded immediately following such transaction on The New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market and (y) as a result of such transaction or transactions, the Shares will consist of such common stock (and any rights attached thereto) and other applicable consideration.

Person” includes any “person” or “group” within the meaning of Section 13(d)(3) of the Exchange Act.

(h) Extension of Settlement. Dealer may (x) divide any Component into additional Components and designate the Expiration Date and the Number of Warrants for each such Component, or (y) extend any Expiration Date or any other date of valuation or delivery of Shares, if Dealer determines, in its good faith reasonable discretion based on advice of counsel, that such further division or extension is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions in the cash market or stock loan market or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement unwind activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal and regulatory requirements.

(i) Transfer and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at any time without the consent of Issuer; provided that at any time at which an Excess Ownership Position (determined, for purposes of this Section 8(i), as if the reference to “9%” in the definition thereof were replaced with “8.5%”) exists (based on a commercially reasonable Hedge Position), if Dealer, in its good faith reasonable discretion, is unable to effect a transfer or assignment to a third party after using its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists (based on a commercially reasonable Hedge Position), Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction such that such Excess Ownership Position no longer exists (based on a commercially reasonable Hedge Position). After a transfer or assignment by Dealer described in the preceding sentence, the transferee or assignee shall agree (1) Issuer will not be required to pay the transferee or assignee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Issuer would have been required to pay to Dealer in the absence of such transfer or assignment and (2) Issuer will not, as a result of such transfer or assignment, receive from the transferee or assignee on any payment date an amount that, after taking into account amounts owed by the transferee or assignee to Issuer and any taxes withheld under Section 2(d)(i)(4) of the Agreement, is less than the amount that Issuer would have received from Dealer in the absence of such transfer or assignment. In the event that Dealer designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(a) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Issuer shall be the sole Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated Transaction.

 

21


(j) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Issuer’s bankruptcy. For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Issuer herein under or pursuant to any other agreement.

(k) No Netting or Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party under any other agreement between parties hereto, by operation of law or otherwise.

(l) [Reserved].

(m) Shareholder Approval. Issuer shall use its reasonable best efforts to seek approval from its shareholders, in accordance with the requirements of Rule 312.03(c) of The New York Stock Exchange Listed Company Manual or any successor rule, for the issuance pursuant to the Transaction of a number of Shares equal to 1.5 times the Number of Shares (without regard to the limitations on adjustment set forth in the second paragraph opposite the caption “Maximum Number of Shares” in Section 2). If Issuer succeeds in obtaining such approval, then upon such approval and without any further action by either party, (i) the provisions set forth opposite the caption “Maximum Number of Shares” in Section 2 shall be deemed to be replaced in their entirety with the phrase “A number of Shares equal to 1.5 times the Number of Shares”, (ii) the phrase “the Aggregate Maximum Number of Shares as of the Trade Date” in Section 7(a)(iii) shall be deemed replaced with the words “the Maximum Number of Shares”, (iii) the words “the Aggregate Maximum Number of Shares” each time they appear in Section 7(a)(vii) and Section 8(e) shall be deemed replaced with the words “the Maximum Number of Shares” and (iv) the Additional Termination Event set forth in Section 8(g)(iv) shall no longer be applicable.

(n) Designation by Dealer. Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Issuer, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may perform such obligations. Dealer shall be discharged of its obligations to Issuer to the extent, and solely to the extent, of any such performance.

(o) Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Issuer and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Issuer relating to such tax treatment and tax structure.

(p) Agreements and Acknowledgements Regarding Hedging. Issuer understands, acknowledges and agrees that: (A) at any time on and prior to the last Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Relevant Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the Settlement Prices, each in a manner that may be adverse to Issuer.

(q) Early Unwind. In the event the sale of the “Firm Securities” (as defined in the Underwriting Agreement) is not consummated with the Underwriters for any reason, or Issuer fails to deliver to Dealer opinions of counsel as required pursuant to Section 7(g), in each case by 5:00 p.m. (New

 

22


York City time) on the Premium Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Issuer under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date. Each of Dealer and Issuer represents and acknowledges to the other that, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.

(r) Payment by Dealer. In the event that (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Issuer an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Issuer, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.

(s) Listing of Warrant Shares. Issuer shall have submitted an application for the listing of the Warrant Shares on the Exchange, and such application and listing shall have been approved by the Exchange, subject only to official notice of issuance, in each case, on or prior to the Premium Payment Date. Issuer agrees and acknowledges that such submission and approval shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.

(t) Tax Representations and Forms.

(i) Dealer and Issuer each represent and warrant that it is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any relevant jurisdiction to make any deduction or withholding for or on account of any Tax from any payment to be made by it to the other party under this Confirmation and the Transaction evidenced hereby.

(ii) For the purpose of Sections 4(a)(i) and (iii) of the Agreement, Dealer agrees to deliver to Issuer one duly executed and completed United States Internal Revenue Service Form W-9 (or successor thereto) upon execution of this Confirmation and shall provide a new form promptly upon (A) reasonable request of Issuer or (B) learning that any form previously provided has become obsolete or incorrect. Any transferee or assignee of Dealer pursuant to paragraph (i) of this Section 8 may provide the Internal Revenue Service Form applicable to it in lieu of Internal Revenue Service Form W-9. For the purpose of Sections 4(a)(i) and (iii) of the Agreement, Issuer agrees to deliver to Dealer one duly executed and completed United States Internal Revenue Service Form W-9 (or successor thereto) upon execution of this Confirmation and shall provide a new form promptly upon (A) reasonable request of Dealer or (B) learning that any form previously provided has become obsolete or incorrect.

(iii) “Tax” as used in subsection (i) immediately above and Sections 5(b)(iii) and 5(b)(iv) of the Agreement, and “Indemnifiable Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected (A) on amounts treated as dividends from sources within the United States under Section 871(m) or Section 305 of the Code, or, in each case, any current or future regulations thereunder or official interpretations thereof (a “Dividend Withholding Tax”) or (B) pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). If, at any time, a party (“X”) is required to remit an amount of tax in respect of any Dividend Withholding Tax or FATCA Withholding Tax, then without duplication for any amount that X has deducted on account of such tax from any amount paid to the other party (“Y”) pursuant to the Transaction, the amount so required to be remitted shall be payable by Y to X within 10 business days of written demand by X. For the avoidance of doubt, each of a Dividend Withholding Tax and a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.

 

23


(u) Dividends. If at any time during the period from and including the Effective Date to and including the last Expiration Date an ex-dividend date for a cash dividend occurs with respect to the Shares, then the Calculation Agent will adjust any of the Strike Price, Number of Warrants, and/or any other variable relevant to the exercise, settlement or payment of the Transaction to preserve the fair value of the Warrants to Dealer after taking into account such dividend (and assuming Dealer maintains a commercially reasonable Hedge Position).

(v) Voting of Shares. Dealer agrees that neither it nor any of its affiliates will vote any shares acquired by Dealer or its affiliates in connection with the Transaction (including, without limitation, Shares acquired by Dealer or its affiliates to hedge any Hedge Position in respect of the Transaction).

(w) Counterparts. This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(x) Waiver of Trial by Jury. EACH OF ISSUER AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR THE TRANSACTION OR THE ACTIONS OF ISSUER OF ITS AFFILIATES OR DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(y) Submission to Jurisdiction and Governing Law. Each party hereby irrevocably and unconditionally submits for itself and its property in any legal action or proceeding by the other party against it relating to the Transaction to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof. THIS CONFIRMATION AND THE TRANSACTION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE).

(z) Illegality. The parties agree that for the avoidance of doubt, for purposes of Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any similar law or regulation, without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after any Trade Date, and the consequences specified in the Agreement, including without limitation, the consequences specified in Section 6 of the Agreement, shall apply to any Illegality arising from any such act, rule or regulation.

(aa) Role of Agent. Credit Suisse Securities (USA) LLC, in its capacity as Agent will be responsible for (A) effecting the Transaction, (B) issuing all required confirmations and statements to Dealer and Issuer, (C) maintaining books and records relating to the Transaction in accordance with its standard practices and procedures and in accordance with applicable law and (D) unless otherwise requested by Issuer, receiving, delivering, and safeguarding Issuer’s funds and any securities in connection with the Transaction, in accordance with its standard practices and procedures and in accordance with applicable law.

