UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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): June 9, 2011
Integra LifeSciences Holdings Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 000-26244 | 510317849 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 311 Enterprise Drive, Plainsboro, New Jersey | 08536 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 609-275-0500
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement
On June 9, 2011, Integra LifeSciences Holdings Corporation (“Integra”) entered into a Purchase
Agreement (the “Purchase Agreement”) with J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., RBC Capital Markets,
LLC and Wells Fargo Securities, LLC, as representatives of the initial purchasers (collectively,
the “Initial Purchasers”), in connection with the offering and sale of $230 million (of which $30
million was issued upon exercise of the Initial Purchasers’ over-allotment option to purchase
additional Notes) in aggregate principal amount of 1.625% convertible senior notes due 2016 (the
“Notes”). A copy of the Purchase Agreement is attached as an exhibit to this report and is
incorporated herein by reference (and this description is qualified in its entirety by reference to
such document).
In connection with the pricing of the initial issuance of the Notes on June 9, 2011 and, in
connection with the exercise of the over-allotment option on June 14, 2011, Integra entered into
convertible note hedge transactions (together, the “Convertible Note Hedge Transactions”) with each
of Deutsche Bank AG, London Branch, Royal Bank of Canada, The Royal Bank of Scotland plc and Wells
Fargo Bank, National Association (the “Option Counterparties”). The Convertible Note Hedge
Transactions cover, subject to customary anti-dilution adjustments substantially similar to those
applicable to the Notes, the number of shares of Integra’s common stock underlying the Notes, as
described below. Concurrently with entering into the Convertible Note Hedge Transactions on each
such date, Integra also entered into warrant transactions (together, the “Warrant Transactions”)
with each of the Option Counterparties whereby Integra sold to the Option Counterparties warrants
to purchase, subject to customary anti-dilution adjustments, up to the same number of shares of
Integra’s common stock.
The Convertible Note Hedge Transactions are expected generally to reduce the potential dilution
upon conversion of the Notes in the event that the market price per share of Integra’s common
stock, as measured under the terms of the Convertible Note Hedge Transactions, is greater than the
strike price of the Convertible Note Hedge Transactions, which initially corresponds to the
conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to
those applicable to the conversion rate of the Notes. If, however, the market price per share of
Integra’s common stock, as measured under the terms of the Warrant Transactions, exceeds the strike
price of the warrants, there would nevertheless be dilution to the extent that such market price
exceeds the strike price of the warrants. The strike price of the Warrant Transactions will
initially be $70.05 per share of Integra’s common stock.
Copies of the confirmations relating to the Convertible Note Hedge Transactions and Warrant
Transactions are attached as exhibits to this report and are incorporated by reference (and this
description is qualified in its entirety by reference to such documents).
On June 15, 2011, the sale of Notes was settled and issued pursuant to an Indenture, dated June 15,
2011 (the “Indenture”) between the Company and Wells Fargo Bank, National Association, as trustee.
The Indenture includes customary terms and covenants, including certain events of default after
which the Notes may be due and payable immediately.
The Notes will mature on December 15, 2016 and will pay 1.625% annual cash interest, payable
semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2011.
On or after June 15, 2016, or prior to then but only under certain circumstances, the Notes will be
convertible into cash up to the principal amount, with the remaining amount to be satisfied, at
Integra’s option, in shares of Integra’s common stock up to a certain limit, cash or a combination
thereof. The Notes will be convertible at an initial conversion rate of 17.4092 shares of Integra’s
common stock per $1,000 principal amount of Notes, subject to adjustment upon certain events, which
is equivalent to an initial conversion price of approximately $57.44 per share of Integra’s common
stock. The Notes are Integra’s general unsecured obligations.
A copy of the Indenture (including the form of the Notes) is attached as an exhibit to this report
and is incorporated herein by reference (and this description is qualified in its entirety by
reference to such document).
The net
proceeds from the sale of the Notes were approximately $223,675,000. Integra used a
portion of the net proceeds to pay the cost of the Convertible Note Hedge Transactions, taking into
account the proceeds to Integra of the Warrant Transactions; approximately $35 million of the net
proceeds to purchase shares of Integra’s common
stock; and the balance of the net proceeds to repay a portion of the indebtedness under Integra’s
senior credit facility and for general corporate purposes.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by
reference.
Item 3.02. Unregistered Sale of Equity Securities
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein
by reference.
Integra offered and sold the Notes to the Initial Purchasers in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), for resale by the Initial Purchasers to qualified institutional buyers pursuant to the
exemption from registration provided by Rule 144A under the Securities Act. Integra relied on these
exemptions from registration based in part on representations made by the Initial Purchasers in the
Purchase Agreement.
Integra entered into the Warrant Transactions with the Option Counterparties in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act.
To the extent that any shares of common stock are issued upon conversion of the Notes or exercise
of the warrants by the Options Counterparties pursuant to the Warrant Transactions, they will be
issued in transactions anticipated to be exempt from registration under the Securities Act by
virtue of Section 3(a)(9) thereof, because no commission or other remuneration is expected to be
paid in connection with conversion of the Notes and any resulting issuance of shares of common
stock.
Item 9.01 Financial Statement and Exhibits.
4.1
|
Purchase Agreement, dated June 9, 2011, by and between Integra LifeSciences Holdings Corporation and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., RBC Capital Markets, LLC and Wells Fargo Securities, LLC | |
4.2
|
Indenture, dated June 15, 201, by and between Integra LifeSciences Holdings Corporation and Wells Fargo Bank, National Association, as trustee | |
10.1
|
Letter Agreement, dated June 9, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.2
|
Letter Agreement, dated June 9, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.3
|
Letter Agreement, dated June 9, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.4
|
Letter Agreement, dated June 9, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.5
|
Letter Agreement, dated June 9, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.6
|
Letter Agreement, dated June 9, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.7
|
Letter Agreement, dated June 9, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.8
|
Letter Agreement, dated June 9, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.9
|
Letter Agreement, dated June 14, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Additional Call Option Transaction | |
10.10
|
Letter Agreement, dated June 14, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Additional Call Option Transaction | |
10.11
|
Letter Agreement, dated June 14, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Additional Call Option Transaction |
10.12
|
Letter Agreement, dated June 14, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Additional Call Option Transaction | |
10.13
|
Letter Agreement, dated June 14, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Additional Warrant Transaction | |
10.14
|
Letter Agreement, dated June 14, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Additional Warrant Transaction | |
10.15
|
Letter Agreement, dated June 14, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Additional Warrant Transaction | |
10.16
|
Letter Agreement, dated June 14, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Additional Warrant Transaction |
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.
| Integra LifeSciences Holdings Corporation |
||||
| June 15, 2011 | By: | Stuart M. Essig | ||
| Name: | Stuart M. Essig | |||
| Title: | Chief Executive Officer | |||
Exhibit Index
| Exhibit No. | Description | |
4.1
|
Purchase Agreement, dated June 9, 2011, by and between Integra LifeSciences Holdings Corporation and J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., RBC Capital Markets, LLC and Wells Fargo Securities, LLC | |
4.2
|
Indenture, dated June 15, 201, by and between Integra LifeSciences Holdings Corporation and Wells Fargo Bank, National Association, as trustee | |
10.1
|
Letter Agreement, dated June 9, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.2
|
Letter Agreement, dated June 9, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.3
|
Letter Agreement, dated June 9, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.4
|
Letter Agreement, dated June 9, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.5
|
Letter Agreement, dated June 9, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.6
|
Letter Agreement, dated June 9, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.7
|
Letter Agreement, dated June 9, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.8
|
Letter Agreement, dated June 9, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.9
|
Letter Agreement, dated June 14, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.10
|
Letter Agreement, dated June 14, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.11
|
Letter Agreement, dated June 14, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.12
|
Letter Agreement, dated June 14, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Base Call Option Transaction | |
10.13
|
Letter Agreement, dated June 14, 2011, between Deutsche Bank AG, London Branch and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.14
|
Letter Agreement, dated June 14, 2011, between Royal Bank of Canada and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.15
|
Letter Agreement, dated June 14, 2011, between The Royal Bank of Scotland plc and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction | |
10.16
|
Letter Agreement, dated June 14, 2011, between Wells Fargo Bank, National Association and Integra LifeSciences Holdings Corporation, regarding the Base Warrant Transaction |
Exhibit 4.1
Execution Version
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
1.625% Convertible Senior Notes due 2016
Purchase Agreement
June 9, 2011
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. LLC
Deutsche Bank Securities Inc.
RBC Capital Markets, LLC
Wells Fargo Securities, LLC
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. LLC
Deutsche Bank Securities Inc.
RBC Capital Markets, LLC
Wells Fargo Securities, LLC
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Integra LifeSciences Holdings Corporation, a Delaware corporation (the “Company”), proposes to
issue and sell to the several initial purchasers listed in Schedule 1 hereto (the “Initial
Purchasers”), for whom you are acting as representatives (the “Representatives”), $200,000,000
principal amount of its 1.625% Convertible Senior Notes due 2016 (the “Underwritten Securities”)
and, at the option of the Initial Purchasers, up to an additional $30,000,000 principal amount of
its 1.625% Convertible Senior Notes due 2016 (the “Option Securities”) solely to cover
over-allotments, if and to the extent that the Initial Purchasers shall have determined to exercise
the option to purchase such 1.625% Convertible Senior Notes due 2016 granted to the Initial
Purchasers in Section 2 hereof. The Underwritten Securities and the Option Securities are herein
referred to as the “Securities”. The Securities will be convertible into cash or a combination of
cash and shares (the “Underlying Securities”) of common stock of the Company, par value $0.01 per
share (the “Common Stock”). The Securities will be issued pursuant to an Indenture to be dated as
of June 15, 2011 (the “Indenture”) between the Company and Wells Fargo Bank, National Association,
as trustee (the “Trustee”).
In connection with the offering of the Underwritten Securities, the Company and four of the
Initial Purchasers or affiliates thereof, (the “Call Spread Counterparties”) are entering into
convertible note hedge transactions and warrant transactions pursuant to convertible note hedge
confirmations and warrant confirmations, each dated the date hereof (the “Base Call Spread
Confirmations”), and in connection with the issuance of any Option Securities, the Company and
2
the
Call Spread Counterparties may enter into additional convertible note hedge transactions and
warrant transactions pursuant to convertible note hedge confirmations and warrant confirmations,
each to be dated the date of issuance of such Option Securities (together with the Base Call Spread
Confirmations, the “Call Spread Confirmations”).
The Company hereby confirms its agreement with the several Initial Purchasers concerning the
purchase and sale of the Securities, as follows:
1. The Securities will be sold to the Initial Purchasers without being registered under the
Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption therefrom.
The Company has prepared a preliminary offering memorandum dated June 9, 2011 (the “Preliminary
Offering Memorandum”) and will prepare an offering memorandum dated the date hereof (the “Offering
Memorandum”) setting forth information concerning the Company and the Securities. Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered
by the Company to the Initial Purchasers pursuant to the terms of this Agreement. The Company
hereby confirms that it has authorized the use of the Preliminary Offering Memorandum, the other
Time of Sale Information (as defined below) and the Offering Memorandum in connection with the
offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this
Agreement. References herein to the Preliminary Offering Memorandum, the Time of Sale Information
and the Offering Memorandum shall be deemed to refer to and include any document incorporated by
reference therein.
At or prior to the time when sales of the Securities were first made (the “Time of Sale”), the
Company had prepared the following information (collectively, the “Time of Sale Information”): the
Preliminary Offering Memorandum, as supplemented and amended by the written communications listed
on Annex B hereto.
2. Purchase and Resale of the Securities by the Initial Purchasers. (a) The Company
agrees to issue and sell the Underwritten Securities to the several Initial Purchasers as provided
in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth herein, agrees, severally and
not jointly, to purchase from the Company the respective principal amount of Underwritten
Securities set forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price equal
to 97.25% of the principal amount thereof (the “Purchase Price”) plus accrued interest, if any,
from June 9, 2011 to the Closing Date (as defined below).
In addition, the Company agrees to issue and sell the Option Securities to the several Initial
Purchasers as provided in this Agreement, and the Initial Purchasers, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Securities at the Purchase Price plus accrued interest, if any, from the Closing Date to the date
of payment and delivery.
If any Option Securities are to be purchased, the amount of Option Securities to be purchased
by each Initial Purchaser shall be the amount of Option Securities which bears the
3
same ratio to
the aggregate amount of Option Securities being purchased as the amount of Underwritten Securities
set forth opposite the name of such Initial Purchaser in Schedule 1 hereto (or such amount
increased as set forth in Section 10 hereof) bears to the aggregate amount of Underwritten
Securities being purchased from the Company by the several Initial Purchasers, subject, however, to
such adjustments to eliminate Securities in denominations other than $1,000 or any multiple of
$1,000 as the Representatives in its sole discretion shall make.
The Initial Purchasers may exercise the option to purchase the Option Securities at any time
in whole, or from time to time in part, on or before the thirtieth day following the date of this
Agreement, by written notice from the Representatives to the Company. Such notice shall set forth
the aggregate amount of Option Securities as to which the option is being exercised and the date
and time when the Option Securities are to be delivered and paid for which may be the same date and
time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date
nor later than the tenth full business day (as hereinafter defined) after the date of such notice
(unless such time and date are postponed in accordance with the provisions of Section 10 hereof).
Any such notice given after the Closing Date shall be given at least two Business Days prior to the
date and time of delivery specified therein.
(b) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale Information. Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that:
(i) it is a qualified institutional buyer within the meaning of Rule 144A under the
Securities Act (a “QIB”) and an accredited investor within the meaning of Rule 501(a) under
the Securities Act;
(ii) it has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D under the Securities
Act (“Regulation D”) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and
(iii) it has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities as part of their initial offering except within the
United States to persons whom it reasonably believes to be QIBs in transactions pursuant to
Rule 144A under the Securities Act (“Rule 144A”) and in connection with each such sale, it
has taken or will take reasonable steps to ensure that the purchaser of the Securities is
aware that such sale is being made in reliance on Rule 144A; or
(c) Each Initial Purchaser acknowledges and agrees that the Company and, for purposes of the
opinions to be delivered to the Initial Purchasers pursuant to Sections 6(f) and 6(g), counsel for
the Company and counsel for the Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers, and compliance by
the Initial Purchasers with their agreements, contained in paragraph (b) above, and each Initial
Purchaser hereby consents to such reliance.
4
(d) The Company acknowledges and agrees that the Initial Purchasers may offer and sell
Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may
offer and sell Securities purchased by it to or through any Initial Purchaser.
(e) Payment for the Securities shall be made by wire transfer in immediately available funds
to the account specified by the Company to the Representatives in the case of the Underwritten
Securities, at the offices of Davis Polk & Wardwell LLP at 10:00 A.M. New York City time on June
15, 2011, or at such other time or place on the same or such other date, not later than the fifth
business day thereafter, as the Representatives and the Company may agree upon in writing or, in
the case of the Option Securities, on the date and at the time and place specified by the
Representatives in the written notice of the Initial Purchasers’ election to purchase such Option
Securities. The time and date of such payment for the Underwritten Securities is referred to
herein as the “Closing Date” and the time and date for such payment for the Option Securities, if
other than the Closing Date, is herein referred to as the “Additional Closing Date”.
Payment for the Securities to be purchased on the Closing Date or the Additional Closing Date,
as the case may be, shall be made against delivery to the nominee of DTC, for the respective
accounts of the several Initial Purchasers of the Securities to be purchased on such date of one or
more global notes representing the Securities (collectively, the “Global Note”), with any transfer
taxes payable in connection with the sale of such Securities duly paid by the Company. The Global
Note will be made available for inspection by the Representatives at the office of J.P. Morgan
Securities LLC set forth above not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date or the Additional Closing Date, as the case may be.
(f) The Company acknowledges and agrees that the Initial Purchasers are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect to the offering of
Securities contemplated hereby (including in connection with determining the terms of the offering)
and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Initial Purchaser is advising the Company
or any other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Initial Purchasers shall have no responsibility or liability to the
Company with respect thereto. Any review by the Initial Purchasers of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be performed solely for the
benefit of the Initial Purchasers and shall not be on behalf of the Company.
3. Representations and Warranties of the Company. The Company represents and warrants
to each Initial Purchaser that:
(a) Preliminary Offering Memorandum. The Preliminary Offering Memorandum, as of its date, did
not contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which
5
they were made,
not misleading; provided that the Company makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with information relating to
any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the
Representatives expressly for use in any Preliminary Offering Memorandum, it being understood and
agreed that the only such information furnished by any Initial Purchaser consists of the
information described as such in Section 7(b) hereof.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale, did not, and
at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain
any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in conformity with information relating to
any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the
Representatives expressly for use in such Time of Sale Information, it being understood and agreed
that the only such information furnished by any Initial Purchaser consists of the information
described as such in Section 7(b) hereof. No statement of material fact included in the Offering
Memorandum has been omitted from the Time of Sale Information and no statement of material fact
included in the Time of Sale Information that is required to be included in the Offering Memorandum
has been omitted therefrom.
(c) Additional Written Communications. Other than the Preliminary Offering Memorandum and the
Offering Memorandum, the Company (including its agents and representatives, other than the Initial
Purchasers in their capacity as such) has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell
or solicitation of an offer to buy the Securities (each such communication by the Company or its
agents and representatives (other than a communication referred to in clauses (i), (ii) and (iii)
below) an “Issuer Written Communication”) other than (i) the Preliminary Offering Memorandum, (ii)
the Offering Memorandum, (iii) the documents listed on Annex B hereto, including a term sheet
substantially in the form of Annex C hereto, which constitute part of the Time of Sale Information,
and (iv) each electronic road show and any other written communications approved in writing in
advance by the Representatives. Each such Issuer Written Communication, when taken together with
the Time of Sale Information, did not, and at the Closing Date and as of the Additional Closing
Date, as the case may be, will not, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Company makes
no representation and warranty with respect to any statements or omissions made in each such Issuer
Written Communication in reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through the Representatives
expressly for use in such Issuer
Written Communication, it being understood and agreed that the only such information furnished by
any Initial Purchaser consists of the information described as such in Section 7(b) hereof.
6
(d) Offering Memorandum. As of the date of the Offering Memorandum and as of the Closing Date
and as of the Additional Closing Date, as the case may be, the Offering Memorandum does not and
will not contain any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser
through the Representatives expressly for use in the Offering Memorandum, it being understood and
agreed that the only such information furnished by any Initial Purchaser consists of the
information described as such in Section 7(b) hereof.
(e) Incorporated Documents. The documents incorporated by reference in the Offering
Memorandum or the Time of Sale Information, when filed with the Commission complied or will comply,
as the case may be, in all material respects with the requirements of the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the
“Exchange Act”) and such documents did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.
(f) Financial Statements. The financial statements and the related notes thereto of the
Company and its consolidated subsidiaries included or incorporated by reference in the Time of Sale
Information and the Offering Memorandum present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries as of the dates indicated and the results
of their operations and the changes in their cash flows for the periods specified; such financial
statements have been prepared in conformity with U.S. generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby; the other financial
information included or incorporated by reference in the Time of Sale Information and the Offering
Memorandum has been derived from the accounting records of the Company and its consolidated
subsidiaries and presents fairly in all material respects the information shown thereby.
(g) No Material Adverse Change. Since the date of the most recent financial statements of the
Company included or incorporated by reference in the Time of Sale Information and the Offering
Memorandum, (i) there has not been any change in the capital stock, long-term debt, notes payable
or current portion of long-term debt of the Company or any of its subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or made by the Company on any class
of capital stock, or any material adverse change, or any development that is reasonably likely to
result in a material adverse change, in or affecting the business, properties, financial position,
stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken
as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction
or agreement that is material to the Company and its
subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that
is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor
any of its subsidiaries has sustained any material loss or interference with its
7
business from
fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise disclosed in the Time of Sale Information
and the Offering Memorandum.
(h) Organization and Good Standing. The Company and each of its significant subsidiaries (as
such term is defined in Rule 1-02(w) of Regulation S-X) have been duly organized or formed and are
validly existing and in good standing under the laws of their respective jurisdictions of
organization or formation, are duly qualified to do business and are in good standing in each
jurisdiction in which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all corporate or limited liability
company power and authority necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to be so qualified or in good
standing or have such power or authority would not, individually or in the aggregate, have a
material adverse effect on the business, properties, financial position, stockholders’ equity,
results of operations or prospects of the Company and its subsidiaries taken as a whole or on the
performance by the Company of its obligations under the Transaction Documents (as defined below) (a
“Material Adverse Effect”). The subsidiaries listed in Schedule 2 to this Agreement are the only
significant subsidiaries of the Company.
(i) Capitalization. The Company has an authorized capitalization as set forth in the Time of
Sale Information and the Offering Memorandum under the heading “Capitalization”; all the
outstanding shares of capital stock of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights;
except as described in or expressly contemplated by the Time of Sale Information and the Offering
Memorandum, there are no outstanding rights (including, without limitation, pre-emptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its subsidiaries, or any contract,
commitment, agreement, understanding or arrangement of any kind relating to the issuance of any
capital stock of the Company or any such subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options; the capital stock of the Company conforms in
all material respects to the description thereof contained in the Time of Sale Information and the
Offering Memorandum; and all the outstanding shares of capital stock or other equity interests of
each significant subsidiary owned, directly or indirectly, by the Company have been duly and
validly authorized and issued, are fully paid and non-assessable, other than as described in the
Time of Sale Information and the Offering Memorandum, and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party.
(j) Stock Options. With respect to the stock options (the “Stock Options”) granted pursuant
to the stock-based compensation plans of the Company and its subsidiaries (the “Company Stock
Plans”), (i) each Stock Option intended to qualify as an “incentive stock option” under
Section 422 of the Code so qualifies, (ii) each grant of a Stock Option was duly authorized no
later than the date on which the grant of such Stock Option was by its terms to be effective (the
“Grant Date”) by all necessary corporate action, including, as applicable, approval by the board of
directors of the Company (or a duly constituted and authorized committee thereof) and any required
stockholder
8
approval by the necessary number of votes or written consents, and the award agreement
governing such grant (if any) was duly executed and delivered by each party thereto, (iii) each
such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and
all other applicable laws and regulatory rules or requirements, including the rules of the Nasdaq
Global Select Market and any other exchange on which Company securities are traded, (iv) the per
share exercise price of each Stock Option was equal to the fair market value of a share of Common
Stock on the applicable Grant Date and (v) each such grant was properly accounted for in accordance
with GAAP in the financial statements (including the related notes) of the Company and disclosed in
the Company’s filings with the Commission in accordance with the Exchange Act and all other
applicable laws. The Company has not knowingly granted, and there is no and has been no policy or
practice of the Company of granting, Stock Options immediately prior to, or otherwise coordinate
the grant of Stock Options with, the release or other public announcement of material information
regarding the Company or its subsidiaries or their results of operations or prospects.
(k) Due Authorization. The Company has full corporate power and authority to execute and
deliver this Agreement, the Indenture, the Securities and the Call Spread Confirmations,
(collectively, the “Transaction Documents”) and to perform its obligations hereunder and
thereunder; and all action required to be taken for the due and proper authorization, execution and
delivery by it of each of the Transaction Documents and the consummation by it of the transactions
contemplated thereby or by the Time of Sale Information and the Offering Memorandum has been duly
and validly taken.
(l) The Indenture. The Indenture has been duly authorized by the Company and, when duly
executed and delivered in accordance with its terms by each of the parties thereto, will constitute
a valid and legally binding agreement of the Company enforceable against the Company in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting creditors’ rights
generally or by equitable principles relating to enforceability (collectively, the ““Enforceability
Exceptions”); and on the Closing Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the
rules and regulations of the Commission applicable to an indenture that is qualified thereunder.
(m) Purchase Agreement. This Agreement has been duly authorized, executed and delivered by
the Company.
(n) The Securities. The Securities have been duly authorized by the Company and, when duly
executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided
herein, will be duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance with
their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of
the Indenture.
(o) The Underlying Securities. Upon issuance and delivery of the Securities in accordance
with this Agreement and the Indenture, the Securities will be convertible at the option of the
holder thereof into cash or a combination of cash and shares of the Underlying Securities in
accordance the terms of the Securities; the Underlying Securities reserved for issuance upon
conversion of the Securities have been duly authorized and reserved and, when issued upon
9
conversion of the Securities in accordance with the terms of the Securities, will be validly
issued, fully paid and non assessable, and the issuance of the Underlying Securities will not be
subject to any preemptive or similar rights.
(p) Descriptions of the Transaction Documents. Each Transaction Document conforms in all
material respects to the description thereof contained in the Time of Sale Information and the
Offering Memorandum.
(q) No Violation or Default. Neither the Company nor any of its significant subsidiaries is
(i) in violation of its charter or by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its significant subsidiaries is a party or by which the Company or any of its
significant subsidiaries is bound or to which any of the property or assets of the Company or any
of its significant subsidiaries is subject; or (iii) in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation
that would not, individually or in the aggregate, have a Material Adverse Effect.
(r) No Conflicts. The execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Securities (including the issuance of the
Underlying Securities upon conversion thereof) and the consummation of the transactions
contemplated by the Transaction Documents or the Time of Sale Information and the Offering
Memorandum will not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its significant
subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its significant subsidiaries is a party or by which
the Company or any of its significant subsidiaries is bound or to which any of the property or
assets of the Company or any of its significant subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws or similar organizational documents of the
Company or any of its significant subsidiaries or (iii) result in the violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or
regulatory authority , except, in the case of clauses (i) and (iii) above, for any such conflict,
breach, violation or default that would not, individually or in the aggregate, have a Material
Adverse Effect.
(s) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of each of the Transaction
Documents, the issuance and sale of the Securities (including the issuance of the Underlying
Securities upon conversion thereof) and the consummation of the transactions contemplated by the
Transaction Documents or the Time of Sale Information and the Offering Memorandum, except for such
as have been obtained or such consents, approvals, authorizations, orders and registrations
10
or
qualifications as may be required under applicable state securities laws in connection with the
purchase and resale of the Securities by the Initial Purchasers.
(t) Legal Proceedings. Except as described in the Time of Sale Information and the Offering
Memorandum, there are no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its significant subsidiaries is or may be a
party or to which any property of the Company or any of its significant subsidiaries is or may be
the subject that, individually or in the aggregate, if determined adversely to the Company or any
of its significant subsidiaries, could reasonably be expected to have a Material Adverse Effect; no
such investigations, actions, suits or proceedings are threatened or, to the best knowledge of the
Company, contemplated by any governmental or regulatory authority or threatened by others.
(u) Independent Accountants. PricewaterhouseCoopers LLP, who have audited certain financial
statements of the Company and its subsidiaries is an independent registered public accounting firm
with respect to the Company and its subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Company Accounting Oversight Board (United
States) and as required by the Securities Act.
(v) Title to Real and Personal Property. The Company and its significant subsidiaries have
good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property that are material to the respective businesses of the Company
and its significant subsidiaries, in each case free and clear of all liens, encumbrances, claims
and defects and imperfections of title except those that (i) are described in the Time of Sale
Information and the Offering Memorandum, (ii) do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries or (iii) could not
reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(w) Intellectual Property. Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, (i) the Company and its subsidiaries each owns or
possesses sufficient rights to use all patents, trademarks, service marks, trade names, domain
names, goodwill associated with the foregoing, copyrights, trade secrets and know-how (including
all registrations and applications for registration of the foregoing, as applicable) (collectively,
“Intellectual Property”) necessary for the conduct of their respective businesses, (ii) the conduct
of the respective businesses of the Company and its subsidiaries does not infringe, misappropriate
or otherwise violate the Intellectual Property of any third party, and (iii) the Company and its
subsidiaries have not received any notice of any threatened or pending claims of infringement,
misappropriation or other violation of any Intellectual Property of any third party.
(x) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that
is required by the Securities Act to be described in a registration statement to be filed with the
Commission and that is not so described in the Time of Sale Information and the Offering
Memorandum.
11
(y) Investment Company Act. The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described in the Time of Sale
Information and the Offering Memorandum, will not be required to register as an “investment
company” or an entity “controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder
(collectively, the “Investment Company Act”).
(z) Taxes. Except as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect,(i) the Company and its subsidiaries have paid all federal, state,
local and foreign taxes and filed all tax returns required to be paid or filed through the date
hereof, except for such taxes that are currently being contested in good faith and for which
adequate reserves have been created by the Company and its subsidiaries to the extent required by
U.S. GAAP; and (ii) except as otherwise disclosed in the Time of Sale Information and the Offering
Memorandum, there is no tax deficiency that has been, or could reasonably be expected to be,
asserted against the Company or any of its subsidiaries or any of their respective properties or
assets, except for such tax deficiencies that are currently being contested in good faith and for
which adequate reserves have been created by the Company and its subsidiaries to the extent
required by U.S. GAAP.
(aa) Licenses and Permits. The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all declarations and
filings with, the appropriate federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in the Time of Sale Information and the
Offering Memorandum, except where the failure to possess or make the same would not, individually
or in the aggregate, have a Material Adverse Effect; and except as described in the Time of Sale
Information and the Offering Memorandum, neither the Company nor any of its subsidiaries has
received notice of any revocation or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.
(bb) No Labor Disputes. No labor disturbance by or dispute with employees of the Company or
any of its subsidiaries exists or, to the best knowledge of the Company, is contemplated or
threatened and the Company is not aware of any existing or imminent labor disturbance by, or
dispute with, the employees of any of its or its subsidiaries’ principal
suppliers, contractors or customers, except, in each case, as would not have a Material Adverse
Effect.
(cc) Compliance With Environmental Laws. (i) The Company and its subsidiaries (x) are, and at
all prior times were, in compliance with any and all applicable federal, state, local and foreign
laws, rules, regulations, requirements, decisions and orders relating to the protection of human
health or safety, the environment, natural resources, hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental Laws”), (y) have received and are in
compliance with all permits, licenses, certificates or other authorizations or approvals required
of them under applicable Environmental Laws to conduct their respective businesses, and (z) have
not received notice of any actual or potential liability under or relating to any Environmental
Laws, including for the investigation or remediation of any disposal or release of
12
hazardous or
toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or
condition that would reasonably be expected to result in any such notice, and (ii) there are no
costs or liabilities associated with Environmental Laws of or relating to the Company or its
subsidiaries, except in the case of each of (i) and (ii) above, for any such failure to comply, or
failure to receive required permits, licenses or approvals, or cost or liability, as would not,
individually or in the aggregate, have a Material Adverse Effect; and (iii) except as described in
each of the Time of Sale Information and the Offering Memorandum, (x) there are no proceedings that
are pending, or that are known to be contemplated, against the Company or any of its subsidiaries
under any Environmental Laws in which a governmental entity is also a party, other than such
proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more
will be imposed, (y) the Company and its subsidiaries are not aware of any issues regarding
compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or
concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could
reasonably be expected to have a material effect on the capital expenditures, earnings or
competitive position of the Company and its subsidiaries, and (z) none of the Company and its
subsidiaries anticipates material capital expenditures relating to any Environmental Laws.
(dd) Hazardous Substances. There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind of toxic wastes or hazardous
substances, including, but not limited to, any naturally occurring radioactive materials, brine,
drilling mud, crude oil, natural gas liquids and other petroleum materials, by, due to or caused by
the Company or any of its subsidiaries (or, to the best of the Company’s knowledge, any other
entity (including any predecessor) for whose acts or omissions the Company or any of its
subsidiaries is or could reasonably be expected to be liable) upon any of the property now or
previously owned or leased by the Company or any of its subsidiaries, or upon any other property,
in violation of any Environmental Laws or in a manner or to a location that could reasonably be
expected to give rise to any liability under the Environmental Laws, except for any violation or
liability which would not, individually or in the aggregate, have a Material Adverse Effect.
(ee) Compliance With ERISA. (i) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
for which the Company or any member of its “Controlled Group” (defined as any trade or business
which is a member of a controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”)
has been maintained in material compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no
prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected pursuant to a statutory or
administrative exemption and excluding transactions that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect; (iii) for each Plan that is subject
to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code, whether or not waived, has occurred or is
reasonably expected to occur; (iv) the fair market value of the assets of each Plan exceeds the
present value of all benefits accrued under such Plan (determined based on
13
those assumptions used
to fund such Plan) except to the extent that any such accumulated funding deficiency, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse Effect; (v) no
“reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably
expected to occur that, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect; and (vi) neither the Company nor any member of the Controlled Group has
incurred, nor reasonably expects to incur, any material liability under Title IV of ERISA (other
than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default)
in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(a)(3) of
ERISA).
(ff) Disclosure Controls. The Company maintains an effective system of “disclosure controls
and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that
information required to be disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the Commission’s rules and forms, including controls and procedures designed to ensure that such
information is accumulated and communicated to the Company’s management as appropriate to allow
timely decisions regarding required disclosure. The Company has carried out evaluations of the
effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange
Act.
(gg) Accounting Controls. The Company maintains a system of “internal control over financial
reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of
the Exchange Act and have been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles, including, but not limited to internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with
the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.
Except as disclosed in the Time of Sale Information and the Offering Memorandum, there are no
material weaknesses in the Company’s internal controls. The Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of internal controls over financial
reporting which are reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information; and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting.
(hh) Insurance. The Company and its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, including business interruption insurance, which
insurance is in amounts and insures against such losses and risks as are adequate to protect the
Company and its subsidiaries and their respective businesses; and neither the Company nor any of
its subsidiaries has (i) received notice from any insurer or agent of such insurer that
14
capital
improvements or other expenditures are required or necessary to be made in order to continue such
insurance or (ii) any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(ii) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, any director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(jj) Compliance with Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit
or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.
(kk) Compliance with OFAC. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly
or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
(ll) No Restrictions on Subsidiaries. Other than pursuant to the terms of the Company’s
existing credit facility, no subsidiary of the Company is currently prohibited, directly or
indirectly, under any agreement or other instrument to which it is a party or is subject, from
paying any dividends to the Company, from making any other distribution on such subsidiary’s
capital stock, from repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary’s properties or assets to the Company or any
other subsidiary of the Company.
(mm) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than this Agreement) that would give
rise to a valid claim against the Company or any of its subsidiaries or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment in connection with the offering and sale of the
Securities.
15
(nn) Rule 144A Eligibility. On the Closing Date, the Securities will not be of the same class
as securities listed on a national securities exchange registered under Section 6 of the Exchange
Act or quoted in an automated inter-dealer quotation system (as determined pursuant to Rule 144A
under the Securities Act); and each of the Time of Sale Information, as of the Time of Sale, and
the Offering Memorandum, as of its date, contains or will contain all the information that, if
requested by a prospective purchaser of the Securities, would be required to be provided to such
prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(oo) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b)
of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to
buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is
or will be integrated with the sale of the Securities in a manner that would require registration
of the Securities under the Securities Act.
(pp) No General Solicitation or Directed Selling Efforts. None of the Company or any of its
affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as
to which no representation is made) has (i) solicited offers for, or offered or sold, the
Securities by means of any form of general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engaged in any directed selling efforts within the
meaning of Regulation S under the Securities Act (“Regulation S”), and all such persons have
complied with the offering restrictions requirement of Regulation S
(qq) Securities Law Exemptions. Assuming the accuracy of the representations and warranties
of the Initial Purchasers contained in Section 2(b) and their compliance with their agreements set
forth therein, it is not necessary, in connection with the issuance and sale of the Securities to
the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement, the Time of Sale Information and the
Offering Memorandum, to register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act.
(rr) No Stabilization. The Company has not taken, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Securities.
(tt) Margin Rules. Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the Time of Sale Information and
the Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.
(uu) Forward-Looking Statements. No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the Time of Sale
Information and the Offering Memorandum has been made or reaffirmed without a reasonable basis or
has been disclosed other than in good faith.
16
(vv) Statistical and Market Data. Nothing has come to the attention of the Company that has
caused the Company to believe that the statistical and market-related data included or incorporated
by reference in the Time of Sale Information and the Offering Memorandum is not based on or derived
from sources that are reliable and accurate in all material respects.
(ww) Sarbanes-Oxley Act. The Company is in compliance in all material respects with the
applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
(xx) No Ratings. There are no securities or preferred stock of or guaranteed by the Company
or any of its subsidiaries that are rated by a “nationally recognized statistical rating
organization,” as such term is defined in Section 3(a)(62) of the Exchange Act.
4. Further Agreements of the Company. The Company covenants and agrees with each
Initial Purchaser that:
(a) Delivery of Copies. Until the completion of the sale of the Securities by the Initial
Purchasers, the Company will deliver to the Initial Purchasers as many copies of the Preliminary
Offering Memorandum, any other Time of Sale Information, any Issuer Written Communication and the
Offering Memorandum (including all amendments and supplements thereto) as the Representatives may
reasonably request.
(b) Offering Memorandum, Amendments or Supplements. Before finalizing the Offering Memorandum
or making or distributing any amendment or supplement to any of the Time of Sale Information or the
Offering Memorandum or filing with the Commission any document that will be incorporated by
reference therein, the Company will furnish to the
Representatives and counsel for the Initial Purchasers a copy of the proposed Offering Memorandum
or such amendment or supplement or document to be incorporated by reference therein for review, and
will not distribute any such proposed Offering Memorandum or amendment or supplement to which the
Representatives reasonably objects or file any such document with the Commission without providing
the Representatives with a reasonable time to review.
(c) Additional Written Communications. Before making, preparing, using, authorizing,
approving or referring to any Issuer Written Communication, the Company will furnish to the
Representatives and counsel for the Initial Purchasers a copy of such written communication for
review and will not make, prepare, use, authorize, approve or refer to any such written
communication to which the Representatives reasonably objects.
(d) Notice to the Representatives. The Company will advise the Representatives promptly, and
confirm such advice in writing, (i) of the issuance by any governmental or regulatory authority of
any order preventing or suspending the use of any of the Time of Sale Information, any Issuer
Written Communication or the Offering Memorandum or the initiation or threatening of any proceeding
for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the
initial offering of the Securities as a result of which any of the
17
Time of Sale Information, any
Issuer Written Communication or the Offering Memorandum as then amended or supplemented would
include any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when such Time of Sale
Information, Issuer Written Communication or the Offering Memorandum is delivered to a purchaser,
not misleading; and (iii) of the receipt by the Company of any notice with respect to any
suspension of the qualification of the Securities for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or suspending the use
of any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum
or suspending any such qualification of the Securities and, if any such order is issued, will
obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance of the Offering Memorandum and Time of Sale Information. (1) If at any
time prior to the completion of the initial offering of the Securities (i) any event shall occur or
condition shall exist as a result of which the Offering Memorandum as then amended or supplemented
would include any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances existing when the
Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will promptly notify the Initial
Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the
Initial Purchasers such amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be necessary so that the
statements in the Offering Memorandum as so amended or supplemented (or including such document to
be incorporated by reference therein) will not, in the light of the circumstances existing when the
Offering Memorandum is delivered to a
purchaser, be misleading or so that the Offering Memorandum will comply with law and (2) if at any
time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of
which any of the Time of Sale Information as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading or
(ii) it is necessary to amend or supplement any of the Time of Sale Information to comply with law,
the Company will promptly notify the Initial Purchasers thereof and forthwith prepare and, subject
to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to any of
the Time of Sale Information (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in any of the Time of Sale
Information as so amended or supplemented will not, in light of the circumstances under which they
were made, be misleading.
(f) Blue Sky Compliance. The Company will qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request
and will continue such qualifications in effect so long as required for the offering and resale of
the Securities; provided that the Company shall not be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such jurisdiction where it would
not otherwise be required to so qualify, (ii) file any general consent to service of
18
process in any
such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(g) Clear Market. For a period of 90 days after the date of the Offering Memorandum, the
Company will not (i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a
registration statement under the Securities Act relating to, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or publicly disclose
the intention to make any offer, sale, pledge, disposition or filing, or (ii) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic consequences of
ownership of the Common Stock or any such other securities, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise, without the prior written consent of J.P. Morgan Securities LLC, Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, other than the Securities
to be sold hereunder and any shares of Common Stock of the Company issued upon the exercise of
options granted under existing employee stock option plans or shares offered under existing and
previously disclosed employee stock purchase plans.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities
as described in the Time of Sale Information and the Offering Memorandum under the heading “Use of
Proceeds”.
(j) No Stabilization. The Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Securities and will not take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Securities contemplated hereby.
(k) Underlying Securities. The Company will reserve and keep available at all times, free of
pre-emptive rights, shares of Common Stock for the purpose of enabling the Company to satisfy all
obligations to issue the Underlying Securities upon conversion of the Securities (calculated after
giving effect to the maximum number of shares of Common Stock at such time issuable upon conversion
of the Securities upon the occurrence of any “make-whole fundamental
change” (as defined in the Offering Memorandum)). The Company will use its reasonable best efforts
to cause the Underlying Securities to be listed on the Nasdaq Global Select Market (the
“Exchange”).
(l) Supplying Information. While the Securities remain outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during
any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, furnish to holders of the Securities, prospective purchasers of the Securities
designated by such holders and securities analysts, in each case upon request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
19
(m) DTC. The Company will assist the Initial Purchasers in arranging for the Securities to
be eligible for clearance and settlement through DTC.
(n) No Resales by the Company. During the period from the Closing Date until one year after
the Closing Date or the Option Closing Date, if applicable, the Company will not, and will not
permit any of its controlled affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Securities that have been acquired by any of them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction registered under the
Securities Act.
(o) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b)
of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy
or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or
will be integrated with the sale of the Securities in a manner that would require registration of
the Securities under the Securities Act.
(p) No General Solicitation or Directed Selling Efforts. None of the Company or any of its
affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as
to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by
means of any form of general solicitation or general advertising within the meaning of Rule 502(c)
of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act or (ii) engage in any directed selling efforts within the meaning
of Regulation S, and all such persons will comply with the offering restrictions requirement of
Regulation S.
5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize use of, refer to, or participate
in the planning for use of, any written communication that constitutes an offer to sell or the
solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum
and the Offering Memorandum, (ii) a written communication that contains no “issuer information” (as
defined in Rule 433(h)(2) under the Securities Act) that was not included (including through
incorporation by reference) in the Preliminary Offering Memorandum or the Offering Memorandum,
(iii) any written communication listed on Annex B or prepared pursuant to Section 4(c) above
(including any electronic road show), (iv) any written communication prepared by such Initial
Purchaser and approved by the Company in advance in writing or (v) any written communication
relating to or that contains the terms of the Securities and/or other information that was included
(including through incorporation by reference) in the Preliminary Offering Memorandum or the
Offering Memorandum.
6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial
Purchaser to purchase the Underwritten Securities on the Closing Date or the Option Securities on
the Additional Closing Date, as the case may be as provided herein is subject to the performance by
the Company of its covenants and other obligations hereunder and to the following additional
conditions:
20
(a) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of the Closing Date or
the Additional Closing Date, as the case may be; and the statements of the Company and its officers
made in any certificates delivered pursuant to this Agreement shall be true and correct on and as
of the Closing Date or the Additional Closing Date, as the case may be.
(b) No Material Adverse Change. No event or condition of a type described in Section 3(g)
hereof shall have occurred or shall exist, which event or condition is not described in the Time of
Sale Information (excluding any amendment or supplement thereto) and the Offering Memorandum
(excluding any amendment or supplement thereto) and the effect of which in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Securities on the Closing Date or the Additional Closing Date, as the case may be,
on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the
Offering Memorandum.
(c) Officer’s Certificate. The Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of the chief financial
officer or chief accounting officer of the Company and one additional senior executive officer of
the Company who is satisfactory to the Representatives (i) confirming that such officers have
carefully reviewed the Time of Sale Information and the Offering Memorandum and, to the best
knowledge of such officers, the representations set forth in Sections 3(a) hereof
are true and correct, (ii) confirming that the other representations and warranties of the Company
in this Agreement are true and correct and that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such
Closing Date and (iii) to the effect set forth in paragraph (b) above.
(d) Comfort Letters. On the date of this Agreement and on the Closing Date or the Additional
Closing Date, as the case may be, PricewaterhouseCoopers LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the respective dates of delivery
thereof and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to
the Representatives, containing statements and information of the type customarily included in
accountants’ “comfort letters” to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in the Time of Sale Information and
the Offering Memorandum; provided, that the letter delivered on the Closing Date or the Additional
Closing Date, as the case may be shall use a “cut-off” date no more than three business days prior
to such Closing Date or such Additional Closing Date, as the case may be.
(e) Opinion and 10b-5 Statement of Counsel for the Company. Latham & Watkins LLP, counsel for
the Company, shall have furnished to the Representatives, at the request of the Company, their
written opinion and 10b-5 statement, dated the Closing Date or the Additional Closing Date, as the
case may be, and addressed to the Initial Purchasers, in form and substance reasonably satisfactory
to the Representatives.
21
(f) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The Representatives
shall have received on and as of the Closing Date or the Additional Closing Date, as the case may
be, an opinion and 10b-5 statement of Davis Polk & Wardwell LLP, counsel for the Initial
Purchasers, with respect to such matters as the Representatives may reasonably request, and such
counsel shall have received such documents and information as they may reasonably request to enable
them to pass upon such matters.
(g) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date or the Additional Closing
Date, as the case may be, prevent the issuance or sale of the Securities; and no injunction or
order of any federal, state or foreign court shall have been issued that would, as of the Closing
Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the
Securities.
(h) Good Standing. The Representatives shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the
Company and its significant subsidiaries in their respective jurisdictions of incorporation or
formation as the Representatives may reasonably request, in each case in writing or any standard
form of telecommunication from the appropriate governmental authorities of such jurisdictions.
(i) DTC. The Securities shall be eligible for clearance and settlement through DTC.
(j) Exchange Listing. An application for the listing of the Underlying Securities shall have
been submitted to the Exchange.
(k) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit A
hereto, between you and, the officers and directors of the Company set forth on Schedule 2 hereto
relating to sales and certain other dispositions of shares of Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be full force and effect on the
Closing Date or Additional Closing Date, as the case may be.
(l) The Company shall have entered into the Second Amended and Restated Credit agreement dated
as of June 8, 2011 with Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C
Issuer, JPMorgan Chase Bank as Syndication Agent, HSBC Bank USA, NA, RBC Captal Markets, Wells
Fargo Bank, N.A., Fifth Third Bank, DNB Nor Bank ASA and TD Bank, N.A., as Co-Documentation Agents,
and other lenders thereto.
(m) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company shall have furnished to the Representatives such further certificates
and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Initial Purchasers.
22
7. Indemnification and Contribution.
(a) Indemnification of the Initial Purchasers. The Company agrees to indemnify and hold
harmless each Initial Purchaser, its affiliates, directors and officers and each person, if any,
who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, reasonable legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are
incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, any
of the other Time of Sale Information, any Issuer Written Communication or the Offering Memorandum
(or any amendment or supplement thereto) or any omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, in each case except insofar as such losses, claims,
damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the
Representatives expressly for use therein, it being understood and agreed that the only such
information furnished by any Initial Purchaser consists of the information described as such in
subsection (b) below.
(b) Indemnification of the Company. Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors, its officers and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only
with respect to any losses, claims, damages or liabilities that arise out of, or are based upon,
any untrue statement or omission or alleged untrue statement or omission made in reliance upon and
in conformity with any information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representatives expressly for use in the Preliminary
Offering Memorandum, any of the other Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum (or any amendment or supplement thereto), it being understood and agreed
upon that the only such information furnished by any Initial Purchaser consists of the following
information in the Preliminary Offering Memorandum and the Offering Memorandum furnished on behalf
of each Initial Purchaser: the ninth and twelfth paragraphs under the caption “Plan of
Distribution” of the Offering Memorandum.
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under paragraph (a) or (b) above except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b)
above. If any such proceeding shall
23
be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the
Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in
such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interest between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid
or reimbursed as they are incurred. Any such separate firm for any Initial Purchaser, its
affiliates, directors and officers and any control persons of such Initial Purchaser shall be
designated in writing by the Representatives and any such separate firm for the Company, its
directors, its officers and any control persons of the Company shall be designated in writing by
the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person
from and against any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Person shall have requested that an
Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y) does
not include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
24
proportion as is appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Initial Purchasers, on the other, from the offering of the Securities or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company, on the one hand, and the Initial Purchasers, on the other, in
connection with the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand, and the Initial Purchasers, on the other, shall be deemed
to be in the same respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Securities and the total discounts and commissions received by
the Initial Purchasers in connection therewith, as provided in this Agreement, bear to the
aggregate offering price of the Securities. The relative fault of the Company, on the one hand,
and the Initial Purchasers, on the other, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or by the Initial
Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above, any reasonable legal
or other expenses incurred by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an Initial Purchaser be
required to contribute any amount in excess of the amount by which the total discounts and
commissions received by such Initial Purchaser with respect to the offering of the Securities
exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this Section 7
are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Termination. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company, if after the execution and delivery of this Agreement
25
and prior to the Closing Date or, in the case of the Option Securities, prior to the Additional
Closing Date (i) trading generally shall have been suspended or materially limited on or by any of
the New York Stock Exchange, the NYSE Amex Equities or the Nasdaq Global Select Market; (ii)
trading of any securities issued or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking
activities shall have been declared by federal or New York State authorities; or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that, in the judgment of the
Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with
the offering, sale or delivery of the Securities on the Closing Date or the Additional Closing
Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Time
of Sale Information and the Offering Memorandum.
