Contract
Exhibit
3
Execution Copy
and
LAW
DEBENTURE TRUST COMPANY OF NEW YORK
Trustee
and
DEUTSCHE
BANK TRUST COMPANY AMERICAS
Paying
Agent, Registrar and Conversion Agent
__________________________
Dated as
of November 25, 2009
to the
Indenture dated as of November 17, 2009
Creating
the series of notes designated
5.00%
Convertible Senior Notes due 2014
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ARTICLE
1
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DEFINITIONS
AND INCORPORATION BY REFERENCE
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Section
1.01
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Definitions
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1
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Section
1.02
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Other
Definitions
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5
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ARTICLE
2
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THE
SECURITIES
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Section
2.01
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Form
and Dating
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6
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Section
2.02
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Execution
and Authorization; Add On Securities
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6
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Section
2.03
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Registrar,
Paying Agent and Conversion Agent
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6
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Section
2.04
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Transfer
and Exchange
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7
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Section
2.05
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Outstanding
Securities
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7
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Section
2.06
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Cancellation
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7
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ARTICLE
3
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REDEMPTION
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ARTICLE
4
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PURCHASE
OF SECURITIES UPON A FUNDAMENTAL CHANGE
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Section
4.01
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Purchase
of Securities at Option of the Holder Upon Fundamental
Change
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8
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Section
4.02
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Effect
of Fundamental Change Purchase Notice
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12
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Section
4.03
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Deposit
of Fundamental Change Purchase Price
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12
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Section
4.04
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Securities
Purchased in Part
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13
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Section
4.05
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Compliance
with Securities Laws Upon Purchase of Securities
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13
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ARTICLE
5
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PAYMENT
OF INTEREST AND MAKE WHOLE ADJUSTMENT EVENTS
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Section
5.01
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Interest
Payments
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13
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Section
5.02
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Increased
Conversion Rate Applicable to Certain Securities Surrendered in Connection
with Make Whole Adjustment Events
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14
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Section
5.03
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Adjustments
Relating to Make Whole Adjustment Event
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16
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ARTICLE
6
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CONVERSION
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Section
6.01
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Conversion
Privilege
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16
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Section
6.02
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Conversion
Procedure
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18
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Section
6.03
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Fractional
Shares
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20
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Section
6.04
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Taxes
on Conversion
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20
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Section
6.05
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Settlement
Upon Conversion
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20
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Section
6.06
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Adjustment
of Conversion Price
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23
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Section
6.07
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No
Adjustment
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31
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Section
6.08
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Adjustment
for Tax Purposes
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32
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Section
6.09
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Notice
of Conversion and Notice of Adjustment
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32
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Section
6.10
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Notice
of Certain Transactions
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32
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Section
6.11
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Stockholder
Rights Plans
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33
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Section
6.12
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Effect
of Reclassification, Consolidation, Merger or Sale on Conversion
Privilege
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33
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Section
6.13
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Trustee’s
Disclaimer
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35
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Section
6.14
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Voluntary
Reduction
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35
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i
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ARTICLE
7
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ADDITIONAL
COVENANTS
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Section
7.01
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Payment
of Additional Tax Amounts
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36
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ARTICLE
8
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CONSOLIDATION,
MERGER, SALE OR CONVEYANCE
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Section
8.01
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Issuer
May Consolidate, etc., on Certain Terms
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37
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ARTICLE
9
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DEFAULT
AND REMEDIES
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Section
9.01
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Limitations
on Suits
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37
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Section
9.02
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Unconditional
Right of Holders to Convert
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37
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Section
9.03
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Waiver
of Default and Events of Default
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38
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ARTICLE
10
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SATISFACTION
AND DISCHARGE
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Section
10.01
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Satisfaction
and Discharge
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38
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Section
10.02
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Application
of Trust Money
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39
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Section
10.03
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Repayment
to Company
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39
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Section
10.04
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Reinstatement
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39
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ARTICLE
11
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MISCELLANEOUS
PROVISIONS
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Section
11.01
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Scope
of Supplemental Indenture
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40
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Section
11.02
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Adoption,
Ratification and Confirmation
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40
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Section
11.03
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New
York Law to Govern
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40
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Section
11.04
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Notices | 40 |
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Section
11.05
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Officers' Certificates | 40 |
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Section
11.06
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Counterparts
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40
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ARTICLE
12
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SUPPLEMENTAL
INDENTURES
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Section
12.01
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Without
Consent of Holders
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40
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ARTICLE
13
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SINKING
FUND
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EXHIBITS
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EXHIBIT
A:
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Form
of Note, Other Forms and Notices
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A-1
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ii
FIRST
SUPPLEMENTAL INDENTURE, dated as of November 25, 2009, among DryShips Inc., a
company organized under the laws of the Xxxxxxxx Islands (the “Company”), Law
Debenture Trust Company of New York, a New York banking corporation, as trustee
(the “Trustee”),
and
Deutsche Bank Trust Company Americas, as Paying Agent, Registrar and Conversion
Agent.
W
I T N E S S E T H:
WHEREAS,
the Company has heretofore executed and delivered to the Trustee an Indenture,
dated as of November 17, 2009 (the “Base Indenture”),
providing for the issuance from time to time of one or more Series of
Securities;
WHEREAS,
Sections 2.01 and 2.02 of the Base Indenture provide that the Company and the
Trustee may from time to time enter into one or more indentures supplemental
thereto to establish the form or terms of a new Series of
Securities;
WHEREAS,
the Company, pursuant to the foregoing authority, proposes in and by this First
Supplemental Indenture (the “Supplemental
Indenture” and, together with the Base Indenture, the “Indenture”) to
supplement the Base Indenture insofar as it will apply only to the 5.00%
Convertible Senior Notes due 2014 (the “Securities”, each a
“Security”)
issued hereunder (and not to any other Series of Securities); and
WHEREAS,
all things necessary have been done to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Supplemental
Indenture a valid agreement of the Company, in accordance with their and its
terms;
NOW,
THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and
in consideration of the premises and the purchases of the Securities by the
holders thereof, the Company and the Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective Holders from time to time of
the Securities as follows:
ARTICLE
1
DEFINITIONS
AND INCORPORATION BY REFERENCE
Section
1.01 Definitions.
For all
purposes of the Indenture and the Securities:
(a) each
term that is used but not defined in this Supplemental Indenture shall have the
meaning provided in the Base Indenture;
(b) each
term that is defined in both this Supplemental Indenture and the Base Indenture
shall have the meaning provided in this Supplemental Indenture unless otherwise
specified herein;
(c) the
below terms are defined as follows:
1
“Add On Securities” means any
Securities originally issued after the date hereof pursuant to
Section 2.02.
“Additional Tax Amounts” has
the meaning specified in Section 7.01. Additional Tax Amounts, for
all purposes of this Indenture, shall constitute and be deemed to be part of the
principal, interest, or other payment to which they relate.
“Agent” means any Paying Agent,
Registrar or Conversion Agent.
“Base Indenture” shall have the
meaning provided in the first recital.
“Cash” or “cash” means such coin or
currency of the United States as at any time of payment is legal tender for the
payment of public and private debts.
“Capital Stock” has the meaning
provided in the Base Indenture and, for the avoidance of doubt, includes the
outstanding Series A Convertible Preferred Stock of the Company.
“Closing Sale Price” of the Common
Stock means, as of any date of determination, the closing per share sale price
(or, if no such closing sale price is reported on such day, the average of the
bid and asked prices or, if more than one in either case, the average of the
average bid and the average asked prices) at 4:00 p.m., New York time, on
such date as reported in composite transactions for the principal U.S.
securities exchange on which the Common Stock is traded or, if the Common Stock
is not listed on a U.S. national or regional securities exchange, as reported by
Pink OTC Markets Inc.
“Common Stock” means the common
stock of the Company, $0.01 par value, as it exists on the date of this
Indenture and any shares of any class or classes of capital stock of the Company
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, however, that, if
at any time there shall be more than one such resulting class, the shares of
each such class then so issuable on conversion of Securities shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
“Company” has the meaning
provided in the preamble.
“Continuing Director” means, as
of any date of determination, any member of the board of directors of the
Company who (i) was a member of such board of directors on the date of the
original issuance of the notes, or (ii) was nominated for election or elected to
such board of directors with the approval of a majority of the continuing
directors who were members of such board at the time of such nomination or
election.
“Conversion Rate” means, as of
any date, an amount equal to $1,000 divided by the then applicable Conversion
Price on such date. As of the date hereof and subject to adjustment
pursuant to Section 6.06, the Conversion Rate with respect to the
Securities is 139.0821 shares of Common Stock for each $1,000 principal amount
of Securities.
2
“Conversion Value” of a
Security means, as of any date of determination, the product of the last
reported bid price of the Common Stock on that date multiplied by the Conversion
Rate of that Security on that date.
“Default Rate” means 5.00% per
annum.
“Event of Default” with respect
to the Securities shall have the meaning assigned to such term by Section 6.01
of the Base Indenture and shall in addition thereto include each of the
following events:
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(i)
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the
Company defaults in the payment of any principal of any Security at
Maturity (including, following a Fundamental Change), including any
Additional Tax Amounts (if any)
thereon;
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(ii)
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the
Company defaults in the payment of any interest on any Security, including
any Additional Tax Amounts (if any) thereon, when it becomes due and
payable, and continuance of such default for a period of 30 days (unless
the entire amount of such payment is deposited by the Company with the
Paying Agent that is not an affiliate of the Company prior to the
expiration of such period of 30
days);
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(iii)
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the
Company fails to pay the cash and deliver the shares of Common Stock, if
any, representing the Conversion Obligation (including any Additional
Shares and any Additional Tax Amounts (if any) thereon) upon conversion of
any Security within the time period required by the provisions of this
Indenture;
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(iv)
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the
Company fails to perform or comply with any of its other covenants or
agreements contained in the Securities or in this Indenture (other than a
covenant or agreement a default in whose performance or whose breach is
specifically dealt with in clauses (i), (ii) or (iii) of this
definition) and the default continues for 60 days after notice is given as
specified below;
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(v)
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the
Company defaults in the payment of the purchase price of any Security when
the same becomes due and payable, including any Additional Tax Amounts (if
any) thereon; and
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(vi)
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the
Company fails to provide a Fundamental Change Purchase Notice when
required by Section 4.01;
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provided, that a default
under clause (iv) above is not an Event of Default until the Trustee
(acting at the written direction of the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding) notifies the Company, or
the Holders of at least 25% in aggregate principal amount of the Securities then
outstanding notify the Company and the Trustee, in writing of the default, and
the Company does not cure the default within 60 days after receipt of such
notice.
3
“Ex-Dividend Date” means with
respect to any issuance, dividend or distribution, the first date on which the
shares of Common Stock trade, regular way, on the relevant exchange or in the
relevant market for which the sale price was obtained without the right to
receive the issuance, dividend or distribution in question.
“Exchange Act” means the
Securities and Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
“Final Maturity Date” means
December 1, 2014.
“Indenture” has the meaning
provided in the third recital.
“Issue Date” means November 25,
2009.
“Market Disruption Event” means
(1) a failure by the primary exchange or quotation system on which the
Common Stock trades or is quoted to open for trading during its regular trading
session or (2) the occurrence or existence for more than one half hour
period in the aggregate on any Scheduled Trading Day for the Common Stock of any
suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by The NASDAQ Global Select Market or otherwise) in
the Common Stock or in any options, contracts or future contracts relating to
the Common Stock, and such suspension or limitation occurs or exists at any time
before 1:00 p.m., New York City time, on such day.
“Scheduled Trading Day” means
any day that is scheduled to be a Trading Day.