 

  (i) Agent is acting in connection with the Transaction solely in its capacity as Agent for Dealer and Issuer pursuant to instructions from Dealer and Issuer. Agent shall have no responsibility or personal liability to Dealer or Issuer arising from any failure by Dealer or Issuer to pay or perform any obligations hereunder, or to monitor or enforce compliance by Dealer or Issuer with any obligation hereunder, including, without limitation, any obligations to maintain collateral. Each of Dealer and Issuer agrees to proceed solely against the other to collect or recover any securities or monies owing to it in connection with or as a result of the Transaction. Agent shall otherwise have no liability in respect of the Transaction, except for its gross negligence or willful misconduct in performing its duties as Agent.

 

24


  (ii) Any and all notices, demands, or communications of any kind relating to the Transaction between Dealer and Issuer shall be transmitted exclusively through Agent at the following address:

Credit Suisse Securities (USA) LLC

Eleven Madison Avenue

New York, NY 10010-3629

For payments and deliveries:

Facsimile No.: (212) 325 8175

Telephone No.: (212) 325 8678 / (212) 325 3213

For all other communications:

Facsimile No.: (212) 325 8173

Telephone No.: (212) 325 8676 / (212) 538 5306 / (212) 538 1193 / (212) 538 6886

 

  (iii) The date and time of the Transaction evidenced hereby will be furnished by the Agent to Dealer and Issuer upon written request.

 

  (iv) The Agent will furnish to Issuer upon written request a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction evidenced hereby.

 

  (v) Dealer and Issuer each represents and agrees (A) that the Transaction is not unsuitable for it in the light of such party’s financial situation, investment objectives and needs and (B) that it is entering into the Transaction in reliance upon such tax, accounting, regulatory, legal and financial advice as it deems necessary and not upon any view expressed by the other or the Agent.

 

  (vi) Dealer is regulated by The Securities and Futures Authority and has entered into the Transaction as principal. The time at which the Transaction was executed will be notified to Issuer (through the Agent) on request.

 

25


Issuer hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Issuer with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, NY 10010-3629, Facsimile No. (212) 325-8173.

 

CREDIT SUISSE INTERNATIONAL
By:  

/s/ Barry Dixon

  Name:   Barry Dixon
  Title:   Authorized Signatory
By:  

/s/ Erica L. Hryniuk

  Name:   Erica L. Hryniuk
  Title:   Authorized Signatory
CREDIT SUISSE SECURITIES (USA) LLC,
 

AS AGENT FOR CREDIT SUISSE

INTERNATIONAL

By:  

/s/ Barry Dixon

  Name:   Barry Dixon
  Title:   Director

[Signature Page to Base Warrant Confirmation]


Agreed and Accepted By:
BRISTOW GROUP INC.
By:  

/s/ Geoffrey L. Carpenter

  Name: Geoffrey L. Carpenter
  Title:   Vice President and Treasurer


Annex A

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

 

Component Number

   Number of Warrants      Expiration Date

1

     19,984      September 1, 2023

2

     19,984      September 5, 2023

3

     19,984      September 6, 2023

4

     19,984      September 7, 2023

5

     19,984      September 8, 2023

6

     19,984      September 11, 2023

7

     19,984      September 12, 2023

8

     19,984      September 13, 2023

9

     19,984      September 14, 2023

10

     19,984      September 15, 2023

11

     19,984      September 18, 2023

12

     19,984      September 19, 2023

13

     19,984      September 20, 2023

14

     19,984      September 21, 2023

15

     19,984      September 22, 2023

16

     19,984      September 25, 2023

17

     19,984      September 26, 2023

18

     19,984      September 27, 2023

19

     19,984      September 28, 2023

20

     19,984      September 29, 2023

21

     19,984      October 2, 2023

22

     19,984      October 3, 2023

23

     19,984      October 4, 2023

24

     19,984      October 5, 2023

25

     19,984      October 6, 2023

26

     19,984      October 9, 2023

27

     19,984      October 10, 2023

28

     19,984      October 11, 2023

29

     19,984      October 12, 2023

30

     19,984      October 13, 2023

31

     19,984      October 16, 2023

32

     19,984      October 17, 2023

33

     19,984      October 18, 2023

34

     19,984      October 19, 2023

35

     19,984      October 20, 2023

36

     19,984      October 23, 2023

37

     19,984      October 24, 2023

38

     19,984      October 25, 2023

39

     19,984      October 26, 2023

40

     19,984      October 27, 2023

41

     19,984      October 30, 2023

42

     19,984      October 31, 2023

43

     19,984      November 1, 2023

44

     19,984      November 2, 2023

45

     19,984      November 3, 2023

46

     19,984      November 6, 2023

47

     19,984      November 7, 2023

48

     19,984      November 8, 2023

49

     19,984      November 9, 2023

50

     19,984      November 10, 2023

51

     19,984      November 13, 2023


52

     19,984      November 14, 2023

53

     19,984      November 15, 2023

54

     19,984      November 16, 2023

55

     19,984      November 17, 2023

56

     19,984      November 20, 2023

57

     19,984      November 21, 2023

58

     19,984      November 22, 2023

59

     19,984      November 24, 2023

60

     19,984      November 27, 2023

61

     19,984      November 28, 2023

62

     19,984      November 29, 2023

63

     19,984      November 30, 2023

64

     19,984      December 1, 2023

65

     19,984      December 4, 2023

66

     19,984      December 5, 2023

67

     19,984      December 6, 2023

68

     19,984      December 7, 2023

69

     19,984      December 8, 2023

70

     19,984      December 11, 2023

71

     19,984      December 12, 2023

72

     19,984      December 13, 2023

73

     19,984      December 14, 2023

74

     19,984      December 15, 2023

75

     19,984      December 18, 2023

76

     19,984      December 19, 2023

77

     19,984      December 20, 2023

78

     19,984      December 21, 2023

79

     19,984      December 22, 2023

80

     19,984      December 26, 2023

Exhibit 10.2

EXECUTION VERSION

 

To: Bristow Group Inc.

2103 City West Blvd., 4th Floor

Houston, Texas 77042

 

From: Barclays Bank PLC

5 The North Colonnade

Canary Wharf, London E14 4BB

Facsimile: +44(20)77736461

Telephone: +44 (20) 777 36810

c/o Barclays Capital Inc.

as Agent for Barclays Bank PLC

745 Seventh Avenue

New York, NY 10019

Telephone: +1 212 412 4000

 

Re: Base Issuer Warrant Transaction

 

Date: December 13, 2017

 

 

Dear Sir(s):

The purpose of this communication (this “Confirmation”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “Transaction”) between Barclays Bank PLC (“Dealer”), through its agent Barclays Capital Inc. (the “Agent”), and Bristow Group Inc. (“Issuer”). This communication constitutes a “Confirmation” as referred to in the Agreement specified below. Dealer is not a member of the Securities Investor Protection Corporation (“SIPC”). Dealer is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

1. This Confirmation is subject to, and incorporates, the definitions and provisions of the 2000 ISDA Definitions (including the Annex thereto) (the “2000 Definitions”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”, and together with the 2000 Definitions, the “Definitions”), in each case as published by the International Swaps and Derivatives Association, Inc. (“ISDA”). In the event of any inconsistency between the 2000 Definitions and the Equity Definitions, the Equity Definitions will govern. For purposes of the Equity Definitions, each reference herein to a Warrant shall be deemed to be a reference to a Call Option or an Option, as context requires.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be subject to an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement, as published by ISDA, as if Dealer and Issuer had executed an agreement in such form on the date hereof (but without any Schedule except for the election of US Dollars (“USD”) as the Termination Currency. The Transaction shall be the only Transaction under the Agreement.

 

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All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.

2. The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:

 

Trade Date:

   December 13, 2017

Effective Date:

   December 18, 2017, subject to Section 8(q).

Components:

   The Transaction will be divided into individual Components, each with the terms set forth in this Confirmation, and, in particular, with the Number of Warrants and Expiration Date set forth in this Confirmation. The payments and deliveries to be made upon settlement of the Transaction will be determined separately for each Component as if each Component were a separate Transaction under the Agreement.

Warrant Style:

   European

Warrant Type:

   Call

Seller:

   Issuer

Buyer:

   Dealer

Shares:

   The Common Stock of Issuer, par value USD0.01 per share (Ticker Symbol: “BRS”).