10. Defaulting Initial Purchaser. (a) If, on the Closing Date or the Additional
Closing Date, as the case may be, any Initial Purchaser defaults on its obligation to purchase the
Securities that it has agreed to purchase hereunder on such date, the non-defaulting Initial
Purchasers may in their discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after
any such default by
any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for the purchase of
such Securities, then the Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to purchase such
Securities on such terms. If other persons become obligated or agree to purchase the Securities of
a defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or the Company may
postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full
business days in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Time of Sale Information, the Offering
Memorandum or in any other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Time of Sale Information or the Offering Memorandum that effects any
such changes. As used in this Agreement, the term “Initial Purchaser” includes, for all purposes
of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto
that, pursuant to this Section 10, purchases Securities that a defaulting Initial Purchaser agreed
but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the
Company as provided in paragraph (a) above, the aggregate number of Securities that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be does not exceed
one-eleventh of the aggregate number of Securities to be purchased on such date, then the Company
shall have the right to require each non-defaulting Initial Purchaser to purchase the number of
Securities that such Initial Purchaser agreed to purchase hereunder on such date plus such Initial
Purchaser’s pro rata share (based on the number of Securities that such Initial Purchaser agreed to
purchase on such date) of the Securities of such defaulting Initial Purchaser or Initial Purchasers
for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the
26
Company as provided in paragraph (a) above, the aggregate number of Securities that remain
unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds
one-eleventh of the aggregate amount of Securities to be purchased on such date, or if the Company
shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect
to any Additional Closing Date, the obligation of the Initial Purchasers to purchase Securities on
the Additional Closing Date, as the case may be, shall terminate without liability on the part of
the non-defaulting Initial Purchasers. Any termination of this Agreement pursuant to this Section
10 shall be without liability on the part of the Company, except that the Company will continue to
be liable for the payment of expenses as set forth in Section 11 hereof and except that the
provisions of Section 7 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it
may have to the Company or any non-defaulting Initial Purchaser for damages caused by its default.
11. Payment of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay or cause to
be paid all costs and expenses incident to the performance of its obligations hereunder, including
without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Securities and any taxes payable in that connection; (ii) the costs incident to the
preparation and printing of the Preliminary Offering Memorandum, any other Time of Sale
Information, any Issuer Written Communication and the Offering Memorandum (including any amendments
and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and
distributing each of the Transaction Documents; (iv) the fees and expenses of the Company’s counsel
and independent accountants; (v) the fees and expenses incurred in connection with the registration
or qualification and determination of eligibility for investment of the Securities under the laws
of such jurisdictions as the Representatives may designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the
Initial Purchasers in an aggregate amount not to exceed $10,000); (vi) any fees charged by rating
agencies for rating the Securities, if applicable; (vii) the fees and expenses of the Trustee and
any paying agent (including reasonable related fees and expenses of any counsel to such parties);
(viii) all expenses and application fees incurred in connection with the application for approval
of the Securities for book-entry transfer by DTC; (ix) all expenses incurred by the Company in
connection with any “road show” presentation to potential investors ; and (x) all expenses and
application fees related to the listing of the Underlying Securities on the Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 9, (ii) the Company for any reason
fails to tender the Securities for delivery to the Initial Purchasers or (iii) the Initial
Purchasers decline to purchase the Securities for any reason permitted under this Agreement, the
Company agrees to reimburse the Initial Purchasers for all out-of-pocket costs and expenses
(including the fees and expenses of their counsel) reasonably incurred by the Initial Purchasers in
connection with this Agreement and the offering contemplated hereby.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to in Section 7 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
27
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Securities from any Initial Purchaser shall be deemed to be a successor merely by
reason of such purchase.
13. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Initial Purchasers contained in this Agreement or
made by or on behalf of the Company or the Initial Purchasers pursuant to this Agreement or any
certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities
and shall remain in full force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Initial Purchasers.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; (c) the term “subsidiary” has the meaning set
forth in Rule 405 under the Securities Act; and (d) the term “significant subsidiary” has the
meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act.
15. Miscellaneous. (a) Authority of the Representatives. Any action by the Initial
Purchasers hereunder may be taken by J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., Wells Fargo
Securities, LLC and RBC Capital Markets Corporation on behalf of the Initial Purchasers, and any
such action taken by J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., Wells Fargo Securities, LLC
and RBC Capital Markets shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Initial Purchasers shall be given to the Representatives c/o
J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179 (fax: (212) 622-8358);
Attention: Equity Syndicate Desk. Notices to the Company shall be given to it at 311 Enterprise
Drive Plainsboro, New Jersey 08536 , (fax: (609) 275-1082); Attention: General Counsel.
(c) Governing Law. This Agreement and any claim, controversy or dispute arising under or
related to this Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to the conflict of laws principles thereof (other than 5-1401 of
the General Obligation Law).
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
28
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
(g) Xtract Research LLC. The Company hereby agrees that the Initial Purchasers may provide
copies of the Preliminary Offering Memorandum and the Offering Memorandum relating to the offering
of the Securities and any other agreements or documents relating thereto, including, without
limitation, trust indentures, to Xtract Research LLC (“Xtract”) following the completion of the
offering for inclusion in an online research service sponsored by Xtract, access to which is
restricted to “qualified institutional buyers” as defined in Rule 144A under the Securities Act.
29
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, INTEGRA LIFESCIENCES HOLDINGS CORPORATION |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
30
Accepted: June 9, 2011
J.P. MORGAN SECURITIES LLC
MERRILL LYNCH. PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. LLC
DEUTSCHE BANK SECURITIES INC.
RBC CAPITAL MARKETS, LLC
WELLS FARGO SECURITIES, LLC
MERRILL LYNCH. PIERCE, FENNER & SMITH INCORPORATED
MORGAN STANLEY & CO. LLC
DEUTSCHE BANK SECURITIES INC.
RBC CAPITAL MARKETS, LLC
WELLS FARGO SECURITIES, LLC
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
several Initial Purchasers listed
in Schedule 1 hereto.
By:
|
J.P. MORGAN SECURITIES LLC | |||
By: |
||||
31
Schedule 1
| Principal Amount of | ||||
| Firm Securities to be | ||||
| Initial Purchaser | Purchased | |||
J.P. Morgan Securities LLC |
$ | 40,000,000 | ||
Morgan Stanley & Co. LLC |
$ | 36,000,000 | ||
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
$ | 32,000,000 | ||
Deutsche Bank Securities Inc. |
$ | 20,000,000 | ||
RBC Capital Markets, LLC |
$ | 20,000,000 | ||
Wells Fargo Securities, LLC |
$ | 20,000,000 | ||
HSBC Securities (USA) Inc. |
$ | 8,000,000 | ||
RBS Securities Inc. |
$ | 8,000,000 | ||
Mitsubishi UFJ Securities (USA), Inc. |
$ | 6,000,000 | ||
Piper Jaffray & Co. |
$ | 2,500,000 | ||
Canaccord Genuity Inc. |
$ | 2,500,000 | ||
Madison Williams and Company LLC |
$ | 2,500,000 | ||
Oppenheimer & Co. Inc. |
$ | 2,500,000 | ||
Total |
$ | 200,000,000 | ||
32
Schedule 2
Officers and Directors
| • | Stuart M. Essig | ||
| • | Peter J. Arduini | ||
| • | John B. Henneman | ||
| • | Judith E. O’Grady | ||
| • | Jerry E. Corbin | ||
| • | Thomas J. Baltimore, Jr. | ||
| • | Keith Bradley | ||
| • | Richard E. Caruso | ||
| • | Neal Moszkowski | ||
| • | Raymond G. Murphy | ||
| • | Christian S. Schade | ||
| • | James M. Sullivan | ||
| • | Anne M. VanLent |
33
Annex B
a. Time of Sale Information
Term sheet containing the terms of the Securities, substantially in the form of Annex C.
34
Annex C
PRICING TERM SHEET
Dated June 9, 2011
Dated June 9, 2011
Integra LifeSciences Holdings Corporation
1.625% Convertible Senior Notes due 2016
1.625% Convertible Senior Notes due 2016
The information in this pricing term sheet supplements Integra LifeSciences Holdings
Corporation’s preliminary offering memorandum, dated June 9, 2011 (the “Preliminary Offering
Memorandum”), and supersedes the information in the Preliminary Offering Memorandum to the extent
inconsistent with the information in the Preliminary Offering Memorandum. In all other respects,
this term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum.
Terms used herein but not defined herein shall have the respective meanings as set forth in the
Preliminary Offering Memorandum. All references to dollar amounts are references to U.S. dollars.
Issuer:
|
Integra LifeSciences Holdings Corporation (“Integra”) | |
Ticker / Exchange:
|
IART / The NASDAQ Global Select Market (“NASDAQ”) | |
Title of securities:
|
1.625% Convertible Senior Notes due 2016 (the “Notes”) | |
Aggregate principal amount offered:
|
$200,000,000 of Notes | |
Offering price:
|
The Notes will be issued at a price of 100% of their principal amount, plus accrued interest, if any, from June 15, 2011 | |
Over-allotment option:
|
$30,000,000 principal amount of Notes | |
Annual interest rate:
|
The Notes will bear interest at a rate equal to 1.625% per annum from June 15, 2011 | |
NASDAQ Last Reported Sale Price on
June 9, 2011:
|
$46.70 per share of Integra common stock | |
Conversion premium:
|
Approximately 23% above the NASDAQ Last Reported Sale Price on June 9, 2011 | |
Initial conversion price:
|
Approximately $57.44 per share of Integra common stock | |
Initial conversion rate:
|
17.4092 shares of Integra common stock per $1,000 principal amount of Notes | |
Interest payment dates:
|
June 15 and December 15, commencing on December 15, 2011 | |
Maturity date:
|
December 15, 2016 | |
Joint book-running managers:
|
J.P. Morgan Securities LLC | |
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | ||
| Morgan Stanley & Co. LLC | ||
| Deutsche Bank Securities Inc. | ||
| RBC Capital Markets, LLC | ||
| Wells Fargo Securities, LLC | ||
Co-managers:
|
HSBC Securities (USA) Inc. | |
| RBS Securities Inc. | ||
| Mitsubishi UFJ Securities (USA), Inc. | ||
| Canaccord Genuity Inc. | ||
| Madison Williams and Company LLC | ||
| Oppenheimer & Co. Inc. |
35
| Piper Jaffray & Co. | ||
Trade date:
|
June 10, 2011 | |
Settlement date:
|
June 15, 2011 | |
CUSIP:
|
457985 AJ8 | |
ISIN:
|
US457985AJ83 | |
Convertible note hedge and warrant
transactions:
|
In connection with the pricing of the Notes, Integra entered into convertible note hedge transactions with one or more affiliates of the initial purchasers (the “option counterparties”). Integra also entered into warrant transactions with the option counterparties. The convertible note hedge transactions are expected to reduce potential dilution to Integra common stock upon any conversion of Notes. The warrant transactions could separately have a dilutive effect to the extent that the market price per share of Integra common stock exceeds the applicable strike price of the warrants. However, subject to certain conditions as specified under the terms of the warrant transactions, Integra may elect to settle all or a portion of the warrant transactions in cash. If the initial purchasers exercise their over-allotment option, Integra may enter into additional convertible note hedge and warrant transactions. | |
Use of proceeds:
|
Integra estimates that the net proceeds from the Notes offering, after deducting estimated fees and expenses and the initial purchasers’ discounts and commissions, will be approximately $194 million if the over-allotment option is not exercised. Integra intends to use: | |
• a portion of the net proceeds to pay the cost
of the convertible note hedge transactions, taking into
account the proceeds to Integra of the warrant
transactions; |
||
• approximately $35 million to purchase shares of
Integra common stock at the closing of the sale of the
Notes; and |
||
• the balance of the net proceeds from the Notes
offering to repay a portion of the indebtedness under
Integra’s senior credit facility and for general
corporate purposes. |
||
| If the initial purchasers exercise their over-allotment option, Integra may sell additional warrants. Integra intends to use the resulting additional proceeds of the sale of the additional Notes and any additional warrants: | ||
• to pay the cost to Integra of entering into
additional convertible notes hedge transactions; and |
||
• for general corporate purposes, including to
repay a portion of the indebtedness under Integra’s
senior credit facility. |
||
Additional interest:
|
If, and for so long as, the restrictive legend on the Notes has not been removed, the Notes are assigned a restricted CUSIP number or the Notes are not otherwise freely tradable by holders other than Integra’s affiliates (without restrictions pursuant to U.S. securities law or the terms of the indenture or the Notes) as of the 375th day after the last date of original issuance of the Notes, Integra will pay additional interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the Notes are freely |
36
| tradable as described above; provided that Integra will not pay additional interest on the Notes for failure to remove the restrictive legend on the Notes or failure to cause the Notes to be assigned an unrestricted CUSIP number unless Integra has received a request to remove such legend and obtain an unrestricted CUSIP number by a holder, any initial purchaser or the trustee on or after the 335th day after the last date of original issuance of the Notes. Additional interest will accrue from (i) if such request has been delivered prior to the 365th day after the last date of original issuance of the Notes, the 375th day after such last date of original issuance or (ii) otherwise, 10 days from the delivery date of such request. | ||
Adjustment to conversion rate upon
a make-whole fundamental change:
|
The table below sets forth the number of additional shares, if any, of Integra common stock to be added to the conversion rate per $1,000 principal amount of Notes in connection with a “make-whole fundamental change” as described in the Preliminary Offering Memorandum, based on the stock price and effective date of the make-whole fundamental change. |
| Stock Price | ||||||||||||||||||||||||||||||||||||||||||||
| Effective date | $46.70 | $50.00 | $55.00 | $60.00 | $65.00 | $70.00 | $80.00 | $90.00 | $100.00 | $120.00 | $140.00 | |||||||||||||||||||||||||||||||||
June 15, 2011 |
4.0040 | 3.5561 | 2.7859 | 2.2125 | 1.7788 | 1.4462 | 0.9841 | 0.6914 | 0.4978 | 0.2702 | 0.1495 | |||||||||||||||||||||||||||||||||
December 15, 2011 |
4.0040 | 3.5964 | 2.7939 | 2.1998 | 1.7536 | 1.4138 | 0.9471 | 0.6564 | 0.4672 | 0.2491 | 0.1359 | |||||||||||||||||||||||||||||||||
December 15, 2012 |
4.0040 | 3.6490 | 2.7757 | 2.1379 | 1.6666 | 1.3144 | 0.8449 | 0.5649 | 0.3903 | 0.1993 | 0.1054 | |||||||||||||||||||||||||||||||||
December 15, 2013 |
4.0040 | 3.6139 | 2.6660 | 1.9867 | 1.4968 | 1.1407 | 0.6872 | 0.4347 | 0.2877 | 0.1393 | 0.0714 | |||||||||||||||||||||||||||||||||
December 15, 2014 |
4.0040 | 3.4247 | 2.3992 | 1.6872 | 1.1946 | 0.8544 | 0.4560 | 0.2616 | 0.1624 | 0.0754 | 0.0386 | |||||||||||||||||||||||||||||||||
December 15, 2015 |
4.0040 | 3.0538 | 1.9132 | 1.1706 | 0.7047 | 0.4220 | 0.1581 | 0.0709 | 0.0410 | 0.0212 | 0.0115 | |||||||||||||||||||||||||||||||||
December 15, 2016 |
4.0040 | 2.5908 | 0.7726 | 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 in the table above, in which
case:
| • | If the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year. | ||
| • | If the stock price is greater than $140.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate. | ||
| • | If the stock price is less than $46.70 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate. |
Notwithstanding the foregoing, in no event will the conversion rate per $1,000 principal amount of
Notes exceed 21.4132, subject to adjustment in the same manner as the conversion rate as set forth
under “Description of notes—Conversion rights—Conversion rate adjustments” in the Preliminary
Offering Memorandum.
37
General
This communication is intended for the sole use of the person to whom it is provided by the sender.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy
securities nor shall there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the laws of any
such state.
The Notes and any shares of common stock issuable upon conversion of the Notes have not been, and
will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or any
state securities laws. Accordingly, the Notes are being offered and sold only to “qualified
institutional buyers” as defined in Rule 144A promulgated under the Securities Act. The Notes are
not transferable except in accordance with the restrictions described under “Transfer restrictions”
in the Preliminary Offering Memorandum.
38
Exhibit A
FORM OF LOCK-UP AGREEMENT
June __, 2011
J.P. Morgan Securities LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. LLC
Deutsche Bank Securities Inc.
RBC Capital Markets, LLC
Wells Fargo Securities, LLC
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. LLC
Deutsche Bank Securities Inc.
RBC Capital Markets, LLC
Wells Fargo Securities, LLC
As Representatives of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Re: Integra LifeSciences Holdings Corporation — Rule 144A Offering
Ladies and Gentlemen:
The undersigned understands that you, as Representatives of the several Initial Purchasers,
propose to enter into a Purchase Agreement (the “Purchase Agreement”) with Integra LifeSciences
Holdings Corporation, a Delaware corporation (the “Company”), providing for the purchase and resale
(the “Placement”) by the several Initial Purchasers named in Schedule 1 to the Purchase Agreement
(the “Initial Purchasers”), of Convertible Senior Notes due 2016, of the Company (the
“Securities”). Capitalized terms used herein and not otherwise defined shall have the meanings set
forth in the Purchase Agreement.
In consideration of the Initial Purchasers’ agreement to purchase and make the Placement of
the Securities, and for other good and valuable consideration receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written consent of J.P. Morgan
Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC on
behalf of the Initial Purchasers, the undersigned will not, during the period ending 90 days after
the date of the offering memorandum relating to the Placement (the “Offering Memorandum”), (1)
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock, $0.01 per share par value, of the
Company (the “Common Stock”) or any securities convertible into or
exercisable or exchangeable for Common Stock (including, without limitation, Common Stock
39
or such
other securities which may be deemed to be beneficially owned by the undersigned in accordance with
the rules and regulations of the Securities and Exchange Commission and securities which may be
issued upon exercise of a stock option or warrant) (collectively, “Transfer”), or publicly disclose
the intention to make any offer, sale, pledge or disposition, (2) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences of ownership of the
Common Stock or such other securities, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise
or (3) make any demand for or exercise any right with respect to the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for Common Stock, in
each case other than (A), the offer, sale, contract to sell, pledge, disposition or transfer of
Common Stock by officers and directors, not earlier than 45 days after the date of the Offering
Memorandum, if the number of shares involved in such transactions does not in the aggregate exceed
250,000 shares of Common Stock of the Company (it being understood and agreed that such 250,000
share limit is an aggregate limit that applies to all of the officers and directors of the Company
executing letter agreements like this one in connection with the Placement and that the Company
shall have the right to designate whether the undersigned may Transfer shares of Common Stock
pursuant to this clause (A)); and (B) the Transfer of shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock (i) as a bona fide gift or gifts
(including to a trust), provided that each donee shall execute and deliver to the Representatives a
lock-up letter in the form of this paragraph; and provided, further, that in the
case of any Transfer pursuant to clause B(i), no filing by any party (donor or donee,) under the
Securities Exchange Act of 1934, as amended, or other public announcement shall be required or
shall be made voluntarily in connection with such Transfer (other than a filing on a Form 5 made
after the expiration of the 90-day period referred to above), (ii) by will or by intestacy, (iii)
deemed to occur upon the cashless exercise of options granted pursuant to the Company’s employee
benefit plans in existence on the date hereof, or (iv) to the Company in an amount necessary to
satisfy taxes payable in connection with awards granted pursuant to the Company’s employee benefit
plans in existence on the date hereof.1
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Purchase Agreement does not become effective by June
30, 2011, or if the Purchase Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated prior to payment for and delivery of the Common
| 1 | For Stuart M. Essig and Richard E. Caruso: or (v) in connection with the early termination of the undersigned’s previously disclosed forward sale contract with Credit Suisse First Boston Capital LLC. |
40
Stock to be sold thereunder, the undersigned shall be released form all obligations under this
Letter Agreement. The undersigned understands that the Initial Purchasers are entering into the
Purchase Agreement and proceeding with the Placement in reliance upon this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this
Letter Agreement shall be governed by and construed in accordance with the laws of the State of New
York, without regard to the conflict of laws principles thereof (other than Section 5-1401 of the
General Obligations Law).
| Very truly yours, [NAME OF STOCKHOLDER] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
Exhibit 4.2
EXECUTION COPY
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
AND
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of June 15, 2011
1.625% Convertible Senior Notes due 2016
TABLE OF CONTENTS
| Page | ||||
| ARTICLE 1 |
||||
| Definitions |
||||
Section 1.01. Definitions |
1 | |||
Section 1.02. References to Interest |
11 | |||
| ARTICLE 2 |
||||
| Issue, Description, Execution, Registration and Exchange of Notes |
||||
Section 2.01. Designation and Amount |
12 | |||
Section 2.02. Form of Notes |
12 | |||
Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts |
13 | |||
Section 2.04. Execution, Authentication and Delivery of Notes |
14 | |||
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary |
14 | |||
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes |
20 | |||
Section 2.07. Temporary Notes |
21 | |||
Section 2.08. Cancellation of Notes Paid, Converted, Etc |
22 | |||
Section 2.09. CUSIP Numbers |
22 | |||
Section 2.10. Additional Notes; Repurchases |
22 | |||
| ARTICLE 3 |
||||
| Satisfaction and Discharge | ||||
Section 3.01. Satisfaction and Discharge |
23 | |||
| ARTICLE 4 |
||||
| Particular Covenants of the Company |
||||
Section 4.01. Payment of Principal and Interest |
23 | |||
Section 4.02. Maintenance of Office or Agency |
23 | |||
Section 4.03. Appointments to Fill Vacancies in Trustee’s Office |
24 | |||
Section 4.04. Provisions as to Paying Agent |
24 | |||
Section 4.05. Existence |
25 | |||
Section 4.06. Rule 144A Information Requirement and Annual Reports |
25 | |||
Section 4.07. Stay, Extension and Usury Laws |
27 | |||
Section 4.08. Compliance Certificate; Statements as to Defaults |
27 | |||
Section 4.09. Further Instruments and Acts |
28 | |||
i
| Page | ||||
| ARTICLE 5 |
||||
| Lists of Holders and Reports by the Company and the Trustee |
||||
Section 5.01. Lists of Holders |
28 | |||
Section 5.02. Preservation and Disclosure of Lists |
28 | |||
| ARTICLE 6 |
||||
| Defaults and Remedies |
||||
Section 6.01. Events of Default |
28 | |||
Section 6.02. Acceleration; Rescission and Annulment |
29 | |||
Section 6.03. Additional Interest |
30 | |||
Section 6.04. Payments of Notes on Default; Suit Therefor |
31 | |||
Section 6.05. Application of Monies Collected by Trustee |
33 | |||
Section 6.06. Proceedings by Holders |
33 | |||
Section 6.07. Proceedings by Trustee |
34 | |||
Section 6.08. Remedies Cumulative and Continuing |
34 | |||
Section 6.09. Direction of Proceedings and Waiver of Defaults by Majority of Holders |
35 | |||
Section 6.10. Notice of Defaults |
35 | |||
Section 6.11. Undertaking to Pay Costs |
36 | |||
| ARTICLE 7 |
||||
| Concerning the Trustee |
||||
Section 7.01. Duties and Responsibilities of Trustee |
36 | |||
Section 7.02. Reliance on Documents, Opinions, Etc |
38 | |||
Section 7.03. No Responsibility for Recitals, Etc |
39 | |||
Section 7.04. Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes |
39 | |||
Section 7.05. Monies and Shares of Common Stock to Be Held in Trust |
39 | |||
Section 7.06. Compensation and Expenses of Trustee |
40 | |||
Section 7.07. [Intentionally Omitted] |
40 | |||
Section 7.08. Eligibility of Trustee |
40 | |||
Section 7.09. Resignation or Removal of Trustee |
41 | |||
Section 7.10. Acceptance by Successor Trustee |
42 | |||
Section 7.11. Succession by Merger, Etc |
42 | |||
Section 7.12. Trustee’s Application for Instructions from the Company |
43 | |||
| ARTICLE 8 |
||||
| Concerning the Holders |
||||
Section 8.01. Action by Holders |
43 | |||
Section 8.02. Proof of Execution by Holders |
44 | |||
Section 8.03. Who Are Deemed Absolute Owners |
44 | |||
Section 8.04. Company-Owned Notes Disregarded |
44 | |||
Section 8.05. Revocation of Consents; Future Holders Bound |
45 | |||
ii
| Page | ||||
| ARTICLE 9 |
||||
| Holders’ Meetings |
||||
Section 9.01. Purpose of Meetings |
45 | |||
Section 9.02. Call of Meetings by Trustee |
45 | |||
Section 9.03. Call of Meetings by Company or Holders |
46 | |||
Section 9.04. Qualifications for Voting |
46 | |||
Section 9.05. Regulations |
46 | |||
Section 9.06. Voting |
46 | |||
Section 9.07. No Delay of Rights by Meeting |
47 | |||
| ARTICLE 10 |
||||
| Supplemental Indentures |
||||
Section 10.01. Supplemental Indentures Without Consent of Holders |
47 | |||
Section 10.02. Supplemental Indentures with Consent of Holders |
48 | |||
Section 10.03. Effect of Supplemental Indentures |
49 | |||
Section 10.04. Notation on Notes |
49 | |||
Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee |
49 | |||
| ARTICLE 11 |
||||
| Consolidation, Merger, Sale, Conveyance and Lease |
||||
Section 11.01. Company May Consolidate, Etc. on Certain Terms |
50 | |||
Section 11.02. Successor Corporation to Be Substituted |
50 | |||
Section 11.03. Evidence to Be Given to Trustee |
51 | |||
| ARTICLE 12 |
||||
| Immunity of Incorporators, Stockholders, Officers and Directors |
||||
Section 12.01. Indenture and Notes Solely Corporate Obligations |
51 | |||
| ARTICLE 13 |
||||
| [Intentionally Omitted] |
||||
| ARTICLE 14 |
||||
| Conversion of Notes |
||||
Section 14.01. Conversion Privilege |
52 | |||
Section 14.02. Conversion Procedure; Settlement Upon Conversion |
54 | |||
|
Section 14.03. Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes |
57 | |||
Section 14.04. Adjustment of Conversion Rate |
59 | |||
Section 14.05. Adjustments of Prices |
67 | |||
Section 14.06. Shares to Be Fully Paid |
67 | |||
Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common Stock |
67 | |||
iii
| Page | ||||
Section 14.08. Certain Covenants |
69 | |||
Section 14.09. Responsibility of Trustee |
69 | |||
Section 14.10. Notice to Holders Prior to Certain Actions |
70 | |||
Section 14.11. Stockholder Rights Plans |
70 | |||
Section 14.12. Limit on Issuance of Shares of Common Stock Upon Conversion |
71 | |||
| ARTICLE 15 |
||||
| Repurchase of Notes at Option of Holders |
||||
Section 15.01. [Intentionally Omitted] |
71 | |||
Section 15.02. Repurchase at Option of Holders Upon a Fundamental Change |
71 | |||
Section 15.03. Withdrawal of Fundamental Change Repurchase Notice |
73 | |||
Section 15.04. Deposit of Fundamental Change Repurchase Price |
74 | |||
Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes |
75 | |||
| ARTICLE 16 |
||||
| No Redemption |
||||
Section 16.01. No Redemption |
75 | |||
| ARTICLE 17 |
||||
| Miscellaneous Provisions |
||||
Section 17.01. Provisions Binding on Company’s Successors |
75 | |||
Section 17.02. Official Acts by Successor Corporation |
75 | |||
Section 17.03. Addresses for Notices, Etc |
75 | |||
Section 17.04. Governing Law and Consent to Jurisdiction |
76 | |||
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee |
77 | |||
Section 17.06. Legal Holidays |
77 | |||
Section 17.07. No Security Interest Created |
77 | |||
Section 17.08. Benefits of Indenture |
77 | |||
Section 17.09. Table of Contents, Headings, Etc |
77 | |||
Section 17.10. Authenticating Agent |
78 | |||
Section 17.11. Execution in Counterparts |
79 | |||
Section 17.12. Severability |
79 | |||
Section 17.13. Waiver of Jury Trial |
79 | |||
Section 17.14. Force Majeure |
79 | |||
Section 17.15. Calculations |
79 | |||
Section 17.16. USA PATRIOT Act |
80 | |||
EXHIBIT |
||||
Exhibit A Form of Note |
A-1 | |||
iv
INDENTURE dated as of June 15, 2011 between INTEGRA LIFESCIENCES HOLDINGS CORPORATION,
a Delaware corporation, as issuer (the “Company”, as more fully set forth in Section 1.01) and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”,
as more fully set forth in Section 1.01).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of
its 1.625% Convertible Senior Notes due 2016 (the “Notes”), initially in an aggregate principal
amount not to exceed $230,000,000, and in order to provide the terms and conditions upon which the
Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution
and delivery of this Indenture; and
WHEREAS, the form of Note, the certificate of authentication to be borne by each Note, the
Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of
Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter
provided; and
WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and
authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this
Indenture provided, the valid, binding and legal obligations of the Company, and this Indenture a
valid agreement according to its terms, have been done and performed, and the execution of this
Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are, and are to be,
authenticated, issued and delivered, and in consideration of the premises and of the purchase and
acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee
for the equal and proportionate benefit of the respective Holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE 1
Definitions
Definitions
Section 1.01. Definitions. The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. The words “herein,” “hereof,” “hereunder,” and words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other subdivision. The
terms defined in this Article include the plural as well as the singular.
“Additional Interest” means all amounts, if any, payable pursuant to Section 4.06(d), Section
4.06(e) and Section 6.03, as applicable.
“Additional Shares” shall have the meaning specified in Section 14.03(a).
“Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control,” when used with respect to any specified Person means the
power to direct or cause the direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Averaging Period” shall have the meaning specified in Section 14.04(e).
“Bid Solicitation Agent” means the Person appointed by the Company to solicit bids for the
Trading Price of the Notes in accordance with Section 14.01(b)(i). The Trustee shall initially act
as the Bid Solicitation Agent.
“Board of Directors” means the board of directors of the Company or a committee of such board
duly authorized to act for it hereunder.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full
force and effect on the date of such certification, and delivered to the Trustee.
“Business Day” means, with respect to any Note, any day other than a Saturday, a Sunday or a
day on which the Federal Reserve Bank of New York is authorized or required by law or executive
order to close or be closed.
“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
stock issued by that entity.
“Cash Percentage” shall have the meaning specified in Section 14.02(a)(i).
“Clause A Distribution” shall have the meaning specified in Section 14.04(c).
“Clause B Distribution” shall have the meaning specified in Section 14.04(c).
“Clause C Distribution” shall have the meaning specified in Section 14.04(c).
“close of business” means 5:00 p.m. (New York City time).
“Commission” means the U.S. Securities and Exchange Commission.
“Common Equity” of any Person means Capital Stock of such Person that is generally entitled
(a) to vote in the election of directors of such Person or (b) if such Person is not a
2
corporation,
to vote or otherwise participate in the selection of the governing body, partners, managers or
others that will control the management or policies of such Person.
“Common Stock” means the common stock of the Company, par value $0.01 per share, at the date
of this Indenture, subject to Section 14.07.
“Company” shall have the meaning specified in the first paragraph of this Indenture, and
subject to the provisions of Article 11, shall include its successors and assigns.
“Company Order” means a written order of the Company, signed by (a) the Company’s Chief
Executive Officer, President, Executive or Senior Vice President, or any Vice President (whether or
not designated by a number or numbers or word or words added before or after the title “Vice
President”) and (b) any such other Officer designated in clause (a) of this definition or the
Company’s Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered
to the Trustee.
“Conversion Agent” shall have the meaning specified in Section 4.02.
“Conversion Date” shall have the meaning specified in Section 14.02(c).
“Conversion Obligation” shall have the meaning specified in Section 14.01(a).
“Conversion Price” means as of any date, $1,000, divided by the Conversion Rate as of such
date.
“Conversion Rate” shall have the meaning specified in Section 14.01(a).
“Corporate Trust Office” means the principal office of the Trustee at which at any time its
corporate trust business shall be administered, which office at the date hereof is located at 45
Broadway, 14th Floor, New York, New York 10006, Attention: Corporate Trust Services, Administrator
for Integra LifeSciences Holdings Corporation, or such other address as the Trustee may designate
from time to time by notice to the Holders and the Company, or the principal corporate trust office
of any successor trustee (or such other address as such successor trustee may designate from time
to time by notice to the Holders and the Company).
“Custodian” means the Trustee, as custodian for The Depository Trust Company, with respect to
the Global Notes, or any successor entity thereto.
“Daily Conversion Value” means, for each of the 50 consecutive Trading Days during the
Observation Period, 2% of the product of (a) the Conversion Rate on such Trading Day and (b) the
Daily VWAP on such Trading Day.
“Daily Net Settlement Amount” means, for each of the 50 consecutive Trading Days during the
relevant Observation Period:
(a) if the Company does not elect a Cash Percentage as set forth herein, a number of
shares of Common Stock equal to (i) the difference between the Daily Conversion Value and
$20, divided by (ii) the Daily VWAP for such Trading Day;
3
(b) if the Company elects a Cash Percentage of 100% as set forth herein, cash in an
amount equal to the difference between the Daily Conversion Value and $20; or
(c) if the Company elects a Cash Percentage of less than 100% as set forth herein, (i)
cash equal to the product of (x) the difference between the Daily Conversion Value and $20
and (y) the Cash Percentage, plus (ii) a number of shares of Common Stock equal to the
product of (x)(A) the difference between the Daily Conversion Value and $20, divided by (B)
the Daily VWAP for such Trading Day and (y) 100% minus the Cash Percentage.
“Daily Settlement Amount” for each of the 50 consecutive Trading Days during the Observation
Period shall consist of:
(a) cash in an amount equal to the lesser of (i) $20 and (ii) the Daily Conversion
Value on such Trading Day; and
(b) if the Daily Conversion Value on such Trading Day exceeds $20, the Daily Net
Settlement Amount.
“Daily VWAP” means, for each of the 50 consecutive Trading Days during the applicable
Observation Period, the per share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page “IART <equity> AQR” (or its equivalent successor if such
page is not available) in respect of the period from the scheduled open of trading until the
scheduled close of trading of the primary trading session on such Trading Day (or if such
volume-weighted average price is unavailable, the market value of one share of the Common Stock on
such Trading Day determined, using a volume-weighted average method, by a nationally recognized
independent investment banking firm retained for this purpose by the Company). The “Daily VWAP”
shall be determined without regard to after hours trading or any other trading outside of the
regular trading session trading hours.
“Default” means any event that is, or after notice or passage of time, or both, would be, an
Event of Default.
“Defaulted Amounts” means any amounts on any Note (including, without limitation, the
Fundamental Change Repurchase Price, principal and interest) that are payable but are not
punctually paid or duly provided for.
“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c)
as the Depositary with respect to such Notes, until a successor shall have been appointed and
become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary”
shall mean or include such successor.
“Distributed Property” shall have the meaning specified in Section 14.04(c).
“Effective Date” shall have the meaning specified in Section 14.03(c).
“Event of Default” shall have the meaning specified in Section 6.01.
4
“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the
applicable exchange or in the applicable market, regular way, without the right to receive the
issuance, dividend or distribution in question, from the Company or, if applicable, from the seller
of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by
such exchange or market.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Form of Assignment and Transfer” shall mean the “Form of Assignment and Transfer” in
substantially the form attached as Attachment 3 to the form of Note attached hereto as Exhibit A.
“Form of Fundamental Change Repurchase Notice” shall mean the “Form of Fundamental Change
Repurchase Notice” in substantially the form attached as Attachment 2 to the form of Note attached
hereto as Exhibit A.
“Form of Notice of Conversion” shall mean the “Form of Notice of Conversion” in substantially
the form attached as Attachment 1 to the form of Note attached hereto as Exhibit A.
“Fundamental Change” shall be deemed to have occurred at the time after the Notes are
originally issued if any of the following occurs:
(a) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act,
other than the Company, its Subsidiaries and the employee benefit plans of the Company and
its Subsidiaries, files a Schedule TO or any schedule, form or report under the Exchange Act
disclosing that such person or group has become the “beneficial owner,” as defined in Rule
13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50% of
the voting power of the Company’s Common Equity;
(b) the consummation of (A) any recapitalization, reclassification or change of the
Common Stock (other than changes resulting from a subdivision or combination) as a result of
which the Common Stock would be converted into, or exchanged for, stock, other securities,
other property or assets; (B) any share exchange, consolidation or merger of the Company
pursuant to which the Common Stock will be converted into cash, securities or other
property, other than a merger of the Company solely for the purpose of changing the
Company’s jurisdiction of incorporation, that results in a reclassification, conversion or
exchange of outstanding shares of the Common Stock solely into shares of common stock of the
surviving entity; or (C) any sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, to any Person other than one of the Company’s Subsidiaries;
provided, however, that a transaction described in clause (B) pursuant to which one or more
holders of shares of the Company’s Common Equity entitled to vote generally in
5
elections of
directors immediately prior to such transaction have the entitlement to exercise, directly
or indirectly, 50% or more of the total voting power of all classes of the Company’s Common
Equity entitled to vote generally in elections of directors of the continuing or surviving
Person immediately after giving effect to such transaction shall not be a Fundamental Change
pursuant to this clause (b) (this proviso, the “Majority Ownership Exception”);
(c) the stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or
(d) the Common Stock (or other common stock, ordinary shares, American depositary
receipts or American depositary shares underlying the Notes) ceases to be listed or quoted
on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global
Market (or any of their respective successors);
provided, however, that a transaction or transactions described in clauses (a) or (b) above shall
not constitute a Fundamental Change if at least 90% of the consideration received or to be received
by the common stockholders of the Company, excluding cash payments for fractional shares and cash
payments made in respect of dissenters’ appraisal rights, in connection with such transaction or
transactions consists of shares of common stock, ordinary shares, American depositary receipts or
American depositary shares that are listed or quoted on any of The New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or
will be so listed or quoted when issued or exchanged in connection with such transaction or
transactions, and, as a result therefrom, such consideration becomes the Reference Property in
respect of the Notes pursuant to Section 14.07 (this proviso, the “Listed Stock Exception”).
“Fundamental Change Company Notice” shall have the meaning specified in Section 15.02(c).
“Fundamental Change Repurchase Date” shall have the meaning specified in Section 15.02(a).
“Fundamental Change Repurchase Notice” shall have the meaning specified in Section
15.02(b)(i).
“Fundamental Change Repurchase Price” shall have the meaning specified in Section 15.02(a).
“Global Note” shall have the meaning specified in Section 2.05(b).
“Holder,” as applied to any Note, or other similar terms (but excluding the term “beneficial
holder” or “beneficial owner” or “owner of a beneficial interest” or terms of similar import),
shall mean any Person in whose name at the time a particular Note is registered on the Note
Register.
“Indenture” means this instrument as originally executed or, if amended or supplemented as
herein provided, as so amended or supplemented.
6
“Initial Purchasers” means J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., RBC Capital Markets, LLC and
Wells Fargo Securities, LLC.
“Interest Payment Date” means each June 15 and December 15 of each year, beginning on December
15, 2011.
“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per
share (or if no closing sale price is reported, the average of the bid and ask prices or, if more
than one in either case, the average of the average bid and the average ask prices) on that date as
reported in composite transactions for the principal U.S. national or regional securities exchange
on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S.
national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall
be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant
date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not
so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and
ask prices for the Common Stock on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for this purpose.
“Listed Stock Exception” shall have the meaning specified in the definition of Fundamental
Change in this Section 1.01.
“Majority Ownership Exception” shall have the meaning specified in the definition of
Fundamental Change in this Section 1.01.
“Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental
Change (as defined above and determined after giving effect to any exceptions to or exclusions from
such definition, but without regard to the Majority Ownership Exception).
“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 future contracts
relating to the Common Stock.
“Maturity Date” means December 15, 2016.
“Measurement Period” shall have the meaning specified in Section 14.01(b)(i).
“Merger Event” shall have the meaning specified in Section 14.07(a).
“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of
this Indenture.
7
“Note Register” shall have the meaning specified in Section 2.05(a).
“Note Registrar” shall have the meaning specified in Section 2.05(a).
“Notice of Conversion” shall have the meaning specified in Section 14.02(b).
“Observation Period” with respect to any Note surrendered for conversion means: (i) if the
relevant Conversion Date occurs prior to June 15, 2016, the 50 consecutive Trading-Day period
beginning on, and including, the second Trading Day after such Conversion Date; and (ii) if the
relevant Conversion Date occurs on or after June 15, 2016, the 50 consecutive Trading Days
beginning on, and including, the 52nd Scheduled Trading Day immediately preceding the Maturity
Date.
“Offering Memorandum” means the preliminary offering memorandum dated June 9, 2011, as
supplemented by the pricing term sheet dated June 9, 2011, relating to the offering and sale of the
Notes.
“Officer” means, with respect to the Company, the President, the Chief Executive Officer, the
Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary, any Executive or Senior
Vice President or any Vice President (whether or not designated by a number or numbers or word or
words added before or after the title “Vice President”).
“Officer’s Certificate,” when used with respect to the Company, means a certificate that is
delivered to the Trustee and that is signed by an Officer of the Company. Each such certificate
shall include the statements provided for in Section 17.05 if and to the extent required by the
provisions of such Section.
“open of business” means 9:00 a.m. (New York City time).
“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an
employee of or counsel to the Company, or other counsel acceptable to the Trustee, that is
delivered to the Trustee, which opinion may contain customary exceptions and qualifications as to
the matters set forth therein. Each such opinion shall include the statements provided for in
Section 17.05 if and to the extent required by the provisions of such Section 17.05.
“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section
8.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under
this Indenture, except:
(a) Notes theretofore canceled by the Trustee or accepted by the Trustee for
cancellation;
(b) Notes, or portions thereof, that have become due and payable and in respect of
which monies in the necessary amount shall have been deposited in trust with the Trustee or
with any Paying
Agent (other than the Company) or shall have been set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent);
8
(c) Notes that have been paid pursuant to Section 2.06 or Notes in lieu of which, or in
substitution for which, other Notes shall have been authenticated and delivered pursuant to
the terms of Section 2.06 unless proof satisfactory to the Trustee is presented that any
such Notes are held by protected purchasers in due course;
(d) Notes converted pursuant to Article 14 and required to be cancelled pursuant to
Section 2.08; and
(e) Notes repurchased by the Company pursuant to the penultimate sentence of Section
2.10.
“Paying Agent” shall have the meaning specified in Section 4.02.
“Person” means an individual, a corporation, a limited liability company, an association, a
partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
“Physical Notes” means permanent certificated Notes in registered form issued in denominations
of $1,000 principal amount and multiples thereof.
“Predecessor Note” of any particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note that it replaces.
“Reference Property” shall have the meaning specified in Section 14.07(a).
“Regular Record Date,” with respect to any Interest Payment Date, shall mean the June 1 or
December 1 (whether or not such day is a Business Day) immediately preceding the applicable June 15
or December 15 Interest Payment Date, respectively.
“Resale Restriction Termination Date” shall have the meaning specified in Section 2.05(c).
“Responsible Officer” means, when used with respect to the Trustee, any officer within the
corporate trust department of the Trustee, including any vice president, any assistant vice
president, any trust officer or assistant trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred because of such
person’s knowledge of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
“Restricted Securities” shall have the meaning specified in Section 2.05(c).
“Rule 144A” means Rule 144A as promulgated under the Securities Act.
9
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal
U.S. national or regional securities exchange or market on which the Common Stock is listed or
admitted for trading. If the Common Stock is not so listed or admitted for trading, “Scheduled
Trading Day” means a Business Day.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Settlement Notice” has the meaning specified in Section 14.02(a)(i).
“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of
“significant subsidiary” in Article 1, Rule 1-02(w) of Regulation S-X under the Exchange Act;
provided that, in the case of a Subsidiary of the Company that meets the criteria of clause (3) but
not clause (1) or (2) thereof, such Subsidiary shall not be deemed to be a Significant Subsidiary
unless the Subsidiary’s income from continuing operations before income taxes, extraordinary items
and cumulative effect of a change in accounting principle exclusive of amounts attributable to any
non-controlling interests for the last completed fiscal year prior to the date of such
determination exceeds $25.0 million.
“Spin-Off” shall have the meaning specified in Section 14.04(c).
“Stock Price” shall have the meaning specified in Section 14.03(c).
“Subsidiary” means, with respect to any Person, any corporation, association, partnership or
other business entity of which more than 50% of the total voting power of shares of Capital Stock
or other interests (including partnership interests) entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers, general partners or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such
Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such
Person.
“Successor Company” shall have the meaning specified in Section 11.01(a).
“Trading Day” means a day on which (i) trading in the Common Stock generally occurs on The
NASDAQ Global Select Market or, if the Common Stock is not then listed on The NASDAQ Global Select
Market, on the principal other U.S. national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional
securities exchange, on the principal other market on which the Common Stock is then traded and
(ii) a Last Reported Sale Price for the Common Stock is available on such securities exchange or
market; provided that if the Common Stock (or other security for which a closing sale price must be
determined) is not so listed or traded, “Trading Day” means a Business Day; and provided, further,
that for purposes of determining amounts due upon conversion only, “Trading Day” means a day on
which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs
on The NASDAQ Global Select Market or, if the Common Stock is not then listed on The NASDAQ Global
Select Market, on the principal other U.S. national or
10
regional securities exchange on which the
Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or
regional securities exchange, on the principal other market on which the Common Stock is then
listed or admitted for trading, except that if the Common Stock is not so listed or admitted for
trading, “Trading Day” means a Business Day.
“Trading Price” of the Notes on any date of determination means the average of the secondary
market bid quotations obtained by the Bid Solicitation Agent for $5 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 the Company selects for this purpose; provided
that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such
bids are obtained, then the average of such two bids shall be used, and if only one such bid can
reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used. If the Bid
Solicitation Agent cannot reasonably obtain at least one bid for $5 million principal amount of
Notes from a nationally recognized securities dealer on any determination date, then the Trading
Price per $1,000 principal amount of Notes on such determination date shall be deemed to be less
than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable
Conversion Rate.
“transfer” shall have the meaning specified in Section 2.05(c).
“Trigger Event” shall have the meaning specified in Section 14.04(c).
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at
the date of execution of this Indenture; provided, however, that in the event the Trust Indenture
Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the
extent required by such amendment, the Trust Indenture Act of 1939, as so amended.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture
until a successor trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder.
“unit of Reference Property” shall have the meaning specified in Section 14.07(a).
“Valuation Period” shall have the meaning specified in Section 14.04(c).
Section 1.02. References to Interest. Unless the context otherwise requires, any reference
to interest on, or in respect of, any Note in this Indenture shall be deemed to include Additional
Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of
Section 4.06(d), Section 4.06(e) and Section 6.03. Unless the context otherwise requires, any
express mention of Additional Interest in any provision hereof shall not be construed as excluding
Additional Interest in those provisions hereof where such express mention is not made.
11
ARTICLE 2
Issue, Description, Execution, Registration and Exchange of Notes
Issue, Description, Execution, Registration and Exchange of Notes
Section 2.01. Designation and Amount. The Notes shall be designated as the “1.625%
Convertible Senior Notes due 2016.” The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is initially limited to $230,000,000, subject to
Section 2.10 and except for Notes authenticated and delivered upon registration or transfer of, or
in exchange for, or in lieu of other Notes pursuant to Section 2.05, Section 2.06, Section 10.04,
Section 14.02 and Section 15.04.
Section 2.02. Form of Notes. The Notes and the Trustee’s certificate of authentication to be
borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, the
terms and provisions of which shall constitute, and are hereby expressly incorporated in and made a
part of this Indenture. To the extent applicable, the Company and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Any Global Note may be endorsed with or have incorporated in the text thereof such legends or
recitals or changes not inconsistent with the provisions of this Indenture as may be required by
the Custodian or the Depositary, or as may be required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities exchange or automated
quotation system upon which the Notes may be listed or traded or designated for issuance or to
conform with any usage with respect thereto, or to indicate any special limitations or restrictions
to which any particular Notes are subject.
Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends or endorsements as the Officers executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions
of this Indenture, or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any securities exchange or automated quotation
system on which the Notes may be listed or designated for issuance, or to conform to usage or to
indicate any special limitations or restrictions to which any particular Notes are subject.
Each Global Note shall represent such principal amount of the outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of
outstanding Notes represented thereby may from time to time be increased or reduced to reflect
repurchases, cancellations, 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 written instructions given by the Holder of such Notes in
accordance with this Indenture. Payment of principal (including the Fundamental Change Repurchase
Price, if applicable) of, and accrued and unpaid interest on, 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.
12
Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts.
(a) The Notes shall be issuable in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof. Each Note shall be dated the date of its
authentication and shall bear interest from the date specified on the face of the form of Note
attached as Exhibit A hereto. Accrued interest on the Notes shall be computed on the basis of a
360-day year composed of twelve 30-day months.
(b) The Person in whose name any Note (or its Predecessor Note) is registered on the Note
Register at the close of business on any Regular Record Date with respect to any Interest Payment
Date shall be entitled to receive the interest payable on such Interest Payment Date. Interest
shall be payable at the office or agency of the Company maintained by the Company for such purposes
in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust
Office. The Company shall pay interest (i) on any Physical Notes (A) to Holders holding Physical
Notes having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of
these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical
Notes having an aggregate principal amount of more than $5,000,000, either by check mailed to such
Holders or, upon application by such Holder to the Note Registrar not later than the relevant
Regular Record Date, by wire transfer in immediately available funds to that Holder’s account
within the United States, which application shall remain in effect until the Holder notifies, in
writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
(c) Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant
payment date but shall accrue interest per annum at the rate borne by the Notes, subject to the
enforceability thereof under applicable law, from, and including, such relevant payment date, and
such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its
election in each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted Amounts to the Persons in
whose names the Notes (or their respective Predecessor Notes) are registered at the close of
business on a special record date for the payment of such Defaulted Amounts, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing of the
amount of the Defaulted Amounts proposed to be paid on each Note and the date of the
proposed payment (which shall be not less than 25 days after the receipt by the Trustee of
such notice, unless the Trustee shall consent in writing to an earlier date), and at the
same time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Amounts as in this clause provided. Thereupon the Company shall
fix a special record date for the payment of such Defaulted Amounts which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed payment, and not
less than 10 days after the receipt by the Trustee of the notice of the proposed payment.