“Securities” has the meaning
provided in the third recital.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
“Settlement Date” means the
third Trading Day immediately following the last Trading Day in the relevant
Conversion Period, unless otherwise specified herein.
“Trading Day” means any day
during which (i) there is no Market Disruption Event and (ii) The
NASDAQ Global Select Market, or if the Common Stock is not listed on The NASDAQ
Global Select Market, the principal other U.S. national or regional securities
exchange on which the Common Stock is then listed is open for trading or, if the
Common Stock is not so listed, any Business Day. A “Trading Day” only
includes those days that have a scheduled closing time of 4:00 p.m., New
York City time, or the then standard closing time for regular trading on the
relevant exchange or trading system.
“Trading Price” means, on any
date of determination with respect to any Security, the average of the secondary
bid quotations per Security obtained by the Conversion Agent for $5,000,000
principal amount of Securities at approximately 3:30 p.m., New York City
time, on such determination date from three independent nationally recognized
securities dealers selected by the Company; provided that, if at least
three such bids cannot reasonably be obtained, but two such bids can reasonably
be obtained, then the average of these two bids shall be used; provided, further, that, if
at least two such bids cannot reasonably be obtained, but one such bid can
reasonably be obtained, this one bid shall be used. If, on any date of
determination, the Conversion Agent cannot reasonably obtain at least one bid
for $5,000,000 principal amount of the Securities from an independent nationally
recognized securities dealer, then the Trading Price of such Securities on such
determination date will be deemed to be less than 98% of the Closing Sale Price
of the Common Stock on such date multiplied by the then current Conversion
Rate.
4
“Voting Stock” of a Person
means any class or classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and normally entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
Section
1.02 Other
Definitions.
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Term
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Defined
in Section
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“Additional
Shares”
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5.02(a)
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“Change
of Control”
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4.01(a)
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“Closing
Sale Price Condition”
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6.01(a)
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“Conversion
Agent”
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2.03
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“Conversion
Date”
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6.02
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“Conversion
Notice”
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6.02
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“Conversion
Obligation”
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6.02
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“Conversion
Period”
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6.05(b)
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“Conversion
Price”
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6.06
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“Daily
Conversion Value”
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6.05(b)
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“Daily
Measurement Value”
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6.05(b)
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“Daily
Net Share Settlement Value”
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6.05(b)
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“Daily
Settlement Amount”
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6.05(b)
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“Daily
VWAP”
|
6.05(b)
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“Effective
Date”
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5.02(a)
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“Expiration
Date”
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6.06(e)
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“Expiration
Time”
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6.06(e)
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“Fundamental
Change”
|
4.01(a)
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“Fundamental
Change Purchase Date”
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4.01(a)
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“Fundamental
Change Purchase Notice”
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4.01(c)
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“Fundamental
Change Purchase Price”
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4.01(a)
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“Interest
Payment Date”
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5.01(a)
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“Make
Whole Adjustment Event”
|
5.02(a)
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“Make
Whole Adjustment Event Period”
|
5.02(a)
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“Merger
Event”
|
6.12
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“Reference
Property”
|
6.12(a)
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“Record
Date”
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5.01(a)
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“Settlement
Method”
|
6.05(a)
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“Specified
Dollar Amount”
|
6.05(b)
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“Spin-Off”
|
6.06(c)
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“Stock
Price”
|
5.02(a)
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“Termination
of Trading”
|
4.01(a)
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“Unissued
Shares”
|
4.01(a)
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“Valuation
Period”
|
6.06(c)
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“Weighted
Average Consideration”
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6.12(c)
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5
ARTICLE
2
THE
SECURITIES
Section
2.01 Form
and Dating. The Securities and the corresponding Trustee’s
certificate of authentication shall be substantially in the respective forms set
forth in Exhibit A, which
Exhibit is incorporated in and made part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. The Securities shall be
dated the date of their authentication.
Section
2.02 Execution and Authorization;
Add On Securities. The Trustee shall authenticate and make
available for delivery Securities for original issue in the aggregate principal
amount of up to $460,000,000 upon receipt of a written order or orders of the
Company signed by two Officers of the Company Order; provided that Add On
Securities may be issued in an unlimited aggregate principal amount without the
consent of any Holders so long as such Securities are part of the same issue,
within the meaning of Treasury Regulations Sections 1.1275-1(f) and
1.1275-2(k)(2), as the Securities initially issued hereunder, and would be
fungible with the Securities issued on the Issue Date for purposes of the
Securities Act, the Exchange Act and other applicable U.S. securities
laws. If any Add On Securities are issued, the Securities issued on the
Issue Date and such Add On Securities shall be treated as a single class for all
purposes under this Indenture and shall vote together as one class on all
matters with respect to the Securities. Each Company Order shall specify
the amount of Securities to be authenticated and the date on which each original
issue of Securities is to be authenticated.
Section
2.03 Registrar, Paying Agent and
Conversion Agent.
The
Company will at all times maintain a Registrar, Paying Agent and agency where
Securities may be presented for conversion (a “Conversion Agent”) in the
Borough of Manhattan, The City of New York.
The
Company will give prompt written notice to the Trustee of the name and address,
and any change in the name or address, of each Conversion Agent. If
at any time the Company shall fail to maintain any such required Conversion
Agent or shall fail to furnish the Trustee with the name and address thereof,
such presentations and surrenders may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations and surrenders. The Company hereby
appoints Deutsche Bank Trust Company Americas as the initial Conversion Agent
for the Securities. Deutsche Bank Trust Company Americas shall be
entitled to all of the rights, protections, exculpations and indemnities
afforded to the Trustee in connection with its role as Conversion
Agent.
6
The
Company may also from time to time designate one or more additional conversion
agents and may from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner relieve the Company
of its obligations to maintain a Conversion Agent. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the name or address of any Conversion Agent. The
term “Conversion Agent” includes any additional conversion agent.
Section
2.04 Transfer and
Exchange. Every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by an
assignment form and, if applicable, a transfer certificate, each in the form
included in Exhibit A and in form satisfactory to the Registrar duly executed by
the Holder thereof or its attorney duly authorized in writing.
The last
sentence of the first paragraph of Section 2.07 of the Base Indenture shall also
not apply to any exchange pursuant to Sections 4.04 or 6.05 of this Supplemental
Indenture.
None of
the Company, any Registrar or the Trustee shall be required to exchange or
register a transfer of any Securities or portions thereof in respect of which a
Fundamental Change Purchase Notice has been delivered and not withdrawn by the
Holder thereof (except, in the case of the purchase of a Security in part, the
portion thereof not to be purchased).
Section
2.05 Outstanding
Securities.
Securities
converted pursuant to Article 6 are not outstanding
Securities.
If a
Paying Agent (other than the Company or an Affiliate of the Company) holds in
respect of Securities on a Fundamental Change Purchase Date or the Final
Maturity Date money sufficient to pay the principal of, and any accrued interest
on, Securities (or portions thereof) payable on that date, then on and after
such Fundamental Change Purchase Date or the Final Maturity Date, as the case
may be, such Securities (or portions thereof, as the case may be) shall cease to
be outstanding and any interest on them shall cease to accrue.
Section
2.06 Cancellation.
The
Conversion Agent shall forward to the Trustee or its agent any Securities
surrendered to them for conversion. The Company may not hold or
resell Securities converted pursuant to Article 6 that are delivered for
cancellation or issue any new Securities to replace any such
Securities.
ARTICLE
3
REDEMPTION
The
Securities are not subject to redemption by the Company at any
time. Article 3 of the Base Indenture does not apply.
7
ARTICLE
4
PURCHASE
OF SECURITIES UPON A FUNDAMENTAL CHANGE
Section
4.01 Purchase of Securities at
Option of the Holder Upon Fundamental Change.
(a) If
at any time that Securities remain outstanding there shall occur a Fundamental
Change, Securities shall be purchased by the Company at the option of the
Holders, as of a date, determined by the Company in its sole discretion, that is
not less than 20 Business Days and not more than 30 Business Days after the
occurrence of the Fundamental Change (the “Fundamental Change Purchase
Date”) at a purchase price equal to 100% of the principal amount of the
Securities to be purchased, together with any accrued and unpaid interest to,
but excluding, the Fundamental Change Purchase Date (the “Fundamental Change Purchase
Price”), unless the Fundamental Change Purchase Date is after a Record
Date and on or prior to the related Interest Payment Date, in which case
interest accrued to the Interest Payment Date will be paid to Holders of the
Securities as of the preceding Record Date and the Fundamental Change Purchase
Price payable to any Holder surrendering such Holder’s Security for purchase
pursuant to this Article 4 shall be equal to the principal amount of
Securities subject to purchase and will not include any accrued and unpaid
interest. The Fundamental Change Purchase Price shall be payable in cash,
subject to satisfaction by or on behalf of any Holder of the requirements set
forth in subsection (c) of this Section 4.01. Notwithstanding
the foregoing, the Company may not repurchase the Securities upon the occurrence
of a Fundamental Change if the principal amount of the Securities has been
accelerated and such acceleration has not been rescinded on or prior to the
Fundamental Change Purchase Date.
A “Fundamental Change” shall mean
the occurrence of a Change in Control or a Termination of Trading.
A “Change in Control” shall be
deemed to have occurred if any of the following occurs after the date
hereof:
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|
(i)
|
any
“person” or “group” (as such terms are defined below) is or becomes the
“beneficial owner” (as defined below), directly or indirectly, of shares
of Voting Stock of the Company representing 50% or more of the total
voting power of all outstanding classes of Voting Stock of the Company or
has the power, directly or indirectly, to elect a majority of the members
of the Board of Directors;
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|
|
(ii)
|
the
Company consolidates with, enters into a binding share exchange with, or
merges with or into, another Person or the Company sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially
all of the assets of the Company, or any Person consolidates with, or
merges with or into, the Company, in any such event other than pursuant to
a transaction (A) in which the Persons that “beneficially owned” (as
defined below), directly or indirectly, shares of Voting Stock of the
Company immediately prior to such transaction “beneficially own” (as
defined below), directly or indirectly, shares of Voting Stock of the
Company representing at least a majority of the total voting power of all
outstanding classes of Voting Stock of the surviving or transferee Person,
with such Holders’ proportional voting power immediately after such
transaction vis-à-vis each other with respect to the securities they
receive in such transaction being in substantially the same proportions as
their respective voting power vis-à-vis each other immediately prior to
such transaction, or (B) which is effected solely to change the
jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of Common
Stock solely into shares of common stock of the surviving Person;
or
|
8
|
|
(iii)
|
the
first day on which a majority of the members of the board of directors of
the Company are not Continuing Directors;
or
|
|
|
(iv)
|
the
holders of capital stock of the Company approve any plan or proposal for
the liquidation or dissolution of the Company (whether or not otherwise in
compliance with the terms of this
Indenture).
|
For the
purpose of the definition of “Change in Control”,
(i) “person” and “group” have the meanings given such terms under
Section 13(d) and 14(d) of the Exchange Act or any successor
provision to either of the foregoing, and the term “group” includes any group
acting for the purpose of acquiring, holding, voting or disposing of securities
within the meaning of Rule 13d-5(b)(1) under the Exchange Act (or any
successor provision thereto), (ii) a “beneficial owner” shall be determined
in accordance with Rule 13d-3 under the Exchange Act, as in effect on the
date of this Indenture, except that the number of shares of Voting Stock of the
Company shall be deemed to include, in addition to all outstanding shares of
Voting Stock of the Company and Unissued Shares deemed to be held by the
“person” or “group” (as such terms are defined above) or other Person with
respect to which the Change in Control determination is being made, all Unissued
Shares deemed to be held by all other Persons, and (iii) the terms
“beneficially owned” and “beneficially own” shall have meanings correlative to
that of “beneficial owner.” The term “Unissued Shares” means shares
of Voting Stock not outstanding that are subject to options, warrants, rights to
purchase or conversion privileges exercisable within 60 days of the date of
determination of a Change in Control.