Number of Warrants:

   For each Component, as provided in Annex A to this Confirmation.

Warrant Entitlement:

   One Share per Warrant

Maximum Number of Shares:

   For any Settlement Date, 7,037,718 Shares (the “Aggregate Maximum Number of Shares”) multiplied by the Applicable Percentage, minus the aggregate number of Shares delivered prior to such day pursuant to (i) this Confirmation and (ii) any other substantially similar confirmation for Warrants sold by Issuer to Dealer with a trade date within 30 days of the Trade Date and with expiration dates the same as the Expiration Dates hereunder.
   Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Maximum Number of Shares be subject to adjustment, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with a Potential Adjustment Event (as defined in Section 11.2(e) of the Equity Definitions and without any amendment thereto pursuant to the terms of this Confirmation)).

 

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Applicable Percentage:

   25%

Strike Price:

   USD20.016

Premium:

   USD6,578,125

Premium Payment Date:

   The Effective Date

Exchange:

   New York Stock Exchange

Related Exchange:

   All Exchanges
Procedures for Exercise:   

In respect of any Component:

  

Expiration Time:

   Valuation Time

Expiration Date:

   As provided in Annex A to this Confirmation (or, if such date is not a Scheduled Trading Day, the next following Scheduled Trading Day that is not already an Expiration Date for another Component); provided that if that date is a Disrupted Day, the Expiration Date for such Component shall be the first succeeding Scheduled Trading Day that is not a Disrupted Day and is not or is not deemed to be an Expiration Date in respect of any other Component of the Transaction hereunder; and provided further that if the Expiration Date has not occurred pursuant to the preceding proviso as of the Final Disruption Date, the Final Disruption Date shall be the Expiration Date (irrespective of whether such date is an Expiration Date in respect of any other Component for the Transaction). “Final Disruption Date” means January 8, 2024. Notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date, the Calculation Agent, acting in good faith and in its commercially reasonable discretion, may determine that such Expiration Date is a Disrupted Day only in part, in which case (i) the Calculation Agent shall make adjustments to the Number of Warrants for the relevant Component for which such day shall be the Expiration Date and shall designate the Scheduled Trading Day determined in the manner described in the immediately preceding sentence as the Expiration Date for the remaining Warrants for such Component and (ii) the VWAP Price for such Disrupted Day shall be determined by the Calculation Agent, acting in good faith and in its commercially reasonable discretion, based on transactions in the Shares on such Disrupted Day effected before the relevant Market Disruption Event occurred and/or after the relevant Market Disruption Event ended. For the avoidance of doubt, any day on which the Exchange is scheduled to close prior to its normal closing time shall not be considered a Disrupted Day in whole or in part. If a Market Disruption Event occurs on the Expiration Date for any Component, the Calculation Agent, in its good faith and

 

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   commercially reasonable discretion, may determine the VWAP Price for such Expiration Date using its commercially reasonable estimate of the value of the Shares on such Expiration Date based on the volume, historical trading patterns and price of the Shares and such other commercially reasonable factors (such as the market for the Shares; volatility, expected dividends, stock loan rate or liquidity relevant to the Shares; other commercially reasonable option pricing inputs; and the ability to maintain a commercially reasonable hedge position relating to the Shares) as it deems appropriate. Section 6.6 of the Equity Definitions shall not apply to any Valuation Date occurring on an Expiration Date.

Market Disruption Events:

   The first sentence of Section 6.3(a) of the Equity Definitions is hereby amended (A) by deleting the words “during the one hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” in the third, fourth and fifth lines thereof, and (B) by replacing the words “or (iii) an Early Closure.” by “(iii) an Early Closure, or (iv) a Regulatory Disruption.”
   Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the term “Scheduled Closing Time” in the fourth line thereof.

Regulatory Disruption:

   Any event that Dealer, in its reasonable discretion, based on advice of counsel, determines makes it appropriate with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer, provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner), and including without limitation Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation M), for Dealer to refrain from or decrease any market activity in connection with the Transaction. Dealer shall notify Issuer as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it.

Automatic Exercise:

   Applicable; and means that the Number of Warrants for the corresponding Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date unless Buyer notifies Seller (by telephone or in writing) prior to the Expiration Time on such Expiration Date that it does not wish Automatic Exercise to occur, in which case Automatic Exercise will not apply to such Expiration Date.

 

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Issuer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice:

   To:    Bristow Group Inc.
   Attn:    Geoffrey L. Carpenter
   Telephone:    (713) 430-7717
   Facsimile:    (713) 267-7620
   With a copy to:   
   Attn:    General Counsel
   Facsimile:    (713) 267-7670
Settlement Terms:      

In respect of any Component:

     

Settlement Currency:

   USD   

Settlement Method:

   Net Share Settlement   

Net Share Settlement:

   On each Settlement Date, Issuer shall deliver to Dealer a number of Shares equal to the Number of Shares to be Delivered for such Settlement Date to the account specified by Dealer and cash in lieu of any fractional Shares valued at the Relevant Price on the Valuation Date corresponding to such Settlement Date. If, in the reasonable judgment of Dealer, for any reason, the Shares deliverable upon Net Share Settlement would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), then Dealer may elect to either (x) accept delivery of such Shares notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(b) below apply.
   The Number of Shares to be Delivered shall be delivered by Issuer to Dealer no later than 5:00 P.M. (local time in New York City) on the relevant Settlement Date.

Number of Shares to be Delivered:

   In respect of any Settlement Date, subject to the last sentence of Section 9.5 of the Equity Definitions, the product of (i) the Number of Warrants exercised or deemed exercised on such Exercise Date, (ii) the Warrant Entitlement and (iii) (A) the excess of the VWAP Price on the Valuation Date occurring on such Exercise Date over the Strike Price (or, if no such excess, zero) divided by (B) such VWAP Price; provided that in no event shall the Number of Shares to be Delivered for any Settlement Date exceed the Maximum Number of Shares for such Settlement Date.

 

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VWAP Price:

   For any Valuation Date, the Rule 10b-18 dollar volume weighted average price per Share for such Exchange Business Day based on transactions executed during such Exchange Business Day, as reported on Bloomberg Page “BRS <Equity> AQR SEC” (or any successor thereto) or, in the event such price is not so reported on such Exchange Business Day for any reason or is, in the reasonable determination of the Calculation Agent, manifestly incorrect, as commercially reasonably determined by the Calculation Agent using a volume-weighted method.

Other Applicable Provisions:

   The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Seller is the issuer of the Shares) and Section 9.12 of the Equity Definitions will be applicable, as if “Physical Settlement” applied to the Transaction.
Adjustments:   

In respect of any Component:

  

Method of Adjustment:

   Calculation Agent Adjustment
Extraordinary Events:   

Consequences of Merger Events:

  

(a)     Share-for-Share:

   Modified Calculation Agent Adjustment.

(b)     Share-for-Other:

   Cancellation and Payment (Calculation Agent Determination).

(c)     Share-for-Combined:

   Component Adjustment.

Tender Offer:

   Applicable

Consequences of Tender Offers:

  

(a)     Share-for-Share:

   Modified Calculation Agent Adjustment.

(b)     Share-for-Other:

   Modified Calculation Agent Adjustment.

(c)     Share-for-Combined:

   Modified Calculation Agent Adjustment.

Announcement Event:

   If an Announcement Event has occurred, the Calculation Agent shall determine the economic effect of the Announcement Event on the theoretical value of the Transaction (including without limitation any change in volatility, stock loan rate or liquidity relevant to the Shares or to the Transaction) (i) at a time that it deems appropriate, in good faith and in its commercially reasonable discretion, from the Announcement Date to the date of such determination (a “Determination Date”), and (ii) on the earlier to occur of (x) the relevant Merger Date or Tender Offer Date, as the case may be, or the date on which the transaction described in the relevant

 

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   Announcement Event is cancelled, withdrawn, discontinued or otherwise terminated, as applicable, and (y) the Expiration Date, date on which a payment amount is determined pursuant to Sections 12.7 or 12.8 of the Equity Definitions or other date of cancellation or termination in respect of the Transaction or any Component (such earlier date, a “Final Determination Date”), from the Announcement Date or the Determination Date, as applicable, to such Final Determination Date. If any such economic effect is deemed to be material in the Calculation Agent’s commercially reasonable discretion, the Calculation Agent shall adjust the terms of the Transaction to reflect such economic effect, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event. “Announcement Event” shall mean the occurrence of an Announcement Date pursuant to Section 12.1(l)(i), (ii) and/or (vii) of the Equity Definitions (as modified pursuant to this Confirmation).