The Company shall promptly notify the Trustee in writing of such special record date and the
Trustee, in the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted
13
Amounts and the special record date therefor to be mailed,
first-class postage prepaid, to each Holder at its address as it appears in the Note
Register, not less than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Amounts and the special record date therefor having been so
mailed, such Defaulted Amounts shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (ii) of this
Section 2.03(c).
(ii) The Company may make payment of any Defaulted Amounts in any other lawful manner
not inconsistent with the requirements of any securities exchange or automated quotation
system on which the Notes may be listed or designated for issuance, and upon such notice as
may be required by such exchange or automated quotation system, if, after written notice
given by the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Section 2.04. Execution, Authentication and Delivery of Notes. The Notes shall be signed in
the name and on behalf of the Company by the manual or facsimile signature of its Chief Executive
Officer, President, Chief Financial Officer, Treasurer, Secretary or any of its Vice Presidents.
At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Notes executed by the Company to the Trustee for authentication, together with
a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance
with such Company Order shall authenticate and deliver such Notes, without any further action by
the Company hereunder.
Only such Notes as shall bear thereon a certificate of authentication substantially in the
form set forth on the form of Note attached as Exhibit A hereto, executed manually by an authorized
officer of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section
17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed
by the Company shall be conclusive evidence that the Note so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the benefits of this
Indenture.
In case any Officer of the Company who shall have signed any of the Notes shall cease to be
such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee,
or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Notes had not ceased to be such Officer of the
Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date
of the execution of such Note, shall be the Officers of the Company, although at the date of the
execution of this Indenture any such person was not such an Officer.
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer;
Depositary. (a) The Company shall cause to be kept at the Corporate Trust Office a register (the
register maintained in such office or in any other office or agency of the Company designated
14
pursuant to Section 4.02, the “Note Register”) in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Notes and of transfers of
Notes. Such register shall be in written form or in any form capable of being converted into
written form within a reasonable period of time. The Trustee is hereby initially appointed the
“Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.
The Company may appoint one or more co-Note Registrars in accordance with Section 4.02.
Upon surrender for registration of transfer of any Note to the Note Registrar or any
co-registrar, and satisfaction of the requirements for such transfer set forth in this Section
2.05, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized denominations and of
a like aggregate principal amount and bearing such restrictive legends as may be required by this
Indenture.
Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at any such office or agency
maintained by the Company pursuant to Section 4.02. Whenever any Notes are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that
the Holder making the exchange is entitled to receive, bearing registration numbers not
contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or for exchange, repurchase or
conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note
Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company and duly executed, by the Holder thereof or its
attorney-in-fact duly authorized in writing.
No service charge shall be imposed by the Company, the Trustee, the Note Registrar or any
co-Note Registrar for any exchange or registration of transfer of Notes, but the Company or the
Trustee may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar
issue or transfer tax required by law or permitted pursuant to Section 14.02(d) or Section
14.02(e).
None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be
required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a
portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion
or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in
accordance with Article 15.
All Notes issued upon any registration of transfer or exchange of Notes in accordance with
this Indenture shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture as the Notes surrendered upon such registration
of transfer or exchange.
(b) So long as the Notes are eligible for book-entry settlement with the Depositary, unless
otherwise required by law, subject to the fourth paragraph from the end of Section 2.05(c) all
Notes shall be represented by one or more Notes in global form (each, a “Global Note”)
15
registered in the name of the Depositary or a nominee of the Depositary. The transfer and exchange of
beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall
be effected through the Depositary (but not the Trustee or the Custodian) in accordance with this
Indenture (including the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.
(c) Every Note that bears or is required under this Section 2.05(c) to bear the legend set
forth in this Section 2.05(c) (together with any Common Stock issued upon conversion of the Notes
and required to bear the legend set forth in Section 2.05(d), collectively, the “Restricted
Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.05(c)
(including the legend set forth below), unless such restrictions on transfer shall be eliminated or
otherwise waived by written consent of the Company, and the Holder of each such Restricted
Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on
transfer. As used in this Section 2.05(c) and Section 2.05(d), the term “transfer” encompasses any
sale, pledge, transfer or other disposition whatsoever of any Restricted Security.
Until the date (the “Resale Restriction Termination Date”) that is the later of (1) the date
that is one year after the last date of original issuance of the Notes, or such shorter period of
time as permitted by Rule 144 under the Securities Act or any successor provision thereto, and (2)
such later date, if any, as may be required by applicable law, any certificate evidencing such Note
(and all securities issued in exchange therefor or substitution thereof, other than Common Stock,
if any, issued upon conversion thereof which shall bear the legend set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form (unless such Notes have been
transferred pursuant to a registration statement that has become or been declared effective under
the Securities Act and that continues to be effective at the time of such transfer, or sold
pursuant to the exemption from registration provided by Rule 144 or any similar provision then in
force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice
thereof to the Trustee):
THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT
EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF INTEGRA LIFESCIENCES HOLDINGS CORPORATION (THE “COMPANY”)
THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL
ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
16
SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO, AND (Y) SUCH LATER DATE, IF ANY, AS MAY
BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER
EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING
MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
DURING THE PERIOD ENDING ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTES, NO
“AFFILIATE” (AS DEFINED IN RULE 144) WILL BE PERMITTED TO RESELL ANY OF THE NOTES THAT CONSTITUTE
“RESTRICTED SECURITIES” UNDER RULE 144 THAT HAVE BEEN REACQUIRED BY ANY OF THEM.
No transfer of any Note prior to the Resale Restriction Termination Date will be registered by
the Note Registrar unless the applicable box on the Form of Assignment and Transfer has been
checked.
Any Note (or security issued in exchange or substitution therefor) as to which such
restrictions on transfer shall have expired in accordance with their terms may, upon surrender of
such Note for exchange to the Note Registrar in accordance with the provisions of this Section
2.05, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.05(c) and shall not be assigned a
restricted CUSIP number. The Company shall be entitled to instruct the Custodian in writing to so
surrender any Global Note as to which such restrictions on transfer shall have expired in
accordance with their terms for exchange, and, upon such instruction, the Custodian shall so
surrender such Global Note for exchange; and any new Global Note so exchanged therefor shall not
bear the restrictive legend specified in this Section 2.05(c) and shall not be assigned a
restricted CUSIP number. The Company shall promptly notify the Trustee upon the occurrence of the
Resale Restriction Termination Date and promptly notify the Trustee and the Holders after
17
a
registration statement, if any, with respect to the Notes or any Common Stock issued upon
conversion of the Notes has been declared effective under the Securities Act.
Notwithstanding any other provisions of this Indenture (other than the provisions set forth in
this Section 2.05(c)), a Global Note may not be transferred as a whole or in part except (i) by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary and (ii) for 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(c).
The Depositary shall be a clearing agency registered under the Exchange Act. The Company
initially appoints The Depository Trust Company to act as Depositary with respect to each Global
Note. Initially, each Global Note shall be issued to the Depositary, registered in the name of
Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede
& Co.
If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or
unable to continue as depositary for the Global Notes and a successor depositary is not appointed
within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange
Act and a successor depositary is not appointed within 90 days, (iii) an Event of Default with
respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests
that its beneficial interest therein be issued as a Physical Note or (iv) the Company and a
beneficial owner of any Note so agree, the Company shall execute, and the Trustee, upon receipt of
an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall
authenticate and deliver (x) in the case of clause (iii) or (iv), a Physical Note to such
beneficial owner in a principal amount equal to the principal amount of such Note corresponding
such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical
Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate
principal amount equal to the aggregate principal amount of such Global Notes in exchange for such
Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be
canceled.
Physical Notes issued in exchange for all or a part of the Global Note pursuant to this
Section 2.05(c) shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such Physical
Notes to the Persons in whose names such Physical Notes are so registered.
At such time as all interests in a Global Note have been converted, canceled, repurchased or
transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance
with its customary procedures. At any time prior to such cancellation, if any interest in a Global
Note is exchanged for Physical Notes, converted, canceled, repurchased or transferred to a
transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred
for part of such Global Note, the principal amount of such Global Note
18
shall, in accordance with
the Trustee’s customary procedures, be appropriately reduced or increased, as the case may be, and
an endorsement shall be made on the Schedule of Exchanges of such Global Note, by the Trustee or
the Custodian, at the direction of the Trustee, to reflect such reduction or increase.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Indenture or under applicable law with respect
to any transfer of any interest in any Note (including any transfers between or among Depositary
participants or beneficial owners of interests in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly required by, and to do so
if and when expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements hereof.
Neither the Trustee nor any agent of the Trustee shall have any responsibility or liability
for any actions taken or not taken by the Depositary.
Neither the Company, the Trustee nor any agent of the Company or the Trustee shall have any
responsibility or liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
(d) Until the Resale Restriction Termination Date, any stock certificate representing Common
Stock issued upon conversion of such Note shall bear a legend in substantially the following form
(unless the Note or such Common Stock has been transferred pursuant to a registration statement
that has become or been declared effective under the Securities Act and that continues to be
effective at the time of such transfer, or pursuant to the exemption from registration provided by
Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has
been issued upon conversion of Notes that have been transferred pursuant to a registration
statement that has become or been declared effective under the Securities Act and that continues to
be effective at the time of such transfer, or pursuant to the exemption from registration provided
by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise
agreed by the Company with written notice thereof to the Trustee and any transfer agent for the
Common Stock):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT
EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
19
(2) AGREES FOR THE BENEFIT OF INTEGRA LIFESCIENCES HOLDINGS CORPORATION (THE “COMPANY”)
THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL
ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER
EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING
MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall have expired in
accordance with their terms may, upon surrender of the certificates representing such shares of
Common Stock for exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of
Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).
(e) The Company shall not, and shall not permit any of its “affiliates” (as defined in Rule
144) to, resell any of the Notes that constitute “restricted securities” under Rule 144 that have
been reacquired by any of them.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become
mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its
written request in a Company Order the Trustee or an authenticating agent appointed by the Trustee
shall authenticate and deliver, a new Note, bearing a registration number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
20
and in substitution
for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless from any loss,
liability, cost or expense caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such substituted Note and
deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if
applicable, such authenticating agent may require. Upon the issuance of any substitute Note, the
Company or the Trustee may require the payment by the Holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note that has matured or is about to mature or has been
surrendered for required repurchase or is about to be converted in accordance with Article 14 shall
become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead
of issuing a substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a mutilated Note), as the
case may be, if the applicant for such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in every case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent
of the destruction, loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.06 by virtue of the
fact that any Note is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other Notes duly issued
hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the replacement or payment or
conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment or conversion of negotiable instruments or
other securities without their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Physical Notes, the Company may
execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written
request of the Company in a Company Order, authenticate and deliver temporary Notes (printed or
lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially
in the form of the Physical Notes but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Company. Every such temporary
Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent
upon the same conditions and in substantially the same manner, and with the same effect, as the
Physical Notes. Without unreasonable delay, the Company shall execute and deliver to the Trustee
or such authenticating agent Physical Notes
21
(other than any Global Note) and thereupon any or all
temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each
office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such
authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal
aggregate principal amount of Physical Notes. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations under this Indenture
as Physical Notes authenticated and delivered hereunder.
Section 2.08. Cancellation of Notes Paid, Converted, Etc. The Company shall cause all Notes
surrendered for the purpose of payment, repurchase, registration of transfer or exchange or
conversion, if surrendered to the Company or the Company’s Agents, Subsidiaries or Affiliates, to
be surrendered to the Trustee for cancellation. All Notes delivered to the Trustee shall be
canceled promptly by it, and no Notes shall be authenticated in exchange thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of
canceled Notes in accordance with its customary procedures and, after such disposition, shall
deliver a certificate of such disposition to the Company, at the Company’s written request in a
Company Order. If the Company shall acquire any of the Notes, such acquisition shall not operate
as a redemption, repurchase or satisfaction of the indebtedness represented by such Notes unless
and until the same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers (if
then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in all notices issued to
Holders as a convenience to such Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Notes or on
such notice and that reliance may be placed only on the other identification numbers printed on the
Notes. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP”
numbers.
Section 2.10. Additional Notes; Repurchases. The Company may, without the consent of the
Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes
hereunder with the same terms and with the same CUSIP number as the Notes initially issued
hereunder in an unlimited aggregate principal amount; provided that if any such additional Notes
are not fungible with the Notes initially issued hereunder for U.S. federal income tax purposes,
such additional Notes shall have a separate CUSIP number. Prior to the issuance of any such
additional Notes, the Company shall deliver to the Trustee a Company Order, an Officer’s
Certificate and an Opinion of Counsel, such Officer’s Certificate and Opinion of Counsel to cover
such matters required by Section 17.05, and such Opinion of Counsel to include a customary legal
opinion as to the enforceability under New York law of such additional Notes, which opinion may
contain customary exceptions and qualifications. In addition, the Company may, to the extent
permitted by law, and directly or indirectly (regardless of whether such Notes are surrendered to
the Company), repurchase Notes in the open market or otherwise, whether by the Company or its
Subsidiaries or through a private or public tender or exchange offer or through counterparties to
private agreements, including by cash-settled swaps or other derivatives. The Company shall cause
any Notes so repurchased (other than Notes repurchased pursuant to cash-settled swaps or other
derivatives) to be surrendered to the Trustee for cancellation in accordance with Section 2.08.
22
ARTICLE 3
Satisfaction and Discharge
Satisfaction and Discharge
Section 3.01. Satisfaction and Discharge. This Indenture shall upon request of the Company
contained in an Officer’s Certificate cease to be of further effect, and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge
of this Indenture, when (a) (i) all Notes theretofore authenticated and delivered (other than (x)
Notes which have been destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.06 and (y) Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 4.04(d)) have been delivered to the Trustee for cancellation; or
(ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the
Notes have become due and payable, whether at the Maturity Date, any Fundamental Change Repurchase
Date, upon conversion or otherwise, cash or cash and shares of Common Stock, if any (solely to
satisfy the Company’s Conversion Obligation, if applicable), sufficient to pay all of the
outstanding Notes and all other sums due and payable under this Indenture by the Company; and (b)
the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall
survive.
ARTICLE 4
Particular Covenants of the Company
Particular Covenants of the Company
Section 4.01. Payment of Principal and Interest. The Company covenants and agrees that it
will cause to be paid the principal (including the Fundamental Change Repurchase Price, if
applicable) of, and accrued and unpaid interest on, each of the Notes at the places, at the
respective times and in the manner provided herein and in the Notes.
Section 4.02. Maintenance of Office or Agency. The Company will maintain in the Borough of
Manhattan, The City of New York, 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 this Indenture may be served. The Company will give prompt written notice
to the Trustee of the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the
Borough of Manhattan, The City of New York.
The Company may also from time to time designate as co-Note Registrars one or more other
offices or agencies where the Notes may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York, for such purposes. The Company
23
will give
prompt written notice to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent”
include any such additional or other offices or agencies, as applicable.
The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar,
Custodian and Conversion Agent and the Corporate Trust Office and the office or agency of the
Trustee in the Borough of Manhattan, The City of New York, each shall be considered as one such
office or agency of the Company for each of the aforesaid purposes.
Section 4.03. Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided
in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 4.04. Provisions as to Paying Agent. (a) If the Company shall appoint a Paying Agent
other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions
of this Section 4.04:
(i) that it will hold all sums held by it as such agent for the payment of the
principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued
and unpaid interest on, the Notes in trust for the benefit of the Holders of the Notes;
(ii) that it will give the Trustee prompt written notice of any failure by the Company
to make any payment of the principal (including the Fundamental Change Repurchase Price, if
applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and
payable; and
(iii) that at any time during the continuance of an Event of Default, upon request of
the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal (including the Fundamental
Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit
with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change
Repurchase Price, if applicable) or accrued and unpaid interest, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such
action; provided that if such deposit is made on the due date, such deposit must be received by the
Paying Agent by 11:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of
the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued
and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the
Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change
Repurchase Price, if applicable) and accrued and unpaid interest so becoming due and will promptly
notify the Trustee in writing of any failure to take such action and of any failure by the Company
to make any payment of the principal (including the Fundamental Change
24
Repurchase Price, if
applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and
payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any
time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other
reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the
Company or any Paying Agent hereunder as required by this Section 4.04, such sums or amounts to be
held by the Trustee upon the trusts herein contained and upon such payment or delivery by the
Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from
all further liability but only with respect to such sums or amounts.
(d) Any money and shares of Common Stock deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal (including the Fundamental
Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, any Note and
remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase
Price, if applicable) or interest has become due and payable shall be paid to the Company on
request of the Company contained in an Officer’s Certificate, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money and shares of Common Stock, and all liability of
the Company as trustee thereof, shall thereupon cease.
Section 4.05. Existence. Subject to Article 11, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate existence.
Section 4.06. Rule 144A Information Requirement and Annual Reports. (a) At any time the
Company is not subject to Sections 13 or 15(d) of the Exchange Act, the Company shall, so long as
any of the Notes shall, at such time, constitute “restricted securities” within the meaning of Rule
144(a)(3) under the Securities Act, promptly provide to the Trustee and shall, upon written
request, provide to any Holder, beneficial owner or prospective purchaser of such Notes, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to
facilitate the resale of such Notes pursuant to Rule 144A under the Securities Act. The Company
shall take such further action as any Holder or beneficial owner of such Notes may reasonably
request to the extent required from time to time to enable such Holder or beneficial owner to sell
such Notes in accordance with Rule 144A under the Securities Act, as such rule may be amended from
time to time.
(b) The Company shall file with the Trustee within 15 days after the same are required to be
filed with the Commission, copies of any documents or reports that the Company is required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any grace
period provided by Rule 12b-25 under the Exchange Act or any successor or similar grace provision).
Any such document or report that the Company files with the Commission via the Commission’s EDGAR
system shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the
time such documents are filed via the EDGAR system, it being understood that the Trustee shall not
be responsible for determining whether such filings have been made.
25
(c) Delivery of the reports and documents described in subsection (b) above to the Trustee is
for informational purposes only, and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to conclusively rely on an Officer’s Certificate).
(d) If, at any time during the six-month period beginning on, and including, the date that is
six months after the last date of original issuance of the Notes, the Company fails to timely file
any document or report that it is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods
thereunder and other than reports on Form 8-K), or the Notes are not otherwise freely tradable by
Holders other than the Company’s Affiliates (as a result of restrictions pursuant to U.S.
securities law or the terms of this Indenture or the Notes), the Company shall pay Additional
Interest on the Notes. Such Additional Interest shall accrue on the Notes at the rate of 0.50% per
annum of the principal amount of the Notes outstanding for each day during such period for which
the Company’s failure to file has occurred and is continuing. As used in this Section 4.06(d),
documents or reports that the Company is required to “file” with the Commission pursuant to Section
13 or 15(d) of the Exchange Act do not include documents or reports that the Company furnishes to
the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
(e) If, and for so long as, the restrictive legend on the Notes specified in Section 2.05(c)
has not been removed, the Notes are assigned a restricted CUSIP number or the Notes are not
otherwise freely tradable by Holders other than the Company’s Affiliates (without restrictions
pursuant to U.S. securities law or the terms of this Indenture or the Notes) as of the 375th day
after the last date of original issuance of the Notes, the Company shall pay Additional Interest on
the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the
restrictive legend on the Notes has been removed in accordance with Section 2.05(c) and the Notes
are freely tradable by Holders other than the Company’s Affiliates (without restrictions pursuant
to U.S. securities law or the terms of this Indenture or the Notes); provided that the Company
shall not pay Additional Interest on the Notes for failure to remove the restrictive legend on the
Notes specified in Section 2.05(c) or failure to cause the Notes to be assigned an unrestricted
CUSIP number unless the Company has received a request to remove such legend and obtain an
unrestricted CUSIP number by a Holder, any Initial Purchaser or the Trustee on or after the 335th
day after the last date of original issuance of the Notes. Additional Interest will accrue from (i)
if such request has been delivered prior to the 365th day after the last date of original issuance
of the Notes, the 375th day after such last date of original issuance of the Notes or (ii)
otherwise, ten days from the delivery date of such request
(f) Notwithstanding the foregoing, no Additional Interest will accrue or be payable under
Section 4.06(e) for each day on which (i) the Company makes available to Holders an effective
registration statement permitting the resale of the Notes and any shares of Common Stock issuable
upon conversion thereof and (ii) the Notes sold under such registration statement and any shares of
Common Stock issuable upon conversion thereof are assigned an unrestricted CUSIP number and are
freely tradable by Holders other than the Company’s Affiliates (without restrictions pursuant to
U.S. securities law or the terms of this Indenture or the Notes). After the Company has made
available such an effective shelf registration statement and has complied
26
with clause (ii) above
for a period of at least two years, no further Additional Interest shall be payable under Section
4.06(e).
(g) Additional Interest will be payable in arrears on each Interest Payment Date following
accrual in the same manner as regular interest on the Notes.
(h) The Additional Interest that is payable in accordance with Section 4.06(d) or Section
4.06(e) shall be in addition to, and not in lieu of, any Additional Interest that may be payable as
a result of the Company’s election pursuant to Section 6.03. Notwithstanding the foregoing, in no
event shall Additional Interest accrue under the terms of this Indenture (taking any Additional
Interest payable pursuant to Section 4.06(d) or Section 4.06(e) together with any Additional
Interest payable pursuant to Section 6.03) at a rate per year in excess of 0.50%, regardless of the
number of events or circumstances giving rise to the requirement to pay such Additional Interest.
(i) If Additional Interest is payable by the Company pursuant to Section 4.06(d) or Section
4.06(e), the Company shall deliver to the Trustee an Officer’s Certificate to that effect stating
(i) the amount of such Additional Interest that is payable and (ii) the date on which such
Additional Interest is payable. Unless and until a Responsible Officer of the Trustee receives at
the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such
Additional Interest is payable. If the Company has paid Additional Interest directly to the
Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting
forth the particulars of such payment.
Section 4.07. Stay, Extension and Usury Laws. The Company covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on
the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that
may affect the covenants or the performance of this Indenture; and the Company (to the extent it
may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 4.08. Compliance Certificate; Statements as to Defaults. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company (beginning with the
fiscal year ending on December 31, 2011) an Officer’s Certificate stating whether or not the
signers thereof have knowledge of any failure by the Company to comply with all conditions and
covenants then required to be performed under this Indenture and, if so, specifying each such
failure and the nature thereof.
In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event
within 30 days after the Company becomes aware of the occurrence of any Event of Default or
Default, an Officer’s Certificate setting forth the details of such Event of Default or Default,
its status and the action that the Company proposes to take with respect thereto.
27
Section 4.09. Further Instruments and Acts. Upon request of the Trustee, the Company will
execute and deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this Indenture.
ARTICLE 5
Lists of Holders and Reports by the Company and the Trustee
Lists of Holders and Reports by the Company and the Trustee
Section 5.01. Lists of Holders. For so long as there are any Physical Notes, the Company
covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually,
not more than 15 days after each June 1 and December 1 in each year beginning with December 1,
2011, and at such other times as the Trustee may request in writing, within 30 days after receipt
by the Company of any such request (or such lesser time as the Trustee may reasonably request in
order to enable it to timely provide any notice to be provided by it hereunder), a list in such
form as the Trustee may reasonably require of the names and addresses of the Holders as of a date
not more than 15 days (or such other date as the Trustee may reasonably request in order to so
provide any such notices) prior to the time such information is furnished, except that no such list
need be furnished so long as the Trustee is acting as Note Registrar.
Section 5.02. Preservation and Disclosure of Lists. The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to the names and addresses of the
Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained
by the Trustee in its capacity as Note Registrar, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.
ARTICLE 6
Defaults and Remedies
Defaults and Remedies
Section 6.01. Events of Default. The following events shall be “Events of Default” with
respect to the Notes:
(a) default in any payment of interest on any Note when due and payable, and the default
continues for a period of 30 days;
(b) default in the payment of principal (including the Fundamental Change Repurchase Price, if
applicable) of any Note when due and payable on the Maturity Date, upon any required repurchase,
upon declaration of acceleration or otherwise;
(c) failure by the Company to comply with its obligation to convert the Notes in accordance
with this Indenture upon exercise of a Holder’s conversion right, and such failure continues for a
period of 5 Business Days;
(d) failure by the Company to issue a Fundamental Change Company Notice in accordance with
Section 15.02(c) or notice of a specified corporate event in accordance with Section 14.01(b)(ii)
or Section 14.01(b)(iii), in each case when due;
28
(e) failure by the Company to comply with its obligations under Article 11;
(f) failure by the Company for 60 days after written notice from the Trustee or the Holders of
at least 25% in principal amount of the Notes then outstanding has been received by the Company to
comply with any of its other agreements contained in the Notes or this Indenture;
(g) default by the Company or any Subsidiary of the Company in the payment when due, after the
expiration of any applicable grace period, of principal of, or premium, if any, or interest on,
recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of
$25.0 million or more, or acceleration of the Company’s or the Company’s Subsidiaries’ recourse
indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that
it becomes due and payable before the date on which it would otherwise have become due and payable,
if such default is not cured or waived, or such acceleration is not rescinded, as the case may be,
within 30 days after written notice to the Company from the Trustee or the Holders of at least 25%
in principal amount of Notes then outstanding in accordance with this Indenture;
(h) a final judgment for the payment of $25.0 million or more (excluding any amounts covered
by insurance) rendered against the Company or any Subsidiary of the Company, 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;
(i) the Company or any Significant Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to the Company or any
such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of the Company or any such Significant Subsidiary or any substantial part of
its property, or shall consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay its debts as they
become due; or
(j) an involuntary case or other proceeding shall be commenced against the Company or any
Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the
Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or such Significant Subsidiary or
any substantial part of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 30 consecutive days.
Section 6.02. Acceleration; Rescission and Annulment. In case one or more Events of Default
shall have occurred and be continuing (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any administrative or governmental
body), then, and in each and every such case (other than an Event of Default specified in Section
6.01(i) or Section 6.01(j) with respect to the Company or any of its
29
Significant Subsidiaries),
unless the principal of all of the Notes shall have already become due and payable, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding
determined in accordance with Section 8.04, by notice in writing to the Company (and to the Trustee
if given by Holders), may declare 100% of the principal of, and accrued and unpaid interest on, all
the Notes to be due and payable immediately, and upon any such declaration the same shall become
and shall automatically be immediately due and payable, anything contained in this Indenture or in
the Notes to the contrary notwithstanding. If an Event of Default specified in Section 6.01(i) or
Section 6.01(j) with respect to the Company or any of its Significant Subsidiaries occurs and is
continuing, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall
become and shall automatically be immediately due and payable.
The immediately preceding paragraph, however, is subject to the conditions that if, at any
time after the principal of the Notes shall have been so declared due and payable, and before any
judgment or decree for the payment of the monies due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to
pay installments of accrued and unpaid interest upon all Notes and the principal of any and all
Notes that shall have become due otherwise than by acceleration (with interest on overdue
installments of accrued and unpaid interest to the extent that payment of such interest is
enforceable under applicable law, and on such principal at the rate borne by the Notes) and amounts
due to the Trustee pursuant to Section 7.06, and if (1) rescission would not conflict with any
judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of
Default under this Indenture, other than the nonpayment of the principal of and accrued and unpaid
interest, if any, on Notes that shall have become due solely by such acceleration, shall have been
cured or waived pursuant to Section 6.09, then and in every such case (except as provided in the
immediately succeeding sentence) the Holders of a majority in aggregate principal amount of the
Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults
or Events of Default with respect to the Notes and rescind and annul such declaration and its
consequences and such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent Default or Event of
Default, or shall impair any right consequent thereon. Notwithstanding anything to the contrary
herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or
Event of Default resulting from (i) the nonpayment of the principal of, or accrued and unpaid
interest on, any Notes or (ii) a failure to pay or deliver, as the case may be, the consideration
due upon conversion of the Notes.
Section 6.03. Additional Interest. Notwithstanding anything in this Indenture or in the
Notes to the contrary, to the extent the Company elects, the sole remedy for Event of Default
relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b)
shall after the occurrence of such an Event of Default consist exclusively of the right to receive
Additional Interest on the Notes at a rate equal to (x) 0.25% per annum of the principal amount of
the Notes outstanding for each day during the 90-day period on which such Event of Default is
continuing beginning on, and including, the date on which such an Event of Default first occurs and
(y) 0.50% per annum of the principal amount of the Notes outstanding for each day during the
180-day period beginning on, and including, the 91st day on which such Event of
30
Default is
continuing. Additional Interest payable pursuant to this Section 6.03 shall be in addition to, not
in lieu of, any Additional Interest payable pursuant to Section 4.06(d) or Section 4.06(e). If the
Company so elects, such Additional Interest shall be payable in the same manner and on the same
dates as regular interest on the Notes. On the 271st day after such Event of Default (if the Event
of Default relating to the Company’s failure to comply with its obligations as set forth in Section
4.06(b) is not cured or waived prior to such 271st day), the Notes will be subject to acceleration
as provided in Section 6.02. In the event the Company does not elect to pay Additional Interest
following an Event of Default in accordance with this Section 6.03, the Notes shall be subject to
acceleration as provided in Section 6.02.
In order to elect to pay Additional Interest as the sole remedy during the first 270 days
after the occurrence of any Event of Default described in the immediately preceding paragraph, the
Company must notify in writing all Holders of the Notes, the Trustee and the Paying Agent of such
election prior to the beginning of such 270-day period. Upon the failure to timely give such
notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02.
In no event shall Additional Interest accrue under the terms of this Indenture (taking any
Additional Interest payable pursuant to this Section 6.03 together with any Additional Interest
payable pursuant to Section 4.06(d) or Section 4.06(e)) at a rate per year in excess of 0.50%,
regardless of the number of events or circumstances giving rise to the requirement to pay such
Additional Interest.
The Trustee shall not at any time be under any duty or responsibility to any Holder to
determine Additional Interest, or with respect to the nature, extent or calculation of the amount
of Additional Interest owed, or with respect to the method employed in such calculation of
Additional Interest.
Section 6.04. Payments of Notes on Default; Suit Therefor. If an Event of Default described
in clause (a) or (b) of Section 6.01 shall have occurred, the Company shall, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders of the Notes, the whole amount then due
and payable on the Notes for principal and interest, if any, with interest on any overdue principal
and interest, if any, at the rate borne by the Notes at such time, and, in addition thereto, such
further amount as shall be sufficient to cover any amounts due to the Trustee under Section 7.06.
If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the property of the Company
or any other obligor upon the Notes, wherever situated.
In the event there shall be pending proceedings for the bankruptcy or for the reorganization
of the Company or any other obligor on the Notes under title 11 of the United States Code, or any
other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or taken possession of
the Company or such other obligor, the property of the Company or such other obligor, or in the
event of any other judicial proceedings relative to the Company or such other obligor upon the
Notes, or to the creditors or property of the Company or such other
31
obligor, the Trustee,
irrespective of whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 6.04, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and accrued and unpaid interest, if any, in respect of the Notes, and, in case
of any judicial proceedings, to file such proofs of claim and other papers or documents and to take
such other actions as it may deem necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative
to the Company or any other obligor on the Notes, its or their creditors, or its or their property,
and to collect and receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due to the Trustee under Section
7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian
or similar official is hereby authorized by each of the Holders to make such payments to the
Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including agents and counsel fees, and
including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date of
such distribution. To the extent that such payment of reasonable compensation, expenses, advances
and disbursements out of the estate in any such proceedings shall be denied for any reason, payment
of the same shall be secured by a lien on, and shall be paid out of, any and all distributions,
dividends, monies, securities and other property that the Holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting such Holder or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under any of the Notes,
may be enforced by the Trustee without the possession of any of the Notes, or the production
thereof at any trial or other proceeding relative thereto, and any such suit or proceeding
instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable
benefit of the Holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving the interpretation
of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held
to represent all the Holders of the Notes, and it shall not be necessary to make any Holders of the
Notes parties to any such proceedings.
In case the Trustee shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned because of any waiver pursuant to Section
6.09 or any rescission and annulment pursuant to Section 6.02 or for any other reason or
32
shall have
been determined adversely to the Trustee, then and in every such case the Company, the Holders, and
the Trustee shall, subject to any determination in such proceeding, be restored respectively to
their several positions and rights hereunder, and all rights, remedies and powers of the Company,
the Holders, and the Trustee shall continue as though no such proceeding had been instituted.
Section 6.05. Application of Monies Collected by Trustee. Any monies collected by the
Trustee pursuant to this Article 6 with respect to the Notes shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of such monies, upon
presentation of the several Notes, and stamping thereon the payment, if only partially paid, and
upon surrender thereof, if fully paid:
First, to the payment of all amounts due the Trustee under Section 7.06;
Second, in case the principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in
the order of the date due of the payments of such interest and cash due upon conversion, as the
case may be, with interest (to the extent that such interest has been collected by the Trustee)
upon such overdue payments at the rate borne by the Notes at such time, such payments to be made
ratably to the Persons entitled thereto;
Third, in case the principal of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid to the payment of the whole amount (including, if applicable, the payment
of the Fundamental Change Repurchase Price and any cash due upon conversion) then owing and unpaid
upon the Notes for principal and interest, if any, with interest on the overdue principal and, to
the extent that such interest has been collected by the Trustee, upon overdue installments of
interest at the rate borne by the Notes at such time, and in case such monies shall be insufficient
to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal (including, if applicable, the Fundamental Change Repurchase Price and the cash due upon
conversion) and interest without preference or priority of principal over interest, or of interest
over principal or of any installment of interest over any other installment of interest, or of any
Note over any other Note, ratably to the aggregate of such principal (including, if applicable, the
Fundamental Change Repurchase Price and any cash due upon conversion) and accrued and unpaid
interest; and
Fourth, to the payment of the remainder, if any, to the Company.
Section 6.06. Proceedings by Holders. Except to enforce the right to receive payment of
principal (including, if applicable, the Fundamental Change Repurchase Price) or interest when due,
or the right to receive payment or delivery of the consideration due upon conversion, no Holder of
any Note shall have any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or with respect to this
Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar
official, or for any other remedy hereunder, unless:
(a) such Holder previously shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof, as herein provided;
33
(b) Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall
have made written request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder;
(c) such Holders shall have offered to the Trustee such security or indemnity satisfactory to
it against any loss, liability or expense to be incurred therein or thereby;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or proceeding; and
(e) no direction that, in the opinion of the Trustee, is inconsistent with such written
request shall have been given to the Trustee by the Holders of a majority of the aggregate
principal amount of the Notes then outstanding within such 60-day period pursuant to Section 6.09,
it being understood and intended, and being expressly covenanted by the taker and Holder of every
Note with every other taker and Holder and the Trustee that no one or more Holders shall have any
right in any manner whatever by virtue of or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holder, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable and common benefit of all Holders
(except as otherwise provided herein) (it being understood that the Trustee does not have an
affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to
such Holders). For the protection and enforcement of this Section 6.06, each and every Holder and
the Trustee shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of any Note, the right
of any Holder to receive payment or delivery, as the case may be, of (x) the principal (including
the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if
any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective
due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the
enforcement of any such payment or delivery, as the case may be, on or after such respective dates
against the Company shall not be impaired or affected without the consent of such Holder.
Section 6.07. Proceedings by Trustee. In case of an Event of Default the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either
by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Section 6.08. Remedies Cumulative and Continuing. Except as provided in the last paragraph
of Section 2.06, all powers and remedies given by this Article 6 to the Trustee or to the Holders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of any
34
thereof or of
any other powers and remedies available to the Trustee or the Holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee or of any Holder of any of the
Notes to exercise any right or power accruing upon any Default or Event of Default shall impair any
such right or power, or shall be construed to be a waiver of any such Default or Event of Default
or any acquiescence therein; and, subject to the provisions of Section 6.06, every power and remedy
given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the Holders.
Section 6.09. Direction of Proceedings and Waiver of Defaults by Majority of Holders. The
Holders of a majority of the aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 8.04 shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to Notes; provided, however, that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such direction. The
Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights
of any other Holder or that would involve the Trustee in personal liability. The Holders of a
majority in aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past
Default or Event of Default hereunder and its consequences except (i) a default in the payment of
accrued and unpaid interest, if any, on, or the principal (including any Fundamental Change
Repurchase Price) of, the Notes when due that has not been cured pursuant to the provisions of
Section 6.01, (ii) a failure by the Company to the consideration due upon conversion of the Notes
or (iii) a default in respect of a covenant or provision hereof which under Article 10 cannot be
modified or amended without the consent of each Holder of an outstanding Note affected. Upon any
such waiver the Company, the Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon. Whenever any Default or Event of
Default hereunder shall have been waived as permitted by this Section 6.09, said Default or Event
of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and
to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event
of Default or impair any right consequent thereon.
Section 6.10. Notice of Defaults. The Trustee shall, within 90 days after it receives
written notice of the occurrence and continuance of a Default, mail to all Holders as the names and
addresses of such Holders appear upon the Note Register, notice of all such Defaults, unless such
Defaults shall have been cured or waived before the giving of such notice; provided that, except in
the case of a Default in the payment of the principal of (including the Fundamental Change
Repurchase Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default
in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected
in withholding such notice if and so long as it in good faith determines that the withholding of
such notice is in the interests of the Holders.
35
Section 6.11. Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder
of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of this Section 6.11
(to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Notes at the time outstanding determined in accordance with Section 8.04, or to any
suit instituted by any Holder for the enforcement of the payment of the principal of or accrued and
unpaid interest, if any, on any Note (including, but not limited to, the Fundamental Change
Repurchase Price with respect to the Notes being repurchased as provided in this Indenture) on or
after the due date expressed or provided for in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of Article 14.
ARTICLE 7
Concerning the Trustee
Concerning the Trustee
Section 7.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence
of an Event of Default and after the curing or waiver of all Events of Default that may have
occurred, undertakes to perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default has occurred that has not been cured or waived the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs; provided that if an Event of Default
occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or
powers under this Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee indemnity or security satisfactory to the Trustee against the costs,
expenses and liabilities that might be incurred by it in compliance with such request or direction.
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own grossly negligent action, its own grossly negligent failure to act or its own willful
misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against the Trustee; and
36
(ii) in the absence of bad faith and willful misconduct on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case of any such certificates
or opinions that by any provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture (but need not confirm or investigate the
accuracy of any mathematical calculations or other facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was
grossly negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable for any action it takes or omits to take in good faith
that it believes to be authorized or within the rights or powers conferred upon it by this
Indenture;
(d) the Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the Holders of not less than a majority of the
aggregate principal amount of the Notes at the time outstanding determined as provided in Section
8.04 relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(e) whether or not therein provided, every provision of this Indenture relating to the conduct
or affecting the liability of, or affording protection to, the Trustee shall be subject to the
provisions of this Section;
(f) the Trustee shall not be liable in respect of any payment (as to the correctness of
amount, entitlement to receive or any other matters relating to payment) or notice effected by the
Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the
Notes;
(g) if any party fails to deliver a notice relating to an event the fact of which, pursuant to
this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its
failure to receive such notice as reason to act as if no such event occurred, unless such
Responsible Officer of the Trustee had actual knowledge of such event;
(h) in the absence of written investment direction from the Company, all cash received by the
Trustee shall be placed in a non-interest bearing trust account, and in no event shall the Trustee
be liable for the selection of investments or for investment losses incurred thereon or for losses
incurred as a result of the liquidation of any such investment prior to its maturity date or the
failure of the party directing such investments prior to its maturity date or the failure of the
party directing such investment to provide timely written investment direction, and the Trustee
shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such
written investment direction from the Company; and
37
(i) in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent,
Conversion Agent, Bid Solicitation Agent or transfer agent hereunder, the rights and protections
afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note
Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers.
Section 7.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section
7.01:
(a) the Trustee may conclusively rely and shall be fully protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, Note, coupon or other paper or document believed by it in good faith
to be genuine and to have been signed or presented by the proper party or parties;
(b) before the Trustee acts or refrains from acting, it may require an Officer’s Certificate
or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits
to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel;
(c) any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be
herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(d) the Trustee may consult with counsel of its selection and require an Opinion of Counsel
and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(e) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent or attorney at the
expense of the Company and shall incur no liability of any kind by reason of such inquiry or
investigation;
(f) the Trustee shall not be required to give any bond or surety in respect of the performance
of its powers and duties hereunder;
(g) the rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
38
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder;
(h) the Trustee may request that the Company deliver a certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to
this Indenture (i.e., an incumbency certificate);
(i) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, custodians, nominees or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of any agent,
custodian, nominee or attorney appointed by it with due care hereunder; and
(j) the permissive rights of the Trustee enumerated herein shall not be construed as duties.
In no event shall the Trustee be responsible or liable for any special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the
form of action other than any such loss or damage caused by the Trustee’s gross negligence or
willful misconduct. The Trustee shall not be charged with knowledge of any Default or Event of
Default with respect to the Notes, unless either (1) a Responsible Officer shall have actual
knowledge of such Default or Event of Default or (2) written notice of such Default or Event of
Default shall have been given to the Trustee by the Company or by any Holder of the Notes.
Section 7.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the
Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes
or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the
provisions of this Indenture.
Section 7.04. Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note
Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent, Bid Solicitation
Agent or Note Registrar, in its individual or any other capacity, may become the owner or pledgee
of Notes with the same rights it would have if it were not the Trustee, Paying Agent, Conversion
Agent, Bid Solicitation Agent or Note Registrar.
Section 7.05. Monies and Shares of Common Stock to Be Held in Trust. All monies and any
shares of Common Stock received by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received. Money and any shares of Common Stock
held by the Trustee in trust hereunder need not be segregated from other funds or property except
to the extent required by law. The Trustee shall be under no liability for interest on any money
or shares of any Common Stock received by it hereunder except as may be agreed from time to time by
the Company and the Trustee.
39
Section 7.06. Compensation and Expenses of Trustee. The Company covenants and agrees to pay
to the Trustee from time to time, and the Trustee shall be entitled to, such compensation for all
services rendered by it hereunder in any capacity (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust) as mutually agreed to in
writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances reasonably incurred or made by
the Trustee in accordance with any of the provisions of this Indenture in any capacity thereunder
(including the reasonable compensation and the expenses and disbursements of its agents and counsel
and of all Persons not regularly in its employ) except any such expense, disbursement or advance as
shall have been caused by its gross negligence or willful misconduct. The Company also covenants
to indemnify the Trustee in any capacity under this Indenture and any other document or transaction
entered into in connection herewith and its agents and any authenticating agent for, and to hold
them harmless against, any loss, claim (whether asserted by the Company, any Holder or any other
Person), damage, liability or expense incurred without gross negligence or willful misconduct on
the part of the Trustee, its officers, directors, agents or employees, or such agent or
authenticating agent, as the case may be, and arising out of or in connection with the acceptance
or administration of this trust or in any other capacity hereunder, including the costs and
expenses of defending themselves against any claim of liability in the premises. The obligations
of the Company under this Section 7.06 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured by a senior claim
to which the Notes are hereby made subordinate on all money or property held or collected by the
Trustee, except, subject to the effect of Section 6.05, funds held in trust herewith for the
benefit of the Holders of particular Notes. The Trustee’s right to receive payment of any amounts
due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the
Company. The obligation of the Company under this Section 7.06 shall survive the satisfaction and
discharge of this Indenture and the earlier resignation or removal or the Trustee. The Company
need not pay for any settlement made without its consent, which consent shall not be unreasonably
withheld. The indemnification provided in this Section 7.06 shall extend to the officers,
directors, agents and employees of the Trustee.
Without prejudice to any other rights available to the Trustee under applicable law, when the
Trustee and its agents and any authenticating agent incur expenses or render services after an
Event of Default specified in Section 6.01(i) or Section 6.01(j) occurs, the expenses and the
compensation for the services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
Section 7.07. [Intentionally Omitted]
Section 7.08. Eligibility of Trustee. There shall at all times be a Trustee hereunder which
shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
40
accordance with the provisions of this Section, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article.
Section 7.09. Resignation or Removal of Trustee. (a) The Trustee may at any time resign by
giving written notice of such resignation to the Company and by mailing notice thereof to the
Holders at their addresses as they shall appear on the Note Register. Upon receiving such notice
of resignation, the Company shall promptly appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within 60 days after the mailing of such
notice of resignation to the Holders, the resigning Trustee may, upon ten Business Days’ notice to
the Company and the Holders, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Holder who has been a bona fide
holder of a Note or Notes for at least six months may, subject to the provisions of Section 6.11,
on behalf of himself and all others similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper
and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall cease to be eligible in accordance with the provisions of Section
7.08 and shall fail to resign after written request therefor by the Company or by any such
Holder, or
(ii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in either case, the Company may by a Board Resolution remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 6.11, any Holder who has been a bona
fide holder of a Note or Notes for at least six months may, on behalf of himself and all others
similarly situated, at the expense of the Company, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Notes at the time
outstanding, as determined in accordance with Section 8.04, may at any time remove the Trustee and
nominate a successor trustee by so notifying the Trustee and the Company in writing not less than
30 days prior to the effective date of such removal. If within ten days after notice to the
Company of such nomination the Company objects thereto, the Trustee so removed or any Holder, upon
the terms and conditions and otherwise as in Section 7.09(a) provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
41
(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant
to any of the provisions of this Section 7.09 shall become effective upon acceptance of appointment
by the successor trustee as provided in Section 7.10.
Section 7.10. Acceptance by Successor Trustee. Any successor trustee appointed as provided
in Section 7.09 shall execute, acknowledge and deliver to the Company and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally named as Trustee
herein; but, nevertheless, on the written request of the Company or of the successor trustee, the
trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of
Section 7.06, execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee,
the Company shall execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all
money or property held or collected by such trustee as such, except for funds held in trust for the
benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 7.06.
No successor trustee shall accept appointment as provided in this Section 7.10 unless at the
time of such acceptance such successor trustee shall be eligible under the provisions of Section
7.08.
Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each
of the Company and the successor trustee, at the written direction and at the expense of the
Company shall mail or cause to be mailed notice of the succession of such trustee hereunder to the
Holders at their addresses as they shall appear on the Note Register. If the Company fails to mail
such notice within ten days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.
The Trustee shall have no responsibility or liability for the action or inaction of a
successor trustee.
Section 7.11. Succession by Merger, Etc. Any corporation or other entity into which the
Trustee may be merged or converted or with which it may be consolidated, or any corporation or
other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation or other entity succeeding to all or substantially all of the corporate
trust business of the Trustee (including the administration of this Indenture), shall be the
successor to the Trustee hereunder without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided that in the case of any corporation or other
entity succeeding to all or substantially all of the corporate trust business of the Trustee such
corporation or other entity shall be eligible under the provisions of Section 7.08.
In case at the time such successor to the Trustee shall succeed to the trusts created by this
Indenture, any of the Notes shall have been authenticated but not delivered, any such successor
42
to the Trustee may adopt the certificate of authentication of any predecessor trustee or
authenticating agent appointed by such predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by such successor trustee may
authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of
the successor trustee; and in all such cases such certificates shall have the full force which it
is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall
have; provided, however, that the right to adopt the certificate of authentication of any
predecessor trustee or to authenticate Notes in the name of any predecessor trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
Section 7.12. Trustee’s Application for Instructions from the Company. Any application by
the Trustee for written instructions from the Company (other than with regard to any action
proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders
of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or
after which such action shall be taken or such omission shall be effective. The Trustee shall not
be liable for any action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer that the Company has indicated to
the Trustee should receive such application actually receives such application, unless any such
officer shall have consented in writing to any earlier date), unless, prior to taking any such
action (or the effective date in the case of any omission), the Trustee shall have received written
instructions in accordance with this Indenture in response to such application specifying the
action to be taken or omitted.
ARTICLE 8
Concerning the Holders
Concerning the Holders
Section 8.01. Action by Holders. Whenever in this Indenture it is provided that the Holders
of a specified percentage of the aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such action, the Holders of
such specified percentage have joined therein may be evidenced (a) by any instrument or any number
of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in
writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly
called and held in accordance with the provisions of Article 9, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of Holders. Whenever the Company
or the Trustee solicits the taking of any action by the Holders of the Notes, the Company or the
Trustee may, but shall not be required to, fix in advance of such solicitation, a date as the
record date for determining Holders entitled to take such action. The record date if one is
selected shall be not more than fifteen days prior to the date of commencement of solicitation of
such action.
43
Section 8.02. Proof of Execution by Holders. Subject to the provisions of Section 7.01,
Section 7.02 and Section 9.05, proof of the execution of any instrument by a Holder or its agent or
proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may
be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar.
The record of any Holders’ meeting shall be proved in the manner provided in Section 9.06.
Section 8.03. Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating
agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the Person in whose
name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute
owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing thereon made by any Person other than the Company or any Note Registrar)
for the purpose of receiving payment of or on account of the principal of and (subject to Section
2.03) accrued and unpaid interest on such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor
any Note Registrar shall be affected by any notice to the contrary. All such payments or
deliveries so made to any Holder for the time being, or upon its order, shall be valid, and, to the
extent of the sums or shares of Common Stock so paid or delivered, effectual to satisfy and
discharge the liability for monies payable or shares deliverable upon any such Note.
Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of
Default, any owner of a beneficial interest in a Global Note may directly enforce against the
Company, without the consent, solicitation, proxy, authorization or any other action of the
Depositary or any other Person, such owner’s right to exchange such beneficial interest for a Note
in certificated form in accordance with the provisions of this Indenture.
Section 8.04. Company-Owned Notes Disregarded. In determining whether the Holders of the
requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or
other action under this Indenture, Notes that are owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common control with the Company
shall be disregarded and deemed not to be outstanding for the purpose of any such determination;
provided that for the purposes of determining whether the Trustee shall be protected in
conclusively relying on any such direction, consent, waiver or other action only Notes that a
Responsible Officer actually knows are so owned shall be so disregarded. Notes so owned that have
been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with
respect to such Notes and that the pledgee is not the Company or a Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the Company. In the
case of a dispute as to such right, any decision or indecision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Notes, if any,
known by the Company to be owned or held by or for the account of any of the above described
Persons; and, subject to Section 7.01, the Trustee shall be entitled to accept such Officer’s
Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes
not listed therein are outstanding for the purpose of any such determination.
44
Section 8.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by
the Holders of the percentage of the aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any Holder of a Note that is shown by the evidence to be
included in the Notes the Holders of which have consented to such action may, by filing written
notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such Note. Except as aforesaid, any such
action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon
all future Holders and owners of such Note and of any Notes issued in exchange or substitution
therefor or upon registration of transfer thereof, irrespective of whether any notation in regard
thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon
registration of transfer thereof.
ARTICLE 9
Holders’ Meetings
Holders’ Meetings
Section 9.01. Purpose of Meetings. A meeting of Holders may be called at any time and from
time to time pursuant to the provisions of this Article 9 for any of the following purposes:
(a) to give any notice to the Company or to the Trustee or to give any directions to the
Trustee permitted under this Indenture, or to consent to the waiving of any Default or Event of
Default hereunder and its consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article 6;
(b) to remove the Trustee and nominate a successor trustee pursuant to the provisions of
Article 7;
(c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to
the provisions of Section 10.02; or
(d) to take any other action authorized to be taken by or on behalf of the Holders of any
specified aggregate principal amount of the Notes under any other provision of this Indenture or
under applicable law.
Section 9.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of
Holders to take any action specified in Section 9.01, to be held at such time and at such place as
the Trustee shall determine. Notice of every meeting of the Holders, setting forth the time and
the place of such meeting and in general terms the action proposed to be taken at such meeting and
the establishment of any record date pursuant to Section 8.01, shall be mailed to Holders of such
Notes at their addresses as they shall appear on the Note Register. Such notice shall also be
mailed to the Company. Such notices shall be mailed not less than 20 nor more than 90 days prior
to the date fixed for the meeting.
Any meeting of Holders shall be valid without notice if the Holders of all Notes then
outstanding are present in person or by proxy or if notice is waived before or after the meeting by
45
the Holders of all Notes then outstanding, and if the Company and the Trustee are either
present by duly authorized representatives or have, before or after the meeting, waived notice.
Section 9.03. Call of Meetings by Company or Holders. In case at any time the Company,
pursuant to a Board Resolution, or the Holders of at least 10% of the aggregate principal amount of
the Notes then outstanding, shall have requested the Trustee to call a meeting of Holders, by
written request setting forth in reasonable detail the action proposed to be taken at the meeting,
and the Trustee shall not have mailed the notice of such meeting within 20 days after receipt of
such request, then the Company or such Holders may determine the time and the place for such
meeting and may call such meeting to take any action authorized in Section 9.01, by mailing notice
thereof as provided in Section 9.02.
Section 9.04. Qualifications for Voting. To be entitled to vote at any meeting of Holders a
Person shall (a) be a Holder of one or more Notes on the record date pertaining to such meeting or
(b) be a Person appointed by an instrument in writing as proxy by a Holder of one or more Notes on
the record date pertaining to such meeting. The only Persons who shall be entitled to be present
or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 9.05. Regulations. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders,
in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters concerning the conduct
of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Company or by Holders as provided in Section 9.03,
in which case the Company or the Holders calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting
shall be elected by vote of the Holders of a majority in principal amount of the Notes represented
at the meeting and entitled to vote at the meeting.
Subject to the provisions of Section 8.04, at any meeting of Holders each Holder or
proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or
represented by him; provided, however, that no vote shall be cast or counted at any meeting in
respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be
not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of
Notes held by it or instruments in writing as aforesaid duly designating it as the proxy to vote on
behalf of other Holders. Any meeting of Holders duly called pursuant to the provisions of Section
9.02 or Section 9.03 may be adjourned from time to time by the Holders of a majority of the
aggregate principal amount of Notes represented at the meeting, whether or not constituting a
quorum, and the meeting may be held as so adjourned without further notice.
Section 9.06. Voting. The vote upon any resolution submitted to any meeting of Holders shall
be by written ballot on which shall be subscribed the signatures of the Holders or of their
46
representatives by proxy and the outstanding principal amount of the Notes held or represented
by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall
count all votes cast at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by
the secretary of the meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting and showing that
said notice was mailed as provided in Section 9.02. The record shall show the principal amount of
the Notes voting in favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters therein stated.
Section 9.07. No Delay of Rights by Meeting. Nothing contained in this Article 9 shall be
deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under
any of the provisions of this Indenture or of the Notes. Nothing contained in this Article 9 shall
be deemed or construed to limit any Holder’s actions pursuant to the applicable procedures of the
Depositary so long as the Notes are issued in global form.
ARTICLE 10
Supplemental Indentures
Supplemental Indentures
Section 10.01. Supplemental Indentures Without Consent of Holders. The Company, when
authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense,
may from time to time and at any time enter into an indenture or indentures supplemental hereto for
one or more of the following purposes:
(a) to cure any ambiguity, omission, defect or inconsistency that does not materially
adversely affect Holders of the Notes;
(b) to provide for the assumption by a Successor Company of the obligations of the Company
under this Indenture pursuant to Article 11;
(c) to add guarantees with respect to the Notes;
(d) to secure the Notes;
(e) to add to the covenants for the benefit of the Holders or surrender any right or power
conferred upon the Company;
47
(f) to make any change that does not materially adversely affect the rights of any Holder;
(g) to provide for the acceptance of appointment by a successor trustee pursuant to Section
7.10 or to facilitate the administration of the trusts by more than one trustee; or
(h) to conform the provisions of this Indenture or the Notes to the “Description of notes”
section of the Offering Memorandum, to the extent such provision in the “Description of notes”
section was intended to be a verbatim recitation of a provision of this Indenture, as evidenced by
an Officer’s Certificate.
Upon the written request of the Company, the Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations that may be therein contained, but the Trustee shall not be obligated
to, but may in its discretion, enter into any supplemental indenture that affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 10.01 may be executed
by the Company and the Trustee without the consent of the Holders of any of the Notes at the time
outstanding, notwithstanding any of the provisions of Section 10.02.
Section 10.02. Supplemental Indentures with Consent of Holders. With the consent (evidenced
as provided in Article 8) of the Holders of at least a majority of the aggregate principal amount
of Notes then outstanding (determined in accordance with Article 8 and including, without
limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for,
Notes), the Company, when authorized by the resolutions of the Board of Directors and the Trustee,
at the Company’s expense, may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the Holders; provided, however, that, without the consent of
each Holder of an outstanding Note affected, no such supplemental indenture shall:
(a) reduce the amount of Notes whose Holders must consent to an amendment;
(b) reduce the rate of or extend the stated time for payment of interest on any Note;
(c) reduce the principal of or extend the Maturity Date of any Note;
(d) make any change that adversely affects the conversion rights of any Notes;
(e) reduce the Fundamental Change Repurchase Price of any Note or amend or modify in any
manner adverse to the Holders the Company’s obligation to make such payments, whether through an
amendment or waiver of provisions in the covenants, definitions or otherwise;
(f) make any Note payable in a currency other than that stated in the Note;
(g) change the ranking of the Notes;
48
(h) impair the right of any Holder to receive payment of principal of (including the
Fundamental Change Repurchase Price, if applicable) and interest on such Holder’s Notes on or after
the due dates therefor or to institute suit for the enforcement of any payment on or with respect
to such Holder’s Note; or
(i) make any change in this Article 10 that requires each Holder’s consent or in the waiver
provisions in Section 6.01 or Section 6.09.
Upon the written request of the Company, and upon the filing with the Trustee of evidence of
the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such supplemental indenture affects
the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such supplemental
indenture.
Holders do not need under this Section 10.02 to approve the particular form of any proposed
supplemental indenture. It shall be sufficient if such Holders approve the substance thereof.
After any such supplemental indenture becomes effective, the Company shall mail to the Holders a
notice briefly describing such supplemental indenture. However, the failure to give such notice to
all the Holders, or any defect in the notice, will not impair or affect the validity of the
supplemental indenture.
Section 10.03. Effect of Supplemental Indentures. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 10, this Indenture shall be and be deemed to
be modified and amended in accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders
shall thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
Section 10.04. Notation on Notes. Notes authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article 10 may, at the Company’s
expense, bear a notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so determine, new Notes so modified as
to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this
Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared
and executed by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 17.10) and delivered in exchange for the Notes then
outstanding, upon surrender of such Notes then outstanding.
Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee. In
addition to the documents required by Section 17.05, the Trustee shall receive and shall be fully
protected in conclusively relying upon an Officer’s Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto complies with the
requirements of this Article 10, is permitted or authorized by this Indenture, such Opinion of
Counsel to include a customary legal opinion as to the enforceability under New
49
York law of such supplemental indenture, which opinion may contain customary exceptions and
qualifications.
ARTICLE 11
Consolidation, Merger, Sale, Conveyance and Lease
Consolidation, Merger, Sale, Conveyance and Lease
Section 11.01. Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of
Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey,
transfer or lease all or substantially all of its properties and assets to another Person, unless:
(a) the resulting, surviving or transferee Person (the “Successor Company”), if not the
Company, shall be a corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia, and the Successor Company (if not the
Company) shall expressly assume, by supplemental indenture all of the obligations of the Company
under the Notes and this Indenture; and
(b) immediately after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing under this Indenture.
For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or
substantially all of the properties and assets of one or more Subsidiaries of the Company to
another Person, which properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the Company on a
consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or
substantially all of the properties and assets of the Company to another Person.
Section 11.02. Successor Corporation to Be Substituted. In case of any such consolidation,
merger, sale, conveyance, transfer or lease and upon the assumption by the Successor Company, by
supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all
of the Notes, the due and punctual delivery or payment, as the case may be, of any consideration
due upon conversion of the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such Successor Company (if not the
Company) shall succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, except in the case of a lease of all or
substantially all of the Company’s properties and assets. Such Successor Company thereupon may
cause to be signed, and may issue either in its own name or in the name of the Company any or all
of the Notes issuable hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and
subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that
previously shall have been signed and delivered by the Officers of the Company to the Trustee for
authentication, and any Notes that such Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the
same legal rank
50
and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Notes had been issued at the date of the
execution hereof. In the event of any such consolidation, merger, sale, conveyance or transfer
(but not in the case of a lease), upon compliance with this Article 11 the Person named as the
“Company” in the first paragraph of this Indenture (or any successor that shall thereafter have
become such in the manner prescribed in this Article 11) may be dissolved, wound up and liquidated
at any time thereafter and, except in the case of a lease, such Person shall be released from its
liabilities as obligor and maker of the Notes and from its obligations under this Indenture and the
Notes.
In case of any such consolidation, merger, sale, conveyance, transfer or lease, such changes
in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as
may be appropriate.
Section 11.03. Evidence to Be Given to Trustee. No consolidation, merger, sale, conveyance,
transfer or lease shall be effective unless the Trustee shall receive an Officer’s Certificate and
an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance,
transfer or lease and any such assumption and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, complies with the provisions of this
Article 11.
ARTICLE 12
Immunity of Incorporators, Stockholders, Officers and Directors
Immunity of Incorporators, Stockholders, Officers and Directors
Section 12.01. Indenture and Notes Solely Corporate Obligations. No recourse for the payment
of the principal of or accrued and unpaid interest on any Note, nor for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement
of the Company in this Indenture or in any supplemental indenture or in any Note, nor because of
the creation of any indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, Officer or director or Subsidiary, as such, past, present or future
of the Company or any successor corporation, whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a condition of, and
as a consideration for, the execution of this Indenture and the issue of the Notes.
51
ARTICLE 13
[Intentionally Omitted]
[Intentionally Omitted]
ARTICLE 14
Conversion of Notes
Conversion of Notes
Section 14.01. Conversion Privilege. (a) Subject to and upon compliance with the provisions
of this Article 14, each Holder of a Note shall have the right, at such Holder’s option, to convert
all or any portion (if the portion to be converted is $1,000 principal amount or an integral
multiple thereof) of such Note (i) subject to satisfaction of the conditions described in Section
14.01(b), at any time prior to the close of business on the Business Day immediately preceding June
15, 2016 under the circumstances and during the periods set forth in Section 14.01(b), and (ii)
irrespective of the conditions described in Section 14.01(b), on or after June 15, 2016 and prior
to the close of business on the second Scheduled Trading Day immediately preceding the Maturity
Date, in each case, at an initial conversion rate of 17.4092 shares of Common Stock (subject to
adjustment as provided in Section 14.04, the “Conversion Rate”) per $1,000 principal amount of
Notes (subject to the settlement provisions of Section 14.02, the “Conversion Obligation”).
(b) (i) Prior to the close of business on the Business Day immediately preceding June 15,
2016, the Notes may be surrendered for conversion during the five Business-Day period immediately
after any ten consecutive Trading-Day period (the “Measurement Period”) in which the Trading Price
per $1,000 principal amount of Notes, as determined following a request by a Holder of Notes in
accordance with this subsection (b)(i), for each Trading Day of the Measurement Period was less
than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate
on each such Trading Day. The Trading Prices shall be determined by the Bid Solicitation Agent
pursuant to this subsection (b)(i) and the definition of Trading Price set forth in this Indenture.
The Company shall provide written notice to the Bid Solicitation Agent of the three independent
nationally recognized securities dealers selected by the Company pursuant to the definition of
Trading Price, along with appropriate contact information for each. The Bid Solicitation Agent
shall have no obligation to determine the Trading Price per $1,000 principal amount of Notes unless
the Company has requested such determination, and the Company shall have no obligation to make such
request unless a Holder of at least $5 million aggregate principal amount of Notes provides the
Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would
be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the
Conversion Rate, at which time the Company shall instruct the Bid Solicitation Agent to determine
the Trading Price per $1,000 principal amount of Notes beginning on the next Trading Day and on
each successive Trading Day until the Trading Price per Note is greater than or equal to 98% of the
product of the Last Reported Sale Price of the Common Stock and the Conversion Rate. If the
Company does not instruct the Bid Solicitation Agent to determine the Trading Price per $1,000
principal amount of Notes when obligated as provided in the preceding sentence, or if the Company
instructs the Bid Solicitation Agent to obtain bids and the Bid Solicitation Agent fails to make
such determination, then, in either case, the Trading Price per $1,000 principal amount of Notes
shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the
52
Common Stock and the Conversion Rate on each Trading Day of such failure. If the Trading
Price condition set forth above has been met, the Company shall so notify the Holders, the Trustee
and the Conversion Agent (if other than the Trustee) in writing. If, at any time after the Trading
Price condition set forth above has been met, the Trading Price per $1,000 principal amount of
Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common
Stock and the applicable Conversion Rate, the Company shall so notify the Holders of the Notes, the
Trustee and the Conversion Agent (if other than the Trustee) in writing.
(ii) If, prior to the close of business on the Business Day immediately preceding June
15, 2016, the Company elects to:
(A) issue to all or substantially all holders of its Common Stock any rights,
options or warrants entitling them, for a period of not more than 60 calendar days
after the announcement date of such issuance, to subscribe for or purchase shares
of its Common Stock, at a price per share that is less than the average of the Last
Reported Sale Prices of the Common Stock for the 10 consecutive Trading-Day period
ending on, and including, the Trading Day immediately preceding the date of
announcement of such issuance; or
(B) distribute to all or substantially all holders of its Common Stock the
Company’s assets, debt securities or rights to purchase securities of the Company,
which distribution has a per share value, as reasonably determined by the Board of
Directors, exceeding 10% of the Last Reported Sale Price of the Common Stock on the
Trading Day preceding the date of announcement for such distribution,
then, in either case, the Company shall notify all Holders of the Notes, the Trustee and the
Conversion Agent (if other than the Trustee) in writing at least 60 Scheduled Trading Days prior to
the Ex-Dividend Date for such issuance or distribution. Once the Company has given such notice,
the Notes may be surrendered for conversion at any time until the earlier of (1) the close of
business on the Business Day immediately preceding the Ex-Dividend Date for such issuance or
distribution and (2) the Company’s announcement that such issuance or distribution will not take
place, even if the Notes are not otherwise convertible at such time.
(iii) If a transaction or event that (x) constitutes a Fundamental Change occurs, (y)
constitutes a Make-Whole Fundamental Change occurs or (z) would have constituted a
Fundamental Change but for the Listed Stock Exception occurs, in each case prior to the
close of business on the Business Day immediately preceding June 15, 2016, regardless of
whether a Holder has the right to require the Company to repurchase the Notes pursuant to
Section 15.02, then the Notes may be surrendered for conversion at any time from or after
the effective date of the transaction or event until the earlier of (A) 35 Trading Days
after the actual effective date of such transaction or event or, if such transaction or
event also constitutes a Fundamental Change, until the related Fundamental Change Repurchase
Date, and (B) the second Scheduled Trading Day immediately preceding the Maturity Date. The
Company shall notify Holders, the Trustee and the Conversion Agent (if other than the
Trustee) in writing no later than five Business Days following the date the Company publicly
announces such transaction or event.
53
(iv) Prior to the close of business on the Business Day immediately preceding June 15,
2016, the Notes may be surrendered for conversion during any calendar quarter commencing
after the calendar quarter ending on September 30, 2011 (and only during such calendar
quarter), if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days
(whether or not consecutive) during the period of 30 consecutive Trading Days ending on the
last Trading Day of the immediately preceding calendar quarter is greater than 150% of the
Conversion Price on each applicable Trading Day. The Conversion Agent, on behalf of the
Company, shall determine at the beginning of each calendar quarter commencing after
September 30, 2011 whether the Notes may be surrendered for conversion in accordance with
this clause (iv) and shall notify the Company and the Trustee if the Notes become
convertible in accordance with this clause (iv).
Section 14.02. Conversion Procedure; Settlement Upon Conversion.
(a) Except as provided in Section 14.03(b) and Section 14.07(a), upon conversion of any Note,
on the third Business Day immediately following the last Trading Day of the relevant Observation
Period, 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, a “Settlement Amount” equal to the sum of
the Daily Settlement Amounts for each of the 50 Trading Days during the applicable Observation
Period for such Note, together with cash, if applicable, in lieu of any fractional share of Common
Stock in accordance with subsection (j) of this Section 14.02.
(i) All conversions occurring on or after June 15, 2016 shall be settled using the same
forms and amounts of consideration. Prior to June 15, 2016, the Company shall use the same
forms and amounts of consideration for all conversions occurring on the same Conversion
Date, but the Company shall not have any obligation to use the same forms and amounts with
respect to conversions that occur on different Trading Days. If the Company elects to
settle all or a portion of its Conversion Obligation in excess of the principal portion of
the Notes being converted in cash, the Company shall inform converting Holders through the
Trustee of such election (the “Settlement Notice”) no later than the close of business on
the Trading Day immediately following the related Conversion Date (or, in the case of any
conversions occurring on or after June 15, 2016, no later than June 15, 2016) and the
Company shall indicate in such Settlement Notice the percentage of each share issuable upon
conversion in excess of the principal portion of the Notes being converted that will be paid
in cash (the “Cash Percentage”). If the Company does not so deliver a Settlement Notice
prior to the deadline set forth in the immediately preceding sentence, the Company shall no
longer have the right to elect a Cash Percentage and the Company shall settle its Conversion
Obligation by paying cash in respect of the principal portion of the converted Notes and
delivering shares of Common Stock in respect of the remainder, if any, of its Conversion
Obligation in excess of the aggregate principal portion of the Notes being converted as set
forth herein.
(ii) The Daily Settlement Amounts (if applicable), the Daily Net Settlement Amounts (if
applicable) and the Daily Conversion Values (if applicable) shall be determined by the
Company promptly following the last day of the applicable Observation Period. Promptly
after such determination of the Daily Settlement Amounts,
54
the Daily Net Settlement Amounts or the Daily Conversion Values, as the case may be,
and the amount of cash payable in lieu of any fractional share, the Company shall notify the
Trustee and the Conversion Agent (if other than the Trustee) in writing of the Daily
Settlement Amounts, the Daily Net Settlement Amounts or the Daily Conversion Values, as the
case may be, and the amount of cash payable in lieu of fractional shares of Common Stock.
The Trustee and the Conversion Agent (if other than the Trustee) shall have no
responsibility for any such determination.
(b) Subject to Section 14.02(e), before any Holder of a Note shall be entitled to convert a
Note as set forth above, such Holder shall (i) in the case of a Global Note, comply with the
procedures of the Depositary in effect at that time and, if required, pay funds equal to interest
payable on the next Interest Payment Date to which such Holder is not entitled as set forth in
Section 14.02(h) and, if required, pay all transfer and similar taxes, if any, and (ii) in the case
of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion
Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a “Notice of
Conversion”) at the office of the Conversion Agent and state in writing therein the principal
amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes
the certificate or certificates for any shares of Common Stock to be delivered upon settlement of
the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company
or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of
the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents, (4)
if required, pay all transfer or similar taxes and (5) if required, pay funds equal to interest
payable on the next Interest Payment Date to which such Holder is not entitled as set forth in
Section 14.02(h). The Trustee (and, if different, the Conversion Agent) shall notify the Company
of any conversion pursuant to this Article 14 on the Conversion Date for such conversion. No
Notice of Conversion with respect to any Notes may be surrendered by a Holder thereof if such
Holder has also delivered a Fundamental Change Repurchase Notice to the Company in respect of such
Notes and not validly withdrawn such Fundamental Change Repurchase Notice in accordance with
Section 15.03.
If more than one Note shall be surrendered for conversion at one time by the same Holder, the
Conversion Obligation with respect to such Notes shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so
surrendered.
(c) A Note shall be deemed to have been converted immediately prior to the close of business
on the date (the “Conversion Date”) that the Holder has complied with the requirements set forth in
subsection (b) above. If any shares of Common Stock are due to converting Holders, the Company
shall issue or cause to be issued, and deliver to the Conversion Agent or to such Holder, or such
Holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the
full number of shares of Common Stock to which such Holder shall be entitled in satisfaction of the
Company’s Conversion Obligation.
(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 a new Note or Notes in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Note, without payment of
55
any service charge by the converting Holder but with payment of a sum sufficient to cover any
transfer tax or similar governmental charge required by law or that may be imposed in connection
therewith as a result of the name of the Holder of the new Notes issued upon such conversion being
different from the name of the Holder of the old Notes surrendered for such conversion.
(e) If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or
similar issue or transfer tax due on the issue of any shares of Common Stock upon conversion,
unless the tax is due because the Holder requests such shares to be issued in a name other than the
Holder’s name, in which case the Holder shall pay that tax. The Conversion Agent may refuse to
deliver the certificates representing the shares of Common Stock being issued in a name other than
the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such
Holder in accordance with the immediately preceding sentence.
(f) Except as provided in Section 14.04, no adjustment shall be made for dividends on any
shares issued upon the conversion of any Note as provided in this Article 14.
(g) Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the
direction of the Trustee, shall make a notation on such Global Note as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in writing of any
conversion of Notes effected through any Conversion Agent other than the Trustee.
(h) Upon conversion, a Holder shall not receive any separate cash payment for accrued and
unpaid interest, if any, except as set forth below. The Company’s settlement of the Conversion
Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the
Note and accrued and unpaid interest, if any, to, but not including, the Conversion Date. As a
result, accrued and unpaid interest, if any, to, but not including, the Conversion Date shall be
deemed to be paid in full rather than cancelled, extinguished or forfeited. Upon a conversion of
Notes, accrued and unpaid interest will be deemed to be paid first out of the cash paid upon such
conversion. Notwithstanding the foregoing, if Notes are converted after the close of business on a
Regular Record Date, Holders of such Notes as of the close of business on such Regular Record Date
will receive the full amount of interest payable on such Notes on the corresponding Interest
Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period
from the close of business on any Regular Record Date to the open of business on the immediately
following Interest Payment Date must be accompanied by funds equal to the amount of interest
payable on the Notes so converted; provided that no such payment shall be required (1) for
conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the
Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and
on or prior to the Business Day immediately following the corresponding Interest Payment Date; or
(3) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of
conversion with respect to such Note.
(i) The Person in whose name the certificate for any shares of Common Stock delivered upon
conversion is registered shall be treated as a stockholder of record as of the close of business on
the last Trading Day of the related Observation Period. Upon a conversion of Notes, such Person
shall no longer be a Holder of such Notes surrendered for conversion.
56
(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 any fractional share of Common Stock issuable upon
conversion based on the Daily VWAP on the Last Trading Day of the applicable Observation Period.
For each Note surrendered for conversion, 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
applicable Observation Period, and any fractional shares remaining after such computation shall be
paid in cash.
Section 14.03. Increased Conversion Rate Applicable to Certain Notes Surrendered in
Connection with Make-Whole Fundamental Changes. (a) If a Make-Whole Fundamental Change occurs
prior to the Maturity Date and a Holder elects to convert its Notes in connection with such
Make-Whole Fundamental Change, the Company shall, under the circumstances described below, increase
the Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of
Common Stock (the “Additional Shares”), as described below. A conversion of Notes shall be deemed
for these purposes to be “in connection with” such Make-Whole Fundamental Change if the applicable
Conversion Date occurs during the period from, and including, the Effective Date of the Make-Whole
Fundamental Change up to, and including, the Business Day immediately prior to the related
Fundamental Change Repurchase Date (or, in the case of a Make-Whole Fundamental Change that would
have been a Fundamental Change but for the Majority Ownership Exception, the 35th Trading Day
immediately following the Effective Date of such Make-Whole Fundamental Change).
(b) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change
pursuant to Section 14.01(b)(iii), the Company shall satisfy the related Conversion Obligation in
accordance with Section 14.02 based on the Conversion Rate as increased to reflect the Additional
Shares pursuant to the table below; provided, however, that if, at the effective time of a
Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the
Reference Property is composed entirely of cash, for any conversion of Notes following the
Effective Date of such Make-Whole Fundamental Change, the Conversion Obligation shall be calculated
based solely on the Stock Price for the transaction and shall be deemed to be an amount of cash per
$1,000 principal amount of converted Notes equal to the Conversion Rate (including any adjustment
for Additional Shares), multiplied by such Stock Price. In such event, the Conversion Obligation
will be determined and shall be paid to Holders in cash on the third Business Day following the
Conversion Date. The Company shall notify the Holders of Notes of the Effective Date of any
Make-Whole Fundamental Change no later than five Business Days after such Effective Date.
(c) The number of Additional Shares, if any, by which the Conversion Rate shall be increased
shall be determined by reference to the table below, based on the date on which the Make-Whole
Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock
Price”) paid (or deemed to be paid) per share of the Common Stock in the Make-Whole Fundamental
Change. If the holders of the Common Stock receive only cash in a Make-Whole Fundamental Change
described in clause (b) of the definition of Fundamental Change, the Stock Price shall be the cash
amount paid per share. Otherwise, the Stock Price shall be the average of the Last Reported Sale
Prices of the Common Stock over the five Trading-Day period ending on, and including, the Trading
Day immediately preceding the Effective Date of the Make-Whole Fundamental Change. The Board of
Directors shall make
57
appropriate adjustments to the Stock Price, in its good faith determination, to account for
any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment
to the Conversion Rate where the Ex-Dividend Date of the event occurs, during such five consecutive
Trading-Day period.
(d) The Stock Prices set forth in the column headings of the table below shall be adjusted as
of any date on which the Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock
Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by
a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment
giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so
adjusted. The number of Additional Shares set forth in the table below shall be adjusted in the
same manner and at the same time as the Conversion Rate as set forth in Section 14.04.
(e) The following table sets forth the number of Additional Shares to be received per $1,000
principal amount of Notes pursuant to this Section 14.03 for each Stock Price and Effective Date
set forth below:
| Stock Price | ||||||||||||||||||||||||||||||||||||||||||||
| Effective Date | $46.70 | $50.00 | $55.00 | $60.00 | $65.00 | $70.00 | $80.00 | $90.00 | $100.00 | $120.00 | $140.00 | |||||||||||||||||||||||||||||||||
June 15, 2011 |
4.0040 | 3.5561 | 2.7859 | 2.2125 | 1.7788 | 1.4462 | 0.9841 | 0.6914 | 0.4978 | 0.2702 | 0.1495 | |||||||||||||||||||||||||||||||||
December 15, 2011 |
4.0040 | 3.5964 | 2.7939 | 2.1998 | 1.7536 | 1.4138 | 0.9471 | 0.6564 | 0.4672 | 0.2491 | 0.1359 | |||||||||||||||||||||||||||||||||
December 15, 2012 |
4.0040 | 3.6490 | 2.7757 | 2.1379 | 1.6666 | 1.3144 | 0.8449 | 0.5649 | 0.3903 | 0.1993 | 0.1054 | |||||||||||||||||||||||||||||||||
December 15, 2013 |
4.0040 | 3.6139 | 2.6660 | 1.9867 | 1.4968 | 1.1407 | 0.6872 | 0.4347 | 0.2877 | 0.1393 | 0.0714 | |||||||||||||||||||||||||||||||||
December 15, 2014 |
4.0040 | 3.4247 | 2.3992 | 1.6872 | 1.1946 | 0.8544 | 0.4560 | 0.2616 | 0.1624 | 0.0754 | 0.0386 | |||||||||||||||||||||||||||||||||
December 15, 2015 |
4.0040 | 3.0538 | 1.9132 | 1.1706 | 0.7047 | 0.4220 | 0.1581 | 0.0709 | 0.0410 | 0.0212 | 0.0115 | |||||||||||||||||||||||||||||||||
December 15, 2016 |
4.0040 | 2.5908 | 0.7726 | 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 in the table above, in
which case:
(i) if the Stock Price is between two Stock Prices in the table above or the Effective
Date is between two Effective Dates in the table above, the number of Additional Shares
shall be determined by a straight-line interpolation between the number of Additional Shares
set forth for the higher and lower Stock Prices and the earlier and later Effective Dates,
as applicable, based on a 365-day year;
(ii) if the Stock Price is greater than $140.00 per share (subject to adjustment in the
same manner as the Stock Prices set forth in the column headings of the table above pursuant
to subsection (d) above), no Additional Shares shall be added to the Conversion Rate; and
(iii) if the Stock Price is less than $46.70 per share (subject to adjustment in the
same manner as the Stock Prices set forth in the column headings of the table above pursuant
to subsection (d) above), no Additional Shares shall be added to the Conversion Rate.
58
Notwithstanding the foregoing, in no event shall the total number of shares of Common Stock
issuable upon conversion exceed 21.4132 per $1,000 principal amount of Notes, subject to adjustment
in the same manner as the Conversion Rate pursuant to Section 14.04.
(f) Nothing in this Section 14.03 shall prevent an adjustment to the Conversion Rate pursuant
to Section 14.04 in respect of a Make-Whole Fundamental Change.
Section 14.04. Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from
time to time by the Company if any of the following events occurs, except that the Company shall
not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in
the case of a share split or share combination), at the same time and upon the same terms as
holders of the Common Stock and solely as a result of holding the Notes, in any of the transactions
described in this Section 14.04, without having to convert their Notes, as if they held a number of
shares of Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed
in thousands) of Notes held by such Holder.
(a) If the Company exclusively issues shares of Common Stock as a dividend or distribution on
shares of its Common Stock, or if the Company effects a share split or share combination, the
Conversion Rate shall be adjusted based on the following formula:
where, |
||||
CR0
|
= | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the effective date of such share split or share combination, as applicable; | ||
CR’
|
= | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or effective date; | ||
OS0
|
= | the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or effective date; and | ||
OS’
|
= | the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination. |
Any adjustment made under this Section 14.04(a) shall become effective immediately after the open
of business on the Ex-Dividend Date for such dividend or distribution, or immediately after the
open of business on the effective date for such share split or share combination, as applicable.
If any dividend or distribution of the type described in this Section 14.04(a) is declared but not
so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.
59
(b) If the Company issues to all or substantially all holders of its Common Stock any rights,
options or warrants entitling them, for a period of not more than 60 calendar days after the
announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a
price per share that is less than the average of the Last Reported Sale Prices of the Common Stock
for the 10 consecutive Trading-Day period ending on, and including, the Trading Day immediately
preceding the date of announcement of such issuance, the Conversion Rate shall be increased based
on the following formula:
where, |
||||
CR0
|
= | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance; | ||
CR’
|
= | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||
OS0
|
= | the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date; | ||
X
|
= | the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and | ||
Y
|
= | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading-Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. |
Any increase made under this Section 14.04(b) shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the open of business on
the Ex-Dividend Date for such issuance. To the extent that shares of the Common Stock are not
delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be
decreased to the Conversion Rate that would then be in effect had the increase with respect to the
issuance of such rights, options or warrants been made on the basis of delivery of only the number
of shares of Common Stock actually delivered. If such rights, options or warrants are not so
issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect
if such Ex-Dividend Date for such issuance had not occurred.
For purposes of this Section 14.04(b), in determining whether any rights, options or warrants
entitle the holders to subscribe for or purchase shares of the Common Stock at less than such
average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading-Day
period ending on, and including, the Trading Day immediately preceding the date of announcement for
such issuance, and in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received by the
60
Company for such rights, options or warrants and any amount payable on exercise or conversion
thereof, the value of such consideration, if other than cash, to be determined by the Board of
Directors.
(c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness,
other assets or property or rights, options or warrants to acquire its Capital Stock or other
securities, to all or substantially all holders of the Common Stock, excluding (i) dividends,
distributions or issuances as to which an adjustment was effected pursuant to Section 14.04(a) or
Section 14.04(b), (ii) dividends or distributions paid exclusively in cash as to which an
adjustment was effected pursuant to Section 14.04(d), and (iii) Spin-Offs as to which the
provisions set forth below in this Section 14.04(c) shall apply (any of such shares of Capital
Stock, evidences of indebtedness, other assets or property or rights, options or warrants to
acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the
Conversion Rate shall be increased based on the following formula:
where, |
||||
CR0
|
= | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution; | ||
CR’
|
= | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||
SP0
|
= | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading-Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and | ||
FMV
|
= | the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution. |
Any increase made under the portion of this Section 14.04(c) above shall become effective
immediately after the open of business on the Ex-Dividend Date for such distribution. If such
distribution is not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate
that would then be in effect if such dividend or distribution had not been declared.
Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than
“SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall
receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same
terms as holders of the Common Stock receive the Distributed Property, the amount and kind of
Distributed Property such Holder would have received if such Holder owned a number of shares of
Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.
If the Board of Directors determines the “FMV” (as defined above) of any distribution for purposes
of this Section 14.04(c) by reference to the actual or when-issued trading market for any
securities, it shall in doing so consider the prices in such market over the same period used in
computing the
61
Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading-Day period ending on,
and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.
With respect to an adjustment pursuant to this Section 14.04(c) where there has been a payment
of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit of the
Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national
securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following
formula:
where, |
||||
CR0
|
= | the Conversion Rate in effect immediately prior to the close of business on the effective date of the Spin-Off; | ||
CR’
|
= | the Conversion Rate in effect immediately after the close of business on the effective date of the Spin-Off; | ||
FMV0
|
= | the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading-Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and | ||
MP0
|
= | the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. |
The adjustment to the Conversion Rate under the preceding paragraph shall occur at the open of
business on the last Trading Day of the Valuation Period, but shall be given effect as of the close
of business on the effective date of the Spin-Off; provided that if settlement of a converted Note
occurs during the Valuation Period, the Company will pay cash and deliver shares of its Common
Stock, if any, on the third Business Day immediately following the last day of the Valuation
Period.
For purposes of this Section 14.04(c) (and subject in all respect to Section 14.11), rights,
options or warrants distributed by the Company to all holders of its Common Stock entitling them to
subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either
initially or under certain circumstances), which rights, options or warrants, until the occurrence
of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares
of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of the Common Stock, shall be deemed not to have been distributed
62
for purposes of this Section 14.04(c) (and no adjustment to the Conversion Rate under this
Section 14.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon
such rights, options or warrants shall be deemed to have been distributed and an appropriate
adjustment (if any is required) to the Conversion Rate shall be made under this Section 14.04(c).
If any such right, option or warrant, including any such existing rights, options or warrants
distributed prior to the date of this Indenture, are subject to events, upon the occurrence of
which such rights, options or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of any and each such
event shall be deemed to be the date of distribution and Ex-Dividend Date with respect to new
rights, options or warrants with such rights (in which case the existing rights, options or
warrants shall be deemed to terminate and expire on such date without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed distribution) of
rights, options or warrants, or any Trigger Event or other event (of the type described in the
immediately preceding sentence) with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Rate under this Section 14.04(c) was
made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or
purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the
Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and
(y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed
distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to
the per share redemption or purchase price received by a holder or holders of Common Stock with
respect to such rights, options or warrants (assuming such holder had retained such rights, options
or warrants), made to all holders of Common Stock as of the date of such redemption or purchase,
and (2) in the case of such rights, options or warrants that shall have expired or been terminated
without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights,
options and warrants had not been issued.
For purposes of Section 14.04(a), Section 14.04(b) and this Section 14.04(c), any dividend or
distribution to which this Section 14.04(c) is applicable that also includes one or both of:
(A) a dividend or distribution of shares of Common Stock to which Section 14.04(a) is
applicable (the “Clause A Distribution”); or
(B) a dividend or distribution of rights, options or warrants to which Section 14.04(b) is
applicable (the “Clause B Distribution”),
then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B
Distribution, shall be deemed to be a dividend or distribution to which this Section 14.04(c) is
applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this
Section 14.04(c) with respect to such Clause C Distribution shall then be made, and (2) the Clause
A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C
Distribution and any Conversion Rate adjustment required by Section 14.04(a) and Section 14.04(b)
with respect thereto shall then be made, except that, if determined by the Company (I) the
“Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be
the Ex-Dividend Date of the Clause C Distribution and (II) any shares of Common Stock included in
the Clause A Distribution or Clause B Distribution shall be deemed
63
not to be “outstanding immediately prior to the open of business on such Ex-Dividend Date or
effective date” within the meaning of Section 14.04(a) or “outstanding immediately prior to the
open of business on such Ex-Dividend Date” within the meaning of Section 14.04(b).
(d) If any cash dividend or distribution is made to all or substantially all holders of the
Common Stock, the Conversion Rate shall be adjusted based on the following formula:
where, |
||||
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 Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; | ||
SP0
|
= | the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and | ||
C
|
= | the amount in cash per share the Company distributes to holders of its Common Stock. |
Any increase pursuant to this Section 14.04(d) shall become effective immediately after the open of
business on the Ex-Dividend Date for such dividend or distribution. If such dividend or
distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the
Board of Directors determines not to make or pay such dividend or distribution, to be the
Conversion Rate that would then be in effect if such dividend or distribution had not been
declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than
“SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall
receive, for each $1,000 principal amount of Notes, at the same time and upon the same terms as
holders of shares of the Common Stock, the amount of cash that such Holder would have received if
such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the
Ex-Dividend Date for such cash dividend or distribution.
(e) If the Company or any of its Subsidiaries make a payment in respect of a tender or
exchange offer for the Common Stock, to the extent that the cash and value of any other
consideration included in the payment per share of the Common Stock exceeds the 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:
where, |
64
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 next succeeding the date such tender or | ||
CR’
|
= | exchange offer expires; the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||
AC
|
= | the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer; | ||
OS0
|
= | the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); | ||
OS’
|
= | the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and | ||
SP’
|
= | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading-Day period (the “Averaging Period”) commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires. |
The adjustment to the Conversion Rate under this Section 14.04(e) shall occur at the open of
business on the Trading Day immediately following the last day of the Averaging Period but will be
given effect immediately after the open of business on the Trading Day immediately following the
last date on which tenders or exchanges may be made pursuant to such tender or exchange offer;
provided that if settlement of a converted Note occurs during the Averaging Period, the Company
will pay cash and deliver shares of its Common Stock, if any, on the third Business Day immediately
following the last day of the Averaging Period.
(f) 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 (including as consideration for a merger, purchase or similar transaction).
(g) In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this
Section 14.04, and to the extent permitted by applicable law and subject to the applicable rules of
The NASDAQ Global Select Market, the Company from time to time may increase the Conversion Rate by
any amount for a period of at least 20 Business Days if the Board of Directors determines that such
increase would be in the Company’s best interest. In addition, to the extent permitted by
applicable law and subject to the applicable rules of The NASDAQ
65
Global Select Market, the Company may (but is not required to) increase the Conversion Rate to
avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in
connection with a dividend or distribution of shares (or rights to acquire shares) or similar
event. Whenever the Conversion Rate is increased pursuant to either of the preceding two
sentences, the Company shall mail to the Holder of each Note at its last address appearing on the
Note Register a notice of the increase at least 15 days prior to the date the increased Conversion
Rate takes effect, and such notice shall state the increased Conversion Rate and the period during
which it will be in effect.
(h) Notwithstanding anything to the contrary in this Article 14, the Conversion Rate shall not
be adjusted:
(i) upon the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on the Company’s
securities and the investment of additional optional amounts in shares of Common Stock under
any plan;
(ii) upon the issuance of any shares of Common Stock or options or rights to purchase
those shares pursuant to any present or future employee, director or consultant benefit plan
or program of or assumed by the Company or any of the Company’s Subsidiaries;
(iii) upon the repurchase of any shares of 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 under Section 14.04(e);
(iv) for a third-party tender offer (other than a tender offer by any Subsidiary of the
Company as described under Section 14.04(e));
(v) 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;
(vi) solely for a change in the par value of the Common Stock; or
(vii) for accrued and unpaid interest, if any.
The Company shall not be required to make an adjustment pursuant to clauses (a), (b), (c), (d)
or (e) of this Section 14.04 unless such adjustment would result in a change of at least 1% of the
then effective Conversion Rate. However, the Company shall carry forward any adjustment that the
Company would otherwise have to make and take that adjustment into account in any subsequent
adjustment. Notwithstanding the foregoing, all such carried-forward adjustments shall be made with
respect to the Notes (i) in connection with any subsequent adjustment to the Conversion Rate of at
least 1% of the Conversion Rate (when such carried-forward adjustments are taken into account),
(ii) on the Conversion Date for any Notes and (iii) on each Trading Day of any Observation Period.
All calculations and other determinations under this Article 14 shall
66
be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000) of a
share.
(i) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee (and the Conversion Agent if not the Trustee) an Officer’s 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 Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of
which it has knowledge is still in effect. Promptly after delivery of such certificate, the
Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted
Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to each Holder at its last address appearing on the Note
Register of this Indenture. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(j) For purposes of this Section 14.04, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company so long as the Company
does not pay any dividend or make any distribution on shares of Common Stock held in the treasury
of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock.
Section 14.05. Adjustments of Prices. Whenever any provision of this Indenture requires the
Company to calculate the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or
the Daily Settlement Amounts over a span of multiple days (including an Observation Period and the
period for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the
Company shall make appropriate adjustments to each to account for any adjustment to the Conversion
Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the
Ex-Dividend Date 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.
Section 14.06. Shares to Be Fully Paid. The Company shall provide, free from preemptive
rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of
Common Stock to provide for conversion of the Notes from time to time as such Notes are presented
for conversion (assuming that at the time of computation of such number of shares, all such Notes
would be converted by a single Holder).
Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common
Stock.
(a) In the case of:
(i) any recapitalization, reclassification or change of the Common Stock (other than
changes resulting from a subdivision or combination),
(ii) any consolidation, merger or combination involving the Company,
67
(iii) any sale, lease or other transfer to a third party of the consolidated assets of
the Company and the Company’s Subsidiaries substantially as an entirety or
(iv) any statutory share exchange,
in each case, as a result of which the Common Stock would be converted into, or exchanged for,
stock, other securities, other property or assets (including cash or any combination thereof) (any
such event, a “Merger Event”), then, at and after the effective time of such Merger Event, the
right to convert each $1,000 principal amount of Notes shall be changed into a right to convert
such principal amount of Notes into the kind and amount of shares of stock, other securities or
other property or assets (including cash or any combination thereof) that a holder of a number of
shares of Common Stock equal to the Conversion Rate immediately prior to such Merger Event would
have owned or been entitled to receive (the “Reference Property”, with each “unit of Reference
Property” meaning the kind and amount of Reference Property that a holder of one share of Common
Stock is entitled to receive) upon such Merger Event and, prior to or at the effective time of such
Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture permitted under Section 10.01(f) providing for such
change in the right to convert each $1,000 principal amount of Notes; provided, however, that at
and after the effective time of the Merger Event the Conversion Obligation shall be calculated and
settled in accordance with Section 14.02 such that (A) the amount otherwise payable in cash upon
conversion of the Notes as set forth under Section 14.02 shall continue to be payable in cash, (B)
the Company shall continue to have the right to elect to determine the form of consideration to be
paid or delivered, as the case may be, in respect of the remainder, if any, of the Conversion
Obligation in excess of the principal amount of the Notes being converted as set forth under
Section 14.02, (C) the number of shares of Common Stock, if any, otherwise deliverable upon
conversion of the Notes in accordance with Section 14.02 shall instead be deliverable in the amount
and type of Reference Property that a holder of that number of shares of Common Stock would have
received in such Merger Event and (D) the Daily VWAP shall be calculated based on the value of a
unit of Reference Property.
If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right
to receive more than a single type of consideration (determined based in part upon any form of
stockholder election), then (i) the Reference Property into which the Notes will be convertible
shall be deemed to be the weighted average of the types and amounts of consideration received by
the holders of Common Stock that affirmatively make such an election, and (ii) the unit of
Reference Property for purposes of the immediately preceding paragraph shall refer to the
consideration referred to in clause (i) attributable to one share of Common Stock. If the holders
receive only cash in such Merger Event, then for all conversions that occur after the effective
date of such Merger Event (x) the consideration due upon conversion of each $1,000 principal amount
of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion
Date (as may be increased by any Additional Shares pursuant to Section 14.03), multiplied by the
price paid per share of Common Stock in such Merger Event and (y) the Company shall satisfy the
Conversion Obligation by paying cash to converting Holders on the third Business Day immediately
following the Conversion Date. The Company shall notify Holders, the Trustee and the Conversion
Agent (if other than the Trustee) of such weighted average as soon as practicable after such
determination is made.
68
Such supplemental indenture described in the second immediately preceding paragraph shall
provide for adjustments that shall be as nearly equivalent as is possible to the adjustments
provided for in this Article 14. If, in the case of any Merger Event, the Reference Property
includes shares of stock, securities or other property or assets (including cash or any combination
thereof) of a Person other than the successor or purchasing corporation, as the case may be, in
such Merger Event, then such supplemental indenture shall also be executed by such other Person and
shall contain such additional provisions to protect the interests of the Holders of the Notes as
the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to
the extent required by the Board of Directors and practicable the provisions providing for the
purchase rights set forth in Article 15.
(b) In the event the Company shall execute a supplemental indenture pursuant to subsection (a)
of this Section 14.07, the Company shall promptly file with the Trustee an Officer’s 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 Holders. The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each Holder, at its address appearing on the Note Register
provided for in this Indenture, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture.
(c) The Company shall not become a party to any Merger Event unless its terms are consistent
with this Section 14.07. None of the foregoing provisions shall affect the right of a holder of
Notes to convert its Notes into cash and shares of Common Stock, if any, as set forth in Section
14.01 and Section 14.02 prior to the effective date of such Merger Event.
(d) The above provisions of this Section shall similarly apply to successive Merger Events.
Section 14.08. Certain Covenants. (a) The Company covenants that any shares of Common Stock
issued upon conversion of Notes will be validly issued, 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 further covenants that if at any time the Common Stock shall be listed on any
national securities exchange or automated quotation system, the Company will list and keep listed,
so long as the Common Stock shall be so listed on such exchange or automated quotation system, any
Common Stock issuable upon conversion of the Notes.
Section 14.09. Responsibility of Trustee. The Trustee and any other Conversion Agent shall
not at any time be under any duty or responsibility to any Holder to determine the Conversion Rate
(or any adjustment thereto) or whether any facts exist that may require any adjustment (including
any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any
such adjustment when made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent
shall not be accountable with respect to the validity or
69
value (or the kind or amount) of any shares of Common Stock, or of any securities, property or
cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee
and any other Conversion Agent make no representations with respect thereto. Neither the Trustee
nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or property or cash
upon the surrender of any Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article. Without limiting the
generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 14.07 relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by Holders upon the conversion of their
Notes after any event referred to in such Section 14.07 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 7.01, may accept (without any
independent investigation) as conclusive evidence of the correctness of any such provisions, and
shall be protected in conclusively relying upon, the Officer’s Certificate (which the Company shall
be obligated to file with the Trustee prior to the execution of any such supplemental indenture)
with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for
determining whether any event contemplated by Section 14.01(b) has occurred that makes the Notes
eligible for conversion or no longer eligible therefor until the Company has delivered to the
Trustee and the Conversion Agent the notices referred to in Section 14.01(b) with respect to the
commencement or termination of such conversion rights, on which notices the Trustee and the
Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the
Trustee and the Conversion Agent immediately after the occurrence of any such event or at such
other times as shall be provided for in Section 14.01(b). The Conversion Agent (if other than the
Company or an Affiliate of the Company) shall have the same protection under this Section 14.09 as
the Trustee.