Notwithstanding
anything to the contrary set forth in this Section 4.01, Holders shall not
have the right to require the Company to purchase any Securities under clauses
(i) and (ii) above, and the Company shall not be required to deliver a
written notice of a Fundamental Change incidental thereto as a result of any
acquisition, consolidation, merger or binding share exchange or a sale,
assignment, conveyance, transfer, lease or other disposition if at least 90% of
the consideration (excluding cash payments for fractional shares and cash
payments pursuant to dissenters’ appraisal rights) paid for the Common Stock in
such transaction or transactions consists of shares of common stock traded on
the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ
Global Market (or any of their respective successors) (or which will be so
traded immediately following the transaction or transactions) and as a result of
such transaction or transactions the Securities become convertible into such
shares of such common stock.
9
A “Termination of Trading” means
that the Common Stock or other securities into which the Securities are
convertible are not approved for listing the New York Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Global Market (or any of their respective
successors).
If any
transaction in which the Common Stock is replaced by the securities of another
entity occurs, following completion of any related Make Whole Adjustment Event
Period and any related Fundamental Change Purchase Date, references to the
Company in the definitions of “Fundamental Change,” “Change of Control” and
“Termination of Trading” above shall apply to such other entity
instead.
(b) Within
10 Business Days after the occurrence of a Fundamental Change, the Company shall
mail a written notice of the Fundamental Change to the Trustee, Conversion
Agent, Registrar and Paying Agent and to each Holder (and to beneficial owners
as required by applicable law). The Company shall also issue a press
release announcing the occurrence of such Fundamental Change (and make such
press release available on the Company’s website). The notice shall
include the form of a Fundamental Change Purchase Notice to be completed by the
Holder and shall state:
|
|
(i)
|
briefly,
the events causing such Fundamental
Change;
|
|
|
(ii)
|
the
effective date of such Fundamental
Change;
|
|
|
(iii)
|
whether
the Fundamental Change constitutes a Make Whole Adjustment Event and, if
so, the Effective Date of such Make Whole Adjustment
Event;
|
|
|
(iv)
|
briefly,
the conversion rights of the Securities, the Conversion Price and any
adjustments thereto;
|
|
|
(v)
|
the
Holder’s right to require the Company to purchase the
Securities;
|
|
|
(vi)
|
the
Fundamental Change Purchase Date;
|
|
|
(vii)
|
the
Fundamental Change Purchase Price;
|
|
|
(viii)
|
the
date by which the Fundamental Change Purchase Notice pursuant to this
Section 4.01 must be given;
|
|
|
(ix)
|
that
Securities as to which a Fundamental Change Purchase Notice has been given
may be converted into Cash and Common Stock (if any) pursuant to
Article 6 of this Supplemental Indenture only to the extent that the
Fundamental Change Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;
|
10
|
|
(x)
|
the
procedures that the Holder must follow to exercise rights under this
Section 4.01;
|
|
|
(xi)
|
the
procedures for withdrawing a Fundamental Change Purchase Notice, including
a form of notice of withdrawal;
|
|
|
(xii)
|
that
the Holder must satisfy the requirements set forth in the Securities in
order to convert the Securities;
and
|
|
|
(xiii)
|
the
name and address of each Paying Agent and Conversion
Agent.
|
If any of
the Securities is in the form of a Global Security, then the Company shall
modify such notice to the extent necessary to accord with the procedures of the
Depository applicable to the repurchase of Global Securities.
(c) A
Holder may exercise its rights specified in subsection (a) of this
Section 4.01 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A hereto
and which may be delivered by letter, overnight courier, hand delivery,
facsimile transmission or in any other written form and, in the case of Global
Securities, may (or, if definitive Certificated Securities have not been issued,
shall) be delivered electronically or by other means in accordance with the
Depository’s customary procedures) of the exercise of such rights (a “Fundamental Change Purchase
Notice”) to any Paying Agent at any time during the period between the
date on which notice is given of the Fundamental Change and the close of
business on the Business Day immediately preceding the Fundamental Change
Purchase Date. The Fundamental Change Purchase Notice must specify the
Securities for which the purchase right is being exercised.
The
delivery of such Security to any Paying Agent (together with all necessary
endorsements) at the office of such Paying Agent shall be a condition to the
receipt by the Holder of the Fundamental Change Purchase Price
therefor.
The
Company shall purchase from the Holder thereof, pursuant to this
Section 4.01, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Security pursuant to
Section 4.01 through Section 4.04 also apply to the purchase of such
portion of such Security.
Notwithstanding
anything herein to the contrary, any Holder delivering to a Paying Agent the
Fundamental Change Purchase Notice contemplated by this subsection
(c) shall have the right to withdraw such Fundamental Change Purchase
Notice in whole or in a portion thereof that is a principal amount of $1,000 or
in an integral multiple thereof at any time prior to 5:00 p.m., New York
City time, on the Business Day immediately preceding the Fundamental Change
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 4.02.
A Paying
Agent shall promptly notify the Company of the receipt by it of any Fundamental
Change Purchase Notice or written withdrawal thereof.
11
Anything
herein to the contrary notwithstanding, in the case of Global Securities, any
Fundamental Change Purchase Notice may be delivered or withdrawn and such
Securities may be surrendered or delivered for purchase in accordance with the
Applicable Procedures as in effect from time to time.
Section
4.02 Effect
of Fundamental Change Purchase Notice.
Upon
receipt by any Paying Agent of the Fundamental Change Purchase Notice specified
in Section 4.01(c), the Holder of the Security in respect of which such
Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified below) thereafter be entitled
to receive the Fundamental Change Purchase Price with respect to such
Security. Such Fundamental Change Purchase Price shall be paid to such
Holder promptly following the later of (a) the Fundamental Change Purchase
Date with respect to such Security (provided the conditions in
Section 4.01(c) have been satisfied) and (b) the time of delivery
of such Security to a Paying Agent by the Holder thereof in the manner required
by Section 4.01(c). Securities in respect of which a Fundamental
Change Purchase Notice has been given by the Holder thereof may not be converted
into shares of Common Stock pursuant to Article 6 on or after the date of
the delivery of such Fundamental Change Purchase Notice unless such Fundamental
Change Purchase Notice has first been validly withdrawn.
A
Fundamental Change Purchase Notice may be withdrawn by means of a written notice
(which may be delivered by mail, overnight courier, hand delivery, facsimile
transmission or in any other written form and, in the case of Global Securities,
may be delivered electronically or by other means in accordance with the
Depository’s customary procedures) of withdrawal delivered by the Holder to a
Paying Agent at any time prior to 5:00 p.m., New York City time, on the
Business Day immediately preceding the Fundamental Change Purchase Date,
specifying the principal amount of the Security or portion thereof (which must
be a principal amount of $1,000 or an integral multiple of $1,000 in excess
thereof) with respect to which such notice of withdrawal is being
submitted.
Section
4.03 Deposit of Fundamental
Change Purchase Price.
On or
before 11:00 a.m., New York City time, on the Fundamental Change Purchase
Date, the Company shall deposit with the Paying Agent (other than the Company or
an Affiliate of the Company) an amount of money (in immediately available funds
if deposited on such Fundamental Change Purchase Date) sufficient to pay the
aggregate Fundamental Change Purchase Price of all the Securities or portions
thereof that are to be purchased as of such Fundamental Change Purchase
Date. The manner in which the deposit required by this Section 4.03
is made by the Company shall be at the option of the Company; provided that such deposit
shall be made in a manner such that the Paying Agent shall have immediately
available funds on the Fundamental Change Purchase Date.
If a
Paying Agent holds, in accordance with the terms hereof, money sufficient to pay
the Fundamental Change Purchase Price of any Security for which a Fundamental
Change Purchase Notice has been tendered and not withdrawn in accordance with
this Indenture, then, on the Fundamental Change Purchase Date, (i) such
Security will cease to be outstanding and interest will cease to accrue (whether
or not book-entry transfer of such Security is made or whether or not such
Security is delivered to the Paying Agent) and (ii) all other rights of the
Holder in respect thereof shall terminate (other than the right to receive the
Fundamental Change Purchase Price and previously accrued and unpaid interest as
aforesaid). The Company shall publicly announce the principal amount of
Securities purchased as a result of such Fundamental Change on or as soon as
practicable after the Fundamental Change Purchase Date.
12
To the
extent that the aggregate amount of cash deposited by the Company pursuant to
this Section 4.03 exceeds the aggregate Fundamental Change Purchase Price
of the Securities or portions thereof that the Company is obligated to purchase,
then promptly after the Fundamental Change Purchase Date the Paying Agent shall
return any such excess cash to the Company.
Section
4.04 Securities Purchased in
Part.
Any
Security that is to be purchased only in part shall be surrendered at the office
of a Paying Agent, and promptly after the Fundamental Change Purchase Date the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or Securities,
of such authorized denomination or denominations as may be requested by such
Holder, in aggregate principal amount equal to, and in exchange for, the portion
of the principal amount of the Security so surrendered that is not
purchased.
Section
4.05 Compliance with Securities
Laws Upon Purchase of Securities.
In
connection with any offer to purchase or repurchase Securities under
Section 4.01, the Company shall (a) comply with Rule 13e-4,
Rule 14e-1 and any other tender offer rules under the Exchange Act, to
the extent any such rules are applicable, (b) file a Schedule TO (or
any successor or similar schedule, form or report), if required, under the
Exchange Act and (c) otherwise comply with all federal and state securities
laws in connection with such offer to purchase or repurchase Securities, all so
as to permit the rights of the Holders and obligations of the Company under
Section 4.01 through Section 4.04 to be exercised in the time and in
the manner specified therein.
ARTICLE
5
PAYMENT
OF INTEREST AND MAKE WHOLE ADJUSTMENT EVENTS
Section
5.01 Interest
Payments.
(a) The
Company shall pay interest on the Securities at a rate of 5.00% per annum,
payable semi-annually in arrears on June 1 and December 1 of each year
(each, an “Interest Payment
Date”), or if any such day is not a Business Day, the immediately
following Business Day, commencing June 1, 2010. Interest on a Security
shall be paid to the Holder of such Security at the close of business on
May 15 or November 15 (each, a “Record Date”), as the case may
be, next preceding the related Interest Payment Date, and shall be computed on
the basis of a 360-day year comprised of twelve 30-day months. In the
event of the maturity, conversion, or purchase of a Security by the Company at
the option of the Holder, interest shall cease to accrue on such Security.
The Company shall pay interest on the Final Maturity Date to Holders of record
of a Security on the Record Date immediately preceding the Final Maturity Date
regardless of whether such Holders convert their Securities.
13
(b) Upon
conversion of a Security, (i) a Holder shall not receive any cash payment
of interest (unless such conversion occurs between a Record Date and the
Interest Payment Date to which it relates, in which case a Holder that was the
Holder on the Record Date will receive on the Interest Payment Date accrued and
unpaid interest) and the Conversion Rate shall not be adjusted to account for
accrued and unpaid interest and (ii) except as set forth in clause
(c) below, the Company’s delivery to a Holder of cash and shares, if any,
of Common Stock into which the Security is convertible shall be deemed to
satisfy its obligation to pay the principal amount of such Security and accrued
and unpaid interest, if any, to but not including the Conversion Date with
respect to such Security. Any accrued but unpaid interest shall be deemed
to be paid in full upon conversion, rather than cancelled, extinguished or
forfeited.