Announcement Date:

   The definition of “Announcement Date” in Section 12.1(l) of the Equity Definitions shall be amended by (i) replacing the word “leads to the” in the third and the fifth lines thereof with the words “that is reasonably likely to be completed (as commercially reasonably determined by the Calculation Agent taking into account the market price of the Shares, volatility with respect to the Shares, the fair value of the Transaction and such other factors as the Calculation Agent deems relevant in its commercially reasonable discretion) and, if completed, would result in a”, (ii) replacing the words “voting shares” in the fifth line thereof with the word “Shares”, (iii) inserting the words “by an entity with direct knowledge” after the word “announcement” in the second and the fourth lines thereof, (iv) replacing the words “firm intention” in the second and fourth lines thereof with the words “bona fide intention (as commercially reasonably determined by the Calculation Agent taking into account the market price of the Shares, volatility with respect to the Shares, the fair value of the Transaction and such other factors (such as the market for the Shares; volatility, expected dividends, stock loan rate or liquidity relevant to the Shares; other commercially reasonable option pricing inputs; and the ability to maintain a commercially reasonable hedge position relating to the Shares) as the Calculation Agent deems relevant in its commercially reasonable discretion)”, (v) deleting the parenthetical in the third and the fifth line thereof, (vi) adding immediately after the words “Merger Event” in the third line thereof “, and any publicly announced change or

 

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   amendment to such an announcement (including the announcement of an abandonment of such intention)”, (vii) adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)”, (viii) deleting the word “and” immediately preceding clause (vi) and (ix) inserting a new clause (vii) immediately following the end of clause (vi) thereof as follows: “and (vii) the public announcement by Issuer and/or its subsidiaries of any potential acquisition by Issuer and/or its subsidiaries where the aggregate consideration exceeds 50% of the market capitalization of Issuer as of the date of such announcement, or any intention to enter into such a transaction”.

New Shares:

   In the definition of New Shares in Section 12.1(i) of the Equity Definitions, the text in clause (i) shall be deleted in its entirety and replaced with “publicly quoted, traded or listed on any of the New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market (or their respective successors)”.

Modified Calculation Agent Adjustment:

   With respect to any Merger Event to which Modified Calculation Agent Adjustment applies, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Dealer, the Issuer of the Affected Shares and the entity that will be the Issuer of the New Shares shall, on or prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as Dealer has determined, in its reasonable discretion based on advice of counsel, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions, and to preserve its hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner), and if such conditions are not met or if the Calculation Agent determines, acting in good faith and in its commercially reasonable discretion, that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity Definitions shall apply.

 

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Reference Markets:

   For the avoidance of doubt, and without limiting the generality of the foregoing provisions, any adjustment effected by the Calculation Agent pursuant to Section 12.2(e) and/or Section 12.3(d) of the Equity Definitions may be determined by reference to the adjustment(s) made in respect of Merger Events or Tender Offers, as the case may be, in the convertible bond market (to the extent such adjustments are based on a commercially reasonable Hedge Position), as determined by the Calculation Agent acting in good faith and in its commercially reasonable discretion.

Nationalization, Insolvency or Delisting:

   Cancellation and Payment (Calculation Agent Determination); provided that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:

  

(a)    Change in Law:

   Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by Dealer on the Trade Date”; provided further that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case, constitutes a “Change in Law” shall be made without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty

 

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   provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and (ii) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof the words “(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)”.

(b)    Insolvency Filing:

   Applicable

(c)    Hedging Disruption:

   Applicable; provided that:
   (i) Section 12.9(a)(v) of the Equity Definitions is hereby modified by inserting the following two phrases at the end of such Section:
   “For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms.”
   (ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”.

(d)    Increased Cost of Hedging:

   Not Applicable

(e)    Loss of Stock Borrow:

   Applicable

Maximum Stock Loan Rate:

   2.00% per annum

(f)     Increased Cost of Stock Borrow:

   Applicable

Initial Stock Loan Rate:

   0.00% per annum until June 1, 2023 and 0.25% per annum thereafter.

Hedging Party:

   Dealer or an affiliate of Dealer that is involved in the hedging of the Transaction for all applicable Additional Disruption Events.

Determining Party:

   Dealer for all applicable Additional Disruption Events

Non-Reliance:

   Applicable

Agreements and Acknowledgments

  

Regarding Hedging Activities:

   Applicable

Additional Acknowledgments:

   Applicable

 

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3.      Calculation Agent:

   Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner; provided that, following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five Exchange Business Days following notice to the Calculation Agent by Issuer of such failure, Issuer shall have the right to designate a nationally recognized third-party dealer in over-the-counter corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default, as the Calculation Agent. Following any determination or calculation by the Calculation Agent hereunder, upon a request by Issuer, the Calculation Agent shall promptly (but in any event within five Scheduled Trading Days) provide to Issuer by e-mail to the e-mail address provided by Issuer in such request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable detail the basis for such determination or calculation (including any assumptions used in making such determination or calculation), it being understood that the Calculation Agent shall not be obligated to disclose any proprietary or confidential models or other proprietary or confidential information used by it for such determination or calculation.

 

  4. Account Details:

Dealer Payment Instructions:

Bank: Barclays Bank plc NY

ABA# 026 00 2574

BIC: BARCUS33

Acct: 50038524

Beneficiary: BARCGB33

Issuer Payment Instructions:

Bank:                 Wells Fargo Bank

SWIFT:             WFBIUS6S

ABA:                 121000248

Acct Name:        Bristow Group Inc.

Acct Number:     4000073916

 

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  5. Offices:

The Office of Dealer for the Transaction is:

Barclays Bank PLC

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, NY 10019

The Office of Issuer for the Transaction is:

Inapplicable, Issuer is not a Multibranch Party.

 

  6. Notices: For purposes of this Confirmation:

 

  (a) Address for notices or communications to Issuer:

To:                Bristow Group Inc.

Attn:             Geoffrey L. Carpenter

Telephone:    (713) 430-7717

Facsimile:    (713) 267-7620

With a copy to:

Attn:             General Counsel

Facsimile:    (713) 267-7670

 

  (b) Address for notices or communications to Dealer:

Barclays Bank PLC

c/o Barclays Capital Inc.

745 Seventh Avenue

New York, NY 10019

Attn: Raj Imteaz

Telephone:         (+1) 212-526-1426

Facsimile:         (+1) 917-522-0595

 

  7. Representations, Warranties and Agreements:

(a) In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Issuer represents and warrants to and for the benefit of, and agrees with, Dealer as follows:

(i) On the Trade Date and the Premium Payment Date, (A) Issuer is not aware of any material nonpublic information regarding Issuer or the Shares and (B) all reports and other documents filed by Issuer with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii) Without limiting the generality of Section 13.1 of the Equity Definitions, Issuer acknowledges that Dealer is not making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260, Earnings Per Share, ASC Topic 815, Derivatives and Hedging, or ASC Topic 480, Distinguishing Liabilities from Equity and ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (or any successor issue statements) or under FASB’s Liabilities & Equity Project.

 

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(iii) A number of Shares equal to the Aggregate Maximum Number of Shares as of the Trade Date (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Issuer. The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.

(iv) Issuer is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act.

(v) Issuer is not, and after giving effect to the transactions contemplated hereby will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

(vi) On the Trade Date and the Premium Payment Date (A) the assets of Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is adequate to conduct the business of Issuer and (C) Issuer has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(vii) Issuer shall not take any action to decrease the number of Available Shares (as defined below) below the Aggregate Maximum Number of Shares.

(viii) The representations and warranties of Issuer set forth in Section 3 of the Agreement and Section 2 of the Underwriting Agreement dated as of December 13, 2017 between Issuer and Credit Suisse Securities (USA) LLC, Barclays Capital Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the Underwriters party thereto (the “Underwriting Agreement”) are true and correct as of the Trade Date and the Effective Date and are hereby deemed to be repeated to Dealer as if set forth herein.

(ix) Issuer understands no obligations of Dealer to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any affiliate of Dealer or any governmental agency.

(x) [Reserved].

(xi) [Reserved].

(xii) [Reserved].