Section 14.10. Notice to Holders Prior to Certain Actions. In case of any voluntary or
involuntary dissolution, liquidation or winding-up of the Company or any of its Subsidiaries, then
(unless notice of such event is otherwise required pursuant to another provision of this Indenture)
the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the
Trustee) and to be mailed to each Holder at its address appearing on the Note Register, as promptly
as possible but in any event at least 20 days prior to the applicable date hereinafter specified, a
notice stating the date on which such dissolution, liquidation or winding-up is expected to become
effective or occur, and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other property deliverable upon
such dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dissolution, liquidation or winding-up.
Section 14.11. Stockholder Rights Plans. To the extent that the Company has a rights plan in
effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such
conversion shall be entitled to receive the appropriate number of rights, if any, and the
certificates representing the Common Stock issued upon such conversion shall bear such legends, if
any, in each case as may be provided by the terms of any such stockholder rights plan, as the same
may be amended from time to time. If at the time of conversion, however, the rights have
70
separated from the shares of Common Stock in accordance with the provisions of the applicable
stockholder rights plan so that the Holders would not be entitled to receive any rights in respect
of Common Stock, if any, issuable upon conversion of the Notes, the Conversion Rate shall be
adjusted at the time of separation as if the Company distributed to all or substantially all
holders of Common Stock shares of Capital Stock of the Company, evidences of its indebtedness,
other assets or property or rights, options or warrants to acquire its Capital Stock or other
securities as provided in Section 14.04(c), subject to readjustment in the event of the expiration,
termination or redemption of such rights.
Section 14.12. Limit on Issuance of Shares of Common Stock Upon Conversion. Notwithstanding
anything to the contrary in this Indenture, if an event occurs that would result in an increase in
the Conversion Rate by an amount in excess of limitations imposed by any shareholder approval rules
or listing standards of any national or regional securities exchange that are applicable to the
Company, the Company will, at its option, either obtain stockholder approval of any issuance of
Common Stock upon conversion of the Notes in excess such limitations or deliver cash in lieu of any
shares of Common Stock otherwise deliverable upon conversions in excess of such limitations based
on the Daily VWAP on each Trading Day of the relevant Observation Period in respect of which, in
lieu of delivering shares of Common Stock, the Company delivers cash pursuant to this Section
14.12.
ARTICLE 15
Repurchase of Notes at Option of Holders
Repurchase of Notes at Option of Holders
Section 15.01. [Intentionally Omitted]
Section 15.02. Repurchase at Option of Holders Upon a Fundamental Change. (a) If a
Fundamental Change occurs at any time, each Holder shall have the right, at such Holder’s option,
to require the Company to repurchase for cash all of such Holder’s Notes, or any portion thereof
that is equal to $1,000 or an integral multiple of $1,000, on the date (the “Fundamental Change
Repurchase Date”) specified by the Company that is not less than 20 Business Days or more than 35
Business Days following the date of the Fundamental Change Company Notice at a repurchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to, but
excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”),
unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to
the Interest Payment Date to which such Regular Record Date relates, in which case the Company
shall instead pay the full amount of accrued and unpaid interest to Holders of record as of such
Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the
principal amount of Notes to be repurchased pursuant to this Article 15.
(b) Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder
thereof, upon:
(i) delivery to the Paying Agent by a Holder of a duly completed notice (the
“Fundamental Change Repurchase Notice”) substantially in the form set forth in Attachment 2
to the form of Note attached hereto as Exhibit A, if the Notes are Physical
71
Notes, or in compliance with the Depositary’s procedures for surrendering interests in
Global Notes, if the Notes are Global Notes, in each case on or before the close of business
on the Business Day immediately preceding the Fundamental Change Repurchase Date; and
(ii) delivery of the Notes, if the Notes are Physical Notes, to the Paying Agent at any
time after delivery of the Fundamental Change Repurchase Notice (together with all necessary
endorsements for transfer) at the Corporate Trust Office of the Paying Agent, or book-entry
transfer of the Notes, if the Notes are Global Notes, in compliance with the procedures of
the Depositary, in each case such delivery being a condition to receipt by the Holder of the
Fundamental Change Repurchase Price therefor.
The Fundamental Change Repurchase Notice in respect of any Notes to be repurchased shall
state:
(i) in the case of Physical Notes, the certificate numbers of the Notes to be delivered
for repurchase;
(ii) the portion of the principal amount of Notes to be repurchased, which must be
$1,000 or an integral multiple thereof; and
(iii) that the Notes are to be repurchased by the Company pursuant to the applicable
provisions of the Notes and this Indenture;
provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice
must comply with appropriate Depositary procedures.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Repurchase Notice contemplated by this Section 15.02 shall have the right to
withdraw, in whole or in part, such Fundamental Change Repurchase Notice at any time prior to the
close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date
by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 15.03.
The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental
Change Repurchase Notice or written notice of withdrawal thereof.
(c) On or before the 20th day after the occurrence of a Fundamental Change, the Company shall
provide to all Holders of Notes and the Trustee and the Paying Agent (in the case of a Paying Agent
other than the Trustee) a notice (the “Fundamental Change Company Notice”) of the occurrence of the
Fundamental Change and of the repurchase right at the option of the Holders arising as a result
thereof. Such notice shall be by first class mail or, in the case of Global Notes, in accordance
with the applicable procedures of the Depositary. Each Fundamental Change Company Notice shall
specify:
(i) the events causing the Fundamental Change;
(ii) the date of the Fundamental Change;
72
(iii) the last date on which a Holder may exercise the repurchase right pursuant to
this Article 15;
(iv) the Fundamental Change Repurchase Price;
(v) the Fundamental Change Repurchase Date;
(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;
(vii) if applicable, the Conversion Rate and any adjustments to the Conversion Rate;
(viii) 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 this
Indenture;
(ix) the procedures that Holders must follow to require the Company to repurchase their
Notes.
No failure of the Company to give the foregoing notices and no defect therein shall limit the
Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the
Notes pursuant to this Section 15.02.
At the Company’s written request and upon 15 days prior notice, the Trustee shall give such
notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases,
the text of such Fundamental Change Company Notice shall be prepared by the Company.
(d) Notwithstanding the foregoing, no Notes may be repurchased by the Company on any date at
the option of the Holders upon a Fundamental Change if the principal amount of the Notes has been
accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the
case of an acceleration resulting from a Default by the Company in the payment of the Fundamental
Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the
respective Holders thereof any Physical Notes held by it during the acceleration of the Notes
(except in the case of an acceleration resulting from a Default by the Company in the payment of
the Fundamental Change Repurchase Price with respect to such Notes), or any instructions for
book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be
deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the
Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.
Section 15.03. Withdrawal of Fundamental Change Repurchase Notice. (a) A Fundamental Change
Repurchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal
delivered to the Paying Agent in accordance with this Section 15.03
73
at any time prior to the close of business on the Business Day immediately preceding the
Fundamental Change Repurchase Date, specifying:
(i) the principal amount of the Notes with respect to which such notice of withdrawal
is being submitted,
(ii) if Physical Notes have been issued, the certificate number of the Note in respect
of which such notice of withdrawal is being submitted, and
(iii) the principal amount, if any, of such Note that remains subject to the original
Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1,000
or an integral multiple of $1,000;
provided, however, that if the Notes are Global Notes, the notice must comply with appropriate
procedures of the Depositary.
Section 15.04. Deposit of Fundamental Change Repurchase Price. (a) The Company will deposit
with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as
its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04) on or
prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date an amount of
money sufficient to repurchase all of the Notes to be repurchased at the appropriate Fundamental
Change Repurchase Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying
Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn
prior to the close of business on the Business Day immediately preceding the Fundamental Change
Repurchase Date) will be made on the later of (i) the Fundamental Change Repurchase Date with
respect to such Note (provided the Holder has satisfied the conditions in Section 15.02) and (ii)
the time of book-entry transfer or the delivery of such Note to the Trustee (or other Paying Agent
appointed by the Company) by the Holder thereof in the manner required by Section 15.02 by mailing
checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in
the Note Register; provided, however, that payments to the Depositary shall be made by wire
transfer of immediately available funds to the account of the Depositary or its nominee. The
Trustee shall, promptly after such payment and upon written demand by the Company, return to the
Company any funds in excess of the Fundamental Change Repurchase Price.
(b) If by 11:00 a.m. New York City time, on the Fundamental Change Repurchase Date, the
Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on
all the Notes or portions thereof that are to be repurchased on such Fundamental Change Repurchase
Date, then (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such
Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been
delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes
will terminate (other than the right to receive the Fundamental Change Repurchase Price).
(c) Upon surrender of a Note that is to be repurchased in part pursuant to Section 15.02, the
Company shall execute and the Trustee shall authenticate and deliver to the Holder a new
74
Note in an authorized denomination equal in principal amount to the unrepurchased portion of
the Note surrendered.
Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes. In
connection with any repurchase offer, the Company will, if required:
(a) comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules
under the Exchange Act;
(b) file a Schedule TO or any successor or similar schedule required under the Exchange Act;
and
(c) otherwise comply with all federal and state securities laws in connection with any offer
by the Company to repurchase the Notes;
in each case, so as to permit the rights and obligations under this Article 15 to be exercised in
the time and in the manner specified in this Article 15.
ARTICLE 16
No Redemption
No Redemption
Section 16.01. No Redemption. The Notes shall not be redeemable by the Company prior to the
Maturity Date, and no sinking fund is provided for the Notes.
ARTICLE 17
Miscellaneous Provisions
Miscellaneous Provisions
Section 17.01. Provisions Binding on Company’s Successors. All the covenants, stipulations,
promises and agreements of the Company contained in this Indenture shall bind its successors and
assigns whether so expressed or not.
Section 17.02. Official Acts by Successor Corporation. Any act or proceeding by any
provision of this Indenture authorized or required to be done or performed by any board, committee
or Officer of the Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation or other entity that shall at the time be the
lawful sole successor of the Company.
Section 17.03. Addresses for Notices, Etc. Any notice or demand that by any provision of
this Indenture is required or permitted to be given or served by the Trustee or by the Holders on
the Company shall be deemed to have been sufficiently given or made, for all purposes if given or
served by being deposited postage prepaid by registered or certified mail in a post office letter
box addressed (until another address is filed by the Company with the Trustee) to Integra
LifeSciences Holdings Corporation, 311 Enterprise Drive, Plainsboro, New Jersey, 08536, Attention:
General Counsel. Any notice, direction, request or demand hereunder to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
75
served by being deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office.
The Trustee, by notice to the Company, may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to it by first class mail,
postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given
to it if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service or by reason of any other cause it
shall be impracticable to give such notice to Holders by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification for every purpose
hereunder.
Section 17.04. Governing Law and Consent to Jurisdiction. THIS INDENTURE AND EACH NOTE, AND
ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE AND EACH NOTE, SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICTS OF LAWS PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW). THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF
THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND ANY OF THE
NOTES, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS INDENTURE SHALL AFFECT ANY RIGHT
THAT THE TRUSTEE, ITS AGENTS OR ANY HOLDER OTHERWISE HAS TO BRING ANY ACTION OR PROCEEDING RELATING
TO THIS INDENTURE AGAINST THE COMPANY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION TO
ENFORCE ANY JUDGMENT, ORDER OR PROCESS ENTERED BY SUCH COURTS SITUATED WITHIN THE STATE OF NEW
76
YORK OR TO ENJOIN ANY VIOLATIONS HEREOF OR FOR RELIEF ANCILLARY HERETO OR OTHERWISE TO COLLECT
ON LOANS OR ENFORCE THE PAYMENT OF ANY NOTES OR TO ENFORCE, PROTECT OR MAINTAIN THEIR RIGHTS AND
CLAIMS OR FOR ANY OTHER LAWFUL PURPOSE. THE COMPANY FURTHER AGREES THAT ANY ACTION OR PROCEEDING
BROUGHT AGAINST THE TRUSTEE, ITS AGENTS OR ANY HOLDER, IF BROUGHT BY THE COMPANY, SHALL BE BROUGHT
ONLY IN NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of
Counsel to Trustee. Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture other than an Opinion of Counsel with respect
to an action to be taken on the date hereof in connection with the initial issuance of the Notes,
the Company shall, if requested by the Trustee, furnish to the Trustee an Officer’s Certificate and
an Opinion of Counsel stating that such action is permitted by the terms of this Indenture.
Each Officer’s Certificate and Opinion of Counsel provided for, by or on behalf of the Company
in this Indenture and delivered to the Trustee with respect to compliance with this Indenture
(other than the Officer’s Certificates provided for in Section 4.08) shall include (a) a statement
that the Person making such certificate is familiar with the requested action and this Indenture;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the
statement contained in such certificate is based; (c) a statement that, in the judgment of such
person, he or she has made such examination or investigation as is necessary to enable him or her
to express an informed judgment as to whether or not such action is permitted by this Indenture;
and (d) a statement as to whether or not, in the judgment of such Person, such action is permitted
by this Indenture.
Section 17.06. Legal Holidays. In any case where any Interest Payment Date, Fundamental
Change Repurchase Date, Conversion Date or Maturity Date is not a Business Day, then any action to
be taken on such date need not be taken on such date, but may be taken on the next succeeding
Business Day with the same force and effect as if taken on such date, and no interest shall accrue
in respect of the delay.
Section 17.07. No Security Interest Created. Nothing in this Indenture or in the Notes,
expressed or implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any
jurisdiction.
Section 17.08. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed
or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any
Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder or
the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.09. Table of Contents, Headings, Etc. The table of contents and the titles and
headings of the articles and sections of this Indenture have been inserted for convenience of
77
reference only, are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 17.10. Authenticating Agent. The Trustee may appoint an authenticating agent that
shall be authorized to act on its behalf and subject to its direction in the authentication and
delivery of Notes in connection with the original issuance thereof and transfers and exchanges of
Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section
10.04 and Section 15.04 as fully to all intents and purposes as though the authenticating agent had
been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes.
For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating
agent shall be deemed to be authentication and delivery of such Notes “by the Trustee” and a
certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be
deemed to satisfy any requirement hereunder or in the Notes for the Trustee’s certificate of
authentication. Such authenticating agent shall at all times be a Person eligible to serve as
trustee hereunder pursuant to Section 7.08.
Any corporation or other entity into which any authenticating agent may be merged or converted
or with which it may be consolidated, or any corporation or other entity resulting from any merger,
consolidation or conversion to which any authenticating agent shall be a party, or any corporation
or other entity succeeding to the corporate trust business of any authenticating agent, shall be
the successor of the authenticating agent hereunder, if such successor corporation or other entity
is otherwise eligible under this Section, without the execution or filing of any paper or any
further act on the part of the parties hereto or the authenticating agent or such successor
corporation or other entity.
Any authenticating agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time terminate the agency of any authenticating
agent by giving written notice of termination to such authenticating agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee may appoint a
successor authenticating agent (which may be the Trustee), shall give written notice of such
appointment to the Company and shall mail notice of such appointment to all Holders as the names
and addresses of such Holders appear on the Note Register.
The Company agrees to pay to the authenticating agent from time to time such compensation for
its services as agreed in writing although the Company may terminate the authenticating agent (if
other than the Trustee), if it determines such authenticating agent’s fees to be unreasonable.
The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section
17.10 shall be applicable to any authenticating agent.
If an authenticating agent is appointed pursuant to this Section, the Notes may have endorsed
thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of
authentication in the following form:
78
__________________________,
as Authenticating Agent, certifies that this is one of the Notes described
in the within-named Indenture.
as Authenticating Agent, certifies that this is one of the Notes described
in the within-named Indenture.
By: ____________________
Authorized Signatory
Authorized Signatory
Section 17.11. Execution in Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall together constitute
but one and the same instrument. The exchange of copies of this Indenture and of signature pages
by facsimile or PDF transmission shall constitute effective execution and delivery of this
Indenture as to the parties hereto and may be used in lieu of the original Indenture for all
purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be
their original signatures for all purposes.
Section 17.12. Severability. In the event any provision of this Indenture or in the Notes
shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity,
legality or enforceability of the remaining provisions shall not in any way be affected or
impaired.
Section 17.13. Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.
Section 17.14. Force Majeure. In no event shall the Trustee be responsible or liable for any
failure or delay in the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural
catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications
or computer (software and hardware) services; it being understood that the Trustee shall use
reasonable efforts that are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
Section 17.15. Calculations. Except as otherwise provided herein, the Company shall be
responsible for making all calculations called for under the Notes. These calculations include,
but are not limited to, determinations of the Last Reported Sale Prices of the Common Stock,
accrued interest payable on the Notes and the Conversion Rate of the Notes. The Company shall make
all these calculations in good faith and, absent manifest error, the Company’s calculations shall
be final and binding on Holders. The Company shall provide a schedule of its calculations to each
of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled
to rely conclusively upon the accuracy of the Company’s calculations without independent
verification. The Trustee will forward the Company’s calculations to any Holder upon the written
request of that Holder at the sole cost and expense of the Company.
79
Section 17.16. USA PATRIOT Act. The parties hereto acknowledge that in accordance with
Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to
help fight the funding of terrorism and money laundering, is required to obtain, verify and record
information that identifies each person or legal entity that establishes a relationship or opens an
account with the Trustee. The parties to this Indenture agree that they will provide the Trustee
with such information as it may request in order for the Trustee to satisfy the requirements of the
USA PATRIOT Act.
80
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the date first written above.
| INTEGRA LIFESCIENCES HOLDINGS CORPORATION | ||||||||
| By: | /s/ Stuart M. Essig | |||||||
| Name: | Stuart M. Essig | |||||||
| Title: | Chief Executive Officer and Director | |||||||
| WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee | ||||||||
| By: | /s/ Martin Reed | |||||||
| Name: | Martin Reed | |||||||
| Title: | Vice President | |||||||
EXHIBIT A
[FORM OF FACE OF NOTE]
[INCLUDE FOLLOWING LEGEND IF A GLOBAL NOTE]
[INCLUDE FOLLOWING LEGEND IF A GLOBAL NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE FOLLOWING LEGEND IF A RESTRICTED SECURITY]
[THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED
INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT
EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF INTEGRA LIFESCIENCES HOLDINGS CORPORATION (THE “COMPANY”)
THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL
ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO, AND (Y) SUCH LATER DATE, IF ANY, AS MAY
BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE
SECURITIES ACT, OR
A-1
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, OR
(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.
PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER
EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING
MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
DURING THE PERIOD ENDING ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTES, NO
“AFFILIATE” (AS DEFINED IN RULE 144) WILL BE PERMITTED TO RESELL ANY OF THE NOTES THAT CONSTITUTE
“RESTRICTED SECURITIES” UNDER RULE 144 THAT HAVE BEEN REACQUIRED BY ANY OF THEM.]
A-2
Integra LifeSciences Holdings Corporation
1.625% Convertible Senior Note due 2016
| No. _____ | Initially $________ | |
| CUSIP No. 457985 AJ8 |
INTEGRA LIFESCIENCES HOLDINGS CORPORATION, a corporation duly organized and validly existing
under the laws of the State of Delaware (the “Company,” which term includes any successor
corporation or other entity under the Indenture referred to on the reverse hereof), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the principal sum [as set
forth in the “Schedule of Exchanges of Notes” attached hereto]1[of $_______ (
DOLLARS)]2, which amount, taken together with the principal amounts of all other
outstanding Notes, shall not, unless permitted by the Indenture, exceed $230,000,000 in aggregate
at any time, in accordance with the rules and procedures of the Depositary, on December 15, 2016,
and interest thereon as set forth below.
This Note shall bear interest at the rate of 1.625% per year from June 15, 2011, or from the
most recent date to which interest has been paid or provided for to, but excluding, the next
scheduled Interest Payment Date until December 15, 2016. Interest is payable semi-annually in
arrears on each June 15 and December 15, commencing on December 15, 2011, to Holders of record at
the close of business on the preceding June 1 and December 1 (whether or not such day is a Business
Day), respectively. Additional Interest will be payable as set forth in Section 4.06(d), Section
4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in
respect of, any Note therein shall be deemed to include Additional Interest if, in such context,
Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section
4.06(e) or Section 6.03 and any express mention of the payment of Additional Interest in any
provision therein shall not be construed as excluding Additional Interest in those provisions
thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes, subject
to the enforceability thereof under applicable law, from, and including, the relevant payment date
to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at
its election, in accordance with Section 2.03(c) of the Indenture.
The Company shall pay the principal of and interest on this Note, if and so long as such Note
is a Global Note, in immediately available funds in lawful money of the United States at the time
to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As
provided in and subject to the provisions of the Indenture, the Company shall pay the principal of
any Notes (other than Notes that are Global Notes) at the office or agency designated by the
Company for that purpose. The Company has initially designated the Trustee as its
| 1 | Include for a Global Note. | |
| 2 | Include for a Physical Note. |
A-3
Paying Agent and Note Registrar in respect of the Notes and its agency in New York, New York
as a place where Notes may be presented for payment or for registration of transfer and exchange.
Reference is made to the further provisions of this Note set forth on the reverse hereof,
including, without limitation, provisions giving the Holder of this Note the right to convert this
Note into cash and shares of Common Stock, if any, on the terms and subject to the limitations set
forth in the Indenture. Such further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Note, and any claim, controversy or dispute arising under or related to this Note, shall
be construed in accordance with and governed by the laws of the State of New York (without regard
to the conflicts of laws provisions thereof other than Section 5-1401 of the General Obligations
Law).
In the case of any conflict between this Note and the Indenture, the provisions of the
Indenture shall control and govern.
This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been manually signed by the Trustee or a duly authorized
authenticating agent under the Indenture.
[Remainder of page intentionally left blank]
A-4
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
| INTEGRA LIFESCIENCES HOLDINGS CORPORATION | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Dated:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
| By: | ||||
| Authorized Signatory | ||||
A-5
[FORM OF REVERSE OF NOTE]
Integra LifeSciences Holdings Corporation
1.625% Convertible Senior Note due 2016
1.625% Convertible Senior Note due 2016
This Note is one of a duly authorized issue of Notes of the Company, designated as its 1.625%
Convertible Senior Notes due 2016 (the “Notes”), initially limited to the aggregate principal
amount of $230,000,000, all issued or to be issued under and pursuant to an Indenture dated as of
June 15, 2011 (the “Indenture”), between the Company and Wells Fargo Bank, National Association
(the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Notes. Additional Notes may be
issued in an unlimited aggregate principal amount, subject to certain conditions specified in the
Indenture. Capitalized terms used in this Note and not defined in this Note shall have the
respective meanings set forth in the Indenture.
In the event of certain Events of Default (other than an Event of Default specified in Section
6.01(i) or Section 6.01(j) of the Indenture with respect to the Company or any of its Significant
Subsidiaries) shall have occurred and be continuing, the principal of, and interest on, all Notes
may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of
the Notes then outstanding, and upon said declaration shall become, due and payable, in the manner,
with the effect and subject to the conditions and certain exceptions set forth in the Indenture.
Subject to the terms and conditions of the Indenture, the Company will make all payments and
deliveries in respect of the Fundamental Change Repurchase Price and the principal amount on the
Maturity Date, as the case may be, to the Holder who surrenders a Note to a Paying Agent to collect
such payments in respect of the Note. The Company will pay cash amounts in money of the United
States that at the time of payment is legal tender for payment of public and private debts.
The Indenture contains provisions permitting the Company and the Trustee in certain
circumstances, without the consent of the Holders of the Notes, and in certain other circumstances,
with the consent of the Holders of not less than a majority in aggregate principal amount of the
Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental
indentures modifying the terms of the Indenture and the Notes as described therein. It is also
provided in the Indenture that, subject to certain exceptions, the Holders of a majority in
aggregate principal amount of the Notes at the time outstanding may on behalf of the Holders of all
of the Notes waive any past Default or Event of Default under the Indenture and its consequences.
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 (including the Fundamental Change Repurchase Price, if applicable) of 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-6
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 transfer or similar tax that may be imposed in connection therewith as
a result of the name of the Holder of the new Notes issued upon such exchange of Notes being
different from the name of the Holder of the old Notes surrendered for such exchange.
The Notes are not subject to redemption through the operation of any sinking fund or
otherwise.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s
option, to require the Company to repurchase for cash all of such Holder’s Notes or any portion
thereof (in principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change
Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option,
during certain periods and upon the occurrence of certain conditions specified in the Indenture,
prior to the close of business on the 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 and shares of Common Stock, if any, at the Conversion Rate specified in the
Indenture, as adjusted from time to time as provided in the Indenture.
Terms used in this Note and defined in the Indenture are used herein as therein defined.
A-7
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST = Custodian
TEN ENT = as tenants by the entireties
JT TEN = joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-8
SCHEDULE A
SCHEDULE OF EXCHANGES OF NOTES
Integra LifeSciences Holdings Corporation
1.625% Convertible Senior Notes due 2016
1.625% Convertible Senior Notes due 2016
The initial principal amount of this Global Note is TWO HUNDRED AND THIRTY MILLION DOLLARS
($230,000,000). The following increases or decreases in this Global Note have been made:
| Principal amount | Signature of | |||||||||||||||
| Amount of | Amount of | of this Global Note | authorized | |||||||||||||
| decrease in | increase in | following such | signatory of | |||||||||||||
| principal amount | principal amount | decrease or | Trustee or | |||||||||||||
| Date of exchange | of this Global Note | of this Global Note | increase | Custodian | ||||||||||||
A-9
ATTACHMENT 1
[FORM OF NOTICE OF CONVERSION]
To: Integra LifeSciences Holdings Corporation
To: Wells Fargo Bank, National Association, 45 Broadway, 14th Floor, New York, New York 10006,
facsimile 212-515-1589
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 shares of Common Stock, if any, in accordance with the terms of the
Indenture referred to in this Note, and directs that any cash payable and any shares of Common
Stock issuable and deliverable upon such conversion, together with any cash for any fractional
share, and any Notes representing any unconverted principal amount hereof, be issued and delivered
to the registered Holder hereof unless a different name has been indicated below. If any shares of
Common Stock or any portion of this Note not converted are to be issued in the name of a Person
other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or
transfer taxes, if any in accordance with Section 14.02(d) and Section 14.02(e) of the Indenture.
Any amount required to be paid to the undersigned on account of interest accompanies this Note.
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.
1
Fill in for registration of shares if
to be issued, and Notes if to
be delivered, other than to and in the
name of the registered holder:
(Name) |
(Street Address) |
(City, State and Zip Code) |
Please print name and address |
Principal amount to be converted (if less than all): |
$______,000 |
NOTICE: The above signature(s) of the Holder(s) hereof must
correspond with the name as written upon the face of the Note
in every particular without alteration or enlargement or any
change whatever. |
Social Security or Other Taxpayer |
Identification Number |
2
ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
To: Integra LifeSciences Holdings Corporation
To: Wells Fargo Bank, National Association, 45 Broadway, 14th Floor, New York, New York 10006,
facsimile 212-515-1589
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from
Integra LifeSciences Holdings Corporation (the “Company”) as to the occurrence of a Fundamental
Change with respect to the Company and specifying the Fundamental Change Repurchase Date and
requests and instructs the Company to pay to the registered holder hereof in accordance with
Section 15.02 of the Indenture referred to in this Note (1) the entire principal amount of this
Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof)
below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the
period after a Regular Record Date and on or prior to the corresponding Interest Payment Date,
accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Repurchase
Date.
In the case of Physical 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 repurchased by the Company (if less
than all): $,000 |
NOTICE: The above signature(s) of the Holder(s) hereof must
correspond with the name as written upon the face of the Note
in every particular without alteration or enlargement or any
change whatever. |
1
ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
Wells Fargo Bank, National Association,
as Trustee and Registrar — DAPS Reorg
MAC N9303-121
608 2nd Avenue South
Minneapolis, MN 55479
Telephone No.: (877) 872-4605
Fax No.: (866) 969-1290
Email: DAPSReorg@wellsfargo.com
as Trustee and Registrar — DAPS Reorg
MAC N9303-121
608 2nd Avenue South
Minneapolis, MN 55479
Telephone No.: (877) 872-4605
Fax No.: (866) 969-1290
Email: DAPSReorg@wellsfargo.com
For value received ____________________________ hereby sell(s), assign(s) and transfer(s) unto
_________________ (Please insert social security or Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints _____________________ attorney to
transfer the said Note on the books of the Company, with full power of substitution in the
premises.
In connection with any transfer of the within Note occurring prior to the Resale Restriction
Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that
such Note is being transferred:
o To Integra LifeSciences Holdings Corporation or a subsidiary thereof; or
o Pursuant to a registration statement that has become or been declared effective under the
Securities Act of 1933, as amended; or
o Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
o Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any
other available exemption from the registration requirements of the Securities Act of 1933, as
amended.
1
Dated: ___________________ |
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.
2
Exhibit 10.1
EXECUTION VERSION
Wells Fargo Bank, National Association
375 Park Avenue, NY 4073
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
375 Park Avenue, NY 4073
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
June 9, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
Re: Base Warrants
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to
Wells Fargo Bank, National Association (“Dealer”) as of the Trade Date specified below (the
“Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below. This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the
terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement,
form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the
“Agreement”) as if Dealer and Company had executed an agreement in such form (but without any
Schedule except for (i) the election of the laws of the State of New York as the governing law
(without reference to choice of law doctrine); (ii) the election that the “Cross Default”
provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that (a) the
phrase “or becoming capable at such time of being declared” shall be deleted from clause (1) of
such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Wells Fargo & Company (the
“Dealer Parent”) and in relation to Company, USD 25 million.)) on the Trade Date. In the event of
any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation
will prevail for the purpose of the Transaction to which this Confirmation relates.
The parties hereby agree that no Transaction other than the Transaction to which this
Confirmation relates shall be governed by the Agreement.
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:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
696,368. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05 | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.68, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 4,948,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges |
Procedures for
Exercise.
2
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | |
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for |
3
| such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | ||
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | |
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. |
Valuation Terms.
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. |
Settlement Terms.
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: | |
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the “Cash Percentage”); | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and |
4
| specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | |
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the |
5
| Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | ||
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. |
| 3. | Additional Terms applicable to the Transaction. | |
| Adjustments applicable to the Transaction: |
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the |
6
| Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. |
Extraordinary Events
applicable to the
Transaction:
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. |
Consequence of Merger Events:
Merger Event:
|
Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination) | |
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). |
Consequence of Tender Offers:
Tender Offer:
|
Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Modified Calculation Agent Adjustment | |
Share-for-Combined:
|
Modified Calculation Agent Adjustment |
7
Announcement Event:
|
If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | |
Announcement Date:
|
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective |
8
| successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | ||
Additional Disruption Events:
|
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Not Applicable | |
Insolvency Filing:
|
Applicable | |
Hedging Disruption:
|
Applicable; provided that: | |
(i) Section 12.9(a)(v) of the Equity Definitions is
hereby amended 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.”; and |
||
(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”. |
||
Increased Cost of Hedging:
|
Applicable | |
Loss of Stock Borrow:
|
Applicable | |
Maximum Stock Loan Rate:
|
200 basis points | |
Increased Cost of Stock Borrow:
|
Applicable | |
Initial Stock Loan Rate:
|
25 basis points | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgments
Regarding Hedging Activities:
|
Applicable |
9
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 Account for delivery of Shares from Company: American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Bank: Wells Fargo Bank, N.A. ABA#: 121-000-248 Internal acct no.: 01020300064228 A/C name: WFB Equity Derivatives |
|||
| Account for delivery of Shares to Dealer: | |||
| DTC Number: 2072 Agent ID: 52196 Institution ID: 52196 |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| Wells Fargo Bank, National Association 375 Park Avenue New York, NY 10152 |
| 7. | Notices. |
10
| (a) | Address for notices or communications to Company: | ||
| Integra LifeSciences Holdings
Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| Wells Fargo Securities, LLC Structured Derivatives Documentation Unit 375 Park Avenue New York, NY 10152 Telephone: 212-214-6101 Facsimile: 212-214-5913 Email: sds@wachovia.com |
|||
| With a copy to: | |||
| Mark Kohn or Head
Trader Telephone: 212-214-6089 Facsimile: 212-214-8914 |
| 8. | Representations and Warranties of Company. | |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. |
11
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. | ||
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | ||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of |
12
| the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of |
13
| Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. | |||
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Terms Relating to Wells Fargo Securities, LLC (the “Agent”). |
| (i) | The Agent is registered as a broker-dealer with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, is acting hereunder for and on behalf of Dealer solely in its capacity as agent for Dealer pursuant to instructions from Dealer, and is not and will not be acting as the Company’s agent, broker, advisor or fiduciary in any respect under or in connection with the Transaction. | ||
| (ii) | In addition to acting as Dealer’s agent in executing the Transaction, the Agent is authorized from time to time to give written payment and/or delivery instructions to Company directing it to make its payments and/or deliveries under the Transaction to an account of the Agent for remittance to the Dealer (or its designee), and for that purpose any such payment or delivery by Company to the Agent shall be treated as a payment or delivery to the Dealer. | ||
| (iii) | Except as otherwise provided herein, any and all notices, demands, or communications of any kind transmitted in writing by either Dealer or Company under or in connection with the Transaction will be transmitted exclusively by such party to the other party through the Agent at the following address: |
Wells Fargo Securities, LLC
201 South College Street, 6th Floor
Charlotte, NC 28288-0601
Facsimile No.: (704) 383-8425
Telephone No.: (704) 715-8086
Attention: Equity Derivatives
201 South College Street, 6th Floor
Charlotte, NC 28288-0601
Facsimile No.: (704) 383-8425
Telephone No.: (704) 715-8086
Attention: Equity Derivatives
| (iv) | The Agent shall have no responsibility or liability to the Dealer or Company for or arising from (i) any failure by either Dealer or Company to perform any of their respective obligations under or in connection with the Transaction, (ii) the collection or enforcement of any such obligations, or (iii) the exercise of any of the rights and remedies of either Dealer or Company under or in connection with the Transaction. Each of Dealer and |
14
| Company agrees to proceed solely against the other to collect or enforce any such obligations, and the Agent shall have no liability in respect of the Transaction except for its gross negligence or willful misconduct in performing its duties as the agent of Dealer. | |||
| (v) | Upon written request, the Agent will furnish to Dealer and Company the date and time of the execution of the Transaction and a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction. |
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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).” | ||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (D) | 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.” | ||
| (E) | 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. |
| (F) | 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.” |
15
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | ||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). | ||
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect to the Transaction in the public market without registration under the Securities |
16
| 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 Dealer). |
Notwithstanding the foregoing, a transaction or transactions described in clauses
(A) or (B) above shall not constitute an Additional Termination Event if at least
90% of the consideration received or to be received by the holders of the Shares,
excluding cash payments for fractional shares and cash payments made in respect of
dissenters’ appraisal rights, in connection with such transaction or transactions
consists of shares of common stock, ordinary shares, American depositary receipts
or American depositary shares that are listed or quoted on any of The New York
Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any
of their respective successors) or will be so listed or quoted when issued or
exchanged in connection with such transaction or transactions
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share |
17
| Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | ||
Share Termination Unit Price:
|
The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price 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. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | |
Share Termination Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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:
|
Inapplicable | |
Other applicable provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or |
18
| Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | ||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, |
19
| in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | |||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | ||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall |
20
| be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | |||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. | ||
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction. |
21
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, |
22
| illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | |||
| (u) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represents and acknowledges to the other that, subject to the proviso included in this Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
23
| Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to Wells Fargo Securities, LLC, 201 South College Street, 6th Floor, Charlotte, NC 28288-0601, Facsimile No.: (704) 383-8425, Telephone No.: (704) 715-8086, Attention: Equity Derivatives. |
Very truly yours,
| Wells Fargo Bank, National Association | ||||||
| By Wells Fargo Securities, LLC, acting solely in its capacity as its Agent |
||||||
| By: Name: |
/s/ Cathleen Burke
|
|||||
| Title: | Managing Director | |||||
| Wells Fargo Securities, LLC | ||||||
| acting solely in its capacity as Agent of | ||||||
| Wells Fargo Bank, National Association | ||||||
| By: Name: |
/s/ Cathleen Burke
|
|||||
| Title: | Managing Director | |||||
| Accepted and confirmed | ||||
| as of the Trade Date: | ||||
| Integra LifeSciences Holdings Corporation | ||||
By:
|
/s/ Stuart M. Essig
|
|||
| Authorized Signatory | ||||
| Name: Stuart M. Essig, CEO | ||||
[Wells Fargo Warrant Confirmation]
Exhibit 10.2
EXECUTION VERSION
Wells Fargo Bank, National
Association 375 Park Avenue, NY
4073 New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
Association 375 Park Avenue, NY
4073 New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
June 9,
2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| Re: | Base Call Option Transaction |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Wells Fargo Bank, National
Association (“Dealer”) and Integra LifeSciences Holdings Corporation (“Counterparty”) as of the
Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
“Offering Memorandum”) relating to the 1.625% Convertible Senior Notes due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD
200,000,000 (as increased by up to an aggregate principal amount of USD 30,000,000 if and to the
extent that the Representatives (as defined herein) exercise their option to purchase additional
Convertible Notes pursuant to the Purchase Agreement (as defined herein)) pursuant to an Indenture
to be dated June 15, 2011 between Counterparty and Wells Fargo Bank, National Association, as
trustee (the “Indenture”). In the event of any inconsistency between the terms defined in the
Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The
parties acknowledge that this Confirmation is entered into on the date hereof with the
understanding that (i) definitions set forth in the Indenture that are also defined herein by
reference to the Indenture and (ii) sections of the Indenture that are referred to herein will
conform to the descriptions thereof in the Offering Memorandum. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith
to preserve the economic intent of the parties based on the draft of the Indenture so reviewed. The
parties further acknowledge that references to the Indenture herein are references to the Indenture
as in effect on the date of its execution and if the Indenture is amended following its execution,
any such amendment will be disregarded for purposes of this Confirmation unless the parties agree
otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Wells Fargo & Company (the
“Dealer Parent”) and in relation to Counterparty, USD 25 million.)) on the Trade Date. In the
event of any inconsistency between provisions of the Agreement and this Confirmation, this
Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates.
The parties hereby agree that no transaction other than the Transaction to which this Confirmation
relates shall be governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms.
Trade Date:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call | |
Buyer:
|
Counterparty | |
Seller:
|
Dealer | |
Shares:
|
The common stock of Counterparty, par value USD 0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
200,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
20% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 7,460,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market |
2
Related Exchange(s):
|
All Exchanges | |
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. | |
Procedures for Exercise. |
||
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any |
3
| adjustments by the Calculation Agent in accordance with the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | ||
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| ‘“Market Disruption Event’ means, in resect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” | ||
Settlement Terms. |
||
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such |
4
| Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | ||
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: | |
(i) a representation that, on the date of such Notice of
Exercise or Notice of Final Settlement Method, as
applicable, Counterparty is not in possession of any
material non-public information with respect to
Counterparty or the Shares; |
||
(ii) a representation that Counterparty is electing the
settlement method for the related Convertible Note
and such Relevant Settlement Method in good faith
and not as part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the Securities
Exchange Act of 1934, as amended (the
“Exchange Act”); |
||
(iii) a representation that Counterparty has not entered
into or altered any hedging transaction relating to
the Shares corresponding to or offsetting the
Transaction; |
5
(iv) a representation that Counterparty is not electing
the settlement method for the related Convertible
Note and such Relevant Settlement Method to
create actual or apparent trading activity in the
Shares (or any security convertible into or
exchangeable for the Shares) or to raise or depress
or otherwise manipulate the price of the Shares (or
any security convertible into or exchangeable for
the Shares); and |
||
(v) an acknowledgment by Counterparty that (A) any
transaction by Dealer following Counterparty’s
election of the settlement method for the related
Convertible Note and such Relevant Settlement
Method shall be made at Dealer’s sole discretion
and for Dealer’s own account and (B) Counterparty
does not have, and shall not attempt to exercise,
any influence over how, when, whether or at what
price to effect such transactions, including, without
limitation, the price paid or received per Share
pursuant to such transactions, or whether such
transactions are made on any securities exchange
or privately. |
||
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period. | |
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: | |
(i) cash in an amount equal to the sum, for each Valid
Day during the Settlement Averaging Period for
such Option, of (i) the Daily Option Value for such
Valid Day, divided by (ii) the number of Valid
Days in the Settlement Averaging Period,
multiplied by (iii) the Cash Percentage; and |
||
(ii) a number of Shares (the “Combination Settlement
Share Amount”) equal to the sum, for each Valid
Day during the Settlement Averaging Period for
such Option, of (i) the Daily Option Value for such
Valid Day, divided by (ii) the Relevant Price on |
6
such Valid Day, divided by (iii) the number of
Valid Days in the Settlement Averaging Period,
multiplied by (iv) (A) 100% minus (B) the Cash
Percentage. |
||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | |
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the |
7
| scheduled open of trading until the scheduled clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | ||
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: | |
(i) if the relevant Conversion Date occurs prior to the
Free Convertibility Date, the 50 consecutive
Valid-Day period beginning on, and including, the
second Valid Day after such Conversion Date; and |
||
(ii) if the relevant Conversion Date occurs on or
following the Free Convertibility Date, the 50
consecutive Valid Days beginning on, and
including, the 52nd Scheduled Valid Day
immediately preceding the Expiration Date. |
||
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | |
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
| 3. | Additional Terms applicable to the Transaction. |
Adjustments applicable to the
Transaction: |
8
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | |
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. | |
Extraordinary Events applicable to the
Transaction: |
||
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | |
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence
of Merger Events / Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is |
9
| not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | ||
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Applicable | |
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgements |
||
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent |
10
| will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Counterparty: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares to Counterparty: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Bank: Wells Fargo Bank, N.A. ABA#: 121-000-248 Internal acct no.: 01020300064228 A/C name: WFB Equity Derivatives |
|||
| Account for delivery of Shares from Dealer: | |||
| DTC Number: 2072 Agent ID: 52196 Institution ID: 52196 |
| 6. | Offices. |
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| Wells Fargo Bank, National Association 375 Park Avenue New York, NY 10152 |
| 7. | Notices. |
| (a) | Address for notices or communications to Counterparty: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer |
11
| Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| Wells Fargo Securities, LLC Structured Derivatives Documentation Unit 375 Park Avenue New York, NY 10152 Telephone: 212-214-6101 Facsimile: 212-214-5913 Email: sds@wachovia.com |
|||
| With a copy to: | |||
| Mark Kohn or Head Trader Telephone: 212-214-6089 Facsimile: 212-214-8914 |
| 8. | Representations and Warranties of Counterparty. | |
| Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. |
12
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any |
13
| Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
14
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer or the Dealer Parent. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. | ||
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer |
15
| shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Terms Relating to Wells Fargo Securities. LLC (the “Agent”). |
| (i) | The Agent is registered as a broker-dealer with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, is acting hereunder for and on behalf of Dealer solely in its capacity as agent for Dealer pursuant to instructions from Dealer, and is not and will not be acting as the Counterparty’s agent, broker, advisor or fiduciary in any respect under or in connection with the Transaction. | ||
| (ii) | In addition to acting as Dealer’s agent in executing the Transaction, the Agent is authorized from time to time to give written payment and/or delivery instructions to Counterparty directing it to make its payments and/or deliveries under the Transaction to an account of the Agent for remittance to the Dealer (or its designee), and for that purpose any such payment or delivery by Counterparty to the Agent shall be treated as a payment or delivery to the Dealer. | ||
| (iii) | Except as otherwise provided herein, any and all notices, demands, or communications of any kind transmitted in writing by either Dealer or Counterparty under or in connection with the Transaction will be transmitted exclusively by such party to the other party through the Agent at the following address: |
| Wells Fargo Securities, LLC 201 South College Street, 6th Floor Charlotte, NC 28288-0601 Facsimile No.: (704) 383-8425 Telephone No.: (704) 715-8086 Attention: Equity Derivatives |
| (iv) | The Agent shall have no responsibility or liability to the Dealer or Counterparty for or arising from (i) any failure by either Dealer or Counterparty to perform any of their respective obligations under or in connection with the Transaction, (ii) the collection or enforcement of any such obligations, or (iii) the exercise of any of the rights and remedies of either Dealer or Counterparty under or in connection with the Transaction. Each of Dealer and Counterparty agrees to proceed solely against the other to collect or enforce any such obligations, and the Agent shall have no liability in respect of the |
16
| Transaction except for its gross negligence or willful misconduct in performing its duties as the agent of Dealer. | |||
| (v) | Upon written request, the Agent will furnish to Dealer and Counterparty the date and time of the execution of the Transaction and a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction. |
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. | ||
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as |
17
| defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 |
18
| case that resulted from an event or events outside Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 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 to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to Deliver:
|
Applicable | |
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and |
19
| Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. | ||
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. |
20
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (t) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. |
21
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
22
Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to Wells Fargo Securities, LLC, 201 South College
Street, 6th Floor, Charlotte, NC 28288-0601, Facsimile No.: (704) 383-8425, Telephone No.: (704)
715-8086, Attention: Equity Derivatives.
Very truly yours,
| Wells Fargo Bank, National Association By Wells Fargo Securities, LLC, acting solely in its capacity as its Agent |
||||||
| By: Name: |
/s/ Cathleen Burke
|
|||||
| Title: | Managing director | |||||
| Wells Fargo Securities, LLC acting solely in its capacity as Agent of Wells Fargo Bank, National Association |
||||||
| By: Name: |
/s/ Cathleen Burke
|
|||||
| Title: | Managing director | |||||
| Accepted and
confirmed as of the Trade Date: |
||||
| Integra LifeSciences Holdings Corporation | ||||
By: |
/s/ Stuart M. Essig | |||
| Authorized Signatory | ||||
Name: |
Stuart M. Essig, CEO | |||
[Wells Fargo Bond Hedge Confirmation]
Exhibit 10.3
EXECUTION VERSION
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
Internal Reference Nr.: 439461
June 9, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
Re: Base Warrants
DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT
OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THIS
TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH
RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS,
ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN
DEUTSCHE BANK AG AND COMPANY SHALL BE TRANSMITTED THROUGH DBSI. DEUTSCHE BANK AG ACTING THROUGH
ITS LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to
Deutsche Bank AG, London Branch (“Dealer”) as of the Trade Date specified below (the
“Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below. This Confirmation shall replace any previous agreements and serve
as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan Krause,
Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: | |
| http://www.deutsche-bank.com |
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Deutsche Bank AG (the “Dealer
Parent”) and in relation to Company, USD 25 million.)) on the Trade Date. In the event of any
inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no Transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.
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:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
696,368. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. |
2
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05. | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.68, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 4,948,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Procedures for
Exercise. |
||
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, |
3
| as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | ||
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | |
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | |
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. | |
Valuation Terms. |
||
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. | |
Settlement Terms. |
||
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: |
4
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the "Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product |
5
| of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | ||
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | |
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume- weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. |
6
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. | |
3. Additional Terms applicable to the Transaction. |
||
Adjustments applicable to the Transaction: |
||
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. | |
Extraordinary Events applicable to the
Transaction: |
||
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. | |
Consequence of Merger Events: |
||
Merger Event:
|
Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination) |
7
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). | |
Consequence of Tender Offers: |
||
Tender Offer:
|
Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Modified Calculation Agent Adjustment | |
Share-for-Combined:
|
Modified Calculation Agent Adjustment | |
Announcement Event:
|
If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | |
Announcement Date:
|
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the |
8
| second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | ||||
| 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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |||
Additional Disruption Events: |
||||
Change
in Law: |
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |||
Failure
to Deliver: |
Not Applicable | |||
Insolvency
Filing: |
Applicable | |||
Hedging
Disruption: |
Applicable; provided that: | |||
| (i) | Section 12.9(a)(v) of the Equity Definitions is
hereby amended 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.”; and |
|||
| (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 | |||
9
| Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”. | ||
Increased Cost of Hedging:
|
Applicable | |
Loss of Stock Borrow:
|
Applicable | |
Maximum Stock Loan Rate:
|
200 basis points | |
Increased Cost of Stock Borrow:
|
Applicable | |
Initial Stock Loan Rate:
|
25 basis points | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgments
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
||
| Account for delivery of Shares from Company: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| To be provided by Dealer. |
10
| Account for delivery of Shares to Dealer: | |||
| To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: London |
| 7. | Notices. |
| (a) | Address for notices or communications to Company: | ||
| Integra LifeSciences Holdings Corporation |
311 Enterprise Drive |
||
Plainsboro, NJ
|
08536 | |
Attention:
|
Treasurer | |
Telephone No.:
|
(609) 275-0500 | |
Facsimile No.:
|
(609) 750-4264 |
| (b) | Address for notices or communications to Dealer: |
To:
|
Deutsche Bank AG, London Branch | |
| c/o Deutsche Bank Securities Inc. | ||
Attn:
|
Faiz Khan / Andrew Yaeger | |
Group:
|
Equity-Linked Capital Markets | |
| 60 Wall Street, 4th Floor | ||
| New York, NY 10005 | ||
Faiz Tel:
|
212-250-0668 | |
Faiz Email:
|
faiz.khan@db.com | |
Andrew Tel:
|
212-250-2717 | |
Andrew Email:
|
Andrew.yaeger@db.com | |
Facsimile:
|
732-460-7499 | |
With a copy to: |
||
Attn:
|
Lars Kestner / Dushyant Chadha | |
Group:
|
Corporate Derivatives | |
| 60 Wall Street, 4th Floor | ||
| New York, NY 10005 | ||
Lars Tel:
|
212-250-6043 | |
Lars Email:
|
lars.kestner@db.com | |
Dushyant Tel:
|
212-250-4980 | |
| Dushyant Email: dushyant.chadha@db.com | ||
| 8. | Representations and Warranties of Company. | |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
11
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. (d) A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | ||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 26,749,873 (in the case of the first such notice) or (ii) thereafter more than 1,622,916 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its |
12
| affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position |
13
| exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. | |||
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Role of Agent. Whenever delivery of funds or other assets is required hereunder by or to Company, such delivery shall be effected through DBSI. In addition, all notices, demands and communications of any kind relating to the Transaction between Dealer and Company shall be transmitted exclusively through DBSI. | ||
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
14
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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).” | ||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (D) | 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.” | ||
| (E) | 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. |
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as |
15
| defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | |||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). | ||
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
| Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or (B) above shall not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock, ordinary shares, American depositary receipts or American depositary shares that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global |
16
| Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions |
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | |
Share Termination Unit Price:
|
The value to Dealer 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. In the case |
17
| of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price 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. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | ||
Share Termination Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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:
|
Inapplicable | |
Other applicable provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause |
18
(ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing
after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable
adjustments to settlement terms and provisions under this Confirmation to reflect a single Private
Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder.