(c) Securities
surrendered for conversion by a Holder after the close of business on any Record
Date but prior to the corresponding Interest Payment Date must be accompanied by
payment of an amount equal to the interest that will be payable on the
Securities so converted on such Record Date; provided, however, that no
such payment need be made (1) if the Company has specified a Fundamental
Change Purchase Date that is after a Record Date and on or prior to the
corresponding Interest Payment Date, (2) with respect to any Securities
surrendered for conversion following the Record Date for the payment of interest
immediately preceding the Final Maturity Date or (3) only to the extent of
overdue interest, if any overdue interest exists at the time of conversion with
respect to such Securities.
Section
5.02 Increased Conversion Rate
Applicable to Certain Securities Surrendered in Connection with Make Whole
Adjustment Events.
(a) Notwithstanding
anything herein to the contrary, in the event a Holder elects to surrender its
Securities for conversion in accordance with Article 6, at any time from,
and including, the Effective Date of a Make Whole Adjustment Event to, and
including, the close of business on the Business Day immediately preceding the
related purchase date, or (in the case of a Make Whole Adjustment Event that
does not also constitute a Fundamental Change) the 40th Scheduled Trading Day
immediately following the Effective Date of such Make Whole Adjustment Event
(such period, the “Make Whole
Adjustment Event Period”), the Company will increase the Conversion Rate
for the Securities surrendered for conversion by a number of additional shares
of Common Stock (the “Additional Shares”), as
described in this Section 5.02.
As used
herein, a “Make Whole
Adjustment Event” means (i) any Change in Control as defined in
clauses (i), (ii) and (iv) of that term and (ii) any Termination of
Trading; provided,
however, that an
acquisition, consolidation, merger or binding share exchange or a sale,
assignment, conveyance, transfer, lease or other disposition otherwise
constituting a Change in Control will not constitute a Make Whole Adjustment
Event if at least 90% of the consideration (excluding cash payments for
fractional shares and cash payments pursuant to dissenters’ appraisal rights)
paid for the Common Stock in such transaction or transactions consists of shares
of common stock traded on the New York Stock Exchange, The NASDAQ Global Select
Market or The NASDAQ Global Market (or any of their respective successors) (or
which will be so traded immediately following the transaction or transactions)
and as a result of such transaction or transactions the Securities become
convertible into such shares of such common stock.
14
The
number of Additional Shares by which the Conversion Rate shall be increased for
conversions in connection with a Make Whole Adjustment Event shall be determined
by reference to the table below and is based on the date on which the Make Whole
Adjustment Event occurs or becomes effective (the “Effective Date”) and
(1) the price paid or deemed paid per share of Common Stock in the Change
in Control in the case of a Make Whole Adjustment Event described in clause
(ii) of the definition of Change in Control in Section 4.01, in the
event that the Common Stock is acquired for cash, or (2) the average of the
Closing Sale Price of the Common Stock over the five consecutive Trading Day
period ending on the Trading Day immediately preceding the Effective Date of
such other Make Whole Adjustment Event, in the case of any other Make Whole
Adjustment Event (such amount determined under the first and second clause of
this sentence, as applicable, the “Stock Price”).
|
Stock
Price
|
||||||||||||||
|
Effective
Date
|
$5.75
|
$6.00
|
$7.00
|
$8.00
|
$9.00
|
$10.00
|
$12.50
|
$15.00
|
$20.00
|
$25.00
|
$30.00
|
$35.00
|
$40.00
|
$50.00
|
|
November
25, 2009
|
34.7826
|
32.2331
|
24.5383
|
19.6825
|
16.3528
|
13.9077
|
9.8345
|
7.2562
|
4.1324
|
2.3568
|
1.2834
|
0.6293
|
0.2460
|
0.0000
|
|
December
1, 2010
|
34.7826
|
30.5958
|
22.2987
|
17.4003
|
14.2419
|
12.0290
|
8.4974
|
6.3107
|
3.6526
|
2.1136
|
1.1620
|
0.5707
|
0.2198
|
0.0000
|
|
December
1, 2011
|
34.7826
|
29.0892
|
19.7622
|
14.6870
|
11.6972
|
9.7556
|
6.8645
|
5.1327
|
3.0244
|
1.7818
|
0.9929
|
0.4886
|
0.1829
|
0.0000
|
|
December
1, 2012
|
34.7826
|
27.6963
|
16.6865
|
11.2945
|
8.5393
|
6.9719
|
4.8887
|
3.6859
|
2.2127
|
1.3328
|
0.7581
|
0.3762
|
0.1367
|
0.0000
|
|
December
1, 2013
|
34.7826
|
27.6080
|
12.1116
|
6.5736
|
4.4869
|
3.5983
|
2.5711
|
1.9575
|
1.1930
|
0.7342
|
0.4287
|
0.2150
|
0.0706
|
0.0000
|
|
December
1, 2014
|
34.7826
|
27.5197
|
3.7161
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
0.0000
|
If the
exact Stock Prices and Effective Dates are not set forth in the table,
then: (i) if the Stock Price is between two Stock Price amounts in
the table or the Effective Date is between two Effective Dates in the table, the
Additional Shares to be issued upon conversion of the Securities shall be
determined by a straight-line interpolation between the number of Additional
Shares set forth for the higher and lower Stock Price amounts and the two
Effective Dates in the table, based on a 365-day year; (ii) if the Stock
Price exceeds $50.00 per share, subject to adjustment as set forth herein, no
Additional Shares shall be issued upon conversion of the Securities; and
(iii) if the Stock Price is less than $5.75 per share, subject to
adjustment as set forth herein, no Additional Shares shall be issued upon
conversion of the Securities.
Notwithstanding
the foregoing, in no event will the total number of shares of Common Stock
issuable upon conversion exceed 173.8647 shares per $1,000 principal amount of
Securities, subject to adjustments for the same events for which the Conversion
Rate is adjusted and pursuant to the same adjustment factor applied in such
Conversion Rate adjustment pursuant to Section 6.06.
As soon
as practicable after the Company determines the anticipated Effective Date of
any proposed Make Whole Adjustment Event, the Company shall mail to each Holder,
the Trustee and the Conversion Agent written notice of, and shall use
commercially reasonable efforts to give such notice not more than 70 Scheduled
Trading Days nor less than 40 Scheduled Trading Days in advance of such
anticipated Effective Date. The Company shall also issue a press release
announcing the anticipated Effective Date (and make such press release available
on the Company’s website). Each such notice and press release shall also
state that in connection with such Make Whole Adjustment Event, the Company
shall increase, in accordance herewith, the Conversion Rate applicable to
Securities entitled to such increase as provided herein (along with a
description of how such increase shall be calculated and the time periods during
which Securities must be surrendered in order to be entitled to such
increase).
15
Section
5.03 Adjustments Relating to Make
Whole Adjustment Event.
Whenever
the Conversion Price shall be adjusted from time to time by the Company pursuant
to Section 6.06, each Stock Price set forth in the table under the row
titled “Stock Price” in the table in Section 5.02(a) shall be adjusted
in the same manner in which, at the same time and for the same events for which,
the Conversion Price is to be so adjusted. The Stock Prices in the table
in Section 5.02(a) will be adjusted by the same adjustment factor
applied to the Conversion Price pursuant to Section 6.06 and the number of
additional shares by which the Conversion Rate will be increased will be
adjusted by the inverse of that adjustment factor.
ARTICLE
6
CONVERSION
Section
6.01 Conversion
Privilege.
(a) Subject
to the further provisions of this Article 6 and paragraph 6 of the
Securities, a Holder of a Security may convert the principal amount of such
Security (or any portion thereof equal to $1,000 or any integral multiple of
$1,000 in excess thereof) into cash, shares of Common Stock or a combination
thereof, determined at the Company’s election, at any time until the close of
business on June 1, 2014, at the Conversion Price then in effect, if, during any
calendar quarter commencing after the date of original issuance of the
Securities, the Closing Sale Price of the Common Stock, for at least 20 Trading
Days in the period of 30 consecutive Trading Days ending on the last Trading Day
of the calendar quarter immediately preceding the calendar quarter in which the
conversion occurs, is more than 130% of the Conversion Price in effect on such
last Trading Day (the “Closing
Sale Price Condition”), subject to the additional exceptions provided in
Section 6.01(b).
Provisions
of this Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.
A
Security in respect of which a Holder has delivered a Fundamental Change
Purchase Notice pursuant to Section 4.01(c) exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if such Fundamental Change Purchase Notice is withdrawn by a written notice
of withdrawal delivered to a Paying Agent prior to 5:00 p.m., New York City
time, on the Business Day immediately preceding the Fundamental Change Purchase
Date in accordance with Section 4.02.
A Holder
of Securities is not entitled to any rights of a holder of Common Stock until
such Holder has converted its Securities and only to the extent such Securities
are deemed to have been converted into Common Stock pursuant to this
Article 6.
(b) Even
if the Closing Sale Price Condition is not satisfied,
16
|
|
(i)
|
if,
after any five consecutive Trading Day period in which the Trading Price
for the Securities for each such Trading Day was less than 98% of the
Closing Sale Price of the Common Stock on such date multiplied by the then
current Conversion Rate, a Holder may surrender Securities for conversion
at any time during the following 10 Trading Days. Upon request by
the Trustee or any Holder or beneficial owner of the Securities, the
Conversion Agent shall, on behalf of the Company, determine if the
Securities are convertible pursuant to this
Section 6.01(b)(i) and will notify the Company and the Trustee
accordingly. The Conversion Agent shall have no obligation to
determine the Trading Price of the Securities unless the Company requests
such determination in writing, the Company has no obligation to make such
request unless a Holder provides the Company and the Trustee with
reasonable evidence that the Trading Price of the Securities on any
Trading Day would be less than 98% of the product of the then-current
Conversion Rate times the Closing Sale Price of the Common Stock on such
date. At such time, the Company shall instruct the Conversion Agent
to determine the Trading Price of the Securities beginning on such Trading
Day and on each of the next four Trading
Days;
|
|
|
(ii)
|
in
the event that the Company declares a dividend or distribution to all or
substantially all holders of Common Stock
of:
|
(a) any
rights, options or warrants entitling them to subscribe for or purchase, for a
period expiring within 60 days, shares of Common Stock at a price per share less
than the Closing Sale Price on the record date for such dividend or
distribution, or
(b) cash,
debt securities (or other evidences of indebtedness) or other assets (excluding
dividends or distributions for which Conversion Price adjustment is required to
be made under Section 6.06(a) or Section 6.06(b) of this
Supplemental Indenture), where the fair market value of such dividend or
distribution per share of Common Stock, as determined in this Indenture,
together with all other such dividends or distributions within the preceding
twelve months, has a per share value exceeding 10% of the Closing Sale Price of
the Common Stock as of the Trading Day immediately preceding the date of
declaration for such dividend or distribution, then, in
each case of clause (a) and (b), the Securities may be surrendered for
conversion beginning on the date the Company gives notice to the Holders of such
right, which notice shall be given not less than 40 Scheduled Trading Days prior
to the Ex-Dividend Date for such dividend or distribution, until the earlier of
the close of business on the Business Day immediately preceding the Ex-Dividend
Date or until the Company announces that such distribution will not take
place;
17
|
|
(iii)
|
upon
the occurrence of a Fundamental Change with respect to the Company, the
Securities may be surrendered for conversion at any time from or after the
effective time of the Fundamental Change until the close of business on
the Business Day immediately preceding the related Fundamental Change
Purchase Date, or, if there is no such Fundamental Change Purchase Date,
the 40th Scheduled Trading Day immediately following the effective date of
the Fundamental Change;
|
|
|
(iv)
|
if
the Company is a party to a consolidation, merger or binding share
exchange or a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of its property and assets that
does not also constitute a Fundamental Change (including any event that
would be a Fundamental Change but for the existence of an exception
specified in the paragraph immediately preceding the definition of
“Termination of Trading” in Section 4.01 hereof), in each case
pursuant to which the Common Stock would be converted into cash,
securities or other property, the Securities may be surrendered conversion
at any time from or after the effective date of such transaction as
announced by the Company (with the Company, to the extent practicable,
giving such announcement at least 40 Scheduled Trading Days but not more
than 70 Scheduled Trading Days prior to such anticipated effective date),
until the close of business on the 40th Scheduled Trading Day following
the effective date of such transaction;
and
|
|
|
(v)
|
at
any time after June 1, 2014 and until the close of business on the
Business Day immediately prior to the Final Maturity Date, the Securities
may be surrendered for conversion regardless of whether the Closing Sale
Price Condition or any of the foregoing conditions has been
satisfied.
|
Section
6.02 Conversion
Procedure.