(xiii) Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Issuer hereunder will (i) conflict with or result in a breach of any agreement or instrument to which Issuer or any of its subsidiaries is a party or by which Issuer or any of its subsidiaries is bound or to which Issuer or any of its subsidiaries is subject, which agreement or instrument was filed as an exhibit to Issuer’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017, as updated by any subsequent filings, except for any such conflict that would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, results of operations or prospects of Issuer and its subsidiaries taken as a whole or on the performance by Issuer of its obligations under the Transaction (“Material Adverse Effect”) or (ii) constitute a default under, or result in the creation of any lien under, any such agreement or instrument, except for any such default or lien that would not, individually or in the aggregate, have a Material Adverse Effect.

 

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(xiv) Assuming compliance by Dealer and its affiliates with the covenant set forth in Section 8(v), no provision in the Restated Certificate of Incorporation of Issuer or the Amended and Restated By-laws of Issuer (each, as amended from time to time) applicable to the Shares, and no state or local (including any non-U.S. jurisdiction’s) law, rule, regulation or regulatory order applicable to the Shares, would give rise to any reporting, consent, registration, or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares.

(xv) Issuer (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million.

(b) Each of Dealer and Issuer agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended.

(c) Each of Dealer and Issuer acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(a)(2) thereof. Accordingly, Dealer represents and warrants to Issuer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.

(d) Each of Dealer and Issuer agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of Title 11 of the United States Code (the “Bankruptcy Code”). The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “settlement payment,” as such term is defined in Section 741(8) of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder is a “transfer,” as such term is defined in Section 101(54) of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

(e) Each party acknowledges and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory Authority applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.

(f) On or prior to the Trade Date, Issuer shall deliver to Dealer a resolution of Issuer’s board of directors authorizing the Transaction.

(g) Issuer shall deliver to Dealer one or more opinions of counsel, dated as of the Effective Date and reasonably acceptable to Dealer in form and substance, with respect to the matters set forth in Sections 3(a)(i), (ii), (iii) and (iv) of the Agreement and Section 7(a)(iii) of this Confirmation; provided that any such opinion of counsel may contain customary exceptions and qualifications, including, without limitation, exceptions and qualifications relating to indemnification provisions.

(h) Issuer is not entering into the Transaction in anticipation of, in connection with, or to facilitate, a self-tender offer or a third-party tender offer, in each case, in violation of the Exchange Act.

 

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  8. Other Provisions:

(a) Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Issuer’s control, or (iii) an Event of Default in which Issuer is the Defaulting Party or a Termination Event in which Issuer is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Issuer’s control), and if Issuer would owe any amount to Dealer pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment Obligation”), then Issuer shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Issuer gives irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) Issuer remakes the representation set forth in Section 7(a)(i) as of the date of such election and (c) Dealer agrees, in its sole discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case may be, shall apply.

 

Share Termination Alternative:    If applicable, means that Issuer shall deliver to Dealer the Share Termination Delivery Property on the date on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, in satisfaction of the Payment Obligation.
Share Termination Delivery Property:    A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of the aggregate amount of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.
Share Termination Unit Price:    The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Issuer at the time of notification of the Payment Obligation.
Share Termination Delivery Unit:    In the case of a Termination Event, Event of Default, Delisting or Additional Disruption Event, one Share or, in the case of an Insolvency, Nationalization, Merger Event or Tender Offer, a unit consisting of the number or amount of each type of property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Insolvency, Nationalization, Merger Event or Tender Offer. If such Insolvency, Nationalization, Merger Event or Tender Offer involves a choice of consideration to be received by holders, such holder shall be deemed to have elected to receive the maximum possible amount of cash.
Failure to Deliver:    Applicable

 

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Other applicable provisions:    If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.10, 9.11 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Seller is the Issuer of the Shares) and 9.12 of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction, except that all references to “Shares” shall be read as references to “Share Termination Delivery Units”. If, in the reasonable judgment of Dealer, for any reason, any securities comprising the Share Termination Delivery Units deliverable pursuant to this Section 8(a) would not be immediately freely transferable by Dealer under Rule 144 under the Securities Act, then Dealer may elect to either (x) accept delivery of such securities notwithstanding any restriction on transfer or (y) have the provisions set forth in Section 8(b) below apply.

Notwithstanding anything to the contrary in this Confirmation, any Payment Obligation under this Confirmation shall, for all purposes, be calculated as if the Maximum Number of Shares were equal to 1.5 times the Number of Shares (without regard to the limitations on adjustment set forth in the second paragraph opposite the caption “Maximum Number of Shares” in Section 2) but any deliveries under this Section 8(a) shall be limited to the Maximum Number of Shares as defined in Section 2 hereof.

(b) Registration/Private Placement Procedures. (i) With respect to the Transaction, the following provisions shall apply to the extent provided for above opposite the caption “Net Share Settlement” in Section 2 or in paragraph (a) of this Section 8. If so applicable, then, at the election of Issuer by notice to Buyer within one Exchange Business Day after the relevant delivery obligation arises, but in any event at least one Exchange Business Day prior to the date on which such delivery obligation is due, either (A) all Shares or Share Termination Delivery Units, as the case may be, delivered by Issuer to Buyer shall be, at the time of such delivery, covered by an effective registration statement of Issuer for immediate resale by Buyer (such registration statement and the corresponding prospectus (the “Prospectus”) (including, without limitation, any sections describing the plan of distribution) in form and content commercially reasonably satisfactory to Buyer) or (B) Issuer shall deliver additional Shares or Share Termination Delivery Units, as the case may be, so that the value of such Shares or Share Termination Delivery Units, as determined by the Calculation Agent to reflect a commercially reasonable liquidity discount, equals the value of the number of Shares or Share Termination Delivery Units that would otherwise be deliverable if such Shares or Share Termination Delivery Units were freely tradeable (without prospectus delivery) upon receipt by Buyer (such value, the “Freely Tradeable Value”); provided that, if requested by Dealer, Issuer shall make the election described in this clause (B) with respect to Shares delivered on all Settlement Dates no later than one Exchange Business Day prior to the first Expiration Date, and the applicable procedures described below shall apply to all Shares delivered on the Settlement Dates on an aggregate basis. (For the avoidance of doubt, as used in this paragraph (b) only, the term “Issuer” shall mean the issuer of the relevant securities, as the context shall require.)

(ii) If Issuer makes the election described in clause (b)(i)(A) above:

(A) Buyer (or an affiliate of Buyer designated by Buyer) shall be afforded a reasonable opportunity to conduct a due diligence investigation with respect to Issuer that is customary in scope for underwritten offerings of equity securities of similar size and that yields results that are satisfactory to Buyer or such affiliate, as the case may be, in its discretion; and

(B) Buyer (or an affiliate of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Registration Agreement”) on commercially reasonable terms in connection with the public resale of such Shares or Share Termination Delivery Units, as the case may be, by Buyer or such affiliate substantially similar to underwriting agreements customary for underwritten offerings of equity securities of similar size, in form and substance commercially reasonably satisfactory to Buyer or such affiliate and Issuer, which Registration Agreement shall include, without limitation, provisions substantially similar to those contained in such underwriting agreements relating to the indemnification of, and contribution in connection with the liability of, Buyer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all registration costs and all fees and expenses of counsel for Buyer, and shall provide for the delivery of opinions of counsel and accountants’ “comfort letters” with respect to the financial statements and certain financial information contained in or incorporated by reference into the Prospectus to Buyer or such affiliate.