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | ||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a "Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the "Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the |
19
| Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | |||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | ||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | ||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer |
20
| will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. | |||
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction. | ||
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued |
21
| Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 |
22
(i) the Transaction and all of the respective rights and obligations of Dealer and
Company 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; provided that, other than in cases
involving a breach of the Purchase Agreement by Dealer, Company shall purchase from
Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its
affiliates in connection with the Transaction at the then prevailing market price. Each
of Dealer and Company represents and acknowledges to the other that, subject to the
proviso included in this Section 9(u), upon an Early Unwind, all obligations with
respect to the Transaction shall be deemed fully and finally discharged.
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
23
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing this Confirmation and returning it to Deutsche
Bank Securities Inc., 60 Wall Street, New York, NY 10005, or by fax to
(212) 797 8974.
| Very truly yours, | ||||
| Deutsche Bank AG, London Branch | ||||
| By: | /s/ Lars Kestner | |||
| Authorised Signatory | ||||
| Name: Lars Kestner Managing Director |
||||
| By: | /s/ Michael Sanderson | |||
| Authorised Signatory | ||||
| Name: Michael Sanderson Managing Director |
||||
| Deutsche Bank Securities Inc., acting solely as Agent in connection with the Transaction | ||||
| By: | /s/ Lars Kestner | |||
| Authorized Signatory | ||||
| Name: Lars Kestner Managing Director |
||||
| By: | /s/ Michael Sanderson | |||
| Authorized Signatory | ||||
| Name: Michael Sanderson Managing Director |
||||
Accepted and confirmed
as of the Trade Date:
as of the Trade Date:
Integra LifeSciences Holdings Corporation
By:
|
/s/ Stuart M. Essig
|
|||
| Authorized Signatory | ||||
| Name: Stuart M. Essig, CEO | ||||
[DB Warrant Confirmation]
Chairman of the
Supervisory Board:
Clemens Börsig
Management Board:
Josef Ackermann
(Chairman), Hugo
Bänziger, Jürgen
Fitschen, Anshuman
Jain, Stefan Krause,
Hermann-Josef Lamberti,
Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: | |
| http://www.deutsche-bank.com |
Exhibit 10.4
EXECUTION VERSION
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
Internal Reference Nr.: 439460
June 9, 2011
| To: | Integra LifeSciences Holdings Corporation | |||
| 311 Enterprise Drive | ||||
| Plainsboro, NJ 08536 | ||||
| Attention: | Treasurer | |||
| Telephone No.: | (609) 275-0500 | |||
| Facsimile No.: | (609) 750-4264 | |||
Re:
Base Call Option Transaction
|
||||
DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT
OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THIS
TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH
RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS,
ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN
DEUTSCHE BANK AG AND COUNTERPARTY SHALL BE TRANSMITTED THROUGH DBSI. DEUTSCHE BANK AG ACTING
THROUGH ITS LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Deutsche Bank AG, London Branch
(“Dealer”) and Integra LifeSciences Holdings Corporation (“Counterparty”) as of the Trade Date
specified below (the “Transaction”). This letter agreement constitutes a “Confirmation” as referred
to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous
agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan
Krause, Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: | |
| http://www.deutsche-bank.com |
Memorandum dated June 9, 2011 (the “Offering Memorandum”) relating to the 1.625% Convertible
Senior Notes due 2016 (as originally issued by Counterparty, the “Convertible Notes” and each USD
1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty in an
aggregate initial principal amount of USD 200,000,000 (as increased by up to an aggregate principal
amount of USD 30,000,000 if and to the extent that the Representatives (as defined herein) exercise
their option to purchase additional Convertible Notes pursuant to the Purchase Agreement (as
defined herein)) pursuant to an Indenture to be dated June 15, 2011 between Counterparty and Wells
Fargo Bank, National Association, as trustee (the “Indenture”). In the event of any inconsistency
between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the
date hereof with the understanding that (i) definitions set forth in the Indenture that are also
defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Offering Memorandum. For the avoidance of
doubt, references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith
to preserve the economic intent of the parties based on the draft of the Indenture so reviewed. The
parties further acknowledge that references to the Indenture herein are references to the Indenture
as in effect on the date of its execution and if the Indenture is amended following its execution,
any such amendment will be disregarded for purposes of this Confirmation unless the parties agree
otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Deutsche Bank AG (the “Dealer
Parent”) and in relation to Counterparty, USD 25 million.)) on the Trade Date. In the event of any
inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General
Terms.
Trade Date:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call |
2
Buyer:
|
Counterparty | |
Seller:
|
Dealer | |
Shares:
|
The common stock of Counterparty, par value USD0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
200,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
20% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 7,460,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. |
Procedures for Exercise.
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. |
3
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any adjustments by the Calculation Agent in accordance with the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | |
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is |
4
| extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | ||
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| “‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” |
Settlement Terms.
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | |
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. |
5
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: |
| (i) | a representation that, on the date of such Notice of Exercise or Notice of Final Settlement Method, as applicable, Counterparty is not in possession of any material non-public information with respect to Counterparty or the Shares; | |||
| (ii) | a representation that Counterparty is electing the settlement method for the related Convertible Note and such Relevant Settlement Method in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); | |||
| (iii) | a representation that Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction; | |||
| (iv) | a representation that Counterparty is not electing the settlement method for the related Convertible Note and such Relevant Settlement Method to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares); and | |||
| (v) | an acknowledgment by Counterparty that (A) any transaction by Dealer following Counterparty’s election of the settlement method for the related Convertible Note and such Relevant Settlement Method shall be made at Dealer’s sole discretion and for Dealer’s own account and (B) Counterparty does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, |
6
| divided by (iii) the number of Valid Days in the Settlement Averaging Period. | ||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: |
| (i) | cash in an amount equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iii) the Cash Percentage; and | |||
| (ii) | a number of Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iv) (A) 100% minus (B) the Cash Percentage. |
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the |
7
| Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | ||
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <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 clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | |
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: |
| (i) | if the relevant Conversion Date occurs prior to the Free Convertibility Date, the 50 consecutive Valid-Day period beginning on, and including, the second Valid Day after such Conversion Date; and | |||
| (ii) | if the relevant Conversion Date occurs on or following the Free Convertibility Date, the 50 consecutive Valid Days beginning on, and including, the 52nd Scheduled Valid Day immediately preceding the Expiration Date. |
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides |
8
| written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | ||
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
3. Additional Terms applicable to the Transaction.
Adjustments applicable to the Transaction:
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | |
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. |
Extraordinary Events applicable to the Transaction:
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the |
9
| occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | ||
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger Events /
|
||
Tender Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events:
|
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) |
10
| Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | ||
Failure to Deliver:
|
Applicable | |
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgements |
||
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable |
4.
|
Calculation Agent. | Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
(a)
|
Account for payments to Counterparty: | |
| Bank Name: Wells Fargo Bank | ||
| ABA #: 121000248 | ||
| Beneficiary: First Clearing, LLC | ||
| Account #: 4122023377 | ||
| FFC Account Name: Integra LifeSciences Holdings Corp | ||
| FFC Account Number: 8595-0713 | ||
| Account for delivery of Shares to Counterparty: | ||
| American Stock Transfer & Trust Co LLC | ||
| Transfer Agent # 2941 | ||
| Account # 10249 | ||
(b)
|
Account for payments to Dealer: | |
| To be provided by Dealer. | ||
| Account for delivery of Shares from Dealer: |
11
| To be provided by Dealer. | ||||
| 6. | Offices. | |||
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | |||
| (b) | The Office of Dealer for the Transaction is: London | |||
| 7. | Notices. | |||
(a)
|
Address for notices or communications to Counterparty: | |
| Integra LifeSciences Holdings Corporation | ||
| 311 Enterprise Drive | ||
| Plainsboro, NJ 08536 |
| Attention: | Treasurer | |||
| Telephone No.: | (609) 275-0500 | |||
| Facsimile No.: | (609) 750-4264 | |||
(b)
|
Address for notices or communications to Dealer: | |||
| To: | Deutsche Bank AG, London Branch | |||
| c/o Deutsche Bank Securities Inc. | ||||
| Attn: | Faiz Khan / Andrew Yaeger | |||
| Group: | Equity-Linked Capital Markets | |||
| 60 Wall Street, 4th Floor | ||||
| New York, NY 10005 | ||||
| Faiz Tel: | 212-250-0668 | |||
| Faiz Email: | faiz.khan@db.com | |||
| Andrew Tel: | 212-250-2717 | |||
| Andrew Email: | Andrew.yaeger@db.com | |||
| Facsimile: | 732-460-7499 | |||
| With a copy to: | ||||
| Attn: | Lars Kestner / Dushyant Chadha | |||
| Group: | Corporate Derivatives | |||
| 60 Wall Street, 4th Floor | ||||
| New York, NY 10005 | ||||
| Lars Tel: | 212-250-6043 | |||
| Lars Email: | lars.kestner@db.com | |||
| Dushyant Tel: | 212-250-4980 | |||
| Dushyant Email: dushyant.chadha@db.com | ||||
| 8. | Representations and Warranties of Counterparty. | |
| Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation |
12
| has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | |||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 26,749,873 (in the case of the first such notice) or (ii) thereafter more than 1,622,916 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the |
13
| manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); |
14
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer or the Dealer Parent. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option |
15
| Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. | |||
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Role of Agent. Whenever delivery of funds or other assets is required hereunder by or to Counterparty, such delivery shall be effected through DBSI. In addition, all notices, demands and communications of any kind relating to the Transaction between Dealer and Counterparty shall be transmitted exclusively through DBSI. | ||
| (h) | Additional Termination Events. |
16
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. | ||
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the |
17
| number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
18
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 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 to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to Deliver:
|
Applicable | |
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the |
19
| other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. | ||
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. |
20
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (t) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder
of Page Intentionally Blank]
21
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY
10005, or by fax to (212) 797 8974.
Very truly yours,
| Deutsche Bank AG, London Branch | ||||||
| By: | /s/ Lars Kestner
|
|||||
| Authorized Signatory | ||||||
| Name: | Lars Kestner | |||||
| Managing Director | ||||||
| By: | /s/ Michael Sanderson
|
|||||
| Authorized Signatory | ||||||
| Name: | Michael Sanderson | |||||
| Managing Director | ||||||
| Deutsche Bank-Securities Inc., acting solely as Agent in connection with the Transaction |
||||||
| By: | /s/ Lars Kestner | |||||
| Authorized Signatory | ||||||
| Name: | Lars Kestner | |||||
| Managing Director | ||||||
| By: | /s/ Michael Sanderson
|
|||||
| Authorized Signatory | ||||||
| Name: | Michael Sanderson | |||||
| Managing Director | ||||||
Accepted
and confirmed as of the
Trade Date:
Integra LifeSciences Holdings Corporation
By: |
/s/ Stuart M. Essig, CEO | |||
| Authorized Signatory Name: Stuart M. Essig, CEO |
||||
[DB Bond Hedge Confirmation]
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan Krause,
Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: http://www.deutsche-bank.com |
22
Exhibit 10.5
EXECUTION VERSION
The Royal Bank of Scotland plc
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
June 9, 2011
To:
|
Integra LifeSciences Holdings Corporation | |
| 311 Enterprise Drive | ||
| Plainsboro, NJ 08536 | ||
| Attention: Treasurer | ||
| Telephone No.: (609) 275-0500 | ||
| Facsimile No.: (609) 750-4264 |
Re:
|
Base Warrants |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to The
Royal Bank of Scotland plc (“Dealer”), acting through RBS Securities Inc., as its agent, as of the
Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Dealer and in relation to
Company, USD 25 million.)) on the Trade Date. In the event of any inconsistency between provisions
of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other
than the Transaction to which this Confirmation relates shall be governed by the Agreement.
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:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
696,368. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05. | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.68, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 4,948,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Procedures for Exercise. |
||
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a |
2
| number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | ||
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | |
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure |
3
| or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | ||
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. | |
Valuation Terms. |
||
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. | |
Settlement Terms. |
||
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: | |
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the “Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any |
4
| indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | |
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The |
5
| provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | ||
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. | |
| 3. Additional Terms applicable to the Transaction. | ||
Adjustments applicable
to the Transaction: |
||
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. | |
6
| Extraordinary Events applicable to the Transaction: | ||
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. | |
Consequence of Merger Events: |
||
Merger Event:
|
Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination) | |
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). | |
Consequence of Tender Offers: |
||
Tender Offer:
|
Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Modified Calculation Agent Adjustment | |
Share-for-Combined:
|
Modified Calculation Agent Adjustment | |
Announcement Event:
|
If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest | |
7
| of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | ||
Announcement Date:
|
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
8
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Not Applicable | |
Insolvency Filing:
|
Applicable | |
Hedging Disruption:
|
Applicable; provided that: | |
(i) Section 12.9(a)(v) of the
Equity Definitions is hereby amended 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.”; and |
||
(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”. |
||
Increased Cost of Hedging:
|
Applicable | |
Loss of Stock Borrow:
|
Applicable | |
Maximum Stock Loan Rate:
|
200 basis points | |
Increased Cost of Stock Borrow:
|
Applicable | |
Initial Stock Loan Rate:
|
25 basis points | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgments Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially |
9
| reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 Account for delivery of Shares from Company: American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
||
| (b) | Account for payments to Dealer: Chase Bank, New York BIC: CHASUS33 ABA # 021000021 A/C Name: RBS Securities Inc. BIC: GRNWUS33 A/C: 066615674 Account for delivery of Shares to Dealer: To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 |
| 7. | Notices. |
| (a) | Address for notices or communications to Company: |
10
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 Attn: Legal Department (Tam Beattie) Telephone: (203) 897-6086 Facsimile: (203) 873-4571 Email: Tamerlaine.Beattie@rbs.com With a copy to: The Royal Bank of Scotland plc c/o RBS Global Banking & Markets 280 Bishopsgate London EC2M 4RB |
| 8. | Representations and Warranties of Company. | |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. |
11
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. | ||
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | ||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of |
12
| the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of |
13
| Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. | |||
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Role of Agent. THE ROYAL BANK OF SCOTLAND PLC HAS ENTERED AS PRINCIPAL TO THE TRANSACTION AND IS COMPANY’S COUNTERPARTY HERETO. THE ROYAL BANK OF SCOTLAND PLC IS NOT REGISTERED AS A BROKER-DEALER UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THE PARTIES ACKNOWLEDGE THAT RBS SECURITIES INC. HAS ACTED AS AGENT FOR THE PARTIES IN CONNECTION WITH THE TRANSACTION. TO THE EXTENT RBS SECURITIES INC. HAS ACTED AS AGENT IN CONNECTION WITH THE TRANSACTION, ITS OBLIGATIONS ARE STRICTLY LIMITED TO THE DELIVERY OF ANY CASH AND SECURITIES THAT IT ACTUALLY RECEIVES FROM THE ROYAL BANK OF SCOTLAND PLC OR COMPANY, AS THE CASE MAY BE, OR DELIVERS TO THE ROYAL BANK OF SCOTLAND PLC OR COMPANY. RBS SECURITIES INC. HAS NO OBLIGATIONS HEREUNDER, BY GUARANTY, ENDORSEMENT OR OTHERWISE, WITH RESPECT TO PERFORMANCE OF THE ROYAL BANK OF SCOTLAND PLC’S OR COMPANY’S OBLIGATIONS HEREUNDER. | ||
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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 |
14
| volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares).” | |||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (D) | 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.” | ||
| (E) | 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. | ||
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | ||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a |
15
| reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). | |||
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
| Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or (B) above shall not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock, ordinary shares, American depositary receipts or American depositary shares that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions |
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. |
16
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination Delivery Property:
|
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | |
Share Termination Unit Price:
|
The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, |
17
| Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | ||
Share Termination Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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:
|
Inapplicable | |
Other applicable provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, |
18
| it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | |||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an |
19
| amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | |||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | ||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | ||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date |
20
| that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. |
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction. |
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
21
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represents and acknowledges to the other that, subject to the proviso included in this |
22
| Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | |||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
23
Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to The Royal Bank of Scotland plc, c/o RBS Securities
Inc., 600 Washington Blvd., Stamford, CT 06901, Attn: Legal Department (Tam Beattie), or by fax to:
(203) 873-4571, with copy to The Royal Bank of Scotland plc, c/o RBS Global Banking & Markets, 280
Bishopsgate, London EC2M 4RB, Attn: Swap Administration, or by fax to: +44 (0) 20 7085 5050.
Very truly yours,
| THE ROYAL BANK OF SCOTLAND PLC | ||||||
| By: RBS Securities Inc., as its agent | ||||||
| By: | /s/ Robert McKillip | |||||
| Name: | ||||||
| Title: | Managing Director | |||||
| Accepted and confirmed as of the Trade Date: 6/9/11 |
||||
| Integra LifeSciences Holdings Corporation | ||||
By: |
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
Name: |
Nora Brennan | |||
[RBS Warrant Confirmation]
Exhibit 10.6
EXECUTION VERSION
The Royal Bank of Scotland
plc c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
plc c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
June 9, 2011
To:
|
Integra LifeSciences Holdings Corporation | |
| 311 Enterprise Drive | ||
| Plainsboro, NJ 08536 | ||
| Attention: Treasurer | ||
| Telephone No.: (609) 275-0500 | ||
| Facsimile No.: (609) 750-4264 | ||
Re:
|
Base Call Option Transaction |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between The Royal Bank of Scotland plc
(“Dealer”), acting through RBS Securities Inc., as its agent, and Integra LifeSciences Holdings
Corporation (“Counterparty”) as of the Trade Date specified below (the “Transaction”). This letter
agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.
This Confirmation shall replace any previous agreements and serve as the final documentation for
the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
"Offering Memorandum”) relating to the 1.625% Convertible Senior Notes due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD
200,000,000 (as increased by up to an aggregate principal amount of USD 30,000,000 if and to the
extent that the Representatives (as defined herein) exercise their option to purchase additional
Convertible Notes pursuant to the Purchase Agreement (as defined herein)) pursuant to an Indenture
to be dated June 15, 2011 between Counterparty and Wells Fargo Bank, National Association, as
trustee (the “Indenture”). In the event of any inconsistency between the terms defined in the
Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The
parties acknowledge that this Confirmation is entered into on the date hereof with the
understanding that (i) definitions set forth in the Indenture that are also defined herein by
reference to the Indenture and (ii) sections of the Indenture that are referred to herein will
conform to the descriptions thereof in the Offering Memorandum. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith
to preserve the economic intent of the parties based on the draft of the Indenture so reviewed. The
parties further acknowledge that references to the Indenture herein are references to the Indenture
as in effect on the date of its execution and if the Indenture is amended following its execution,
any such amendment will be disregarded for purposes of this Confirmation unless the parties agree
otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement,
form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the
“Agreement”) as if Dealer and Counterparty had executed an agreement in such form (but without any
Schedule except for (i) the election of the
laws of the State of New York as the governing law (without reference to choice of law doctrine);
(ii) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall
apply to both parties, provided that (a) the phrase “or becoming capable at such time of being
declared” shall be deleted from clause (1) of such Section 5(a)(vi); (b) the following language
shall be added to the end thereof: “Notwithstanding the foregoing, a default under subsection (2)
hereof shall not constitute an Event of Default if (i) the default was caused solely by error or
omission of an administrative or operational nature; (ii) funds were available to enable the party
to make the payment when due; and (iii) the payment is made within two Local Business Days of such
party’s receipt of written notice of its failure to pay.”; (c) “Specified Indebtedness” will have
the meaning specified in Section 14 of the Agreement, except that such term shall not include
obligations in respect of deposits received in the ordinary course of a party’s banking business;
and (d) “Threshold Amount” means in relation to Dealer, three percent (3%) of shareholders’ equity
of Dealer and in relation to Counterparty, USD 25 million.)) on the Trade Date. In the event of any
inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.
| 2. | The terms of the particular Transaction to which this Confirmation relates are as follows: | |
| General Terms. |
Trade Date:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call | |
Buyer:
|
Counterparty | |
Seller:
|
Dealer | |
Shares:
|
The common stock of Counterparty, par value USD0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
200,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
20% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 7,460,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. |
Procedures
for Exercise.
2
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any adjustments by the Calculation Agent in accordance with the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the |
3
| Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | ||
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| “‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” |
Settlement
Terms.
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method |
4
| in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | ||
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: |
| (i) | a representation that, on the date of such Notice of Exercise or Notice of Final Settlement Method, as applicable, Counterparty is not in possession of any material non-public information with respect to Counterparty or the Shares; | ||
| (ii) | a representation that Counterparty is electing the settlement method for the related Convertible Note and such Relevant Settlement Method in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); | ||
| (iii) | a representation that Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction; | ||
| (iv) | a representation that Counterparty is not electing the settlement method for the related Convertible Note and such Relevant Settlement Method to create actual or apparent trading activity in the Shares (or any security convertible into or |
5
| exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares); and | |||
| (v) | an acknowledgment by Counterparty that (A) any transaction by Dealer following Counterparty’s election of the settlement method for the related Convertible Note and such Relevant Settlement Method shall be made at Dealer’s sole discretion and for Dealer’s own account and (B) Counterparty does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option
exercised or deemed exercised hereunder, Dealer will
deliver to Counterparty, on the relevant Settlement Date
for each such Option, a number of Shares (the “Net Share
Settlement Amount”) equal to the sum, for each Valid
Day during the Settlement Averaging Period for each
such Option, of (i) the Daily Option Value for such Valid
Day, divided by (ii) the Relevant Price on such Valid Day,
divided by (iii) the number of Valid Days in the
Settlement Averaging Period. Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. |
|
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: |
| (i) | cash in an amount equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iii) the Cash Percentage; and | ||
| (ii) | a number of Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iv) (A) 100% minus (B) the Cash Percentage. |
6
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | |
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <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 clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by |
7
| the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | ||
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: |
| (i) | if the relevant Conversion Date occurs prior to the Free Convertibility Date, the 50 consecutive Valid-Day period beginning on, and including, the second Valid Day after such Conversion Date; and | ||
| (ii) | if the relevant Conversion Date occurs on or following the Free Convertibility Date, the 50 consecutive Valid Days beginning on, and including, the 52nd Scheduled Valid Day immediately preceding the Expiration Date. |
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | |
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
| 3. | Additional Terms applicable to the Transaction. | |
| Adjustments applicable to the Transaction: |
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an |
8
| adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | ||
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. |
Extraordinary Events applicable to the Transaction:
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | |
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger Events / Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be |
9
| a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | ||
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. |
Additional Disruption Events:
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Applicable | |
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgements
|
||
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable |
4.
|
Calculation Agent. | Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable |
10
| detail the basis for such calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Counterparty: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares to Counterparty: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
| (b) | Account for payments to Dealer: | ||
| Chase Bank, New York BIC: CHASUS33 ABA # 021000021 A/C Name: RBS Securities Inc. BIC: GRNWUS33 A/C: 066615674 |
|||
| Account for delivery of Shares from Dealer: | |||
| To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 |
| 7. | Notices. |
| (a) | Address for notices or communications to Counterparty: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
11
| (b) | Address for notices or communications to Dealer: |
The Royal Bank of Scotland plc
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
Attn: Legal Department (Tam Beattie)
Telephone: (203) 897-6086
Facsimile: (203) 873-4571
Email: Tamerlaine.Beattie@rbs.com
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
Attn: Legal Department (Tam Beattie)
Telephone: (203) 897-6086
Facsimile: (203) 873-4571
Email: Tamerlaine.Beattie@rbs.com
With a copy to:
The Royal Bank of Scotland plc
c/o RBS Global Banking & Markets
280 Bishopsgate
London EC2M 4RB
c/o RBS Global Banking & Markets
280 Bishopsgate
London EC2M 4RB
8. Representations and Warranties of Counterparty.
Each of the representations and warranties of Counterparty set forth in Section 3 of the
Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty
and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true
and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that
no such representation or warranty, other than the representations and warranties set forth in
Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of
Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and
warrants to Dealer on the date hereof and on and as of the Premium Payment Date that:
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. |
12
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
9. Other Provisions.
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any |
13
| Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
14
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. | ||
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer |
15
| shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Role of Agent. THE ROYAL BANK OF SCOTLAND PLC HAS ENTERED AS PRINCIPAL TO THE TRANSACTION AND IS COUNTERPARTY’S COUNTERPARTY HERETO. THE ROYAL BANK OF SCOTLAND PLC IS NOT REGISTERED AS A BROKER-DEALER UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THE PARTIES ACKNOWLEDGE THAT RBS SECURITIES INC. HAS ACTED AS AGENT FOR THE PARTIES IN CONNECTION WITH THE TRANSACTION. TO THE EXTENT RBS SECURITIES INC. HAS ACTED AS AGENT IN CONNECTION WITH THE TRANSACTION, ITS OBLIGATIONS ARE STRICTLY LIMITED TO THE DELIVERY OF ANY CASH AND SECURITIES THAT IT ACTUALLY RECEIVES FROM THE ROYAL BANK OF SCOTLAND PLC OR COUNTERPARTY, AS THE CASE MAY BE, OR DELIVERS TO THE ROYAL BANK OF SCOTLAND PLC OR COUNTERPARTY. RBS SECURITIES INC. HAS NO OBLIGATIONS HEREUNDER, BY GUARANTY, ENDORSEMENT OR OTHERWISE, WITH RESPECT TO PERFORMANCE OF THE ROYAL BANK OF SCOTLAND PLC’S OR COUNTERPARTY’S OBLIGATIONS HEREUNDER. | ||
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) |
16
| of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the "Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. | |||
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of |
17
| such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 |
18
| replacing any fractional portion 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 to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit: Failure to Deliver: |
One Share or, if a Merger Event has
occurred and a corresponding adjustment to the
Transaction has been made, 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 Merger Event, as
determined by the Calculation
Agent. Applicable |
|
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and |
19
| substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. | |||
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (r) Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
20
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (t) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
21
| Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Confirmation and returning it to The Royal Bank of Scotland pic, c/o RBS Securities Inc., 600 Washington Blvd., Stamford, CT 06901, Attn: Legal Department (Tarn Beattie), or by fax to: (203) 873-4571, with copy to The Royal Bank of Scotland plc, c/o RBS Global Banking & Markets, 280 Bishopsgate, London EC2M 4RB, Attn: Swap Administration, or by fax to: +44 (0) 20 7085 5050. |
| Very truly yours, | ||||||
| THE ROYAL BANK OF SCOTLAND PLC | ||||||
| By: RBS Securities Inc., as its agent | ||||||
| By: | /s/ Robert McKillip | |||||
| Name: | Robert McKillip | |||||
| Title: | Managing Director | |||||
| Accepted and confirmed | ||||
| as of the Trade Date: 6/9/11 | ||||
| Integra Life Sciences Holdings Corporation | ||||
By:
|
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
| Name: Nora Brennan | ||||
[RBS
Bond Hedge Confirmation]
Exhibit
10.7
EXECUTION VERSION
RBC Capital Markets, LLC
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
June 9, 2011
To:
|
Integra LifeSciences Holdings Corporation | |
| 311 Enterprise Drive | ||
| Plainsboro, NJ 08536 | ||
| Attention: Treasurer | ||
| Telephone No.: (609) 275-0500 | ||
| Facsimile No.: (609) 750-4264 | ||
Re:
|
Base Warrants |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to Royal
Bank of Canada (“Dealer”) as of the Trade Date specified below (the “Transaction”). This letter
agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.
This Confirmation shall replace any previous agreements and serve as the final documentation for
the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Dealer and in relation to
Company, USD 25 million.)) on the
Trade Date. In the event of any inconsistency between provisions of that Agreement and this
Confirmation, this Confirmation will prevail for
the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no
Transaction other than the Transaction to which this Confirmation relates shall be governed by the
Agreement.
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:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
1,392,736. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05. | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.68, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 9,896,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Procedures for
Exercise. |
2
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | |
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for |
3
| such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | ||
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | |
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. | |
Valuation
Terms. |
||
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. | |
Settlement Terms. |
||
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: | |
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the “Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and |
4
| specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | |
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the |
5
| Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | ||
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. | |
3. Additional
Terms applicable to the
Transaction.
|
||
Adjustments applicable to the Transaction:
|
||
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the |
6
| Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. | ||||
| Extraordinary Events applicable to the Transaction: | ||||
| New Shares: | Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. | |||
| Consequence of Merger Events: | ||||
| Merger Event: | Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |||
| Share-for-Share: | Modified Calculation Agent Adjustment | |||
| Share-for-Other: | Cancellation and Payment (Calculation Agent Determination) | |||
| Share-for-Combined: | Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). | |||
| Consequence of Tender Offers: | ||||
| Tender Offer: | Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |||
| Share-for-Share: | Modified Calculation Agent Adjustment | |||
| Share-for-Other: | Modified Calculation Agent Adjustment | |||
| Share-for-Combined: | Modified Calculation Agent Adjustment |
7
| Announcement Event: | If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | |||
| Announcement Date: | The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | |||
| 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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective |
8
| successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | ||||
| Additional Disruption Events: | ||||
| Change in Law: | Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |||
| Failure to Deliver: | Not Applicable | |||
| Insolvency Filing: | Applicable | |||
| Hedging Disruption: | Applicable; provided that: | |||
(i) Section 12.9(a)(v) of the Equity Definitions is
hereby amended 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.”; and |
||||
(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”. |
||||
| Increased Cost of Hedging: | Applicable | |||
| Loss of Stock Borrow: | Applicable | |||
| Maximum Stock Loan Rate: | 200 basis points | |||
| Increased Cost of Stock Borrow: | Applicable | |||
| Initial Stock Loan Rate: | 25 basis points | |||
| Hedging Party: | For all applicable Additional Disruption Events, Dealer. | |||
| Determining Party: | For all applicable Extraordinary Events, Dealer. | |||
| Non-Reliance: | Applicable | |||
| Agreements and Acknowledgments Regarding Hedging Activities: | Applicable |
9
| Additional Acknowledgments: | Applicable | |||
4.
|
Calculation Agent. | Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares from Company: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
| (b) | Account for payments to Dealer: | ||
| Royal Bank of Canada JP Morgan Chase NY (CHASUS33) ABA # 021-000-021 Royal Bank of Canada (ROYCUS3X) A/C # 920-1-033363 Ref: US Transit A/C 204-1499 |
|||
| Account for delivery of Shares to Dealer: | |||
| To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. |
| (b) | The Office of Dealer for the Transaction is: New York |
| RBC Capital Markets, LLC as agent for Royal Bank of Canada 3 World Financial Center — 8th Floor 200 Vesey Street |
10
| New York, New York 10281-8098 Telephone: 212-858-7000 |
| 7. | Notices. |
| (a) | Address for notices or communications to Company: |
| Integra LifeSciences Holdings
Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| (b) | Address for notices or communications to Dealer: |
| Trade Affirmations and Settlements: RBC Capital Markets, LLC Attn: Structured Derivatives Documentation Three World Financial Center 200 Vesey Street New York, NY 10006-1404 USA Facsimile Number: +1-212-858-7033 e-Mail Address: geda@rbccm.com |
| Trade Confirmations: RBC Capital Markets, LLC Attn: Structured Derivatives Documentation Three World Financial Center 200 Vesey Street New York, NY 10281-1021 USA Facsimile Number: +1-212-428-3053 e-Mail Address: SDD@rbccm.com |
| 8. | Representations and Warranties of Company. |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. |
11
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. |
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. |
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. |
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. |
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). |
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. |
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 26,253,195 (in the case of the first such notice) or (ii) thereafter more than 1,988,648 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any |
12
| governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. |
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. |
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person |
13
| subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. |
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. |
| (g) | Disclosure of Agency Relationship. Dealer has appointed, as its agent, its indirect wholly-owned subsidiary, RBC Capital Markets, LLC (“RBCCM”), for purposes of conducting, on Dealer’s behalf, a business in privately negotiated transactions in options and other derivatives. Company hereby is advised that Dealer, the principal and stated counterparty in such transactions, duly has authorized RBCCM to market, structure, negotiate, document, price, execute and hedge transactions in over-the-counter derivative products. |
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. |
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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 |
14
| volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares).” |
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. |
| (D) | 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.” |
| (E) | 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. |
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. |
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a |
15
| reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). |
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. |
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. |
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
| Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or (B) above shall not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock, ordinary shares, American depositary receipts or American depositary shares that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions |
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. |
16
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
| Share Termination Alternative: | If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |||
| Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | |||
| Share Termination Unit Price: | The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, |
17
| Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | ||||
| Share Termination Delivery Unit: | In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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: | Inapplicable | |||
| Other applicable provisions: | If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, |
18
| it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | |||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an |
19
| amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | |||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | ||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | ||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date |
20
| that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. | |||
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction. | ||
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
21
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represents and acknowledges to the other that, subject to the proviso included in this |
22
| Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | |||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
23
Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to RBC Capital Markets, LLC, Attn: Structured
Derivatives Documentation, Three World Financial Center, 200 Vesey Street, New York, NY 10281-1021,
or by fax to (212) 428-3053, or by email to SDD@rbccm.com.
| Very truly yours, RBC Capital Markets, LLC, as agent for Royal Bank of Canada |
||||
| By: | /s/ Brian ward | |||
| Authorized Signatory | ||||
| Name: Brian ward | ||||
Accepted and confirmed
as of the Trade Date:
as of the Trade Date:
Integra LifeSciences Holdings Corporation
| By: | /s/ Stuart M. Essig, CEO | |||
| Authorized Signatory | ||||
| Name: Stuart M. Essig, CEO | ||||
[RBC Warrant Confirmation]
Exhibit 10.8
EXECUTION VERSION
RBC Capital Markets, LLC
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
June 9, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
Re: Base Call Option Transaction
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Royal Bank of Canada (“Dealer”) and
Integra LifeSciences Holdings Corporation (“Counterparty”) as of the Trade Date specified below
(the “Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below. This Confirmation shall replace any previous agreements and serve
as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
“Offering Memorandum”) relating to the 1.625% Convertible Senior Notes due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD
200,000,000 (as increased by up to an aggregate principal amount of USD 30,000,000 if and to the
extent that the Representatives (as defined herein) exercise their option to purchase additional
Convertible Notes pursuant to the Purchase Agreement (as defined herein)) pursuant to an Indenture
to be dated June 15, 2011 between Counterparty and Wells Fargo Bank, National Association, as
trustee (the “Indenture”). In the event of any inconsistency between the terms defined in the
Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The
parties acknowledge that this Confirmation is entered into on the date hereof with the
understanding that (i) definitions set forth in the Indenture that are also defined herein by
reference to the Indenture and (ii) sections of the Indenture that are referred to herein will
conform to the descriptions thereof in the Offering Memorandum. For the avoidance of doubt,
references herein to sections of the Indenture are based on the draft of the Indenture most
recently reviewed by the parties at the time of execution of this Confirmation. If any relevant
sections of the Indenture are changed, added or renumbered following execution of this Confirmation
but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith
to preserve the economic intent of the parties based on the draft of the Indenture so reviewed. The
parties further acknowledge that references to the Indenture herein are references to the Indenture
as in effect on the date of its execution and if the Indenture is amended following its execution,
any such amendment will be disregarded for purposes of this Confirmation unless the parties agree
otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Dealer and in relation to
Counterparty, USD 25 million.)) on the Trade Date. In the event of any inconsistency between
provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose
of the Transaction to which this Confirmation relates. The parties hereby agree that no transaction
other than the Transaction to which this Confirmation relates shall be governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms.
Trade Date:
|
June 9, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call | |
Buyer:
|
Counterparty | |
Seller:
|
Dealer | |
Shares:
|
The common stock of Counterparty, par value USD0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
200,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
40% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 14,920,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges |
2
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. |
Procedures for Exercise.
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any adjustments by the Calculation Agent in accordance with |
3
| the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | ||
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| “Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” |
Settlement Terms.
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement |
4
| Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | ||
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: | |
(i) a representation that, on the date of such Notice of
Exercise or Notice of Final Settlement Method, as
applicable, Counterparty is not in possession of any
material non-public information with respect to
Counterparty or the Shares; |
||
(ii) a representation that Counterparty is electing the
settlement method for the related Convertible Note
and such Relevant Settlement Method in good faith
and not as part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the Securities
Exchange Act of 1934, as amended (the
“Exchange Act”); |
||
(iii) a representation that Counterparty has not entered
into or altered any hedging transaction relating to
the Shares corresponding to or offsetting the
Transaction; |
5
(iv) a representation that Counterparty is not electing
the settlement method for the related Convertible
Note and such Relevant Settlement Method to
create actual or apparent trading activity in the
Shares (or any security convertible into or
exchangeable for the Shares) or to raise or depress
or otherwise manipulate the price of the Shares (or
any security convertible into or exchangeable for
the Shares); and |
||
(v) an acknowledgment by Counterparty that (A) any
transaction by Dealer following Counterparty’s
election of the settlement method for the related
Convertible Note and such Relevant Settlement
Method shall be made at Dealer’s sole discretion
and for Dealer’s own account and (B) Counterparty
does not have, and shall not attempt to exercise,
any influence over how, when, whether or at what
price to effect such transactions, including, without
limitation, the price paid or received per Share
pursuant to such transactions, or whether such
transactions are made on any securities exchange
or privately. |
||
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period. | |
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: | |
(i) cash in an amount equal to the sum, for each Valid
Day during the Settlement Averaging Period for
such Option, of (i) the Daily Option Value for such
Valid Day, divided by (ii) the number of Valid
Days in the Settlement Averaging Period,
multiplied by (iii) the Cash Percentage; and |
||
(ii) a number of Shares (the “Combination Settlement
Share Amount”) equal to the sum, for each Valid
Day during the Settlement Averaging Period for
such Option, of (i) the Daily Option Value for such
Valid Day, divided by (ii) the Relevant Price on |
6
such Valid Day, divided by (iii) the number of
Valid Days in the Settlement Averaging Period,
multiplied by (iv) (A) 100% minus (B) the Cash
Percentage. |
||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | |
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the |
7
| scheduled open of trading until the scheduled clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | ||
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: | |
(i) if the relevant Conversion Date occurs prior to the
Free Convertibility Date, the 50 consecutive
Valid-Day period beginning on, and including, the
second Valid Day after such Conversion Date; and |
||
(ii) if the relevant Conversion Date occurs on or
following the Free Convertibility Date, the 50
consecutive Valid Days beginning on, and
including, the 52nd Scheduled Valid Day
immediately preceding the Expiration Date. |
||
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | |
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
3. Additional Terms applicable to the Transaction.
Adjustments applicable to
the Transaction: |
8
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | |
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. |
Extraordinary Events applicable to the Transaction:
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | |
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger Events / Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is |
9
| not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | ||||
| 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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |||
| Additional Disruption Events: | ||||
| Change in Law: | Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |||
| Failure to Deliver: | Applicable | |||
| Hedging Disruption: | Applicable | |||
| Increased Cost of Hedging: | Applicable | |||
| Hedging Party: | For all applicable Additional Disruption Events, Dealer. | |||
| Determining Party: | For all applicable Extraordinary Events, Dealer. | |||
| Non-Reliance: | Applicable | |||
| Agreements and Acknowledgements | ||||
| Regarding Hedging Activities: | Applicable | |||
| Additional Acknowledgments: | Applicable | |||
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent | |||
10
| will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
5. Account Details.
| (a) | Account for payments to Counterparty: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares to Counterparty: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Royal Bank of Canada JP Morgan Chase NY (CHASUS33) ABA # 021-000-021 Royal Bank of Canada (ROYCUS3X) A/C # 920-1-033363 Ref: US Transit A/C 204-1499 |
|||
| Account for delivery of Shares from Dealer: | |||
| To be provided by Dealer. |
6. Offices.
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: New York | ||
| RBC Capital Markets, LLC as agent for Royal Bank of Canada 3 World Financial Center — 8th Floor 200 Vesey Street New York, New York 10281-8098 Telephone: 212-858-7000 |
7. Notices.
| (a) | Address for notices or communications to Counterparty: |
11
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| Trade Affirmations and Settlements: RBC Capital Markets, LLC Attn: Structured Derivatives Documentation Three World Financial Center 200 Vesey Street New York, NY 10006-1404 USA Facsimile Number: +1-212-858-7033 e-Mail Address: geda@rbccm.com |
|||
| Trade Confirmations: RBC Capital Markets, LLC Attn: Structured Derivatives Documentation Three World Financial Center 200 Vesey Street New York, NY 10281-1021 USA Facsimile Number: +1-212-428-3053 e-Mail Address: SDD@rbccm.com |
8. Representations and Warranties of Counterparty.
| Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. |
12
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
9. Other Provisions.
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 26,253,195 (in the case of the first such notice) or (ii) thereafter more than 1,988,648 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such |
13
| settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax |
14
| documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | |||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. |
15
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Disclosure of Agency Relationship. Dealer has appointed, as its agent, its indirect wholly-owned subsidiary, RBC Capital Markets, LLC (“RBCCM”), for purposes of conducting, on Dealer’s behalf, a business in privately negotiated transactions in options and other derivatives. Counterparty hereby is advised that Dealer, the principal and stated counterparty in such transactions, duly has authorized RBCCM to market, structure, negotiate, document, price, execute and hedge transactions in over-the-counter derivative products. | ||
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number |
16
| of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. | |||
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
17
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 a security therein with an amount of cash equal to the value of such |
18
| fractional security based on the values used to calculate the Share Termination Unit Price. | ||
Share Termination Unit Price:
|
The value to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to Deliver:
|
Applicable | |
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate |
19
| Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. | |||
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
20
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (t) | Early Unwind. In the event the sale of the “Underwritten Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
21
Please confirm that the foregoing correctly sets forth the terms of our agreement by
executing this Confirmation and returning it to RBC Capital Markets,
LLC, Attn: Structured
Derivatives Documentation, Three World Financial Center, 200 Vesey Street, New York, NY 10281-1021,
or by fax to (212) 428-3053, or by email to SDD@rbccm.com.
Very truly yours,
| RBC Capital Markets, LLC, as agent for Royal Bank of Canada | ||||||
| By: | /s/ Brian Ward
Name: Brian Ward |
|||||
Accepted and
confirmed as of the Trade Date:
Integra LifeSciences Holdings Corporation
By: /s/ Stuart M. Essig, CEO
Authorized Signatory
Name: Stuart M. Essig, CEO
Authorized Signatory
Name: Stuart M. Essig, CEO
[RBC Bond Hedge Confirmation]
Exhibit 10.9
EXECUTION VERSION
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
Internal Reference Nr.: 440007
June 14, 2011
To:
|
Integra LifeSciences Holdings Corporation | |||
| 311 Enterprise Drive | ||||
| Plainsboro, NJ 08536 | ||||
| Attention: Treasurer | ||||
| Telephone No.: (609) 275-0500 | ||||
| Facsimile No.: (609) 750-4264 |
Re: Additional Call Option Transaction
DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT
OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THIS
TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH
RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS,
ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN
DEUTSCHE BANK AG AND COUNTERPARTY SHALL BE TRANSMITTED THROUGH DBSI. DEUTSCHE BANK AG ACTING
THROUGH ITS LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Deutsche Bank AG, London Branch
(“Dealer”) and Integra LifeSciences Holdings Corporation (“Counterparty”) as of the Trade Date
specified below (the “Transaction”). This letter agreement constitutes a “Confirmation” as
referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
"Offering Memorandum”) relating to the 1.625% Convertible Senior Notes
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan
Krause, Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin – Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: | |
| http://www.deutsche-bank.com |
due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of
Convertible Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial
principal amount of USD 230,000,000 pursuant to an Indenture to be dated June 15, 2011 between
Counterparty and Wells Fargo Bank, National Association, as trustee (the “Indenture”). In the
event of any inconsistency between the terms defined in the Offering Memorandum, the Indenture and
this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation
is entered into on the date hereof with the understanding that (i) definitions set forth in the
Indenture that are also defined herein by reference to the Indenture and (ii) sections of the
Indenture that are referred to herein will conform to the descriptions thereof in the Offering
Memorandum. For the avoidance of doubt, references herein to sections of the Indenture are based
on the draft of the Indenture most recently reviewed by the parties at the time of execution of
this Confirmation. If any relevant sections of the Indenture are changed, added or renumbered
following execution of this Confirmation but prior to the execution of the Indenture, the parties
will amend this Confirmation in good faith to preserve the economic intent of the parties based on
the draft of the Indenture so reviewed. The parties further acknowledge that references to the
Indenture herein are references to the Indenture as in effect on the date of its execution and if
the Indenture is amended following its execution, any such amendment will be disregarded for
purposes of this Confirmation unless the parties agree otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section 14
of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means in
relation to Dealer, three percent (3%) of shareholders’ equity of Deutsche Bank AG (the “Dealer
Parent”) and in relation to Counterparty, USD 25 million.)) on the Trade Date. In the event of any
inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms.
Trade Date:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call | |
Buyer:
|
Counterparty | |
Seller:
|
Dealer |
2
Shares:
|
The common stock of Counterparty, par value USD0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
30,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
20% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 1,119,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. | |
Procedures for Exercise. |
||
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to (i) the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated June 9, 2011 between Dealer and Counterparty (the “Base Call Option Confirmation”), shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. |
3
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any adjustments by the Calculation Agent in accordance with the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the "Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. |
4
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| ‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” | ||
Settlement Terms. |
||
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | |
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. |
5
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: |
| (i) | a representation that, on the date of such Notice of Exercise or Notice of Final Settlement Method, as applicable, Counterparty is not in possession of any material non-public information with respect to Counterparty or the Shares; | ||
| (ii) | a representation that Counterparty is electing the settlement method for the related Convertible Note and such Relevant Settlement Method in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); | ||
| (iii) | a representation that Counterparty has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction; | ||
| (iv) | a representation that Counterparty is not electing the settlement method for the related Convertible Note and such Relevant Settlement Method to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares); and | ||
| (v) | an acknowledgment by Counterparty that (A) any transaction by Dealer following Counterparty’s election of the settlement method for the related Convertible Note and such Relevant Settlement Method shall be made at Dealer’s sole discretion and for Dealer’s own account and (B) Counterparty does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately. |
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, |
6
| divided by (iii) the number of Valid Days in the Settlement Averaging Period. | ||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. |
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: |
| (i) | cash in an amount equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iii) the Cash Percentage; and | ||
| (ii) | a number of Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iv) (A) 100% minus (B) the Cash Percentage. | ||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | |||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional |
7
| securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | ||
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <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 clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | |
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: |
| (i) | if the relevant Conversion Date occurs prior to the Free Convertibility Date, the 50 consecutive Valid-Day period beginning on, and including, the second Valid Day after such Conversion Date; and | ||
| (ii) | if the relevant Conversion Date occurs on or following the Free Convertibility Date, the 50 consecutive Valid Days beginning on, and including, the 52nd Scheduled Valid Day immediately preceding the Expiration Date. |
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. |
8
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
| 3. | Additional Terms applicable to the Transaction. | |
| Adjustments applicable to the Transaction: |
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | |
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. |
Extraordinary Events applicable to the Transaction:
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. |
9
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger Events / Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Applicable |
10
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgements Regarding Hedging Activities: |
Applicable |
|
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. | |
| 5. | Account Details. |
| (a) | Account for payments to Counterparty: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares to Counterparty: American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| To be provided by Dealer. | |||
| Account for delivery of Shares from Dealer: | |||
| To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. |
11
| (b) | The Office of Dealer for the Transaction is: London |
| 7. | Notices. |
| (a) | Address for notices or communications to Counterparty: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| (b) | Address for notices or communications to Dealer: |
| To: | Deutsche Bank AG, London Branch | |||
| c/o Deutsche Bank Securities Inc. | ||||
| Attn: | Faiz Khan / Andrew Yaeger | |||
| Group: | Equity-Linked Capital Markets | |||
| 60 Wall Street, 4th Floor | ||||
| New York, NY 10005 | ||||
| Faiz Tel: | 212-250-0668 | |||
| Faiz Email: | faiz.khan@db.com | |||
| Andrew Tel: | 212-250-2717 | |||
| Andrew Email: | Andrew.yaeger@db.com | |||
| Facsimile: | 732-460-7499 |
|||
| With a copy to: |
||||
| Attn: | Lars Kestner / Dushyant Chadha | |||
| Group: | Corporate Derivatives | |||
| 60 Wall Street, 4th Floor | ||||
| New York, NY 10005 | ||||
| Lars Tel: | 212-250-6043 | |||
| Lars Email: | lars.kestner@db.com | |||
| Dushyant Tel: | 212-250-4980 | |||
| Dushyant Email: | dushyant.chadha@db.com |
| 8. | Representations and Warranties of Counterparty. | |
| Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and |
12
| except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | |||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 26,749,873 (in the case of the first such notice) or (ii) thereafter more than 1,622,916 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in |
13
| writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; |
14
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer or the Dealer Parent. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 |
15
| meets a relevant definition of ownership under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. | |||
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Role of Agent. Whenever delivery of funds or other assets is required hereunder by or to Counterparty, such delivery shall be effected through DBSI. In addition, all notices, demands and communications of any kind relating to the Transaction between Dealer and Counterparty shall be transmitted exclusively through DBSI. | ||
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a |
16
| commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, minus the “Affected Number of Options” (as defined in the Base Call Option Transaction Confirmation), if any, that relate to such Repurchase Event, as the case may be (and, for the purposes of determining whether any Options under this Confirmation or under the Base Call Option Transaction Confirmation will be among the Affected Number of Options hereunder or among the “Affected Number of Options” under, and as defined in, the Base Call Option Transaction Confirmation, the Affected Number of Options shall be allocated first to the Base Call Option Transaction Confirmation until all Options thereunder are exercised or terminated), and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. | |||
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise minus the number of “Make-Whole Conversion Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Convertible Notes and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be |
17
| calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the |
18
| date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | ||
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 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 to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to Deliver:
|
Applicable | |
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose |
19
| of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. | |||
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or |
20
| substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | |||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (t) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
21
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY
10005, or by fax to (212) 797 8974.