The right
to convert any Security may be exercised, (a) if such Security is
represented by a Global Security, by book-entry transfer to the Conversion Agent
through the facilities of the Depository in accordance with the applicable
procedures of the Depository, and, if required, by payment of any tax or duty,
in accordance with Section 6.04, that may be payable in respect of any
transfer involving the issue or delivery of the Common Stock in the name of
Person other than the Holder of the Security, or (b) if such Security is
represented by a Certificated Security, by delivery of such Security at the
specified office of the Conversion Agent, accompanied by: (i) a
completed and duly signed conversion notice, in the form as set forth on the
reverse of Security attached hereto as Exhibit A (a
“Conversion Notice”);
(ii) if such Certificated Security has been lost, stolen, destroyed or
mutilated, a notice to the Registrar in accordance with Section 2.08 of the
Base Indenture regarding the loss, theft, destruction or mutilation of the
Security; (iii) appropriate endorsements and transfer documents if required
by the Conversion Agent; and (iv) payment of any tax or duty, in accordance
with Section 6.04, which may be payable in respect of any transfer
involving the issue or delivery of the Common Stock in the name of a Person
other than the Holder of the Security. The “Conversion Date” shall be the
Business Day on which the Holder satisfies all of the requirements set forth in
the immediately preceding sentence; provided, however, if a Holder
surrenders for conversion a Security at any time after the 30th Scheduled
Trading Day prior to the Final Maturity Date, the Conversion Date shall be
deemed to be the 30th Trading Day immediately preceding such Security’s Final
Maturity Date. On the Settlement Date, subject to Section 6.05, the
Company shall deliver to the Holder through a Conversion Agent a certificate for
the number of whole shares of Common Stock issuable upon the conversion and cash
in an amount payable upon conversion (including cash in lieu of any fractional
shares pursuant to Section 6.03).
18
Securities
that are validly surrendered for conversion in accordance with the terms of this
Indenture will be deemed to have been converted immediately prior to the close
of business on the Conversion Date. The person in whose name the
Common Stock certificate is registered shall be deemed to be a stockholder of
record as of the last Trading Day of the related Conversion Period; provided, however, that if the related
Conversion Date or such last Trading Day of the Conversion Period occurs on any
date when the stock transfer books of the Company shall be closed, such
occurrence shall not be effective to constitute the person or persons entitled
to receive any such shares of Common Stock due upon conversion as the record
holder or holders of such shares of Common Stock on such date, but such
occurrence shall be effective to constitute the person or persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open. Upon conversion of Securities, such person
shall no longer be a Holder.
Upon
surrender of a Security that is converted in part, the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder, a new Security
equal in principal amount to the unconverted portion of the Security
surrendered.
No
Conversion Notice with respect to any Securities may be given by a Holder
thereof if such Holder has also delivered a Fundamental Change Purchase Notice
to the Company in respect of such Securities and not validly withdrawn such
Fundamental Change Purchase Notice in accordance with Section 4.02, unless
the Company defaults in the payment of the Fundamental Change Purchase
Price.
Except as
provided below, the Company shall pay or deliver the cash, shares of Common
Stock, if any, or combination thereof, payable or deliverable, as the case may
be, upon conversion of a Security (the “Conversion Obligation”),
through the Conversion Agent on the Settlement Date; provided, that if prior to
the relevant Conversion Date, the Common Stock has been replaced by Reference
Property consisting solely of cash, pursuant to Section 5.12, the Company
shall pay such cash on the third Trading Day immediately following the relevant
Conversion Date. Notwithstanding the foregoing, if any information
required to calculate the Conversion Obligation is not available as of the
applicable Settlement Date, the Company will deliver the Conversion Obligation
on the third Trading Day after the earliest Trading Day on which such
calculation can be made (but in no event later than May 31, 2015). If
application of the proviso to the first sentence of this paragraph would result
in settlement of a conversion during the 10 Trading Days immediately following
the effective date of a Fundamental Change, the Settlement Date will instead be
the 10th Trading Day following the relevant effective date. If any shares of
Common Stock are due to a converting Holder, the Company shall issue or cause to
be issued, and deliver to the Conversion Agent or to such Holder, or such
Holder’s nominee or nominees, certificates or a book-entry transfer through the
Depository for the number of full shares of Common Stock to which such Holder
shall be entitled in satisfaction of such Conversion Obligation.
19
Section
6.03 Fractional
Shares.
The
Company will not issue fractional shares of Common Stock upon conversion of a
Security. Instead, the Company will pay cash in lieu of fractional shares
based on the Daily VWAP of the Common Stock on the relevant Conversion Date if
the Company has elected to satisfy its Conversion Obligation solely in shares of
Common Stock or based on the Daily VWAP of the Common Stock on the last Trading
Day of the relevant Conversion Period in the case of any other Settlement
Method. Whether fractional shares are issuable upon a conversion will be
determined on the basis of the aggregate principal amount of Securities that the
Holder is then converting into cash and shares of Common Stock, if any, and the
aggregate number of shares, if any, of Common Stock issuable upon such
conversion.
Section
6.04 Taxes
on Conversion.
If a
Holder converts a Security, the Company shall pay any documentary, stamp or
similar issue or transfer tax due on the issue of shares of Common Stock upon
such conversion; provided, however, that the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder’s name. The Conversion Agent may
refuse to deliver the certificate representing the Common Stock being issued in
a name other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder’s name. Nothing herein shall preclude any
tax withholding required by law or regulation.
Section
6.05 Settlement Upon
Conversion.
(a) Subject
to Section 6.01, a Holder upon conversion will receive, in respect of each
$1,000 aggregate principal amount of such Holder’s Securities being converted,
cash, shares of Common Stock or a combination thereof at the Company’s
election. All conversions after June 1, 2014 will be settled in the
same relative proportions of cash and shares of Common Stock (the “Settlement
Method”). If the Company has not delivered a notice to the
Conversion Agent and Holders of its election of Settlement Method on or prior to
June 1, 2014, the Company will, with respect to any conversions thereafter, be
deemed to have elected to deliver, pursuant to 6.05(b)(iii) below, cash or cash
and shares of Common Stock, as the case may be, in respect of its Conversion
Obligation and the Specified Dollar Amount will be equal to
$1,000. On or prior to June 1, 2014, the Company will use the same
Settlement Method for all conversions occurring on any given Conversion
Date. Except for any conversions that occur after June 1, 2014, the
Company will not have any obligation to use the same Settlement Method with
respect to conversions that occur on different Conversion Dates. If
the Company elects a particular settlement method in connection with any
conversion on or prior to June 1, 2014, it will inform Holders converting at
that time through the Conversion Agent of the Settlement Method the Company has
selected (including the Specified Dollar Amount, if applicable), no later than
the second Business Day immediately following the related Conversion
Date. If the Company does not make such an election, it will be
deemed to have elected to deliver, pursuant to Section 6.05(b)(iii) below, cash
or a combination of cash and shares of the Common Stock, as the case may be, in
respect of its Conversion Obligation and the Specified Dollar Amount will be
equal to $1,000 for each such Conversion Date. The Company may, at
its option, for purposes of the Daily Settlement Amount irrevocably elect a
particular Specified Dollar Amount for all subsequent conversions by notice of
such election to the Holders. As of the date of this Indenture, it is
the Company’s policy and intent to settle the principal amount of the Securities
in cash.
20
(b) The
Conversion Obligation deliverable on the Settlement Date will be calculated as
follows:
|
|
(i)
|
If
the Company elects to satisfy its Conversion Obligation solely in shares
of Common Stock, the Company will deliver to the converting Holder a
number of shares of Common Stock equal to (1) the aggregate principal
amount of Securities to be converted divided by $1,000, multiplied by (2)
the applicable Conversion Rate;
|
|
|
(ii)
|
If
the Company elects to satisfy its Conversion Obligation solely in cash,
the Company will deliver to the converting Holder in respect of each
$1,000 principal amount of Securities being converted cash in an amount
equal to the sum of the Daily Conversion Values for each of the 25
consecutive Trading Days during the related Conversion Period;
and
|
|
|
(iii)
|
If
the Company elects to satisfy its Conversion Obligation through the
delivery of a Combination of cash and Common Stock, it will deliver to the
converting Holder in respect of each $1,000 principal amount of Securities
being converted an amount of cash and shares of Common Stock, if any,
equal to the sum of the Daily Settlement Amounts for each of the 25
consecutive Trading Days during the related Conversion
Period.
|
“Conversion Period”, with
respect to any Security, means the 25 consecutive Trading Day period beginning
on and including the third Trading Day immediately following the related
Conversion Date, except that if a Holder surrenders a Security for conversion at
any time after the 30th Scheduled Trading Day prior to the Final Maturity Date
and until the close of business on the Business Day immediately preceding the
Final Maturity Date, then (i) the Holder will be deemed to have surrendered
such Security as of the 30th Trading Day immediately preceding the Final
Maturity Date, (ii) the Conversion Period for such Security will commence
on the 27th Trading Day immediately preceding the Final Maturity Date, and
(iii) the Settlement Date for the conversion of such Security will be the
Final Maturity Date (assuming no delay in settlement due to Market Disruption
Events).
“Daily Conversion Value” means,
for each of the 25 consecutive Trading Days during the Conversion Period, for
each $1,000 in aggregate principal amount of Securities, one-twenty-fifth
(1/25th) of the product of (i) the applicable Conversion Rate and
(ii) the Daily VWAP of the Common Stock (or other Reference Property, if
applicable) on such Trading Day.
21
“Daily Settlement Amount,” for
each of the 25 consecutive Trading Days during the relevant Conversion Period,
for each $1,000 aggregate principal amount of Securities validly surrendered for
conversion will consist of:
|
|
(i)
|
if
(x) the Daily Conversion Value for such Trading Day for each $1,000
aggregate principal amount of Securities exceeds (y) the dollar amount in
cash per Security to be received upon conversion as specified in the
notice regarding the Company’s chosen settlement method (the “Specified Dollar
Amount”), if any divided by 25 (such quotient being referred to as
the “Daily Measurement
Value”), the sum of:
|
(a) a
cash payment of the Daily Measurement Value; and
|
|
(b)
|
a
number of shares (the “Daily Net Share Settlement
Value”) equal to (1) the difference between the Daily Conversion
Value and the Daily Measurement Value, divided by (2) the Daily VWAP of
the Common Stock for such Trading Day;
or
|
|
|
(ii)
|
if
the Daily Conversion Value for such Trading Day for each $1,000 aggregate
principal amount of Securities is less than or equal to the Daily
Measurement Value, a cash payment equal to the Daily Conversion
Value.
|
“Daily VWAP” for the Common
Stock (or any security that is part of the Reference Property into which the
Common Stock has been converted, if applicable), in respect of any Trading Day,
means the per share volume-weighted average price of the Common Stock (or other
security) on The NASDAQ Global Select Market (or other principal exchange on
which such security is then listed) as displayed under the heading “Bloomberg
VWAP” on Bloomberg page “DRYS<equity>AQR” (or its equivalent
successor if such page is not available, or the Bloomberg page for any
security that is part of the Reference Property into which the Common Stock has
been converted, if applicable) in respect of the period from the scheduled
opening 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 (or the Reference Property is not a security), the market value of
one share of the Common Stock (or other Reference Property) on such Trading Day
as determined by the Board of Directors in a commercially reasonable manner,
using a volume-weighted average price method (unless the Reference Property is
not a security), provided
that in making a volume-weighted average pricing determination, the Board
of Directors may rely conclusively on the determination of Daily VWAP for such
Trading Day made by an independent nationally recognized securities dealer
selected by the Board of Directors), and will be determined without regard to
after hours trading or any other trading outside of the regular trading
session.