 

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(iii) If Issuer makes the election described in clause (b)(i)(B) above:

(A) Buyer (or an affiliate of Buyer designated by Buyer) and any potential institutional purchaser of any such Shares or Share Termination Delivery Units, as the case may be, from Buyer or such affiliate identified by Buyer shall be afforded a commercially reasonable opportunity to conduct a due diligence investigation in compliance with applicable law with respect to Issuer customary in scope for private placements of equity securities of similar size (including, without limitation, the right to have made available to them for inspection all financial and other records, pertinent corporate documents and other information reasonably requested by them), subject to execution by such recipients of customary confidentiality agreements reasonably acceptable to Issuer;

(B) Buyer (or an affiliate of Buyer designated by Buyer) and Issuer shall enter into an agreement (a “Private Placement Agreement”) on commercially reasonable terms in connection with the private placement of such Shares or Share Termination Delivery Units, as the case may be, by Issuer to Buyer or such affiliate and the private resale of such shares by Buyer or such affiliate, substantially similar to private placement purchase agreements customary for private placements of equity securities of similar size, in form and substance commercially reasonably satisfactory to Buyer and Issuer, which Private Placement Agreement shall include, without limitation, provisions substantially similar to those contained in such private placement purchase agreements relating to the indemnification of, and contribution in connection with the liability of, Buyer and its affiliates and Issuer, shall provide for the payment by Issuer of all expenses in connection with such resale, including all fees and expenses of counsel for Buyer, shall contain representations, warranties and agreements of Issuer reasonably necessary or advisable to establish and maintain the availability of an exemption from the registration requirements of the Securities Act for such resales, and shall provide for the delivery of opinions of counsel and accountants’ “comfort letters” with respect to the financial statements and certain financial information contained in or incorporated by reference into the offering memorandum prepared for the resale of such Shares to Buyer or such affiliate; and

(C) Issuer agrees that any Shares or Share Termination Delivery Units so delivered to Dealer (i) may be transferred by and among Dealer and its affiliates, and Issuer shall effect such transfer without any further action by Dealer and (ii) after the minimum “holding period” within the meaning of Rule 144(d) under the Securities Act has elapsed with respect to such Shares or any securities issued by Issuer comprising such Share Termination Delivery Units, Issuer shall promptly remove, or cause the transfer agent for such Shares or securities to remove, any legends referring to any such restrictions or requirements from such Shares or securities upon delivery by Dealer (or such affiliate of Dealer) to Issuer or such transfer agent of seller’s and broker’s representation letters customarily delivered by Dealer in connection with resales of restricted securities pursuant to Rule 144 under the Securities Act, without any further requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of Dealer).

(D) Issuer shall not take, or cause to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Issuer to Dealer (or any affiliate designated by Dealer) of the Shares or Share Termination Delivery Units, as the case may be, or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales of the Shares or Share Termination Delivery Units, as the case may be, by Dealer (or any such affiliate of Dealer).

 

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(iv) If the private placement settlement or the registration settlement shall not be effected as set forth in Section (8)(b)(ii) or Section (8)(b)(iii) of this Confirmation, as applicable, then failure to effect such private placement settlement or such registration settlement shall constitute an Event of Default with respect to which Issuer shall be the Defaulting Party.

(c) Make-whole Shares. If Issuer makes the election described in clause (i)(B) of paragraph (b) of this Section 8, then Dealer or its affiliate may sell (which sale shall be made in a commercially reasonable manner) such Shares or Share Termination Delivery Units, as the case may be, during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Shares or Share Termination Delivery Units, as the case may be, and ending on the Exchange Business Day on which Dealer completes the sale of all such Shares or Share Termination Delivery Units, as the case may be, or a sufficient number of Shares or Share Termination Delivery Units, as the case may be, so that the realized net proceeds of such sales exceed the Freely Tradeable Value. If any of such delivered Shares or Share Termination Delivery Units remain after such realized net proceeds exceed the Freely Tradeable Value, Dealer shall return such remaining Shares or Share Termination Delivery Units to Issuer. If the Freely Tradeable Value exceeds the realized net proceeds from such resale, Issuer shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Business Day immediately following the last day of the Resale Period the amount of such excess (the “Additional Amount”) in cash or in a number of additional Shares (“Make-whole Shares”) in an amount that, based on the Relevant Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Relevant Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares in the manner contemplated by this Section 8(c). This provision shall be applied successively until the Additional Amount is equal to zero, subject to Section 8(e).

(d) Beneficial Ownership. Notwithstanding anything to the contrary in the Agreement or this Confirmation, in no event shall Buyer be entitled to receive, or shall be deemed to receive, any Shares if, immediately upon giving effect to such receipt of such Shares, (i) the “beneficial ownership” (within the meaning of Section 13 of the Exchange Act and the rules promulgated thereunder) of Shares by Buyer or any affiliate of Buyer subject to aggregation with Buyer under such Section 13 and rules or any “group”, as such term is used in such Section 13 and rules, of which Buyer or any such affiliate of Buyer is a member or may be deemed to be a member (collectively, “Buyer Group”) would be equal to or greater than 9% or more of the outstanding Shares or (ii) Buyer, Buyer Group or any person whose ownership position would be aggregated with that of Buyer or Buyer Group (Buyer, Buyer Group or any such person, a “Buyer Person”) under any state or federal bank holding company or banking laws, or other federal, state or local regulations or regulatory orders or any organizational documents or contracts of Issuer that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting or registration obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Buyer Person under Applicable Restrictions and with respect to which such requirements have not been met or the relevant approval has not been received minus (y) 1% of the number of Shares outstanding on the date of determination (either such condition described in clause (i) or (ii), an “Excess Ownership Position”). If any delivery owed to Buyer hereunder is not made, in whole or in part, as a result of this provision, Issuer’s obligation to make such delivery shall not be extinguished and Issuer shall make such delivery as promptly as practicable after, but in no event later than one Exchange Business Day after, Buyer gives notice to Issuer that such delivery would not result in the existence of an Excess Ownership Position.

(e) Limitations on Settlement by Issuer. Notwithstanding anything herein or in the Agreement to the contrary, in no event shall Issuer be required to deliver Shares in connection with the Transaction on any date in excess of the Maximum Number of Shares on such date. Issuer represents and warrants to Dealer (which representation and warranty shall be deemed to be repeated on each day that the Transaction is outstanding) that the Aggregate Maximum Number of Shares is equal to or less than the number of authorized but unissued Shares of Issuer that are not reserved for future issuance in connection with transactions in the Shares (other than the Transaction) on the date of the determination of the Aggregate Maximum Number of Shares (such Shares, the “Available Shares”). In the event Issuer shall not have delivered the full number of Shares otherwise deliverable as a result of this Section 8(e) because Issuer has insufficient authorized but unissued Shares that are not reserved for other transactions (the resulting deficit, the “Deficit Shares”), Issuer shall be continually obligated to deliver, from time to time

 

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until the full number of Deficit Shares have been delivered pursuant to this paragraph, Shares when, and to the extent, that (i) Shares are repurchased, acquired or otherwise received by Issuer or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (ii) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date which prior to the relevant date become no longer so reserved and (iii) Issuer additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Issuer deliver any Shares to Dealer pursuant to this Section 8(e) to the extent that such delivery would cause the aggregate number of Shares delivered to Dealer to exceed the Maximum Number of Shares. Issuer shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (i), (ii) or (iii) and the corresponding number of Shares to be delivered) and promptly deliver such Shares thereafter.

(f) Amendments to Equity Definitions. The following amendments shall be made to the Equity Definitions:

(i) Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “a material”, (y) adding the phrase “or Warrants” after the words “the relevant Shares” in the same sentence and (z) deleting the phrase “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing it with the phrase “(and, for the avoidance of doubt, adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares);

(ii) Each of Section 11.2(a) and Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “diluting or concentrative” and replacing them with the words “a material”, and adding the phrase “or Warrants” at the end of the sentence;

(iii) Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and (2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) at Dealer’s option, the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA Master Agreement with respect to that Issuer”;

(iv) Section 12.9(b)(iv) of the Equity Definitions is hereby amended by (x) deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and (y) deleting the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares in the amount of the Hedging Shares or” in the penultimate sentence; and

(v) Section 12.9(b)(v) of the Equity Definitions is hereby amended by (x) adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (y) (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C) and (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other”.

(g) Additional Termination Events. The occurrence of any of the following shall constitute an Additional Termination Event with respect to which the Transaction shall be the sole Affected Transaction and Issuer shall be the sole Affected Party; provided that with respect to any Additional Termination Event, the Calculation Agent may choose, in good faith and its commercially reasonable discretion, to treat part of the Transaction as the sole Affected Transaction, and, upon the termination of the Affected Transaction, a Transaction with terms identical to those set forth herein except with a Number of Warrants equal to the unaffected number of Warrants shall be treated for all purposes as the Transaction, which shall remain in full force and effect:

(i) Dealer, despite using commercially reasonable efforts, is unable or reasonably determines, based on advice of counsel, that it is impractical or illegal, to hedge its obligations pursuant to the Transaction in the public market without registration under the Securities Act or as a result of any legal, regulatory or self-regulatory requirements or related policies and procedures (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Buyer in light of legal, regulatory, or self-regulatory concerns, provided that such policies and procedures have been adopted by Dealer in good faith and are generally applicable in similar situations and applied in a non-discriminatory manner).