Very truly yours,
| Deutsche Bank AG, London Branch | ||||||
| By: | /s/ Lars Kestner | |||||
| Authorized Signatory | ||||||
| Name: | Lars Kestner | |||||
| By: | /s/ Natalie Heaton | |||||
| Authorized Signatory | ||||||
| Name: | Natalie Heaton | |||||
| Deutsche Bank Securities Inc., acting solely as Agent in connection with the Transaction | ||||||
| By: | /s/ Lars Kestner | |||||
| Authorized Signatory | ||||||
| Name: | Lars Kestner | |||||
| By: | /s/ Natalie Heaton | |||||
| Authorized Signatory | ||||||
| Name: | Natalie Heaton | |||||
| Accepted and confirmed as of the Trade Date: |
||||
| Integra LifeSciences Holdings Corporation | ||||
By: |
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
Name: |
Nora Brennan | |||
[DB Additional Bond Hedge Confirmation]
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan
Krause, Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin – Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: http://www.deutsche-bank.com |
Exhibit 10.10
EXECUTION VERSION
RBC Capital Markets, LLC
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| Re: Additional Call Option Transaction |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Royal Bank of Canada (“Dealer”) and
Integra LifeSciences Holdings Corporation (“Counterparty”) as of the Trade Date specified below
(the “Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below. This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
“Offering Memorandum”) relating to the 1.625% Convertible Senior Notes due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD
230,000,000 pursuant to an Indenture to be dated June 15, 2011 between Counterparty and Wells Fargo
Bank, National Association, as trustee (the “Indenture”). In the event of any inconsistency
between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the
date hereof with the understanding that (i) definitions set forth in the Indenture that are also
defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Offering Memorandum. For the avoidance
of doubt, references herein to sections of the Indenture are based on the draft of the Indenture
most recently reviewed by the parties at the time of execution of this Confirmation. If any
relevant sections of the Indenture are changed, added or renumbered following execution of this
Confirmation but prior to the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties based on the draft of the Indenture so
reviewed. The parties further acknowledge that references to the Indenture herein are references to
the Indenture as in effect on the date of its execution and if the Indenture is amended following
its execution, any such amendment will be disregarded for purposes of this Confirmation unless the
parties agree otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election
that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both
parties, provided that (a) the phrase “or becoming capable at such time of being declared” shall be
deleted from clause (1) of such Section 5(a)(vi); (b) the following language shall be added to the
end thereof: “Notwithstanding the foregoing, a default under subsection (2) hereof shall not
constitute an Event of Default if (i) the default was caused solely by error or omission of an
administrative or operational nature; (ii) funds were available to enable the party to make the
payment when due; and (iii) the payment is made within two Local Business Days of such party’s
receipt of written notice of its failure to pay.”; (c) “Specified Indebtedness” will have the
meaning specified in Section 14 of the Agreement, except that such term shall not include
obligations in respect of deposits received in the ordinary course of a party’s banking business;
and (d) “Threshold Amount” means in relation to Dealer, three percent (3%) of shareholders’ equity
of Dealer and in relation to Counterparty, USD 25 million.)) on the Trade Date. In the event of
any inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms. |
||
Trade Date:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call | |
Buyer:
|
Counterparty | |
Seller:
|
Dealer | |
Shares:
|
The common stock of Counterparty, par value USD0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
30,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
40% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 2,238,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. | |
Procedures for Exercise. |
2
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to (i) the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated June 9, 2011 between Dealer and Counterparty (the “Base Call Option Confirmation”) shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any adjustments by the Calculation Agent in accordance with |
3
| the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | ||
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| “‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” | ||
Settlement Terms. |
||
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement |
4
| Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | ||
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: | |
(i) a representation that, on the date of such
Notice of Exercise or Notice of Final
Settlement Method, as applicable,
Counterparty is not in possession of any
material non-public information with respect
to Counterparty or the Shares; |
||
(ii) a representation that Counterparty is
electing the settlement method for the
related Convertible Note and such Relevant
Settlement Method in good faith and not as
part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the
Securities Exchange Act of 1934, as amended
(the “Exchange Act”); |
||
(iii) a representation that Counterparty has not
entered into or altered any hedging
transaction relating to the Shares
corresponding to or offsetting the
Transaction; |
||
(iv) a representation that Counterparty is not
electing the settlement method for the
related Convertible Note and such Relevant
Settlement Method to |
5
create actual or apparent trading activity
in the Shares (or any security convertible
into or exchangeable for the Shares) or to
raise or depress or otherwise manipulate the
price of the Shares (or any security
convertible into or exchangeable for the
Shares); and |
||
(v) an acknowledgment by Counterparty that (A)
any transaction by Dealer following
Counterparty’s election of the settlement
method for the related Convertible Note and
such Relevant Settlement Method shall be
made at Dealer’s sole discretion and for
Dealer’s own account and (B) Counterparty
does not have, and shall not attempt to
exercise, any influence over how, when,
whether or at what price to effect such
transactions, including, without limitation,
the price paid or received per Share
pursuant to such transactions, or whether
such transactions are made on any securities
exchange or privately. |
||
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period. | |
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: | |
(i) cash in an amount equal to the sum, for
each Valid Day during the Settlement
Averaging Period for such Option, of (i) the
Daily Option Value for such Valid Day,
divided by (ii) the number of Valid Days in
the Settlement Averaging Period, multiplied
by (iii) the Cash Percentage; and |
||
(ii) a number of Shares (the “Combination
Settlement Share Amount”) equal to the sum,
for each Valid Day during the Settlement
Averaging Period for such Option, of (i) the
Daily Option Value for such Valid Day,
divided by (ii) the Relevant Price on such
Valid Day, divided by (iii) the number of
Valid Days in the Settlement Averaging
Period, multiplied by (iv) (A) 100% minus
(B) the Cash Percentage. |
6
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | |
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <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 clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be |
7
| determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | ||
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: | |
(i) if the relevant Conversion Date occurs
prior to the Free Convertibility Date, the
50 consecutive Valid-Day period beginning
on, and including, the second Valid Day
after such Conversion Date; and |
||
(ii) if the relevant Conversion Date occurs on
or following the Free Convertibility Date,
the 50 consecutive Valid Days beginning on,
and including, the 52nd Scheduled Valid Day
immediately preceding the Expiration Date. |
||
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | |
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
3. Additional Terms applicable to the Transaction.
Adjustments applicable to the Transaction: |
||
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. |
8
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. | |
| Extraordinary Events applicable to the Transaction: | ||
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | |
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger Events /Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | |
9
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Applicable | |
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgements
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
10
| 5. | Account Details. |
| (a) | Account for payments to Counterparty: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares to Counterparty: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Royal Bank of Canada JP Morgan Chase NY (CHASUS33) ABA # 021-000-021 Royal Bank of Canada (ROYCUS3X) A/C # 920-1-033363 Ref: US Transit A/C 204-1499 |
|||
| Account for delivery of Shares from Dealer: | |||
| To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: New York | ||
| RBC Capital Markets, LLC as agent for Royal Bank of Canada 3 World Financial Center — 8th Floor 200 Vesey Street New York, New York 10281-8098 Telephone: 212-858-7000 |
| 7. | Notices. |
| (a) | Address for notices or communications to Counterparty: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| Trade Affirmations and Settlements: |
11
| RBC Capital Markets, LLC Attn: Structured Derivatives Documentation Three World Financial Center 200 Vesey Street New York, NY 10006-1404 USA Facsimile Number: +1-212-858-7033 e-Mail Address: geda@rbccm.com |
|||
| Trade Confirmations: RBC Capital Markets, LLC Attn: Structured Derivatives Documentation Three World Financial Center 200 Vesey Street New York, NY 10281-1021 USA Facsimile Number: +1-212-428-3053 e-Mail Address: SDD@rbccm.com |
| 8. | Representations and Warranties of Counterparty. | |
| Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. |
12
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 26,253,195 (in the case of the first such notice) or (ii) thereafter more than 1,988,648 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in |
13
| this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a |
14
| rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. |
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
15
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Disclosure of Agency Relationship. Dealer has appointed, as its agent, its indirect wholly-owned subsidiary, RBC Capital Markets, LLC (“RBCCM”), for purposes of conducting, on Dealer’s behalf, a business in privately negotiated transactions in options and other derivatives. Counterparty hereby is advised that Dealer, the principal and stated counterparty in such transactions, duly has authorized RBCCM to market, structure, negotiate, document, price, execute and hedge transactions in over-the-counter derivative products. | ||
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, minus the “Affected Number of Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Repurchase Event, as the case may be (and, for the purposes of determining whether any Options under this Confirmation or under the Base Call Option Confirmation will be among the Affected Number of Options hereunder or among the “Affected Number of Options” under, and as defined in, the Base Call Option Confirmation, the Affected Number of Options shall be allocated first to the Base Call Option Confirmation until all Options thereunder are exercised or terminated), and (B) the number of Options then outstanding. For the avoidance of doubt, in determining |
16
| the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. |
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise minus the number of “Make-Whole Conversion Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Convertible Notes and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
17
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 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. |
18
Share Termination Unit Price:
|
The value to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to Deliver:
|
Applicable | |
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. |
19
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, |
20
| illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). |
| (t) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
21
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to RBC Capital Markets, LLC, Attn: Structured Derivatives
Documentation, Three World Financial Center, 200 Vesey Street, New York, NY 10281-1021, or by fax
to (212) 428-3053, or by email to SDD@rbccm.com.
Very truly yours,
| RBC Capital Markets, LLC, as agent for Royal Bank of Canada |
||||
| By: | /s/ Brian Ward | |||
| Authorized Signatory | ||||
| Name: Brian Ward | ||||
| Accepted and confirmed | ||||
| as of the Trade Date: | ||||
| Integra LifeSciences Holdings Corporation |
||||
By: |
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
| Name: Nora Brennan | ||||
[RBC Additional Bond Hedge Confirmation]
Exhibit 10.11
EXECUTION VERSION
The Royal Bank of Scotland plc
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
Re: Additional Call Option Transaction
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between The Royal Bank of Scotland plc
(“Dealer”), acting through RBS Securities Inc., as its agent, and Integra LifeSciences Holdings
Corporation (“Counterparty”) as of the Trade Date specified below (the “Transaction”). This letter
agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.
This Confirmation shall replace any previous agreements and serve as the final documentation for
the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
“Offering Memorandum”) relating to the 1.625% Convertible Senior Notes due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD
230,000,000 pursuant to an Indenture to be dated June 15, 2011 between Counterparty and Wells Fargo
Bank, National Association, as trustee (the “Indenture”). In the event of any inconsistency
between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the
date hereof with the understanding that (i) definitions set forth in the Indenture that are also
defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Offering Memorandum. For the avoidance
of doubt, references herein to sections of the Indenture are based on the draft of the Indenture
most recently reviewed by the parties at the time of execution of this Confirmation. If any
relevant sections of the Indenture are changed, added or renumbered following execution of this
Confirmation but prior to the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties based on the draft of the Indenture so
reviewed. The parties further acknowledge that references to the Indenture herein are references to
the Indenture as in effect on the date of its execution and if the Indenture is amended following
its execution, any such amendment will be disregarded for purposes of this Confirmation unless the
parties agree otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form
(but without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default
under subsection (2) hereof shall not constitute an Event of Default if (i) the default was caused
solely by error or omission of an administrative or operational nature; (ii) funds were available
to enable the party to make the payment when due; and (iii) the payment is made within two Local
Business Days of such party’s receipt of written notice of its failure to pay.”; (c) “Specified
Indebtedness” will have the meaning specified in Section 14 of the Agreement, except that such term
shall not include obligations in respect of deposits received in the ordinary course of a party’s
banking business; and (d) “Threshold Amount” means in relation to Dealer, three percent (3%) of
shareholders’ equity of Dealer and in relation to Counterparty, USD 25 million.)) on the Trade
Date. In the event of any inconsistency between provisions of the Agreement and this Confirmation,
this Confirmation will prevail for the purpose of the Transaction to which this Confirmation
relates. The parties hereby agree that no transaction other than the Transaction to which this
Confirmation relates shall be governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms. |
||||
Trade Date:
|
June 14, 2011 | |||
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |||
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |||
Option Type:
|
Call | |||
Buyer:
|
Counterparty | |||
Seller:
|
Dealer | |||
Shares:
|
The common stock of Counterparty, par value USD0.01 per share (Exchange symbol “IART”). | |||
Number of Options:
|
30,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |||
Applicable Percentage:
|
20% | |||
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |||
Strike Price:
|
USD 57.441 | |||
Premium:
|
USD 1,119,000 | |||
Premium Payment Date:
|
June 15, 2011 | |||
Exchange:
|
The NASDAQ Global Select Market | |||
Related Exchange(s):
|
All Exchanges | |||
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. | |||
Procedures for Exercise. |
||||
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the | |||
2
| requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | ||||
Free Convertibility Date:
|
June 15, 2016 | |||
Expiration Time:
|
The Valuation Time | |||
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |||
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |||
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to (i) the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated June 9, 2011 between Dealer and Counterparty (the “Base Call Option Confirmation”) shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |||
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the number of such Options (without regard to any adjustments by the Calculation Agent in accordance with the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant | |||
3
| Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | ||||
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |||
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |||
| “‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” | ||||
Settlement Terms. |
||||
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method | |||
4
| in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | ||||
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |||
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||||
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: | |||
(i) a representation that, on the date of such Notice of Exercise or Notice of
Final Settlement Method, as applicable, Counterparty is not in possession of any material
non-public information with respect to Counterparty or the Shares;
|
||||
(ii) a representation that Counterparty is electing the settlement method for the
related Convertible Note and such Relevant Settlement Method in good faith and not as part
of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”);
|
||||
|
(iii) a representation that Counterparty has not entered into or altered any
hedging transaction relating to the Shares corresponding to or offsetting the Transaction;
|
||||
(iv) a representation that Counterparty is not electing the settlement method for
the related Convertible Note and such Relevant Settlement Method to create actual or
apparent trading activity in the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress
|
||||
5
or otherwise manipulate the price of the Shares (or
any security convertible into or exchangeable for the Shares); and
|
||||
(v) an acknowledgment by Counterparty that (A) any transaction by Dealer
following Counterparty’s election of the settlement method for the related Convertible Note
and such Relevant Settlement Method shall be made at Dealer’s sole discretion and for
Dealer’s own account and (B) Counterparty does not have, and shall not attempt to exercise,
any influence over how, when, whether or at what price to effect such transactions,
including, without limitation, the price paid or received per Share pursuant to such
transactions, or whether such transactions are made on any securities exchange or privately.
|
||||
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period. | |||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||||
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: | |||
(i) cash in an amount equal to the sum, for each Valid Day during the Settlement
Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided
by (ii) the number of Valid Days in the Settlement Averaging Period, multiplied by (iii) the
Cash Percentage; and
|
||||
(ii) a number of Shares (the “Combination Settlement Share Amount”) equal to the
sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the
Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day,
divided by (iii) the number of Valid Days in the Settlement Averaging Period, multiplied by
(iv) (A) 100% minus (B) the Cash Percentage.
|
||||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement | ||||
6
| Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |||
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |||
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | |||
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |||
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |||
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <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 clos of trading of the primary trading session on such Valid Day (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any | |||
7
| other trading outside of the regular trading session trading hours. | ||||
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: | |||
(i) if the relevant Conversion Date occurs prior to the Free Convertibility Date,
the 50 consecutive Valid-Day period beginning on, and including, the second Valid Day after
such Conversion Date; and
|
||||
(ii) if the relevant Conversion Date occurs on or following the Free
Convertibility Date, the 50 consecutive Valid Days beginning on, and including, the 52nd
Scheduled Valid Day immediately preceding the Expiration Date.
|
||||
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | |||
Settlement Currency:
|
USD | |||
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |||
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). | |||
3. Additional Terms applicable to the Transaction.
Adjustments applicable to the Transaction: |
||
Potential Adjustment Events: |
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | |
8
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions: |
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. | |
Extraordinary Events applicable
to the Transaction: |
||
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | |
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger
Events / Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | |
9
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events:
|
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Applicable | |
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and
Acknowledgements |
||
Regarding Hedging Activities: |
Applicable | |
Additional Acknowledgments: |
Applicable | |
| 4. Calculation Agent. | Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
10
5.
Account Details.
| (a) | Account for payments to Counterparty: Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
||
| Account for delivery of Shares to Counterparty: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Chase Bank, New York BIC: CHASUS33 ABA # 021000021 A/C Name: RBS Securities Inc. BIC: GRNWUS33 A/C: 066615674 |
|||
| Account for delivery of Shares from Dealer: | |||
| To be provided by Dealer. |
6. Offices.
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 |
7. Notices.
| (a) | Address for notices or communications to Counterparty: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 |
11
Attn: Legal Department (Tam Beattie)
Telephone: (203) 897-6086
Facsimile: (203) 873-4571
Email: Tamerlaine.Beattie@rbs.com
Telephone: (203) 897-6086
Facsimile: (203) 873-4571
Email: Tamerlaine.Beattie@rbs.com
With a copy to:
The Royal Bank of Scotland plc
c/o RBS Global Banking & Markets
280 Bishopsgate
c/o RBS Global Banking & Markets
280 Bishopsgate
London EC2M 4RB
8. Representations and Warranties of Counterparty.
Each of the representations and warranties of Counterparty set forth in Section 3 of the
Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between
Counterparty and the representatives of the Initial Purchasers party thereto (the
“Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if
set forth herein; provided that no such representation or warranty, other than the
representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase
Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement.
Counterparty hereby further represents and warrants to Dealer on the date hereof and on and
as of the Premium Payment Date that:
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
12
9. Other Provisions.
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | ||
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) |
13
| of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | |||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage |
14
| exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. |
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement |
15
| Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Role of Agent. THE ROYAL BANK OF SCOTLAND PLC HAS ENTERED AS PRINCIPAL TO THE TRANSACTION AND IS COUNTERPARTY’S COUNTERPARTY HERETO. THE ROYAL BANK OF SCOTLAND PLC IS NOT REGISTERED AS A BROKER-DEALER UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THE PARTIES ACKNOWLEDGE THAT RBS SECURITIES INC. HAS ACTED AS AGENT FOR THE PARTIES IN CONNECTION WITH THE TRANSACTION. TO THE EXTENT RBS SECURITIES INC. HAS ACTED AS AGENT IN CONNECTION WITH THE TRANSACTION, ITS OBLIGATIONS ARE STRICTLY LIMITED TO THE DELIVERY OF ANY CASH AND SECURITIES THAT IT ACTUALLY RECEIVES FROM THE ROYAL BANK OF SCOTLAND PLC OR COUNTERPARTY, AS THE CASE MAY BE, OR DELIVERS TO THE ROYAL BANK OF SCOTLAND PLC OR COUNTERPARTY. RBS SECURITIES INC. HAS NO OBLIGATIONS HEREUNDER, BY GUARANTY, ENDORSEMENT OR OTHERWISE, WITH RESPECT TO PERFORMANCE OF THE ROYAL BANK OF SCOTLAND PLC’S OR COUNTERPARTY’S OBLIGATIONS HEREUNDER. |
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, minus the “Affected Number of Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Repurchase Event, as the case may be (and, for the purposes of determining whether any Options under this Confirmation or under the Base Call Option Confirmation will be among the Affected Number of Options hereunder or among the “Affected Number of Options” under, and as defined in, the Base Call |
16
| Option Confirmation, the Affected Number of Options shall be allocated first to the Base Call Option Confirmation until all Options thereunder are exercised or terminated), and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. |
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise minus the number of “Make-Whole Conversion Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Convertible Notes and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the |
17
| Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | |
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 a security therein |
18
| 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 to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share Termination Delivery Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to Deliver: |
Applicable | |
Other applicable provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate |
19
| Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. |
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. |
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. |
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. |
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. |
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that |
20
| neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). |
| (t) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. |
| (u) | Payment by Counterparty. 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, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
21
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to The Royal Bank of Scotland plc, c/o RBS Securities Inc., 600
Washington Blvd., Stamford, CT 06901, Attn: Legal Department (Tam Beattie), or by fax to: (203)
873-4571, with copy to The Royal Bank of Scotland plc, c/o RBS Global Banking & Markets, 280
Bishopsgate, London EC2M 4RB, Attn: Swap Administration, or by fax to: +44 (0) 20 7085 5050.
| Very truly yours, | ||||
| THE ROYAL BANK OF SCOTLAND PLC | ||||
| By: RBS Securities Inc., as its agent | ||||
| By: | /s/ Eric Waller | |||
| Name: | Eric Waller | |||
| Title: | Managing Director | |||
| Accepted and confirmed | ||||
| as of the Trade Date: | ||||
| Integra LifeSciences Holdings Corporation | ||||
By: |
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
Name: |
Nora Brennan | |||
[RBS Additional Bond Hedge Confirmation]
Exhibit 10.12
EXECUTION VERSION
Wells Fargo Bank, National Association
375 Park Avenue, NY 4073
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
375 Park Avenue, NY 4073
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| Re: | Additional Call Option Transaction |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between Wells Fargo Bank, National
Association (“Dealer”) and Integra LifeSciences Holdings Corporation (“Counterparty”) as of the
Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms
used herein are based on terms that are defined in the Offering Memorandum dated June 9, 2011 (the
“Offering Memorandum”) relating to the 1.625% Convertible Senior Notes due 2016 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible
Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD
230,000,000 pursuant to an Indenture to be dated June 15, 2011 between Counterparty and Wells Fargo
Bank, National Association, as trustee (the “Indenture”). In the event of any inconsistency
between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this
Confirmation shall govern. The parties acknowledge that this Confirmation is entered into on the
date hereof with the understanding that (i) definitions set forth in the Indenture that are also
defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred
to herein will conform to the descriptions thereof in the Offering Memorandum. For the avoidance
of doubt, references herein to sections of the Indenture are based on the draft of the Indenture
most recently reviewed by the parties at the time of execution of this Confirmation. If any
relevant sections of the Indenture are changed, added or renumbered following execution of this
Confirmation but prior to the execution of the Indenture, the parties will amend this Confirmation
in good faith to preserve the economic intent of the parties based on the draft of the Indenture so
reviewed. The parties further acknowledge that references to the Indenture herein are references to
the Indenture as in effect on the date of its execution and if the Indenture is amended following
its execution, any such amendment will be disregarded for purposes of this Confirmation unless the
parties agree otherwise in writing.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as
to the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and
Counterparty had executed an agreement in such form (but without any Schedule except for (i) the
election of the
laws of the State of New York as the governing law (without reference to choice of
law doctrine); (ii) the election that the “Cross Default” provisions of Section 5(a)(vi) of the
Agreement shall apply to both parties, provided that (a) the phrase “or becoming capable at such
time of being declared” shall be deleted from clause (1) of such Section 5(a)(vi); (b) the
following language shall be added to the end thereof: “Notwithstanding the foregoing, a default
under subsection (2) hereof shall not constitute an Event of Default if (i) the default was caused
solely by error or omission of an administrative or operational nature; (ii) funds were available
to enable the party to make the payment when due; and (iii) the payment is made within two Local
Business Days of such party’s receipt of written notice of its failure to pay.”; (c) “Specified
Indebtedness” will have the meaning specified in Section 14 of the Agreement, except that such term
shall not include obligations in respect of deposits received in the ordinary course of a party’s
banking business; and (d) “Threshold Amount” means in relation to Dealer, three percent (3%) of
shareholders’ equity of Wells Fargo & Company (the “Dealer Parent”) and in relation to
Counterparty, USD 25 million.)) on the Trade Date. In the event of any inconsistency between
provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose
of the Transaction to which this Confirmation relates. The parties hereby agree that no
transaction other than the Transaction to which this Confirmation relates shall be governed by the
Agreement.
2. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms. |
||
Trade Date:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below | |
Option Type:
|
Call | |
Buyer:
|
Counterparty | |
Seller:
|
Dealer | |
Shares:
|
The common stock of Counterparty, par value USD 0.01 per share (Exchange symbol “IART”). | |
Number of Options:
|
30,000. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by Counterparty. In no event will the Number of Options be less than zero. | |
Applicable Percentage:
|
20% | |
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and 17.4092. | |
Strike Price:
|
USD 57.441 | |
Premium:
|
USD 1,119,000 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Excluded Provisions:
|
Section 14.03 and Section 14.04(g) of the Indenture. |
2
Procedures for Exercise. |
||
Conversion Date:
|
With respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the requirements for conversion thereof as set forth in Sections 14.02(b) and (c) of the Indenture. | |
Free Convertibility Date:
|
June 15, 2016 | |
Expiration Time:
|
The Valuation Time | |
Expiration Date:
|
December 15, 2016, subject to earlier exercise. | |
Multiple Exercise:
|
Applicable, as described under “Automatic Exercise” below. | |
Automatic Exercise:
|
Notwithstanding Section 3.4 of the Equity Definitions, on each Conversion Date, a number of Options equal to (i) the number of Convertible Notes in denominations of USD 1,000 as to which such Conversion Date has occurred minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated June 9, 2011 between Dealer and Counterparty (the “Base Call Option Confirmation”) shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed to be exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. | |
| Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. | ||
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above, in order to exercise any Options, Counterparty must notify Dealer in writing before (i) 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised or (ii) 5:00 p.m. (New York City time) on the fifth Scheduled Valid Day immediately following the scheduled first day of the Settlement Averaging Period for the Options being exercised (in which case the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and reasonable expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) due to such notification occurring after the time specified in the immediately preceding clause (i)) of (w) the |
3
| number of such Options (without regard to any adjustments by the Calculation Agent in accordance with the immediately preceding clause (ii)) and (x) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (y) the Relevant Settlement Method for such Options, and (z) if the Relevant Settlement Method for such Options is not Net Share Settlement (as defined below), the percentage of each Share issuable upon conversion in excess of the principal portion of the Convertible Notes being converted that will be paid in cash (the “Cash Percentage”), and such notice shall also include the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below; provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (w) above, and (B) if the Relevant Settlement Method for such Options is not Net Share Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on or prior to the Free Convertibility Date specifying the information required in clauses (y) and (z) above, as well as the information, representations, acknowledgements and agreements required pursuant to “Settlement Method Election Conditions” below. | ||
Valuation Time:
|
The close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Market Disruption Event:
|
Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: | |
| “‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Valid Day for the Shares 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 Shares or in any options, contracts or future contracts relating to the Shares.” | ||
Settlement Terms. |
||
Settlement Method:
|
For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such |
4
| Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement Method, but only if the Settlement Method Election Conditions have been satisfied and Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. | ||
Relevant Settlement Method:
|
In respect of any Option, subject to the Settlement Method Election Conditions: | |
| (i) if Counterparty has not specified a Cash Percentage or has specified a Cash Percentage of 0% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then, in either case, the Relevant Settlement Method for such Option shall be Net Share Settlement; | ||
| (ii) if Counterparty has specified a Cash Percentage of between 0% and 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Combination Settlement; and | ||
| (iii) if Counterparty has specified a Cash Percentage of 100% in respect of settling its conversion obligations in respect of the related Convertible Note pursuant to Section 14.02(a)(i) of the Indenture, then the Relevant Settlement Method for such Option shall be Cash Settlement. | ||
Settlement Method Election Conditions:
|
For any Relevant Settlement Method other than Net Share Settlement, such Relevant Settlement Method shall apply to an Option only if the Notice of Exercise or Notice of Final Settlement Method for such Option, as applicable, contains: | |
(i) a representation that, on the date of such
Notice of Exercise or Notice of Final
Settlement Method, as applicable,
Counterparty is not in possession of any
material non-public information with respect
to Counterparty or the Shares; |
||
(ii) a representation that Counterparty is
electing the settlement method for the
related Convertible Note and such Relevant
Settlement Method in good faith and not as
part of a plan or scheme to evade the
prohibitions of Rule 10b-5 under the
Securities Exchange Act of 1934, as amended
(the “Exchange Act”); |
||
(iii) a representation that Counterparty has not
entered into or altered any hedging
transaction relating to the Shares
corresponding to or offsetting the
Transaction; |
5
(iv) a representation that Counterparty is not
electing the settlement method for the
related Convertible Note and such Relevant
Settlement Method to create actual or
apparent trading activity in the Shares (or
any security convertible into or
exchangeable for the Shares) or to raise or
depress or otherwise manipulate the price of
the Shares (or any security convertible into
or exchangeable for the Shares); and |
||
(v) an acknowledgment by Counterparty that (A)
any transaction by Dealer following
Counterparty’s election of the settlement
method for the related Convertible Note and
such Relevant Settlement Method shall be
made at Dealer’s sole discretion and for
Dealer’s own account and (B) Counterparty
does not have, and shall not attempt to
exercise, any influence over how, when,
whether or at what price to effect such
transactions, including, without limitation,
the price paid or received per Share
pursuant to such transactions, or whether
such transactions are made on any securities
exchange or privately. |
||
Net Share Settlement:
|
If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the Relevant Price on such Valid Day, divided by (iii) the number of Valid Days in the Settlement Averaging Period. | |
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Combination Settlement:
|
If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: | |
(i) cash in an amount equal to the sum, for
each Valid Day during the Settlement
Averaging Period for such Option, of (i) the
Daily Option Value for such Valid Day,
divided by (ii) the number of Valid Days in
the Settlement Averaging Period, multiplied
by (iii) the Cash Percentage; and |
||
(ii) a number of Shares (the “Combination
Settlement Share Amount”) equal to the sum,
for each Valid Day during the Settlement
Averaging Period for such Option, of (i) the
Daily Option Value for such Valid Day,
divided by (ii) the Relevant Price on such
Valid Day, divided by (iii) the number of |
6
Valid Days in the Settlement Averaging
Period, multiplied by (iv) (A) 100% minus
(B) the Cash Percentage. |
||
| Dealer will deliver cash in lieu of any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. | ||
Cash Settlement:
|
If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an amount of cash equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the number of Valid Days in the Settlement Averaging Period. | |
Daily Option Value:
|
For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. | |
Valid Day:
|
A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other U.S. national or regional securities exchange on which the Shares are then listed or, if the Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. | |
Scheduled Valid Day:
|
A day that is scheduled to be a Valid Day on the principal U.S. national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for trading, “Scheduled Valid Day” means a Business Day. | |
Business Day:
|
Any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed. | |
Relevant Price:
|
For each of the 50 consecutive Valid Days during the applicable Settlement Averaging Period, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “IART <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 clos of trading of the primary trading session on such Valid Day |
7
| (or if such volume-weighted average price is unavailable, the market value of one Share on such Valid Day determined, using a volume-weighted average method, by the Calculation Agent). The Relevant Price shall be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours. | ||
Settlement Averaging Period:
|
For any Option and regardless of the Settlement Method applicable to such Option: | |
(i) if the relevant Conversion Date occurs
prior to the Free Convertibility Date, the
50 consecutive Valid-Day period beginning
on, and including, the second Valid Day
after such Conversion Date; and |
||
(ii) if the relevant Conversion Date occurs on
or following the Free Convertibility Date,
the 50 consecutive Valid Days beginning on,
and including, the 52nd Scheduled Valid Day
immediately preceding the Expiration Date. |
||
Settlement Date:
|
For any Option, the date Shares and/or cash are delivered with respect to the Convertible Note related to such Option pursuant to Section 14.02(a) of the Indenture; provided that the Settlement Date will not be prior to the later of (i) the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option and (ii) the Exchange Business Day immediately following the date Counterparty provides written notice to Dealer of such date of delivery under the Indenture prior to 4:00 PM, New York City time. | |
Settlement Currency:
|
USD | |
Other Applicable Provisions:
|
The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 (as modified below) of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding anything to the contrary in Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to restrictions and limitations arising from Counterparty’s status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
3. Additional Terms applicable to the Transaction.
Adjustments applicable to the Transaction: |
||
Potential Adjustment Events:
|
Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an |
8
| occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an adjustment to the Conversion Rate (as defined in the Indenture) of the Convertible Notes. | ||
Method of Adjustment:
|
Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any Potential Adjustment Event, the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided that, notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, as determined by it, to the terms hereof in order to account for such Potential Adjustment Event. | |
Dilution Adjustment Provisions:
|
Section 14.04(a), (b), (c), (d) and (e) and Section 14.05 of the Indenture. | |
Extraordinary Events applicable to the Transaction: |
||
Merger Events:
|
Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in the definition of “Merger Event” in Section 14.07(a) of the Indenture. | |
Tender Offers:
|
Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. | |
Consequence of Merger Events / Tender
Offers:
|
Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided, however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the Transaction |
9
| following such Merger Event or Tender Offer, will not be a corporation or will not be the Issuer following such Merger Event or Tender Offer, then Cancellation and Payment (Calculation Agent Determination) shall apply. | ||
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Applicable | |
Hedging Disruption:
|
Applicable | |
Increased Cost of Hedging:
|
Applicable | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgements
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Counterparty, the Calculation Agent will provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used file format for the storage and manipulation of financial data) displaying in reasonable |
10
| detail the basis for such calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Counterparty: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares to Counterparty: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Bank: Wells Fargo Bank, N.A. ABA#: 121-000-248 Internal acct no.: 01020300064228 A/C name: WFB Equity Derivatives |
|||
| Account for delivery of Shares from Dealer: | |||
| DTC Number: 2072 Agent ID: 52196 Institution ID: 52196 |
| 6. | Offices. |
| (a) | The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| Wells Fargo Bank, National Association 375 Park Avenue New York, NY 10152 |
| 7. | Notices. |
| (a) | Address for notices or communications to Counterparty: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
11
| (b) | Address for notices or communications to Dealer: |
Wells Fargo Securities, LLC
Structured Derivatives Documentation Unit
375 Park Avenue
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
Email: sds@wachovia.com
Structured Derivatives Documentation Unit
375 Park Avenue
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
Email: sds@wachovia.com
With a copy to:
Mark Kohn or Head Trader
Telephone: 212-214-6089
Facsimile: 212-214-8914
Telephone: 212-214-6089
Facsimile: 212-214-8914
| 8. | Representations and Warranties of Counterparty. |
| Each of the representations and warranties of Counterparty set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Counterparty and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Counterparty hereby further represents and warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
| (a) | Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Counterparty or any of its subsidiaries is a party or by which Counterparty or any of its subsidiaries is bound or to which Counterparty or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. | ||
| (d) | Counterparty is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (e) | Counterparty is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). |
12
| (f) | Each of Counterparty and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Counterparty or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares or consummates or otherwise executes or engages in any transaction or event (a “Conversion Rate Adjustment Event”) that would lead to an increase in the Conversion Rate (as such term is defined in the Indenture), promptly give Dealer a written notice of such repurchase or Conversion Rate Adjustment Event (a “Repurchase Notice”) on such day if following such repurchase or Conversion Rate Adjustment Event, the number of outstanding Shares as determined on such day is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person may become subject to, as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph that is in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
13
| (c) | Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Exchange Act, of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. |
| (i) | Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”); provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including, but not limited to, the following conditions: |
| (A) | With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this Confirmation; | ||
| (B) | Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); | ||
| (C) | Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; | ||
| (D) | Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment; | ||
| (E) | An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; | ||
| (F) | Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and | ||
| (G) | Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
| (ii) | Dealer may not, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction except to any affiliate of Dealer (A) that has a rating for its long term, unsecured and unsubordinated indebtedness that is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (B) whose |
14
| obligations hereunder will be guaranteed, pursuant to the terms of a customary guarantee in a form used by Dealer generally for similar transactions, by Dealer or the Dealer Parent. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Option Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion, (2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Counterparty 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. | |||
| (iii) | 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, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
| (f) | Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer |
15
| reasonably determines that it would not be advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on the Settlement Date for the Transaction, Dealer may, by notice to Counterparty on or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
| (i) | in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each Staggered Settlement Date; | ||
| (ii) | the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date; and | ||
| (iii) | if the Net Share Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the Net Shares will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause (i) above. |
| (g) | Terms Relating to Wells Fargo Securities, LLC (the “Agent”). |
| (i) | The Agent is registered as a broker-dealer with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, is acting hereunder for and on behalf of Dealer solely in its capacity as agent for Dealer pursuant to instructions from Dealer, and is not and will not be acting as the Counterparty’s agent, broker, advisor or fiduciary in any respect under or in connection with the Transaction. | ||
| (ii) | In addition to acting as Dealer’s agent in executing the Transaction, the Agent is authorized from time to time to give written payment and/or delivery instructions to Counterparty directing it to make its payments and/or deliveries under the Transaction to an account of the Agent for remittance to the Dealer (or its designee), and for that purpose any such payment or delivery by Counterparty to the Agent shall be treated as a payment or delivery to the Dealer. | ||
| (iii) | Except as otherwise provided herein, any and all notices, demands, or communications of any kind transmitted in writing by either Dealer or Counterparty under or in connection with the Transaction will be transmitted exclusively by such party to the other party through the Agent at the following address: |
Wells Fargo Securities, LLC
201 South College Street, 6th Floor
Charlotte, NC 28288-0601
Facsimile No.: (704) 383-8425
Telephone No.: (704) 715-8086
Attention: Equity Derivatives
201 South College Street, 6th Floor
Charlotte, NC 28288-0601
Facsimile No.: (704) 383-8425
Telephone No.: (704) 715-8086
Attention: Equity Derivatives
| (iv) | The Agent shall have no responsibility or liability to the Dealer or Counterparty for or arising from (i) any failure by either Dealer or Counterparty to perform any of their respective obligations under or in connection with the Transaction, (ii) the collection or enforcement of any such obligations, or (iii) the exercise of any of the rights and remedies of either Dealer or Counterparty under or in connection with the Transaction. Each of Dealer and Counterparty agrees to proceed solely against the other to collect or enforce any such obligations, and the Agent shall have no liability in respect of the Transaction except for its gross negligence or willful misconduct in performing its duties as the agent of Dealer. |
16
| (v) | Upon written request, the Agent will furnish to Dealer and Counterparty the date and time of the execution of the Transaction and a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction. |
| (h) | Additional Termination Events. |
| (i) | Notwithstanding anything to the contrary in this Confirmation if (i) an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture or (ii) Counterparty gives Dealer the notice required pursuant to the last sentence of this paragraph, then such occurrence or the giving of such notice, as applicable, shall constitute an Additional Termination Event applicable to the Transaction and, with respect to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall correspond in the case of a Repurchase Event (as defined below), if applicable, to a payment date under Section 6(d)(ii) of the Agreement occurring within a commercially reasonable period of time (as determined by Dealer in a commercially reasonable manner in consultation with counsel with regard to legal, regulatory or commercial issues arising in connection with any related hedging or hedge unwind activities) after the date of payment with respect to the Convertible Notes, if applicable, for such Repurchase Event) and determine the amount payable pursuant to Section 6(e) of the Agreement; provided that in the case of a Repurchase Event, the Transaction shall be subject to termination only in respect of a number of Options (the “Affected Number of Options”), equal to the lesser of (A) the number of Convertible Notes that cease to be outstanding in connection with or as a result of such Repurchase Event, as the case may be, minus the “Affected Number of Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Repurchase Event, as the case may be (and, for the purposes of determining whether any Options under this Confirmation or under the Base Call Option Confirmation will be among the Affected Number of Options hereunder or among the “Affected Number of Options” under, and as defined in, the Base Call Option Confirmation, the Affected Number of Options shall be allocated first to the Base Call Option Confirmation until all Options thereunder are exercised or terminated), and (B) the number of Options then outstanding. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with a Repurchase Event, the Calculation Agent shall assume that the Convertible Notes subject to such Repurchase Event shall not have been repurchased and remain outstanding. Counterparty shall notify Dealer promptly following the occurrence of any Repurchase Event; provided that Counterparty agrees to initiate a Repurchase Event only if Counterparty represents to Dealer at the time it takes action to so initiate such Repurchase Event that it is not in possession of any material nonpublic information with respect to Counterparty or the Shares. | ||
| “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether in connection with or as a result of a fundamental change, howsoever defined, a tender offer or similar transaction or for any other reason) by Counterparty, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty (howsoever described), (iii) any principal of any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (whether following acceleration of the Convertible Notes or otherwise), or (iv) any Convertible Notes are exchanged by or for the benefit of the holders thereof for any other securities of Counterparty (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction. For the avoidance of doubt, any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. | |||
| (ii) | Notwithstanding anything to the contrary in this Confirmation, the receipt by Dealer from Counterparty, within the applicable time period set forth under “Notice of Exercise” |
17
| above, of any Notice of Exercise in respect of Options that relate to Convertible Notes as to which additional Shares would be added to the Conversion Rate pursuant to Section 14.03 of the Indenture in connection with a “Make-Whole Fundamental Change” (as defined in the Indenture) shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Notice of Exercise, Dealer shall designate an Exchange Business Day following such Additional Termination Event (which Exchange Business Day shall in no event be earlier than the related settlement date for such Convertible Notes) as an Early Termination Date with respect to the portion of this Transaction corresponding to a number of Options (the “Make-Whole Conversion Options”) equal to the lesser of (A) the number of such Options specified in such Notice of Exercise minus the number of “Make-Whole Conversion Options” (as defined in the Base Call Option Confirmation), if any, that relate to such Convertible Notes and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the number of Make-Whole Conversion Options. Any payment hereunder with respect to such termination shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to this Transaction and a Number of Options equal to the number of Make-Whole Conversion Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, in determining the amount payable pursuant to Section 6 of the Agreement, the Calculation Agent shall not take into account any adjustments to the Option Entitlement that result from corresponding adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture); provided that the amount of cash deliverable in respect of such early termination by Dealer to Counterparty shall not be greater than the product of (x) the Applicable Percentage and (y) the excess of (I) (1) the number of Make-Whole Conversion Options multiplied by (2) the Conversion Rate (after taking into account any applicable adjustments to the Conversion Rate pursuant to Section 14.03 of the Indenture) multiplied by (3) a price per Share determined by the Calculation Agent over (II) the aggregate principal amount of such Convertible Notes, as determined by the Calculation Agent in a commercially reasonable manner. |
| (i) | Amendments to Equity Definitions. |
| (i) | 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.” | ||
| (ii) | Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party” with “notice to Counterparty” in the first sentence of such section. |
| (j) | No Set-off. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (k) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If in respect of the Transaction, an amount is payable by Dealer to Counterparty (i) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (ii) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Counterparty may request Dealer to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Counterparty shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer, in each case, 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 Counterparty’s control, or (III) an Event of Default in which Counterparty is |
18
| the Defaulting Party or a Termination Event in which Counterparty 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 Counterparty’s control) and shall give 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, the Tender Offer Date, the Announcement Date (in the case of Nationalization, Insolvency or Delisting), the Early Termination Date or date of cancellation, as applicable; provided that if Counterparty does not validly request Dealer to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right, in its sole discretion, to satisfy its Payment Obligation by the Share Termination Alternative, notwithstanding Counterparty’s election to the contrary. |
Share
Termination
Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable (the “Share Termination Payment Date”), in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment. | |
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 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 to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share Termination Delivery Property. | |
Share
Termination
Delivery
Unit:
|
One Share or, if a Merger Event has occurred and a corresponding adjustment to the Transaction has been made, 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 Merger Event, as determined by the Calculation Agent. | |
Failure to
Deliver:
|
Applicable | |
Other
applicable
provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified |
19
| above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable as if Physical Settlement were applicable. |
| (l) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (m) | Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act and enter into an agreement, in form and substance satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered secondary offering of substantially similar size; provided, however, that if Dealer, in its sole reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of substantially similar size, in form and substance satisfactory to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. | ||
| (n) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty 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 Counterparty relating to such tax treatment and tax structure. | ||
| (o) | Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with respect to some or all of the Options hereunder, if Dealer reasonably determines based on the advice of counsel, in its discretion, that such action is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (p) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. |
20
| (q) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (r) | Notice of Certain Other Events. Counterparty covenants and agrees that: |
| (i) | promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any consolidation, merger and binding share exchange to which Counterparty is a party, or any sale of all or substantially all of Counterparty’s assets, in each case pursuant to which the Shares will be converted into cash, securities or other property, Counterparty shall give Dealer written notice of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such transaction or event (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the date on which such transaction or event is consummated; and | ||
| (ii) | promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such adjustment. |
| (s) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (t) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Counterparty 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Counterparty shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Counterparty represents and acknowledges to the other that, subject to the proviso included in this Section 9(r), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (u) | Payment by Counterparty. 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 |
21
| than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or (ii) Counterparty owes to Dealer, 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. |
[Remainder of Page Intentionally Blank]
22
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Wells Fargo Securities, LLC, 201 South College Street, 6th
Floor, Charlotte, NC 28288-0601, Facsimile No.: (704) 383-8425, Telephone No.: (704) 715-8086,
Attention: Equity Derivatives.
| Very truly yours, | ||||||
| Wells Fargo Bank, National Association | ||||||
| By Wells Fargo Securities, LLC, acting solely in its capacity as its Agent |
||||||
| By: | /s/ Cathleen Burke | |||||
| Name: | ||||||
| Title: | Managing Director | |||||
| Wells Fargo Securities, LLC acting solely in its capacity as Agent of Wells Fargo Bank, National Association |
||||||
| By: | /s/ Cathleen Burke | |||||
| Name: | ||||||
| Title: | Managing Director | |||||
| Accepted and confirmed as of the Trade Date: | ||||
| Integra LifeSciences Holdings Corporation | ||||
By: |
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
Name: |
Nora Brennan | |||
[WF Additional Bond Hedge Confirmation]
Exhibit 10.13
EXECUTION VERSION
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
Winchester House
1 Great Winchester Street
London EC2N 2DB
Telephone: 44 20 7545 8000
c/o Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
60 Wall Street
New York, NY 10005
Telephone: 1-212-250-2500
Internal Reference Nr.: 440024
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
Re: Additional Warrants
DEUTSCHE BANK AG IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT
OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THIS
TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH
RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS,
ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN
DEUTSCHE BANK AG AND COMPANY SHALL BE TRANSMITTED THROUGH DBSI. DEUTSCHE BANK AG ACTING THROUGH
ITS LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to
Deutsche Bank AG, London Branch (“Dealer”) as of the Trade Date specified below (the
“Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below. This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan
Krause, Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: | |
| http://www.deutsche-bank.com |
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section
14 of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means
in relation to Dealer, three percent (3%) of shareholders’ equity of Deutsche Bank AG (the “Dealer
Parent”) and in relation to Company, USD 25 million.)) on the Trade Date. In the event of any
inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will
prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby
agree that no Transaction other than the Transaction to which this Confirmation relates shall be
governed by the Agreement.
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:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
104,455. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant |
2
Strike Price:
|
USD 70.05. | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.60, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 742,200 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges | |
Procedures for Exercise. |
||
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially |
3
| reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | ||
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | |
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | |
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. |
Valuation Terms.
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. |
Settlement Terms.