(c) The
Daily Settlement Amounts (if applicable) and the Daily Conversion Values (if
applicable) shall be determined by the Company promptly following the last day
of the Conversion Period. Promptly after such determination of the Daily
Settlement Amounts or the Daily Conversion Values, as the case may be, and the
amount of cash deliverable in lieu of fractional shares (if any), the Company
shall notify the Trustee and the Conversion Agent of the Daily Settlement
Amounts or the Daily Conversion Values, as the case may be, and the amount of
cash deliverable in lieu of fractional shares of Common Stock. The Trustee
and the Conversion Agent shall have no responsibility for any such
determination.
22
(d) The
Company shall, prior to the issuance of any Securities hereunder, and from time
to time as may be necessary, reserve at all times and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, a sufficient
number of shares of Common Stock deliverable upon conversion of all of the
Securities.
(e) All
shares of Common Stock that may be issued upon conversion of the Securities
shall be newly issued shares, shall be duly authorized, validly issued, fully
paid and nonassessable and shall be free of any preemptive rights and free of
any lien or adverse claim.
(f) The
Company shall endeavor to comply with all applicable securities laws regulating
the offer and delivery of any Common Stock upon conversion of Securities and
shall list or cause to have quoted such shares of Common Stock on each national
securities exchange, including The NASDAQ Global Select Market, or
over-the-counter market or such other market on which the Common Stock is then
listed or quoted; provided, however, that if the rules of such automated
quotation system or exchange permit the Company to defer the listing of such
Common Stock until the first conversion of the Securities into Common Stock in
accordance with the provisions of this Indenture, the Company covenants to list
such Common Stock issuable upon conversion of the Securities in accordance with
the requirements of such automated quotation system or exchange at such time.
Any Common Stock issued upon conversion of a Security hereunder which at the
time of conversion was a “restricted security” (as defined in Rule 144
under the Securities Act) shall also be a restricted security.
(g) Notwithstanding
anything herein to the contrary, nothing herein shall give to any Holder any
rights as a creditor in respect of its right to conversion.
Section
6.06 Adjustment of Conversion
Price.
The
conversion price per share of Common Stock as stated in paragraph 6 of the
Securities (the “Conversion
Price”) shall be adjusted from time to time by the Company as
follows:
(a) If
the Company issues solely shares of Common Stock as a dividend or distribution
on all or substantially all of the shares of Common Stock, or if the Company
subdivides or combines the outstanding shares of Common Stock, the applicable
Conversion Price will be adjusted based on the following formula:
|
CP
= CP0 ×
|
OS0
|
||
|
OS
|
where
|
CP0
|
=
|
the
Conversion Price in effect immediately prior to the open of business on
the Ex-Dividend Date for such dividend or distribution, or immediately
prior to the open of business on the effective date of such subdivision or
combination of Common Stock, as the case may
be;
|
23
|
CP
|
=
|
the
Conversion Price in effect immediately after the open of business on the
Ex-Dividend Date for such dividend or distribution, or immediately after
the open of business on the effective date of such subdivision or
combination of Common Stock, as the case may be;
|
|
OS0
|
=
|
the
number of shares of Common Stock outstanding immediately prior to the open
of business on the Ex-Dividend Date for such dividend or distribution, or
immediately prior to the open of business on the effective date of such
subdivision or combination of Common Stock, as the case may be;
and
|
|
OS
|
=
|
the
number of shares of Common Stock outstanding immediately after such
dividend or distribution, or immediately after the effective date of such
subdivision or combination of Common Stock, as the case may
be.
|
Such
adjustment shall become effective immediately after the opening of business on
the Ex-Dividend Date for such dividend or distribution, or the effective date
for such subdivision or combination of Common Stock. If any dividend or
distribution of the type described in this Section 6.06(a) is declared
but not so paid or made, or the outstanding shares of Common Stock are not split
or combined, as the case may be, the Conversion Price shall be immediately
readjusted, effective as of the date the Board of Directors determines not to
pay such dividend or distribution, or subdivide or combine the outstanding
shares of Common Stock, as the case may be, to the Conversion Price that would
then be in effect if such dividend, distribution, subdivision or combination of
Common Stock had not been declared or announced.
(b) If
the Company distributes 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 from the record date for such distribution to subscribe for or
purchase shares of the Common Stock (or securities convertible into Common
Stock), at a price per share (or a conversion price per share) less than the
average of the Closing Sale Prices of the Common Stock for the 10 consecutive
Trading Day period ending on, and including, the Trading Day immediately
preceding the Ex-Dividend Date for such distribution, the Conversion Price shall
be decreased based on the following formula:
|
CP
= CP0 ×
|
OS0
+ Y
|
||
|
OS0
+ X
|
where
|
CP0
|
=
|
the
Conversion Price in effect immediately prior to the open of business on
the Ex-Dividend Date for such distribution;
|
|
CP
|
=
|
the
Conversion Price in effect immediately after the open of business on the
Ex-Dividend Date for such distribution;
|
24
|
OS0
|
=
|
the
number of shares of the Common Stock that are outstanding immediately
prior to the open of business on the Ex-Dividend Date for such
distribution;
|
|
X
|
=
|
the
total number of shares of the Common Stock issuable pursuant to such
rights, options or warrants; and
|
|
Y
|
=
|
the
number of shares of the Common Stock equal to the aggregate price payable
to exercise such rights, options or warrants, divided by the average
of the Closing Sale Prices of Common Stock over the 10 consecutive Trading
Day period ending on, and including, the Trading Day immediately preceding
the Ex-Dividend Date relating to such
distribution.
|
Such
adjustment shall be successively made whenever any such rights, options or
warrants are distributed and shall become effective immediately after the
opening of business on the Ex-Dividend Date for such distribution. To the
extent that shares of the Common Stock are not delivered after the expiration of
such rights, options or warrants, the Conversion Price shall be readjusted to
the Conversion Price that would then be in effect had the adjustments made upon
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 Price
shall again be adjusted to be the Conversion Price that would then be in effect
if such Ex-Dividend Date for such distribution had not been fixed.
For
purposes of this Section 6.06(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 the average of the Closing Sale Prices of the
Common Stock for each Trading Day in the applicable 10-consecutive Trading Day
period, there shall be taken into account any consideration received by the
Company for such rights, options or warrants and any amount payable on exercise
or conversion thereof, the value of such consideration, if other than cash, to
be determined by the Board of Directors. In no event shall the Conversion
Price be increased pursuant to this Section 6.06(b).
(c) If
the Company shall distribute shares of its Capital Stock, evidences of its
indebtedness or other of its assets or property to all or substantially all
holders of its Common Stock other than (i) dividends or distributions
(including subdivision of Common Stock) covered by Section 6.06(a) or
Section 6.06(b), (ii) dividends or distributions paid exclusively in
cash covered by Section 6.06(d), (iii) Spin-Offs to which the
provisions set forth below in this Section 6.06(c) shall apply, and
(iv) distributions of rights to all or substantially all holders of Common
Stock pursuant to the adoption of a shareholder rights plan, then, in each such
case the Conversion Price shall be decreased based on the following
formula:
|
CP
= CP0 ×
|
SP0 -
FMV
|
||
|
SP0
|
25
where
|
CP0
|
=
|
the
Conversion Price in effect immediately prior to the open of business on
the Ex-Dividend Date for such distribution;
|
|
CP
|
=
|
the
Conversion Price in effect immediately after the open of business on the
Ex-Dividend Date for such distribution.
|
|
SP0
|
=
|
the
average of the Closing Sale Prices of the Common Stock over the 10
consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the Ex-Dividend Date for such distribution;
and
|
|
FMV
|
=
|
the
fair market value (as determined by the Board of Directors) of the shares
of Capital Stock, evidences of indebtedness, assets or property
distributed with respect to each outstanding share of the Common Stock as
of the open of business on the Ex-Dividend Date for such
distribution.
|
If the
then-fair market value of the portion of the shares of Capital Stock, evidences
of indebtedness or other assets or property so distributed applicable to one
share of Common Stock is equal to or greater than the average of the Closing
Sale Prices of the Common Stock over the 10 consecutive Trading Day period
ending on the Trading Day immediately preceding the Ex-Dividend Date for such
distribution, in lieu of the foregoing adjustment, adequate provisions shall be
made so that each Holder of a Security shall have the right to receive on
conversion in respect of each Security held by such Holder, in addition to the
number of shares of Common Stock to which such Holder is entitled to receive,
the amount and kind of securities and assets such Holder would have received had
such Holder already owned a number of shares of Common Stock equal to the
Conversion Rate immediately prior to the record date for the distribution of the
securities or assets.
With
respect to an adjustment pursuant to this Section 6.06(c) where there
has been a dividend or other distribution on the Common Stock of shares of
Capital Stock of any class or series, or similar equity interest, of or relating
to a Subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion
Price will be decreased based on the following formula:
|
CP
= CP0 ×
|
MP0
|
||
|
FMV
+ MP0
|
where
|
CP0
|
=
|
the
Conversion Price in effect immediately prior to the open of business on
the Ex-Dividend Date for the Spin-Off;
|
|
CP
|
=
|
the
Conversion Price in effect immediately after the open of business on the
Ex-Dividend Date for the Spin-Off;
|
|
FMV
|
=
|
the
average of the Closing Sale Prices of the Capital Stock or similar equity
interests distributed to holders of the Common Stock applicable to one
share of the Common Stock over the first 10 consecutive Trading Day period
immediately following, and including, the Ex-Dividend Date for the
Spin-Off (such period, the “Valuation Period”),
and
|
26
|
MP0
|
=
|
the
average of the Closing Sale Prices of the Common Stock over the Valuation
Period.
|
The
adjustment to the Conversion Price under the preceding paragraph of this
Section 6.06(c) shall be made immediately after the open of business
on the day after the last day of the Valuation Period, but shall become
effective as of the open of business on the Ex-Dividend Date for the
Spin-Off. If the Ex-Dividend Date for the Spin-Off is less than 10 Trading
Days prior to, and including, the end of the Conversion Period in respect of any
conversion, references within this Section 6.06(c) to 10 Trading Days
shall be deemed replaced, for purposes of calculating the affected daily
Conversion Prices in respect of that conversion, with such lesser number of
Trading Days as have elapsed from, and including, the Ex-Dividend Date for the
Spin-Off to, and including, the last Trading Day of such Conversion
Period. For purposes of determining the Conversion Price, in respect of
any conversion during the 10 Trading Days commencing on the Ex-Dividend Date of
any Spin-Off, references in the portion of this Section 6.06(c) related to
Spin-Offs to 10 Trading Days shall be deemed replaced with such lesser number of
Trading Days as have elapsed from, and including, the Ex-Dividend Date for such
Spin-Off to, but excluding, the Conversion Date for such
conversion.