 

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(ii) Any Person (as defined below) becomes the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of Issuer’s common stock representing more than 50% of the voting power of Issuer’s common stock entitled to vote generally in the election of directors and (x) files a Schedule 13D or Schedule TO or any other schedule, form or report under the Exchange Act disclosing such beneficial ownership or (y) Issuer otherwise becomes aware of any such Person; provided that this clause (ii) shall not apply to a transaction covered in clause (iii) below, including any exception thereto.

(iii) The consummation of (A) any recapitalization, reclassification or change of Issuer’s common stock (other than changes resulting from a share split or share combination or changes solely to par value) as a result of which all of Issuer’s common stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of Issuer pursuant to which all of Issuer’s 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 Issuer and its subsidiaries, taken as a whole, to any person other than one of Issuer’s subsidiaries; provided, however, that any merger or consolidation of Issuer solely for the purpose of changing its jurisdiction of incorporation that results in a reclassification, conversion or exchange of its outstanding common stock solely into shares of common stock of the surviving entity shall not constitute an Additional Termination Event pursuant to this clause (iii).

(iv) On any day during the period from and including the Trade Date, to and including the final Expiration Date, (I) the Notional Unwind Shares (as defined below) as of such day exceeds a number of Shares equal to 75% of the Maximum Number of Shares, or (II) Issuer makes a public announcement of any transaction or event that, in the commercially reasonable opinion of Calculation Agent would, upon consummation of such transaction or upon the occurrence of such event, as applicable, and after giving effect to any applicable adjustments hereunder, cause the Notional Unwind Shares immediately following the consummation of such transaction or the occurrence of such event to exceed a number of Shares equal to 75% of the Maximum Number of Shares. The “Notional Unwind Shares” as of any day is a number of Shares equal to (1) the amount that would be payable pursuant to Section 6 of the Agreement (determined as of such day as if an Early Termination Date had been designated in respect of the Transaction and as if Issuer were the sole Affected Party and the Transaction were the sole Affected Transaction), divided by (2) the Relevant Price (determined as if such day were a Valuation Date).

(v) A default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by Issuer or any of Issuer’s subsidiaries, other than any subsidiary that is designated an “Unrestricted Subsidiary” under the supplemental indenture governing Issuer’s 6 14% senior notes due 2022 or any other indenture or supplemental indenture containing substantially similar provisions related to unrestricted subsidiaries or similar concepts (collectively, “Unrestricted Subsidiaries”) (or the payment of which is guaranteed by Issuer or any of Issuer’s subsidiaries (other than Unrestricted Subsidiaries)), which default is caused by a failure to pay principal of or premium or interest on such indebtedness prior to the expiration of any grace period provided in such indebtedness, including any extension thereof (a “Payment Default”), or results in the acceleration of such indebtedness prior to its stated maturity and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates in excess of $50.0 million (or the foreign currency equivalent thereof), such default is not cured or waived or such acceleration is not rescinded, as applicable, and such indebtedness is not repaid, within a period of 10 days from the continuation of such default beyond the applicable grace period or the occurrence of such acceleration, as the case may be.

 

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(vi) a final judgment for the payment of $50.0 million (or the foreign currency equivalent thereof) or more (excluding amounts covered by insurance) is rendered against Issuer or any of its significant subsidiaries (as defined in Regulation S-X under the Securities Act) (other than Unrestricted Subsidiaries), which judgment is not paid, discharged or stayed within 60 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.

Notwithstanding the foregoing, a transaction set forth in clause (ii) or (iii) above will not constitute an Additional Termination Event if (x) more than 90% of the consideration in the transaction or transactions (other than cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights) which otherwise would constitute an Additional Termination Event under clause (iii) above consists of shares of common stock traded or to be traded immediately following such transaction on The New York Stock Exchange, the NASDAQ Global Select Market or the NASDAQ Global Market and (y) as a result of such transaction or transactions, the Shares will consist of such common stock (and any rights attached thereto) and other applicable consideration.

Person” includes any “person” or “group” within the meaning of Section 13(d)(3) of the Exchange Act.

(h) Extension of Settlement. Dealer may (x) divide any Component into additional Components and designate the Expiration Date and the Number of Warrants for each such Component, or (y) extend any Expiration Date or any other date of valuation or delivery of Shares, if Dealer determines, in its good faith reasonable discretion based on advice of counsel, that such further division or extension is necessary or advisable to preserve Dealer’s hedging activity hereunder in light of existing liquidity conditions in the cash market or stock loan market or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement unwind activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal and regulatory requirements.

(i) Transfer and Assignment. Dealer may transfer or assign its rights and obligations hereunder and under the Agreement, in whole or in part, at any time without the consent of Issuer; provided that at any time at which an Excess Ownership Position (determined, for purposes of this Section 8(i), as if the reference to “9%” in the definition thereof were replaced with “8.5%”) exists (based on a commercially reasonable Hedge Position), if Dealer, in its good faith reasonable discretion, is unable to effect a transfer or assignment to a third party after using its commercially reasonable efforts on pricing terms reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists (based on a commercially reasonable Hedge Position), Dealer may designate any Scheduled Trading Day as an Early Termination Date with respect to a portion (the “Terminated Portion”) of the Transaction such that such Excess Ownership Position no longer exists (based on a commercially reasonable Hedge Position). After a transfer or assignment by Dealer described in the preceding sentence, the transferee or assignee shall agree (1) Issuer will not be required to pay the transferee or assignee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Issuer would have been required to pay to Dealer in the absence of such transfer or assignment and (2) Issuer will not, as a result of such transfer or assignment, receive from the transferee or assignee on any payment date an amount that, after taking into account amounts owed by the transferee or assignee to Issuer and any taxes withheld under Section 2(d)(i)(4) of the Agreement, is less than the amount that Issuer would have received from Dealer in the absence of such transfer or assignment. In the event that Dealer designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(a) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Issuer shall be the sole Affected Party with respect to such partial termination and (iii) such portion of the Transaction shall be the only Terminated Transaction.

(j) Equity Rights. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Issuer’s bankruptcy. For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Issuer’s bankruptcy to any claim arising as a result of a breach by Issuer of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt, the parties acknowledge that this Confirmation is not secured by any collateral that would otherwise secure the obligations of Issuer herein under or pursuant to any other agreement.

 

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(k) No Netting or Set-off. The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party under any other agreement between parties hereto, by operation of law or otherwise.

(l) [Reserved].

(m) Shareholder Approval. Issuer shall use its reasonable best efforts to seek approval from its shareholders, in accordance with the requirements of Rule 312.03(c) of The New York Stock Exchange Listed Company Manual or any successor rule, for the issuance pursuant to the Transaction of a number of Shares equal to 1.5 times the Number of Shares (without regard to the limitations on adjustment set forth in the second paragraph opposite the caption “Maximum Number of Shares” in Section 2). If Issuer succeeds in obtaining such approval, then upon such approval and without any further action by either party, (i) the provisions set forth opposite the caption “Maximum Number of Shares” in Section 2 shall be deemed to be replaced in their entirety with the phrase “A number of Shares equal to 1.5 times the Number of Shares”, (ii) the phrase “the Aggregate Maximum Number of Shares as of the Trade Date” in Section 7(a)(iii) shall be deemed replaced with the words “the Maximum Number of Shares”, (iii) the words “the Aggregate Maximum Number of Shares” each time they appear in Section 7(a)(vii) and Section 8(e) shall be deemed replaced with the words “the Maximum Number of Shares” and (iv) the Additional Termination Event set forth in Section 8(g)(iv) shall no longer be applicable.

(n) Designation by Dealer. Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities to or from Issuer, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may perform such obligations. Dealer shall be discharged of its obligations to Issuer to the extent, and solely to the extent, of any such performance.

(o) Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Issuer and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Issuer relating to such tax treatment and tax structure.

(p) Agreements and Acknowledgements Regarding Hedging. Issuer understands, acknowledges and agrees that: (A) at any time on and prior to the last Expiration Date, Dealer and its affiliates may buy or sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Relevant Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect the market price and volatility of Shares, as well as the Settlement Prices, each in a manner that may be adverse to Issuer.