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: |
4
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the “Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a |
5
| fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | ||
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | |
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 |
6
| and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | ||||
| Representation and Agreement: | Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. | |||
| 3. | Additional Terms applicable to the Transaction. | |||
| Adjustments applicable to the Transaction: | ||||
| Method of Adjustment: | Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. | |||
| Extraordinary Events applicable to the Transaction: | ||||
| New Shares: | Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. | |||
| Consequence of Merger Events: | ||||
| Merger Event: | Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |||
| Share-for-Share: | Modified Calculation Agent Adjustment | |||
| Share-for-Other: | Cancellation and Payment (Calculation Agent Determination) | |||
| Share-for-Combined: | Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its | |||
7
| commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). | ||||
| Consequence of Tender Offers: | ||||
| Tender Offer: | Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |||
| Share-for-Share: | Modified Calculation Agent Adjustment | |||
| Share-for-Other: | Modified Calculation Agent Adjustment | |||
| Share-for-Combined: | Modified Calculation Agent Adjustment | |||
| Announcement Event: | If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | |||
| Announcement Date: | The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead |
8
| to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | ||||
| 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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |||
| Additional Disruption Events: | ||||
| Change in Law: | Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |||
| Failure to Deliver: | Not Applicable | |||
| Insolvency Filing: | Applicable | |||
| Hedging Disruption: | Applicable; provided that: |
| (i) | Section 12.9(a)(v) of the Equity Definitions is hereby amended 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.”; and | |||
| (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”. |
9
| Increased Cost of Hedging: | Applicable | |||
| Loss of Stock Borrow: | Applicable | |||
| Maximum Stock Loan Rate: | 200 basis points | |||
| Increased Cost of Stock Borrow: | Applicable | |||
| Initial Stock Loan Rate: | 25 basis points | |||
| Hedging Party: | For all applicable Additional Disruption Events, Dealer. | |||
| Determining Party: | For all applicable Extraordinary Events, Dealer. | |||
| Non-Reliance: | Applicable | |||
| Agreements and Acknowledgments | ||||
| Regarding Hedging Activities: | Applicable | |||
| Additional Acknowledgments: | Applicable | |||
4.
|
Calculation Agent. | Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares from Company: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| To be provided by Dealer. | |||
| Account for delivery of Shares to Dealer: |
10
| To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: London |
| 7. | Notices. |
| (a) | Address for notices or communications to Company: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| (b) | Address for notices or communications to Dealer: |
To:
|
Deutsche Bank AG, London Branch | |
| c/o Deutsche Bank Securities Inc. | ||
Attn:
|
Faiz Khan / Andrew Yaeger | |
Group:
|
Equity-Linked Capital Markets | |
| 60 Wall Street, 4th Floor | ||
| New York, NY 10005 | ||
Faiz Tel:
|
212-250-0668 | |
Faiz Email:
|
faiz.khan@db.com | |
Andrew Tel:
|
212-250-2717 | |
Andrew Email:
|
Andrew.yaeger@db.com | |
Facsimile:
|
732-460-7499 | |
With a copy to: |
||
Attn:
|
Lars Kestner / Dushyant Chadha | |
Group:
|
Corporate Derivatives | |
| 60 Wall Street, 4th Floor | ||
| New York, NY 10005 | ||
Lars Tel:
|
212-250-6043 | |
Lars Email:
|
lars.kestner@db.com | |
Dushyant Tel:
|
212-250-4980 | |
Dushyant Email:
|
dushyant.chadha@db.com |
| 8. | Representations and Warranties of Company. | |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been |
11
| duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | |||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. | ||
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | ||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 26,749,873 (in the case of the first such notice) or (ii) thereafter more than 1,622,916 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the |
12
| risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to |
13
| Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. | |||
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Role of Agent. Whenever delivery of funds or other assets is required hereunder by or to Company, such delivery shall be effected through DBSI. In addition, all notices, demands and communications of any kind relating to the Transaction between Dealer and Company shall be transmitted exclusively through DBSI. | ||
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (y) adding the phrase “or |
14
| 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).” | |||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (D) | 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.” | ||
| (E) | 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. |
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | ||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, |
15
| other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). | |||
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
| Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or (B) above shall not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock, ordinary shares, American depositary receipts or American depositary shares that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions |
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the |
16
| Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | |||
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination Delivery |
||
Property:
|
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | |
Share Termination Unit Price:
|
The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the |
17
| Settlement Price 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. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | ||
Share Termination Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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:
|
Inapplicable | |
Other applicable provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided |
18
| that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | |||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following the last day of the Resale Period the amount of such excess (the |
19
| “Additional Amount”) in cash or in a number of Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | |||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | ||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder and after taking into account any Shares deliverable to Dealer under the letter agreement dated June 9, 2011 between Dealer and Company regarding Base Warrants (the “Base Warrant Confirmation”), (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery and after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | ||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share |
20
| Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. | |||
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation. | ||
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be |
21
| delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer |
22
| and Company represents and acknowledges to the other that, subject to the proviso included in this Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | |||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
23
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Deutsche Bank Securities Inc., 60 Wall Street, New York, NY
10005, or by fax to (212) 797 8974.
| Very truly yours, | ||||||||
| Deutsche Bank AG, London Branch | ||||||||
| By: | /s/ Lars Kestner | |||||||
| Authorized Signatory | ||||||||
| Name: | Lars Kestner | |||||||
| By: | /s/ Natalie Heaton | |||||||
| Authorized Signatory | ||||||||
| Name: | Natalie Heaton | |||||||
| Deutsche Bank Securities Inc., acting solely as | ||||||||
| Agent in connection with the Transaction | ||||||||
| By: | /s/ Lars Kestner | |||||||
| Authorized Signatory | ||||||||
| Name: | Lars Kestner | |||||||
| By: | /s/ Natalie Heaton | |||||||
| Authorized Signatory | ||||||||
| Name: | Natalie Heaton | |||||||
Accepted
and confirmed as of the Trade Date:
Integra LifeSciences Holdings Corporation
By: |
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
Name: |
Nora Brennan | |||
[DB Additional Warrant Confirmation]
Chairman of the Supervisory Board: Clemens Börsig
Management Board: Josef Ackermann (Chairman), Hugo
Bänziger, Jürgen Fitschen, Anshuman Jain, Stefan
Krause, Hermann-Josef Lamberti, Rainer Neske
|
Deutsche Bank AG is authorized under German Banking Law (competent authority: BaFin — Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business; a member of the London Stock Exchange. Deutsche Bank AG is a joint stock corporation with limited liability incorporated in the Federal Republic of Germany HRB No. 30 000 District Court of Frankfurt am Main; Branch Registration in England and Wales BR000005; Registered address: Winchester House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank Group online: | |
| http://www.deutsche-bank.com |
Exhibit 10.14
EXECUTION VERSION
RBC Capital Markets, LLC
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, NY 10006-1404
Attn: Andrew Apthorpe
Telephone: 212-858-7000
Facsimile: 212-428-3053
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| Re: | Additional Warrants |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to Royal
Bank of Canada (“Dealer”) as of the Trade Date specified below (the “Transaction”). This letter
agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.
This Confirmation shall replace any previous agreements and serve as the final documentation for
the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section
14 of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means
in relation to Dealer, three percent (3%) of shareholders’ equity of Dealer and in relation to
Company, USD 25 million.)) on the Trade Date. In the event of any inconsistency between provisions
of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other
than the Transaction to which this Confirmation relates shall be governed by the Agreement.
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:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
208,910. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05. | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.60, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 1,484,400 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges |
Procedures for Exercise.
2
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | |
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for |
3
| such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | ||
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | |
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. |
Valuation Terms.
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. |
Settlement Terms.
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: | |
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the “Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and specifies a Cash Percentage that is less than or equal to 0% |
4
| or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | |
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share |
5
| Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | ||
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. |
3. Additional Terms applicable to the Transaction.
Adjustments applicable to the Transaction:
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. |
6
Extraordinary Events applicable to the Transaction:
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. |
Consequence of Merger Events:
Merger Event:
|
Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination) | |
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). |
Consequence of Tender Offers:
Tender Offer:
|
Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Modified Calculation Agent Adjustment | |
Share-for-Combined:
|
Modified Calculation Agent Adjustment |
Announcement Event:
|
If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other |
7
| date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | ||
Announcement Date:
|
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
8
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Not Applicable | |
Insolvency Filing:
|
Applicable | |
Hedging Disruption:
|
Applicable; provided that: |
| (i) | Section 12.9(a)(v) of the Equity Definitions is hereby amended 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.”; and | |||
| (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”. |
Increased Cost of Hedging:
|
Applicable | |
Loss of Stock Borrow:
|
Applicable | |
Maximum Stock Loan Rate:
|
200 basis points | |
Increased Cost of Stock Borrow:
|
Applicable | |
Initial Stock Loan Rate:
|
25 basis points | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgments Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
9
5. Account Details.
| (a) | Account for payments to Company: |
Bank Name: Wells Fargo Bank
ABA #: 121000248
Beneficiary: First Clearing, LLC
Account #: 4122023377
FFC Account Name: Integra LifeSciences Holdings Corp
FFC Account Number: 8595-0713
ABA #: 121000248
Beneficiary: First Clearing, LLC
Account #: 4122023377
FFC Account Name: Integra LifeSciences Holdings Corp
FFC Account Number: 8595-0713
Account for delivery of Shares from Company:
American Stock Transfer & Trust Co LLC
Transfer Agent # 2941
Account # 10249
Transfer Agent # 2941
Account # 10249
| (b) | Account for payments to Dealer: |
Royal Bank of Canada
JP Morgan Chase NY (CHASUS33)
ABA # 021-000-021
Royal Bank of Canada (ROYCUS3X)
A/C # 920-1-033363
Ref: US Transit
A/C 204-1499
JP Morgan Chase NY (CHASUS33)
ABA # 021-000-021
Royal Bank of Canada (ROYCUS3X)
A/C # 920-1-033363
Ref: US Transit
A/C 204-1499
Account for delivery of Shares to Dealer:
To be provided by Dealer.
6. Offices.
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: New York |
RBC Capital Markets, LLC
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, New York 10281-8098
Telephone: 212-858-7000
as agent for Royal Bank of Canada
3 World Financial Center — 8th Floor
200 Vesey Street
New York, New York 10281-8098
Telephone: 212-858-7000
7. Notices.
| (a) | Address for notices or communications to Company: |
10
Integra LifeSciences Holdings Corporation
311 Enterprise Drive
Plainsboro, NJ 08536
Attention: Treasurer
Telephone No.: (609) 275-0500
Facsimile No.: (609) 750-4264
311 Enterprise Drive
Plainsboro, NJ 08536
Attention: Treasurer
Telephone No.: (609) 275-0500
Facsimile No.: (609) 750-4264
| (b) | Address for notices or communications to Dealer: |
Trade Affirmations and Settlements:
RBC Capital Markets, LLC
Attn: Structured Derivatives Documentation
Three World Financial Center
200 Vesey Street
New York, NY 10006-1404 USA
Facsimile Number: +1-212-858-7033
e-Mail Address: geda@rbccm.com
RBC Capital Markets, LLC
Attn: Structured Derivatives Documentation
Three World Financial Center
200 Vesey Street
New York, NY 10006-1404 USA
Facsimile Number: +1-212-858-7033
e-Mail Address: geda@rbccm.com
Trade Confirmations:
RBC Capital Markets, LLC
Attn: Structured Derivatives Documentation
Three World Financial Center
200 Vesey Street
New York, NY 10281-1021 USA
Facsimile Number: +1-212-428-3053
e-Mail Address: SDD@rbccm.com
RBC Capital Markets, LLC
Attn: Structured Derivatives Documentation
Three World Financial Center
200 Vesey Street
New York, NY 10281-1021 USA
Facsimile Number: +1-212-428-3053
e-Mail Address: SDD@rbccm.com
8. Representations and Warranties of Company.
Each of the representations and warranties of Company set forth in Section 3 of the Purchase
Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the
representatives of the Initial Purchasers party thereto (the “Representatives”), is true and
correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that
no such representation or warranty, other than the representations and warranties set forth
in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event
of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and
warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the
case of the representations in Section 8(d), at all times until termination of the
Transaction, that:
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its |
11
| subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. |
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. | ||
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | ||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
9. Other Provisions.
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 26,253,195 (in the case of the first such notice) or (ii) thereafter more than 1,988,648 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its |
12
| written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of |
13
| which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. |
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Disclosure of Agency Relationship. Dealer has appointed, as its agent, its indirect wholly-owned subsidiary, RBC Capital Markets, LLC (“RBCCM”), for purposes of conducting, on Dealer’s behalf, a business in privately negotiated transactions in options and other derivatives. Company hereby is advised that Dealer, the principal and stated counterparty in such transactions, duly has authorized RBCCM to market, structure, negotiate, document, price, execute and hedge transactions in over-the-counter derivative products. | ||
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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).” | ||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. |
14
| (D) | 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.” | ||
| (E) | 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. |
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | ||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly |
15
| or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). |
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
| Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or (B) above shall not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock, ordinary shares, American depositary receipts or American depositary shares that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions |
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company is the Affected Party, other than an |
16
| 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | |
Share Termination Unit Price:
|
The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price 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. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | |
Share Termination Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger |
17
| Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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:
|
Inapplicable | |
Other applicable provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination |
18
| Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). |
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | ||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade |
19
| Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). |
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder and after taking into account any Shares deliverable to Dealer under the letter agreement dated June 9, 2011 between Dealer and Company regarding Base Warrants (the “Base Warrant Confirmation”), (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery and after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | ||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of |
20
| outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. |
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation. | ||
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. |
21
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represents and acknowledges to the other that, subject to the proviso included in this Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
22
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to RBC Capital Markets, LLC, Attn: Structured Derivatives
Documentation, Three World Financial Center, 200 Vesey Street, New York, NY 10281-1021, or by fax
to (212) 428-3053, or by email to SDD@rbccm.com.
| Very truly yours, | ||||||
| RBC Capital Markets, LLC, as agent for Royal | ||||||
| Bank of Canada | ||||||
| By: | /s/ Brian Ward | |||||
| Authorized Signatory | ||||||
| Name: Brian Ward | ||||||
| Accepted and confirmed | ||||
| as of the Trade Date: | ||||
| Integra LifeSciences Holdings Corporation | ||||
By:
|
/s/ Nora Brennan | |||
| Authorized Signatory | ||||
| Name: Nora Brennan | ||||
[RBC Additional Warrant Confirmation]
23
Exhibit 10.15
EXECUTION VERSION
The Royal Bank of Scotland plc
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
c/o RBS Securities Inc.
600 Washington Blvd.
Stamford, CT 06901
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
Re: Additional Warrants
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to The
Royal Bank of Scotland plc (“Dealer”), acting through RBS Securities Inc., as its agent, as of the
Trade Date specified below (the “Transaction”). This letter agreement constitutes a “Confirmation”
as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any
previous agreements and serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
"Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section
14 of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means
in relation to Dealer, three percent (3%) of shareholders’ equity of Dealer and in relation to
Company, USD 25 million.)) on the Trade Date. In the event of any inconsistency between provisions
of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other
than the Transaction to which this Confirmation relates shall be governed by the Agreement.
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:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
104,455. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05. | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.60, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 742,200 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges |
Procedures for Exercise.
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the |
2
| 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | ||
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | |
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety |
3
| with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | ||
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. |
Valuation Terms.
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. |
Settlement Terms.
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: | |
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the "Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any |
4
| indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | |
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply |
5
| to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | ||
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. |
| 3. | Additional Terms applicable to the Transaction. | |
| Adjustments applicable to the Transaction: |
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. |
| Extraordinary Events applicable to the Transaction: |
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its |
6
| entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. | ||
Consequence of Merger Events: |
||
Merger Event:
|
Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination) | |
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). | |
Consequence of Tender Offers: |
||
Tender Offer:
|
Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Modified Calculation Agent Adjustment | |
Share-for-Combined:
|
Modified Calculation Agent Adjustment | |
Announcement Event:
|
If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of |
7
| whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | ||
Announcement Date:
|
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. | |
Additional Disruption Events: |
||
Change in Law:
|
Applicable; provided that (i) 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 with the words “(including, for the avoidance of doubt and without limitation, (x) any tax law |
8
| or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | ||
Failure to Deliver:
|
Not Applicable | |
Insolvency Filing:
|
Applicable | |
Hedging Disruption:
|
Applicable; provided that: | |
(i) Section 12.9(a)(v) of the Equity
Definitions is hereby amended 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.”; and |
||
(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”. |
||
Increased Cost of Hedging:
|
Applicable | |
Loss of Stock Borrow:
|
Applicable | |
Maximum Stock Loan Rate:
|
200 basis points | |
Increased Cost of Stock Borrow:
|
Applicable | |
Initial Stock Loan Rate:
|
25 basis points | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgments
Regarding Hedging Activities:
|
Applicable | |
Additional Acknowledgments:
|
Applicable | |
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written request a report (in a commonly used file format for the storage and |
9
| manipulation of financial data) displaying in reasonable detail the basis for such calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 Account for delivery of Shares from Company: American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Chase Bank, New York BIC: CHASUS33 ABA # 021000021 A/C Name: RBS Securities Inc. BIC: GRNWUS33 A/C: 066615674 Account for delivery of Shares to Dealer: To be provided by Dealer. |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 |
| 7. | Notices. |
| (a) | Address for notices or communications to Company: | ||
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
10
| (b) | Address for notices or communications to Dealer: | ||
| The Royal Bank of Scotland plc c/o RBS Securities Inc. 600 Washington Blvd. Stamford, CT 06901 Attn: Legal Department (Tam Beattie) Telephone: (203) 897-6086 Facsimile: (203) 873-4571 Email: Tamerlaine.Beattie@rbs.com |
|||
| With a copy to: | |||
| The Royal Bank of Scotland plc c/o RBS Global Banking & Markets 280 Bishopsgate London EC2M 4RB |
| 8. | Representations and Warranties of Company. | |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. | ||
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. The |
11
| 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | |||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, |
12
| in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company 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 under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date |
13
| hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. | |||
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Role of Agent. THE ROYAL BANK OF SCOTLAND PLC HAS ENTERED AS PRINCIPAL TO THE TRANSACTION AND IS COMPANY’S COUNTERPARTY HERETO. THE ROYAL BANK OF SCOTLAND PLC IS NOT REGISTERED AS A BROKER-DEALER UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED. THE PARTIES ACKNOWLEDGE THAT RBS SECURITIES INC. HAS ACTED AS AGENT FOR THE PARTIES IN CONNECTION WITH THE TRANSACTION. TO THE EXTENT RBS SECURITIES INC. HAS ACTED AS AGENT IN CONNECTION WITH THE TRANSACTION, ITS OBLIGATIONS ARE STRICTLY LIMITED TO THE DELIVERY OF ANY CASH AND SECURITIES THAT IT ACTUALLY RECEIVES FROM THE ROYAL BANK OF SCOTLAND PLC OR COMPANY, AS THE CASE MAY BE, OR DELIVERS TO THE ROYAL BANK OF SCOTLAND PLC OR COMPANY. RBS SECURITIES INC. HAS NO OBLIGATIONS HEREUNDER, BY GUARANTY, ENDORSEMENT OR OTHERWISE, WITH RESPECT TO PERFORMANCE OF THE ROYAL BANK OF SCOTLAND PLC’S OR COMPANY’S OBLIGATIONS HEREUNDER. | ||
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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).” | ||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (D) | 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) |
14
| 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.” | |||
| (E) | 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. |
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | ||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such |
15
| transaction shall not constitute an Additional Termination Event pursuant to this clause (B). | |||
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
Notwithstanding the foregoing, a transaction or transactions described in
clauses (A) or (B) above shall not constitute an Additional Termination
Event if at least 90% of the consideration received or to be received by the
holders of the Shares, excluding cash payments for fractional shares and
cash payments made in respect of dissenters’ appraisal rights, in connection
with such transaction or transactions consists of shares of common stock,
ordinary shares, American depositary receipts or American depositary shares
that are listed or quoted on any of The New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Global Market (or any of their respective
successors) or will be so listed or quoted when issued or exchanged in
connection with such transaction or transactions
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. |
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic |
16
| notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination
Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination
Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). | |
Share Termination
Unit Price:
|
The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price 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. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | |
Share Termination
Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 |
17
| consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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:
|
Inapplicable | |
Other applicable
provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such |
18
| Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | |||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | ||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such |
19
| Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | |||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder and after taking into account any Shares deliverable to Dealer under the letter agreement dated June 9, 2011 between Dealer and Company regarding Base Warrants (the “Base Warrant Confirmation”), (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery and after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. |
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. |
20
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. |
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation. | ||
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy |
21
| proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. |
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represents and acknowledges to the other that, subject to the proviso included in this Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | ||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
22
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to The Royal Bank of Scotland plc, c/o RBS Securities Inc., 600
Washington Blvd.,
Stamford, CT 06901, Attn: Legal Department (Tam Beattie), or by fax to: (203) 873-4571, with copy
to The Royal
Bank of Scotland plc, c/o RBS Global Banking & Markets, 280 Bishopsgate, London EC2M 4RB, Attn:
Swap
Administration, or by fax to: +44 (0) 20 7085 5050.
Very truly yours,
| THE ROYAL BANK OF SCOTLAND PLC | ||||||
| By: RBS Securities Inc., as its agent | ||||||
| By: | /s/ Eric Waller | |||||
Name: |
||||||
| Title: | Managing Director | |||||
Accepted and confirmed
as of the Trade Date:
as of the Trade Date:
Integra LifeSciences Holdings Corporation
By: |
/s/ Nora Brennan | |||
Authorized Signatory
Name: Nora Brennan
Name: Nora Brennan
[RBS Additional Warrant Confirmation]
Exhibit 10.16
EXECUTION VERSION
Wells Fargo Bank, National Association
375 Park Avenue, NY 4073
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
375 Park Avenue, NY 4073
New York, NY 10152
Telephone: 212-214-6101
Facsimile: 212-214-5913
June 14, 2011
| To: | Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
| Re: | Additional Warrants |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the Warrants issued by Integra LifeSciences Holdings Corporation (“Company”) to Wells
Fargo Bank, National Association (“Dealer”) as of the Trade Date specified below (the
“Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA
Master Agreement specified below. This Confirmation shall replace any previous agreements and
serve as the final documentation for the Transaction.
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.
(“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be
deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.
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.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to
the terms of the Transaction to which this Confirmation relates. This Confirmation shall
supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but
without any Schedule except for (i) the election of the laws of the State of New York as the
governing law (without reference to choice of law doctrine); (ii) the election that the “Cross
Default” provisions of Section 5(a)(vi) of the Agreement shall apply to both parties, provided that
(a) the phrase “or becoming capable at such time of being declared” shall be deleted from clause
(1) of such Section 5(a)(vi); (b) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event
of Default if (i) the default was caused solely by error or omission of an administrative or
operational nature; (ii) funds were available to enable the party to make the payment when due; and
(iii) the payment is made within two Local Business Days of such party’s receipt of written notice
of its failure to pay.”; (c) “Specified Indebtedness” will have the meaning specified in Section
14 of the Agreement, except that such term shall not include obligations in respect of deposits
received in the ordinary course of a party’s banking business; and (d) “Threshold Amount” means
in relation to Dealer, three percent (3%) of shareholders’ equity of Wells Fargo & Company (the
“Dealer Parent”) and in relation to Company, USD 25 million.)) on the Trade Date. In the event of
any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation
will prevail for the purpose of the Transaction to which this Confirmation relates.
The parties
hereby agree that no Transaction other than the Transaction to which this Confirmation relates
shall be governed by the Agreement.
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:
|
June 14, 2011 | |
Effective Date:
|
The third Exchange Business Day immediately prior to the Premium Payment Date | |
Warrants:
|
Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. | |
Warrant Style:
|
European | |
Seller:
|
Company | |
Buyer:
|
Dealer | |
Shares:
|
The common stock of Company, par value USD 0.01 per Share (Exchange symbol “IART”) | |
Number of Warrants:
|
104,455. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be less than zero. | |
Warrant Entitlement:
|
One Share per Warrant | |
Strike Price:
|
USD 70.05 | |
| Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the Strike Price would be less than USD 46.60, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to Company’s capitalization. | ||
Premium:
|
USD 742,200 | |
Premium Payment Date:
|
June 15, 2011 | |
Exchange:
|
The NASDAQ Global Select Market | |
Related Exchange(s):
|
All Exchanges |
2
Procedures for Exercise. |
||
Expiration Time:
|
The Valuation Time | |
Expiration Dates:
|
Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 100th Scheduled Trading Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the Calculation Agent shall (i) make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Scheduled Trading Day or on any subsequent Scheduled Trading Day, as the Calculation Agent shall determine using commercially reasonable means. Any Scheduled Trading Day on which, as of the date hereof, the Exchange is scheduled to close prior to its normal close of trading shall be deemed not to be a Scheduled Trading Day; if a closure of the Exchange prior to its normal close of trading on any Scheduled Trading Day is scheduled following the date hereof, then such Scheduled Trading Day shall be deemed to be a Disrupted Day in full. | |
First Expiration Date:
|
March 15, 2017 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. | |
Daily Number of Warrants:
|
For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number, subject to adjustment pursuant to the provisos to “Expiration Dates”. | |
Automatic Exercise:
|
Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of |
3
| Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration Date. | ||
Market Disruption Event:
|
Section 6.3(a)(ii) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure or (iv) a Regulatory Disruption; in each case that the Calculation Agent determines is material.” | |
Regulatory Disruption:
|
Any event that Dealer, in its discretion based on the advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures, 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. | |
Valuation Terms. |
||
Valuation Time:
|
Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion. | |
Valuation Date:
|
Each Exercise Date. | |
Settlement Terms. |
||
Settlement Method Election:
|
Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) the following is hereby inserted after the words “apply to such Transaction” in the seventh line of Section 7.1 of the Equity Definitions: | |
| “and, if Cash Settlement is elected, the percentage of Company’s settlement obligations with respect to such Transaction, which percentage shall be greater than 0% and less than or equal to 100%, that shall be settled in cash (the “Cash Percentage”)”; | ||
| (iii) Company’s election of Cash Settlement shall be deemed to be a representation and warranty by Company that on the date of such election (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities), the capital of Company is adequate to conduct the business of Company, and Company 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; (iv) the same election of settlement method and Cash Percentage shall apply to all Expiration Dates hereunder ; (v) if Company elects Cash Settlement and |
4
| specifies a Cash Percentage that is less than or equal to 0% or greater than 100%, then the notice delivered by Company will be deemed to be ineffective and the Default Settlement Method will be deemed applicable to such Transaction and (vi) Company may elect a Cash Percentage only if no event of default has occurred and is continuing under any indebtedness of Company or its subsidiaries in an aggregate principal amount of $100 million or more. | ||
Electing Party:
|
Company | |
Settlement Method Election Date:
|
The third Scheduled Trading Day immediately preceding the First Expiration Date. | |
Default Settlement Method:
|
Net Share Settlement | |
Cash Percentage:
|
0%; provided, however, that if Company (i) validly delivers notice of Cash Settlement hereunder and (ii) in such notice validly elects a Cash Percentage greater than 0% and less than or equal to 100%, the Cash Percentage shall equal the percentage specified as such in such notice. | |
Net Share Settlement:
|
On the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System and pay to Dealer an amount of cash in USD the Fractional Share Amount for such Settlement Date. For purposes of determining any dividends or distributions payable in respect of such Shares, Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date. | |
Share Delivery Quantity:
|
For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the product of (i) one minus the Cash Percentage, expressed as a fraction, and (ii) the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement Date, rounded down to the nearest whole number (for any Settlement Date, the fraction of a share eliminated by such rounding, the “Share Fraction” for such Settlement Date). | |
Fractional Share Amount:
|
An amount of cash in USD equal to the product of (i) the Share Fraction for such Settlement Date and (ii) the Settlement Price on the Valuation Date for such Settlement Date. | |
Net Share Settlement Amount:
|
For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the Warrant Entitlement. | |
Cash Settlement:
|
If Cash Settlement is applicable, then, on the relevant Settlement Date, Company shall (i) pay to Dealer an amount of cash in USD equal to sum of (A) the product of (x) the Cash Percentage and (y) the Net Share Settlement Amount |
5
| for such Settlement Date and (B) the Fractional Share Amount, if any, for such Settlement Date and (ii) deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified hereto free of payment through the Clearance System. The provisions opposite Net Share Settlement above shall apply to any Shares delivered pursuant to clause (ii) of the immediately preceding sentence. | ||
Settlement Price:
|
For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page IART <equity> AQR (or any successor thereto) in respect of the period from the scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent). Notwithstanding the foregoing, if (i) any Expiration Date is a Disrupted Day and (ii) the Calculation Agent determines that such Expiration Date shall be an Expiration Date for fewer than the Daily Number of Warrants, as described above, then the Settlement Price for the relevant Valuation Date shall be the volume-weighted average price per Share on such Valuation Date on the Exchange, as determined by the Calculation Agent based on such sources as it deems appropriate using a volume-weighted methodology, for the portion of such Valuation Date for which the Calculation Agent determines there is no Market Disruption Event. | |
Settlement Dates:
|
As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(k)(i) hereof. | |
Other Applicable Provisions:
|
If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. | |
Representation and Agreement:
|
Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer may be, upon delivery, subject to restrictions and limitations arising from Company’s status as issuer of the Shares under applicable securities laws. | |
| 3. Additional Terms applicable to the Transaction. | ||
Adjustments applicable to the Transaction: |
||
Method of Adjustment:
|
Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed | |
6
| by Section 9(f) of this Confirmation in lieu of Article 10 or Section 11.2(c) of the Equity Definitions. | ||
Extraordinary Events applicable to the Transaction:
|
||
New Shares:
|
Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly quoted, traded or listed (or whose related depositary receipts are 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)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. | |
Consequence of Merger Events: |
||
Merger Event:
|
Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(h)(ii)(B) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.1(b) of the Equity Definitions or Section 9(h)(ii)(B) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Cancellation and Payment (Calculation Agent Determination) | |
Share-for-Combined:
|
Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination). | |
Consequence of Tender Offers: |
||
Tender Offer:
|
Applicable; provided that if an event occurs that constitutes both a Tender Offer under Section 12.1(d) of the Equity Definitions and Additional Termination Event under Section 9(h)(ii)(A) of this Confirmation, Dealer may elect, in its commercially reasonable judgment, whether the provisions of Section 12.3 of the Equity Definitions or Section 9(h)(ii)(A) will apply. | |
Share-for-Share:
|
Modified Calculation Agent Adjustment | |
Share-for-Other:
|
Modified Calculation Agent Adjustment | |
Share-for-Combined:
|
Modified Calculation Agent Adjustment | |
Announcement Event:
|
If an Announcement Date occurs in respect of a Merger Event or Tender Offer (such occurrence or any |
7
| subsequent announcement relating to the same subject matter, an “Announcement Event”), then on the earliest of the Expiration Date, Early Termination Date or other date of cancellation (the “Announcement Event Adjustment Date”) in respect of each Warrant, the Calculation Agent will determine the economic effect on such Warrant of the Announcement Event (regardless of whether the Announcement Event actually results in a Merger Event or Tender Offer, and taking into account such factors as the Calculation Agent may determine, including, without limitation, changes in volatility, expected dividends, stock loan rate or liquidity relevant to the Shares or the Transaction whether prior to or after the Announcement Event or for any period of time, including, without limitation, the period from the Announcement Event to the relevant Announcement Event Adjustment Date). If the Calculation Agent determines that such economic effect on any Warrant is material, then on the Announcement Event Adjustment Date for such Warrant, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of such Warrant as the Calculation Agent determines in its reasonable discretion is appropriate to account for such economic effect, which adjustment shall be effective immediately prior to the exercise, termination or cancellation of such Warrant, as the case may be. For the avoidance of doubt, if more than one Announcement Event occurs before the Announcement Event Adjustment Date, such adjustment shall take into account each such Announcement Event. | ||
Announcement Date:
|
The definition of “Announcement Date” in Section 12.1 of the Equity Definitions is hereby amended by (i) replacing the words “a firm” with the word “any” in the second and fourth lines thereof, (ii) replacing the word “leads to the” with the words “, if completed, would lead to a” in the third and the fifth lines thereof, (iii) replacing the words “voting shares” with the word “Shares” in the fifth line thereof, and (iv) inserting the words “by any entity” after the word “announcement” in the second and the fourth lines thereof. | |
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 will 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 of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the Exchange. |
8
Additional Disruption Events: |
||
Change in Law:
|
Applicable; provided that (i) 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 with 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)” and (ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions.” | |
Failure to Deliver:
|
Not Applicable | |
Insolvency Filing:
|
Applicable | |
Hedging Disruption:
|
Applicable; provided that: | |
| (i) | Section 12.9(a)(v) of the Equity
Definitions is hereby amended 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.”; and |
||
| (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”. |
Increased Cost of Hedging:
|
Applicable | |
Loss of Stock Borrow:
|
Applicable | |
Maximum Stock Loan Rate:
|
200 basis points | |
Increased Cost of Stock Borrow:
|
Applicable | |
Initial Stock Loan Rate:
|
25 basis points | |
Hedging Party:
|
For all applicable Additional Disruption Events, Dealer. | |
Determining Party:
|
For all applicable Extraordinary Events, Dealer. | |
Non-Reliance:
|
Applicable | |
Agreements and Acknowledgments Regarding Hedging Activities: |
Applicable | |
Additional Acknowledgments:
|
Applicable |
9
4. Calculation Agent.
|
Dealer, whose judgments, determinations and calculations shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Calculation Agent hereunder, upon a written request by Company, the Calculation Agent will provide to Company by e-mail to the e-mail address provided by Company in such written 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 calculation, it being understood that the Calculation Agent shall not be obligated to disclose any proprietary models used by it for such calculation. |
| 5. | Account Details. |
| (a) | Account for payments to Company: | ||
| Bank Name: Wells Fargo Bank ABA #: 121000248 Beneficiary: First Clearing, LLC Account #: 4122023377 FFC Account Name: Integra LifeSciences Holdings Corp FFC Account Number: 8595-0713 |
|||
| Account for delivery of Shares from Company: | |||
| American Stock Transfer & Trust Co LLC Transfer Agent # 2941 Account # 10249 |
|||
| (b) | Account for payments to Dealer: | ||
| Bank: Wells Fargo Bank, N.A. ABA#: 121-000-248 Internal acct no.: 01020300064228 A/C name: WFB Equity Derivatives |
|||
| Account for delivery of Shares to Dealer: | |||
| DTC Number: 2072 Agent ID: 52196 Institution ID: 52196 |
| 6. | Offices. |
| (a) | The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. | ||
| (b) | The Office of Dealer for the Transaction is: | ||
| Wells Fargo Bank, National Association 375 Park Avenue New York, NY 10152 |
| 7. | Notices. |
| (a) | Address for notices or communications to Company: |
10
| Integra LifeSciences Holdings Corporation 311 Enterprise Drive Plainsboro, NJ 08536 Attention: Treasurer Telephone No.: (609) 275-0500 Facsimile No.: (609) 750-4264 |
|||
| (b) | Address for notices or communications to Dealer: | ||
| Wells Fargo Securities, LLC Structured Derivatives Documentation Unit 375 Park Avenue New York, NY 10152 Telephone: 212-214-6101 Facsimile: 212-214-5913 Email: sds@wachovia.com |
|||
| With a copy to: | |||
| Mark Kohn or Head Trader Telephone: 212-214-6089 Facsimile: 212-214-8914 |
| 8. | Representations and Warranties of Company. | |
| Each of the representations and warranties of Company set forth in Section 3 of the Purchase Agreement (the “Purchase Agreement”), dated as of June 9, 2011, between Company and the representatives of the Initial Purchasers party thereto (the “Representatives”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein; provided that no such representation or warranty, other than the representations and warranties set forth in Sections 3(a), (b), (d) and (e) of the Purchase Agreement, may be the basis of an Event of Default under Section 5(a)(iv) of the Agreement. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the Premium Payment Date and, in the case of the representations in Section 8(d), at all times until termination of the Transaction, that: |
| (a) | Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto. | ||
| (b) | Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which Company or any of its subsidiaries is a party or by which Company or any of its subsidiaries is bound or to which Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument. | ||
| (c) | No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by Company of |
11
| this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “Securities Act”) or state securities laws. | |||
| (d) | A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. 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 Warrants following the exercise of the Warrants in accordance with the terms and conditions of the Warrants, 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. | ||
| (e) | Company is not and will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended. | ||
| (f) | Company is an “eligible contract participant” (as such term is defined in Section 1a(12) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under Section 1a(12)(C) of the Commodity Exchange Act). | ||
| (g) | Each of Company and its officers and directors is not, on the date hereof, in possession of any material non-public information with respect to Company or the Shares. |
| 9. | Other Provisions. |
| (a) | Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Trade Date, with respect to the matters set forth in Sections 8(a) through (d) of this Confirmation. Delivery of such opinion to Dealer 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. | ||
| (b) | Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 24,264,547 (in the case of the first such notice) or (ii) thereafter more than 3,192,382 less than the number of Shares included in the immediately preceding Repurchase Notice. Company agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, that an Indemnified Person actually may become subject to, as a result of Company’s failure to provide Dealer with a Repurchase Notice on the day and in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been |
12
| sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. | |||
| (c) | Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the Effective Date, engage in any such distribution. | ||
| (d) | No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. | ||
| (e) | Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or assign all or any part of its rights or obligations under the Transaction to any third party. If at any time at which (A) the Section 16 Percentage exceeds 7.5%, (B) the Warrant Equity Percentage exceeds 14.5%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(j) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Warrant Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”), owns, beneficially owns, constructively owns, |
13
| controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Dealer in its reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filings of Schedule 13D or Schedule 13G under the Exchange Act or any other filing obligations applicable as of the date hereof) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or could result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its reasonable discretion, minus (B) 1% of the number of Shares outstanding. 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, or make or receive any payment in cash, to or from Company, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance. | |||
| (f) | 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 (an “Ex-Dividend Date”), then the Calculation Agent will adjust any of the Strike Price, Number of Warrants and/or Daily Number of Warrants to preserve the fair value of the Warrants to Dealer after taking into account such dividend. | ||
| (g) | Terms Relating to Wells Fargo Securities, LLC (the “Agent”). |
| (i) | The Agent is registered as a broker-dealer with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, is acting hereunder for and on behalf of Dealer solely in its capacity as agent for Dealer pursuant to instructions from Dealer, and is not and will not be acting as the Company’s agent, broker, advisor or fiduciary in any respect under or in connection with the Transaction. | ||
| (ii) | In addition to acting as Dealer’s agent in executing the Transaction, the Agent is authorized from time to time to give written payment and/or delivery instructions to Company directing it to make its payments and/or deliveries under the Transaction to an account of the Agent for remittance to the Dealer (or its designee), and for that purpose any such payment or delivery by Company to the Agent shall be treated as a payment or delivery to the Dealer. | ||
| (iii) | Except as otherwise provided herein, any and all notices, demands, or communications of any kind transmitted in writing by either Dealer or Company under or in connection with the Transaction will be transmitted exclusively by such party to the other party through the Agent at the following address: |
| Wells Fargo Securities, LLC 201 South College Street, 6th Floor Charlotte, NC 28288-0601 Facsimile No.: (704) 383-8425 Telephone No.: (704) 715-8086 Attention: Equity Derivatives |
| (iv) | The Agent shall have no responsibility or liability to the Dealer or Company for or arising from (i) any failure by either Dealer or Company to perform any of their respective obligations under or in connection with the Transaction, (ii) the collection or enforcement of any such obligations, or (iii) the exercise of any of the rights and remedies of either Dealer or Company under or in connection with the Transaction. Each of Dealer and Company agrees to proceed solely against the other to collect or enforce any such obligations, and the Agent shall have no liability in respect of the Transaction except for its gross negligence or willful misconduct in performing its duties as the agent of Dealer. |
14
| (v) | Upon written request, the Agent will furnish to Dealer and Company the date and time of the execution of the Transaction and a statement as to the source and amount of any remuneration received or to be received by the Agent in connection with the Transaction. |
| (h) | Additional Provisions. |
| (i) | Amendments to the Equity Definitions: |
| (A) | Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the words “an”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (B) | Section 11.2(c) of the Equity Definitions is hereby amended by (x) replacing the words “a diluting or concentrative” with “an”, (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).” | ||
| (C) | Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “a diluting or concentrative” and replacing them with the word “a material”; and adding the phrase “or Warrants” at the end of the sentence. | ||
| (D) | 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.” | ||
| (E) | 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. |
| (F) | 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.” |
| (ii) | Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be |
15
| deemed the sole Affected Party with respect to such Additional Termination Event and (3) the Transaction shall be deemed the sole Affected Transaction: |
| (A) | A “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. | ||
| (B) | The consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property, other than a merger of Company solely for the purpose of changing Company’s jurisdiction of incorporation, that results in a reclassification, conversion or exchange of then outstanding Shares solely into shares of common stock of the surviving entity, 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 Company and its subsidiaries, taken as a whole, to any person other than one of Company’s subsidiaries; provided, however, that a transaction described in clause (II) pursuant to which one or more holders of Company’s common equity entitled to vote generally in elections of directors immediately prior to such transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all classes of Company’s common equity entitled to vote generally in elections of directors of the continuing or surviving person immediately after giving effect to such transaction shall not constitute an Additional Termination Event pursuant to this clause (B). | ||
| (C) | Default by Company or any subsidiary of Company in the payment when due, after the expiration of any applicable grace period, of principal of, or premium, if any, or interest on, recourse indebtedness for money borrowed in the aggregate principal amount then outstanding of $25.0 million or more, or acceleration of Company’s or any subsidiary of Company’s recourse indebtedness for money borrowed in the aggregate principal amount of $25.0 million or more so that it becomes due and payable before the date on which it would otherwise have become due and payable, if such default is not cured or waived, or such acceleration is not rescinded, as the case may be. | ||
| (D) | A final judgment for the payment of $25.0 million or more (excluding any amounts covered by insurance) rendered against Company or any of its 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. | ||
| (E) | Dealer, despite using commercially reasonable efforts, is unable or reasonably determines that it is impractical or illegal, to hedge its exposure with respect 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 Dealer). |
16
| Notwithstanding the foregoing, a transaction or transactions described in clauses (A) or (B) above shall not constitute an Additional Termination Event if at least 90% of the consideration received or to be received by the holders of the Shares, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal rights, in connection with such transaction or transactions consists of shares of common stock, ordinary shares, American depositary receipts or American depositary shares that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions |
| (i) | No Collateral or Set-off. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any other agreement, applicable law or otherwise. | ||
| (j) | Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If, in respect of the Transaction, an amount is payable by Company to Dealer, (A) pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or (B) pursuant to Section 6(d)(ii) of the Agreement (any such amount, a “Payment Obligation”), Company shall have the right, in its sole discretion, to satisfy the Payment Obligation by the Share Termination Alternative (as defined below) (except that Company shall not have the right to make such an election in the event of (I) a Nationalization, Insolvency, Merger Event or Tender Offer 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 Company’s control, or (III) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company 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 Company’s control) and shall give irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 5:00 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; provided that if Company does not validly elect to satisfy the Payment Obligation by the Share Termination Alternative, Dealer shall have the right to require Company to satisfy its Payment Obligation by the Share Termination Alternative. |
Share Termination Alternative:
|
If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Section 12.7 or Section 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(k)(i) below, in satisfaction, subject to Section 9(k)(ii) below, of the relevant Payment Obligation, in the manner reasonably requested by Dealer free of payment. | |
Share Termination Delivery Property: |
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of Share Termination Delivery Property by replacing any fractional portion 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 (without giving effect to any discount pursuant to Section 9(k)(i)). |
17
Share Termination Unit Price:
|
The value to Dealer 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. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as defined below), as set forth in Section 9(k)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(k)(ii) below, the Share Termination Unit Price shall be the Settlement Price 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. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(k)(i). | |
Share Termination Delivery Unit:
|
In the case of a Termination Event, Event of Default Additional Disruption Event or Delisting, one Share or, in the case of Nationalization, Insolvency, Tender Offer or Merger Event, 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 Nationalization, Insolvency, Tender Offer or Merger Event. If such Nationalization, Insolvency, Tender Offer or Merger Event 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: |
Inapplicable | |
Other applicable provisions:
|
If Share Alternative Termination is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 (as modified below), 9.12 and 10.5 of the Equity Definitions will be applicable as if Physical Settlement were applicable. |
| (k) | Registration/Private Placement Procedures. If, in the reasonable judgment of Dealer based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to Dealer hereunder, such Shares or Share Termination Delivery Property would be in the hands of Dealer subject to any applicable restrictions with respect to any registration or qualification requirement or prospectus delivery requirement for such Shares or Share Termination Delivery Property pursuant to any applicable federal or state securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such Shares or Share Termination Delivery Property being “restricted securities”, as such term is defined in Rule 144 under the Securities Act, or as a result of the sale of such Shares or Share Termination Delivery Property being subject to paragraph (c) of Rule 145 under the Securities Act) (such Shares or Share Termination Delivery Property, “Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, solely in respect of any Daily Number of |
18
| Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the First Expiration Date, a Private Placement Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all Settlement Dates for such Warrants and the procedures in clause (i) or clause (ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. The Calculation Agent shall make reasonable adjustments to settlement terms and provisions under this Confirmation to reflect a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
| (i) | If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in accordance with customary private placement procedures for placements of equity securities of substantially similar size reasonably acceptable to Dealer; provided that Company may not elect a Private Placement Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(2) of the Securities Act for the sale by Company to Dealer (or any affiliate designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(1) or Section 4(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Private Placement Settlement of such Restricted Shares shall include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Restricted Shares by Dealer), opinions and certificates, and such other documentation as is customary for private placements of equity securities of substantially similar size, all reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or any Settlement Price (in the case of settlement of Shares pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company, of such applicable discount and the number of Restricted Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(j) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). | ||
| (ii) | If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale Period) file and use its reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer, to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, underwriting discounts (if applicable), commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary in underwriting agreements for equity resales of substantially similar size, all reasonably acceptable to Dealer. If Dealer, in its reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a period (the “Resale Period”) commencing on the Exchange Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(j) above or (y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the earliest of (i) |
19
| the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above), (ii) the date upon which all Restricted Shares have been sold or transferred pursuant to Rule 144 (or similar provisions then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act and (iii) the date upon which all Restricted Shares may be sold or transferred by a non-affiliate pursuant to Rule 144 (or any similar provision then in force) or Rule 145(d)(2) (or any similar provision then in force) under the Securities Act. If the Payment Obligation exceeds the realized net proceeds from such resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading 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 Shares (“Make-whole Shares”) in an amount that, based on the Settlement Price on the last day of the Resale Period (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. | |||
| (iii) | Without limiting the generality of the foregoing, Company agrees that any Restricted Shares delivered to Dealer, as purchaser of such Restricted Shares, (A) may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to Company) has elapsed after any Settlement Date or Share Termination Payment Date, as applicable, for such Restricted Shares, Company shall promptly remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer agent, without any 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). | ||
| (iv) | If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| (l) | Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder and after taking into account any Shares deliverable to Dealer under the letter agreement dated June 9, 2011 between Dealer and Company regarding Base Warrants (the “Base Warrant Confirmation”), (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery and after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such |
20
| delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount would not exceed the Applicable Share Limit. | |||
| (m) | Share Deliveries. Company acknowledges and agrees that, to the extent the holder of this Warrant is not then an affiliate and has not been an affiliate for 90 days (it being understood that Dealer will not be considered an affiliate under this paragraph solely by reason of its receipt of Shares pursuant to the Transaction), and otherwise satisfies all holding period and other requirements of Rule 144 of the Securities Act applicable to it, any delivery of Shares or Share Termination Delivery Property hereunder at any time after 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company) shall be eligible for resale under Rule 144 of the Securities Act and Company agrees to promptly remove, or cause the transfer agent for such Shares or Share Termination Delivery Property, to remove, any legends referring to any restrictions on resale under the Securities Act from the Shares or Share Termination Delivery Property. Company further agrees that any delivery of Shares or Share Termination Delivery Property prior to the date that is 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) are not satisfied with respect to Company), may be transferred by and among Dealer and its affiliates and Company shall effect such transfer without any further action by Dealer. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. Notwithstanding anything to the contrary herein, to the extent the provisions of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. | ||
| (n) | Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. | ||
| (o) | Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company 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 Company relating to such tax treatment and tax structure. | ||
| (p) | Maximum Share Delivery. |
| (i) | Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than two times the Number of Shares (the “Maximum Number of Shares”) to Dealer in connection with the Transaction after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation. | ||
| (ii) | In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient authorized but unissued Shares (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be, to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(p)(ii), when, and |
21
| to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares reserved for issuance in respect of other transactions prior to such date that prior to the relevant date become no longer so reserved or (C) Company additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(p)(ii) to the extent that such delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter. |
| (q) | Right to Extend. Dealer may postpone, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment based on the advice of counsel, that such extension is reasonably necessary or advisable to preserve Dealer’s hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer. | ||
| (r) | Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction. | ||
| (s) | Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be 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, (ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy Code. | ||
| (t) | Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). | ||
| (u) | Early Unwind. In the event the sale of the “Option Securities” (as defined in the Purchase Agreement) is not consummated with the Representatives for any reason, or Company fails to |
22
| deliver to Dealer opinions of counsel as required pursuant to Section 9(a), 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 Company 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; provided that, other than in cases involving a breach of the Purchase Agreement by Dealer, Company shall purchase from Dealer on the Early Unwind Date all Shares purchased by Dealer or one or more of its affiliates in connection with the Transaction at the then prevailing market price. Each of Dealer and Company represents and acknowledges to the other that, subject to the proviso included in this Section 9(u), upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. | |||
| (v) | 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 Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, 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. |
[Remainder of Page Intentionally Blank]
23
Please confirm that the foregoing correctly sets forth the terms of our agreement by executing
this Confirmation and returning it to Wells Fargo Securities, LLC, 201 South College Street, 6th
Floor, Charlotte, NC 28288-0601, Facsimile No.: (704) 383-8425, Telephone No.: (704) 715-8086,
Attention: Equity Derivatives.
Very truly yours,
| Wells Fargo Bank, National Association By Wells Fargo Securities, LLC, acting solely in its capacity as its Agent |
||||
| By: | /s/ Cathleen Burke | |||
| Name: | Cathleen Burke | |||
| Title: | Managing Director | |||
| Wells Fargo Securities, LLC acting solely in its capacity as Agent of Wells Fargo Bank, National Association |
||||
| By: | /s/ Cathleen Burke | |||
| Name: | Cathleen Burke | |||
| Title: | Managing Director | |||
| Accepted and confirmed as of the Trade Date: Integra LifeSciences Holdings Corporation |
||||
| By: | /s/ Nora Brennan | |||
| Authorized Signatory | ||||
| Name: Nora Brennan | ||||
[WF Additional Warrant Confirmation]