For
purposes of this Section 6.06(c), Section 6.06(a) and
Section 6.06(b), any dividend or distribution to which this Section
6.06(c) is applicable that also includes shares of Common Stock, or rights,
options or warrants to subscribe for or purchase shares of Common Stock to which
Section 6.06(a) or Section 6.06(b) applies (or both), shall
be deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, assets or shares of Capital Stock other than such shares of Common
Stock or rights, options or warrants to which this Section 6.06(c) applies
(and any Conversion Price adjustment required by this Section 6.06(c) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock
or such rights, options or warrants (and any further Conversion Price adjustment
required by Section 6.06(a) and Section 6.06(b) with respect
to such dividend or distribution shall then be made), except (A) the
Ex-Dividend Date of such dividend or distribution shall be substituted as “the
Ex-Dividend Date,” “the Ex-Dividend Date relating to such distribution of such
rights, options or warrants” and “the Ex-Dividend Date for such distribution”
within the meaning of Section 6.06(a) and
Section 6.06(b) and (B) any shares of Common Stock included in
such dividend or distribution shall not be deemed “outstanding immediately prior
to the Ex-Dividend Date for such dividend or distribution, or the effective date
of such share split or share combination, as the case may be” within the meaning
of Section 6.06(a) or “outstanding immediately prior to the
Ex-Dividend Date for such dividend or distribution” within the meaning of
Section 6.06(b).
In no
event shall the Conversion Price be increased pursuant to this Section
6.06(c).
27
(d) If
the Company makes or pays any cash dividend or distribution to all or
substantially all holders of its outstanding Common Stock (other than (i)
distributions pursuant to Section 6.06(e) and (ii) any dividend or
distribution in connection with the liquidation, dissolution or winding up on
the Company), the applicable Conversion Price shall be decreased based on the
following formula:
|
CP
= CP0 ×
|
SP0 -
C
|
||
|
SP0
|
where
|
CP0
|
=
|
the
Conversion Price in effect immediately prior to the open of business on
the Ex-Dividend Date for such dividend or distribution;
|
|
CP
|
=
|
the
Conversion Rate in effect immediately after the open of business on the
Ex-Dividend Date for such dividend or distribution;
|
|
SP0
|
=
|
the
average of the Closing 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 dividend or
distribution; and
|
|
C
|
=
|
the
amount in cash per share the Company pays or distributes to holders of its
Common Stock.
|
If any
dividend or distribution described in this Section 6.06(d) is declared but
not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such dividend or distribution
had not been declared.
For the
avoidance of doubt, for purposes of this Section 6.06(d), in the event of any
reclassification of the Common Stock, as a result of which the Securities become
convertible into more than one class of Common Stock, if an adjustment to the
Conversion Price is required pursuant to this Section 6.06(d), references in
this Section to one share of Common Stock or Closing Sale Prices of one
share of Common Stock shall be deemed to refer to a unit or to the price of a
unit consisting of the number of shares of each class of Common Stock into which
the Securities are then convertible equal to the number of shares of such class
issued in respect of one share of Common Stock in such reclassification.
The above provisions of this paragraph shall similarly apply to successive
reclassifications.
In no
event shall the Conversion Price be increased pursuant to this Section
6.06(d).
(e) If
the Company or any of its Subsidiaries makes a payment in respect of a tender
offer or exchange offer for the Common Stock and if the cash and value of any
other consideration included in the payment per share of the Common Stock
exceeds the average of the Closing Sale Prices of the Common Stock over the 10
consecutive Trading Day period commencing on, and including, the Trading Day
next succeeding the last date on which tenders or exchanges may be made pursuant
to such tender or exchange offer (the “Expiration Date”), the
Conversion Price shall be decreased based on the following formula:
28
|
CP
= CP0 ×
|
OS0 x
SP
|
||
|
AC
+ (OS x SP)
|
where
|
CP0
|
=
|
the
Conversion Price in effect immediately prior to the open of business on
the Trading Day next succeeding the Expiration Date;
|
|
CP
|
=
|
the
Conversion Price in effect immediately after the open of business on the
Trading Day next succeeding the Expiration Date;
|
|
AC
|
=
|
the
aggregate value of all cash and any other consideration (as determined by
the Board of Directors) paid or payable for shares of Common Stock
purchased in such tender or exchange offer;
|
|
OS0
|
=
|
the
number of shares of Common Stock outstanding immediately prior to the time
(the “Expiration
Time”) such tender or exchange offer expires (prior to giving
effect to such tender offer or exchange offer);
|
|
OS
|
=
|
the
number of shares of Common Stock outstanding immediately after the
Expiration Time (after giving effect to such tender offer or exchange
offer); and
|
|
SP
|
=
|
the
average of the Closing Sale Prices of Common Stock over the 10 consecutive
Trading Day period commencing on, and including, the Trading Day next
succeeding the Expiration Date.
|
Such
adjustment under this Section 6.06(e) shall become effective at the opening
of business on the Trading Day next succeeding the Expiration Date. If the
Trading Day next succeeding the Expiration Date is less than 10 Trading Days
prior to, and including, the end of the Conversion Period in respect of any
conversion, references within this Section 6.06(e) to 10 Trading Days shall
be deemed replaced, for purposes of calculating the affected daily Conversion
Prices in respect of that conversion, with such lesser number of Trading Days as
have elapsed from, and including, the Trading Day next succeeding the Expiration
Date to, and including, the last Trading Day of such Conversion Period.
For purposes of determining the Conversion Price, in respect of any conversion
during the 10 Trading Days commencing on the Trading Day next succeeding the
Expiration Date, references within this Section 6.06(e) to 10 Trading Days
shall be deemed replaced with such lesser number of Trading Days as have elapsed
from, and including, the Trading Day next succeeding the Expiration Date to, but
excluding, the Conversion Date for such conversion. If the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any or all
or any portion of such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such tender or exchange offer had not been made or had been
made only in respect of the purchases that had been effected. In no event
shall the Conversion Price be increased pursuant to this Section
6.06(e).
29
(f) Notwithstanding
this Section 6.06 or any other provision of this Indenture or the Securities, if
any Conversion Price adjustment becomes effective, or any Ex-Dividend Date for
any issuance, dividend or distribution (relating to a required Conversion Price
adjustment) occurs, during the period beginning on, and including, the open of
business on a Conversion Date and ending on, and including, the close of
business on the last Trading Day of a related Conversion Period, the Board of
Directors shall make adjustments to the Conversion Price and the amount of cash
or number of shares of Common Stock issuable upon conversion of the Securities,
as the case may be, as are necessary or appropriate to effect the intent of this
Section 6.06 and the other provisions of this Article 6 and to avoid unjust
or inequitable results, as determined in good faith by the Board of
Directors. Any adjustment made pursuant to this Section 6.06(f) shall
apply in lieu of the adjustment or other term that would otherwise be
applicable.
(g) If,
in respect of any Trading Day within the Conversion Period for a converted
Security:
|
|
(i)
|
the
Company elects to satisfy its Conversion Obligation through delivery of a
combination of cash and Common Stock, and shares of Common Stock are
deliverable to settle the Daily Net Share Settlement Value for a given
Trading Day within the Conversion Period applicable to the Securities
converted by a Holder;
|
|
|
(ii)
|
any
event that requires an adjustment to the Conversion Price under any of
clauses (a), (b), (c), (d) and (e) of this Section 6.06 has not
resulted in an adjustment to the Conversion Price as of such Trading Day;
and
|
|
|
(iii)
|
the
shares of Common Stock the Holder of such Security shall receive in
respect of such Trading Day are not entitled to participate in the
distribution or transaction giving rise to such adjustment event because,
pursuant to the terms of the second paragraph of Section 6.02, such
shares were not held by such Holder on the record date corresponding to
such distribution or transaction,
|
then the
Company will adjust the number of shares of Common Stock deliverable with
respect to the Daily Settlement Amount for such Trading Day to reflect the
relevant distribution or transaction.
(h) If:
|
|
(i)
|
the
Company elects to satisfy its Conversion Obligation solely in shares of
Common Stock,
|
30
|
|
(ii)
|
any
event that requires an adjustment to the Conversion Price under any of
clauses (a), (b), (c), (d) and (e) of this Section 6.06 has not
yet resulted in an adjustment to the Conversion Price on the Conversion
Date, and
|
|
|
(iii)
|
the
shares of Common Stock the Holder of such Security shall receive on the
Settlement Date are not entitled to participate in the distribution or
transaction giving rise to such adjustment event because, pursuant to the
terms of the second paragraph of Section 6.02, such shares were not
held by such Holder on the record date corresponding to such distribution
or transaction,
|
then the
Company will adjust the number of shares of Common Stock that it delivers to you
in respect of the relevant Trading Day to reflect the relevant distribution or
transaction.
Section
6.07 No
Adjustment.
All
calculations and other determinations under this Article 6 shall be made by
the Company and shall be made to the nearest one-ten thousandth (1/10,000) of a
share. No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, the
Company shall carry forward any adjustments that are less than 1% of the
Conversion Rate and make such carried forward adjustment, regardless of whether
the aggregate adjustment is less than 1%, (i) upon any conversion of
Securities, (ii) upon any required repurchase of Securities in connection
with a Fundamental Change, and (iii) on each of the 27 Scheduled Trading
Days immediately preceding the Final Maturity Date.
Except as
otherwise provided herein, no adjustment need be made:
(a) upon
the issuance of any shares of the Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on the
Company’s securities and the investment of additional optional amounts in shares
of the Common Stock under any plan;
(b) upon
the issuance of any shares of the 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;
(c) 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 (b) of this subsection and outstanding as of the date the Securities
were first issued; or
(d) for
accrued and unpaid interest, if any.
Except as
set forth in this Article 6, the Company shall not adjust the Conversion
Price. The Company shall not be obligated to adjust the Conversion Price
in transactions in which Holders participate without conversion of the
Securities.
31
To the
extent that the Securities become convertible into the right to receive cash, no
adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
Section
6.08 Adjustment for Tax
Purposes.
The
Company shall be entitled to (but is not required to) make such reductions in
the Conversion Price, in addition to those required by Section 6.06, as it
in its discretion shall determine to be advisable in order to avoid or diminish
any tax to holders of Common Stock (or holders of rights to purchase Common
Stock) in connection with any stock dividends, subdivisions of shares,
distributions of rights to purchase stock or securities or distributions of
securities convertible into or exchangeable for stock (or rights to acquire such
securities) hereafter made by the Company to its stockholders; provided the Company
shall not take any action that would result in an adjustment to the Conversion
Price in such a manner as to result in the reduction of the Conversion Price to
less than the par value per share of the Common Stock.
Section
6.09 Notice
of Conversion and Notice of Adjustment.
Upon
determining that Holders are entitled to convert their notes in accordance with
the provisions described herein, the Company will promptly (i) issue a press
release and use its reasonable efforts to post such information on the Company’s
website or otherwise publicly disclose this information or (ii) provide written
notice to the Holders of the Securities in a manner contemplated by the
Indenture, including through the facilities of the Depository.
Whenever
the Conversion Price is adjusted, the Company shall promptly mail to Holders a
notice of the adjustment and file with the Trustee and the Conversion Agent an
Officers’ Certificate setting forth the Conversion Price, detailing the
calculation of the Conversion Price and briefly stating the facts upon which the
adjustment is based. In addition, the Company will issue a press release
containing such information and make such press release available on its
website.
Unless
and until the Trustee and Conversion Agent shall receive an Officers’
Certificate setting forth an adjustment of the Conversion Price, the Trustee and
Conversion Agent may assume without inquiry that the Conversion Price has not
been adjusted and that the last Conversion Price of which it has knowledge
remains in effect.
Section
6.10 Notice
of Certain Transactions.