(q) Early Unwind. In the event the sale of the “Firm Securities” (as defined in the Underwriting Agreement) is not consummated with the Underwriters for any reason, or Issuer fails to deliver to Dealer opinions of counsel as required pursuant to Section 7(g), in each case by 5:00 p.m. (New York City time) on the Premium Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early Unwind”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Issuer under the Transaction shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date. Each of Dealer and Issuer represents and acknowledges to the other that, upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.

 

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(r) Payment by Dealer. In the event that (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Issuer an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Issuer, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.

(s) Listing of Warrant Shares. Issuer shall have submitted an application for the listing of the Warrant Shares on the Exchange, and such application and listing shall have been approved by the Exchange, subject only to official notice of issuance, in each case, on or prior to the Premium Payment Date. Issuer agrees and acknowledges that such submission and approval shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.

(t) Tax Representations and Forms.

(i) Dealer and Issuer each represent and warrant that it is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any relevant jurisdiction to make any deduction or withholding for or on account of any Tax from any payment to be made by it to the other party under this Confirmation and the Transaction evidenced hereby.

(ii) For the purpose of Sections 4(a)(i) and (iii) of the Agreement, Dealer agrees to deliver to Issuer one duly executed and completed United States Internal Revenue Service Form W-8ECI (or successor thereto) upon execution of this Confirmation and shall provide a new form promptly upon (A) reasonable request of Issuer or (B) learning that any form previously provided has become obsolete or incorrect. Any transferee or assignee of Dealer pursuant to paragraph (i) of this Section 8 may provide the Internal Revenue Service Form applicable to it in lieu of Internal Revenue Service Form W-8ECI. For the purpose of Sections 4(a)(i) and (iii) of the Agreement, Issuer agrees to deliver to Dealer one duly executed and completed United States Internal Revenue Service Form W-9 (or successor thereto) upon execution of this Confirmation and shall provide a new form promptly upon (A) reasonable request of Dealer or (B) learning that any form previously provided has become obsolete or incorrect.

(iii) “Tax” as used in subsection (i) immediately above and Sections 5(b)(iii) and 5(b)(iv) of the Agreement, and “Indemnifiable Tax” as defined in Section 14 of the Agreement, shall not include any withholding tax imposed or collected (A) on amounts treated as dividends from sources within the United States under Section 871(m) or Section 305 of the Code, or, in each case, any current or future regulations thereunder or official interpretations thereof (a “Dividend Withholding Tax”) or (B) pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). If, at any time, a party (“X”) is required to remit an amount of tax in respect of any Dividend Withholding Tax or FATCA Withholding Tax, then without duplication for any amount that X has deducted on account of such tax from any amount paid to the other party (“Y”) pursuant to the Transaction, the amount so required to be remitted shall be payable by Y to X within 10 business days of written demand by X. For the avoidance of doubt, each of a Dividend Withholding Tax and a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.

(u) Dividends. If at any time during the period from and including the Effective Date to and including the last Expiration Date an ex-dividend date for a cash dividend occurs with respect to the Shares, then the Calculation Agent will adjust any of the Strike Price, Number of Warrants, and/or any other variable relevant to the exercise, settlement or payment of the Transaction to preserve the fair value of the Warrants to Dealer after taking into account such dividend (and assuming Dealer maintains a commercially reasonable Hedge Position).

 

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(v) Voting of Shares. Dealer agrees that neither it nor any of its affiliates will vote any shares acquired by Dealer or its affiliates in connection with the Transaction (including, without limitation, Shares acquired by Dealer or its affiliates to hedge any Hedge Position in respect of the Transaction).

(w) Counterparts. This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(x) Waiver of Trial by Jury. EACH OF ISSUER AND DEALER HEREBY IRREVOCABLY WAIVES (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR THE TRANSACTION OR THE ACTIONS OF ISSUER OF ITS AFFILIATES OR DEALER OR ITS AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.

(y) Submission to Jurisdiction and Governing Law. Each party hereby irrevocably and unconditionally submits for itself and its property in any legal action or proceeding by the other party against it relating to the Transaction to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Supreme Court of the State of New York, sitting in New York County, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof. THIS CONFIRMATION AND THE TRANSACTION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE).

(z) Illegality. The parties agree that for the avoidance of doubt, for purposes of Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any similar law or regulation, without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after any Trade Date, and the consequences specified in the Agreement, including without limitation, the consequences specified in Section 6 of the Agreement, shall apply to any Illegality arising from any such act, rule or regulation.

(aa) Role of Agent. Each of Dealer and Issuer acknowledges to and agrees with the other party hereto and to and with the Agent that (i) the Agent is acting as agent for Dealer under the Transaction pursuant to instructions from such party, (ii) the Agent is not a principal or party to the Transaction, and may transfer its rights and obligations with respect to the Transaction, (iii) the Agent shall have no responsibility, obligation or liability, by way of issuance, guaranty, endorsement or otherwise in any manner with respect to the performance of either party under the Transaction, (iv) Dealer and the Agent have not given, and Issuer is not relying (for purposes of making any investment decision or otherwise) upon, any statements, opinions or representations (whether written or oral) of Dealer or the Agent, other than the representations expressly set forth in this Confirmation or the Agreement, and (v) each party agrees to proceed solely against the other party, and not the Agent, to collect or recover any money or securities owed to it in connection with the Transaction. Each party hereto acknowledges and agrees that the Agent is an intended third party beneficiary hereunder. Issuer acknowledges that the Agent is an affiliate of Dealer. Dealer will be acting for its own account in respect of this Confirmation and the Transaction contemplated hereunder.

(bb) Regulatory Provisions. The time of dealing for the Transaction will be confirmed by Dealer upon written request by Issuer. The Agent will furnish to Issuer upon written request a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with a Transaction.

(cc) Method of Delivery. Whenever delivery of funds or other assets is required hereunder by or to Issuer, such delivery shall be effected through the Agent. In addition, all notices, demands and communications of any kind relating to the Transaction between Dealer and Issuer shall be transmitted exclusively through the Agent.

 

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(dd) Bail-In Protocol. Notwithstanding anything contained in the Agreement, the parties agree that the provisions of the ISDA 2016 Bail-In Article 55 BRRD Protocol published by the International Swaps and Derivatives Association, Inc. on 14 July 2016 (the “Bail-In Protocol”) shall be deemed to be incorporated into and apply to the Agreement with effect from the date of this Confirmation as if references in those provisions to “Protocol Covered Agreement” as defined in the Bail-in Protocol were references to the Agreement, and on the basis that references to the “Implementation Date” in the Bail-in Protocol shall be deemed to be references to the date of this Confirmation.

(ee) Contractual Recognition of UK Stay in Resolution. Notwithstanding anything contained in the Agreement, the parties agree that the provisions of paragraphs 1 to 4 (inclusive) of the UK (PRA Rule) Jurisdictional Module (the “UK Module”) published by the International Swaps and Derivatives Association, Inc. on 3 May 2016, as amended from time to time, shall be deemed to be incorporated into the Agreement as if references in those provisions to “Covered Agreement” were references to the Agreement, and on the basis that: (i) Dealer shall be treated as a “Regulated Entity” and as a “Regulated Entity Counterparty” with respect to Issuer, (ii) Issuer shall be treated as a “Module Adhering Party”, and (iii) references to the “Implementation Date” in the UK Module shall be deemed to be references to the date of this Confirmation.

 

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Issuer hereby agrees (a) to check this Confirmation carefully and immediately upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Issuer with respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to Dealer.

 

  Yours faithfully,
  BARCLAYS BANK PLC
By:  

/s/ Syed Rajib Imteaz

  Authorized Signatory
  Name: Syed Rajib Imteaz
  Managing Director

[Signature Page to Base Warrant Confirmation]


Agreed and Accepted By:
BRISTOW GROUP INC.
By:  

/s/ Geoffrey L. Carpenter

  Name: Geoffrey L. Carpenter
  Title: Vice President and Treasurer


Annex A

For each Component of the Transaction, the Number of Warrants and Expiration Date is set forth below.

 

Component Number

  

Number of Warrants

  

Expiration Date

1

   24,980    September 1, 2023

2

   24,980    September 5, 2023

3

   24,980    September 6, 2023

4

   24,980    September 7, 2023

5

   24,980    September 8, 2023

6