In the
event that:
(1) the
Company takes any action which would require an adjustment in the Conversion
Price;
(2) the
Company consolidates or merges with, or transfers all or substantially all of
its property and assets to, another corporation and shareholders of the Company
must approve the transaction; or
(3) there
is a dissolution or liquidation of the Company;
32
the
Company shall mail to Holders and file with the Trustee and the Conversion Agent
a notice stating the proposed record or effective date, as the case may
be. The Company shall use commercially reasonable efforts to mail the
notice at least 30 Business Days before such date and, in any event, as promptly
as practicable thereafter and in no event less than 10 days prior to such
event. Failure to mail such notice or any defect therein shall not affect
the validity of any transaction referred to in clause (1), (2) or
(3) of this Section 6.10.
Section
6.11 Stockholder Rights
Plans.
To the
extent that the Company has a stockholder rights plan or other “poison pill” in
effect upon conversion of the Securities, 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 or poison pill, as the
same may be amended from time to time. If, however, prior to the time of
conversion, the rights provided by such stockholder rights plan or poison pill
have separated from the shares of Common Stock in accordance with the provisions
of the applicable stockholder rights agreement so that the holders of the
Securities would not be entitled to receive any rights in respect of Common
Stock, if any, issuable upon conversion of the Securities, the Conversion Rate
will be adjusted at the time of separation as if the Company has distributed to
all holders of Common Stock, shares of Capital Stock of the Company, evidences
of indebtedness or assets as provided in Section 6.04(c), subject to
readjustment in the event of the expiration, termination or redemption of such
rights.
Section
6.12 Effect
of Reclassification, Consolidation, Merger or Sale on Conversion
Privilege.
If any of
the following shall occur, namely: (i) any reclassification or change
of shares of Common Stock issuable upon conversion of the Securities (other than
a change in par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination, or any other
change for which an adjustment is provided in Section 6.06); (ii) any
consolidation, merger or binding share exchange involving the Company; or
(iii) any sale, assignment, conveyance, transfer, lease or other
disposition to another person of the Company’s property and assets as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive cash, securities or other
property with respect to or in exchange for such Common Stock (any such event a
“Merger Event”),
then:
(a) the
Company, or such successor purchasing Person, as the case may be, shall, as a
condition precedent to such Merger Event, execute and deliver to the Trustee a
supplemental indenture (which shall comply with the TIA as in force at the date
of execution of such supplemental indenture if such supplemental indenture is
then required to so comply) providing that Holders shall be entitled thereafter
to convert their Securities into the type 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 the Common Stock equal to the
Conversion Rate immediately prior to such Merger Event would have owned or been
entitled to receive (the “Reference Property”) upon such
Merger Event; provided
that, at and after the effective time of any such Merger Event, any amount
otherwise payable in cash upon conversion of the Securities shall continue to be
payable as provided in Section 6.05, including the Company’s right to
determine the form of consideration as provided therein. For purposes
of this Article 6, if the Common Stock has been replaced by Reference Property
as a result of any transaction described in this Section 6.12(a), references to
the Common Stock shall refer to such Reference Property.
33
(b) In
the event the Company shall execute a supplemental indenture pursuant to this
Section 6.12, the Company shall promptly file with the Trustee (x) an
Officers’ Certificate briefly describing the Merger Event, the kind or amount of
shares of stock or other securities or property (including cash) that will
comprise the Reference Property after any such Merger Event, any adjustment to
be made with respect thereto and stating that all conditions precedent have been
complied with and (y) an Opinion of Counsel that all conditions precedent
have been complied with. Any failure to deliver such Officers’ Certificate
shall not affect the legality or validity of such supplemental
indenture.
(c) With
respect to each $1,000 principal amount of Securities surrendered for conversion
after the effective date of any such Merger Event in lieu of cash and shares of
Common Stock, if any, otherwise provided for hereunder, the Company shall
deliver to the converting Holder a number of units of Reference Property (each
such unit comprised of the kind and amount of shares of stock, securities or
other property or assets (including cash or any combination thereof) that a
holder of one share of Common Stock immediately prior to such Merger Event would
have owned or been entitled to receive based on the Weighted Average
Consideration) equal to (1) the aggregate principal amount of Securities to
be converted, divided by $1,000, multiplied by (2) the then-applicable
Conversion Rate.
|
|
(i)
|
The
Company will deliver the cash in lieu of fractional units of Reference
Property as set forth pursuant to Section 6.03 (provided that the
amount of such cash shall be determined as if references in such
Section to “the Closing Sale Price” were instead a reference to “the
Closing Sale Price of a unit of Reference Property” composed of the type
and amount of shares of stock, securities or other property or assets
(including cash or any combination thereof) that a holder of one share of
Common Stock immediately prior to such Merger Event would have owned or
been entitled to receive based on the Weighted Average
Consideration).
|
|
|
(ii)
|
The
Daily Settlement Amounts (if applicable) and Daily Conversion Values (if
applicable) shall be determined by the Company promptly following the last
day of the applicable Conversion
Period.
|
|
|
(iii)
|
For
purposes of this Section 6.12, the “Weighted Average
Consideration” means the weighted average of the types and amounts
of consideration received by the holders of the Common Stock entitled to
receive cash, securities or other property or assets with respect to or in
exchange for such Common Stock in any Merger Event who affirmatively make
such an election; provided that, if the
types and amounts of consideration that holders of the Common Stock would
be entitled to receive with respect to or in exchange for such Common
Stock is based in part upon any form of stockholder election, the
“Weighted Average Consideration” will be deemed to be (A) if holders
of the majority of the shares of Common Stock affirmatively make such an
election, the weighted average of the types and amounts of consideration
received by the holders of the Common Stock that affirmatively make such
an election or (B) if the holders of a majority of the shares of
Common Stock do not affirmatively make such an election, the types and
amount of consideration actually received by such
holders.
|
34
|
|
(iv)
|
The
Company shall notify the holders of the Weighted Average Consideration as
soon as practicable after the Weighted Average Consideration is
determined.
|
|
|
(v)
|
The
above provisions of this Section shall similarly apply to successive
Merger Events.
|
Promptly
following the effective time of any such Merger Event, the Company shall notify
the Trustee and the Conversion Agent and issue a press release describing the
type or amount of cash, securities, property or other assets that will comprise
the Reference Property after any such Merger Event (and shall make the press
release available on its website).
Section
6.13 Trustee’s
Disclaimer.
The
Trustee and the Conversion Agent shall have no duty to determine when an
adjustment under this Article 6 should be made, how it should be made or
what such adjustment should be, but may accept as conclusive evidence of that
fact or the correctness of any such adjustment, and shall be protected in
relying upon, an Officers’ Certificate, including the Officers’ Certificate with
respect thereto which the Company is obligated to file with the Trustee pursuant
to Section 6.09. Neither the Trustee nor the Conversion Agent
makes any representation as to the validity or value of any securities or assets
issued upon conversion of Securities, and the Trustee and the Conversion Agent
shall not be responsible for the Company’s failure to comply with any provisions
of this Article 6.
The
Trustee shall not be under any responsibility to determine the correctness of
any provisions contained in any supplemental indenture executed pursuant to
Section 6.12, but may accept as conclusive evidence of the correctness
thereof, and shall be fully protected in relying upon, the Officers’ Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 6.12.
Section
6.14 Voluntary
Reduction.
The
Company from time to time may reduce the Conversion Price by any amount for any
period of time if the period is at least 20 Business Days and if the reduction
is irrevocable during the period if the Board of Directors determines that such
reduction would be in the best interest of the Company or to avoid or diminish
income tax to holders of shares of Common Stock or rights to purchase shares of
Common Stock in connection with a dividend or distribution of shares (or rights
to acquire shares) or similar event, and the Company provides at least 15 days’
prior notice of any reduction in the Conversion Price; provided, however, that in no
event may the Company reduce the Conversion Price to be less than the par value
of a share of Common Stock.
35
ARTICLE
7
ADDITIONAL
COVENANTS
In
addition to the covenant set forth in Article 4 of the Base Indenture, the
Securities shall be subject to the additional covenant set forth
below:
Section
7.01 Payment of
Additional Tax Amounts. All payments of interest and principal
(including the payment of any amount upon Maturity or that constitutes all or
part of a Conversion Obligation) by the Company under the Securities shall be
made without withholding or deduction for, or on account of, any present or
future taxes, duties, assessments or governmental charges of whatever nature
imposed or levied by or on behalf of the Xxxxxxxx Islands, Greece or any
political sub-division thereof or any other jurisdiction in which the Company or
Cardiff Marine Inc. is organized or maintains an executive office or place of
management. In that event, the Company, as applicable, will pay such
additional amounts as may be necessary in order that the net amounts received by
a Holder after such withholding or deduction shall equal the amount of interest
and principal (including the payment of any amount upon Maturity or that
constitutes all or part of a Conversion Obligation) which would have been
receivable in respect of the Securities in the absence of such withholding or
deduction (“Additional Tax
Amounts”), except that no such Additional Tax Amounts shall apply
to:
(a) any
present or future tax, assessment or other governmental charge that would not
have been so imposed but for the existence of any present or former connection
between the holder (or between a fiduciary, settlor, beneficiary, member or
shareholder of the holder, if the holder is an estate, a trust, a partnership, a
limited liability company or a corporation) and a relevant jurisdiction and its
possessions, including, without limitation, the holder (or such fiduciary,
settlor, beneficiary, member or shareholder) being or having been a citizen or
resident of a relevant jurisdiction or being or having been engaged in a trade
or business or present in a relevant jurisdiction or having, or having had, a
permanent establishment in a relevant jurisdiction;
(b) any
estate, inheritance, gift, sales, transfer, capital gains, excise or personal
property tax or any similar tax, assessment or governmental charge;
(c) any
tax, assessment or other governmental charge that is payable otherwise than by
withholding or deduction from payments on or in respect of any
Security;
(d) any
tax, assessment or other governmental charge that would not have been imposed
but for the failure to comply with certification, information or other reporting
requirements concerning the nationality, residence or identity of the holder or
beneficial owner of that Security, if compliance is required by statute or by
regulation of a relevant jurisdiction or of any political subdivision or taxing
authority thereof or therein as a precondition to relief or exemption from the
tax, assessment or other governmental charge;
36
(e) any
tax, assessment or other governmental charge required to be withheld by any
paying agent from any payment of principal of, or interest on any note, if
payment can be made without withholding by at least one other paying agent;
or
(f) in
the case of any combination of the items listed above.
Nor
will additional amounts be paid with respect to any payment on a Security to a
Holder who is a fiduciary, a partnership, a limited liability company or other
than the sole beneficial owner of that payment to the extent that payment would
be required by the laws of a relevant jurisdiction (or any political subdivision
thereof) to be included in the income, for tax purposes, of a beneficiary or
settlor with respect to the fiduciary, a member of that partnership, an
interestholder in a limited liability company or a beneficial owner who would
not have been entitled to the additional amounts had that beneficiary, settlor,
member or beneficial owner been the holder.
ARTICLE
8
CONSOLIDATION,
MERGER, SALE OR CONVEYANCE
Section
8.01 Issuer
May Consolidate, etc., on Certain Terms.
The
Company shall not consolidate with, enter into a binding share exchange, or
merge into any other Person in a transaction in which it is not the surviving
entity, or sell, assign, convey, transfer or lease or otherwise dispose of all
or substantially all of its properties and assets to any Person (a “successor
person”), unless (i) it complies with the requirements of Article 5 under the
Base Indenture which, for the avoidance of doubt, requires the performance and
observance of every covenant of the Indenture, including providing for the
conversion rights set forth under Article 6 of this Supplement Indenture, and
(ii) the successor person is a corporation organized and validly existing under
the laws of the Xxxxxxxx Islands, England and Wales, the United States, any
state of the United States or the District of Columbia.
ARTICLE
9
DEFAULT
AND REMEDIES
Section
9.01 Limitations on
Suits.
The
limitations on suits set forth in Section 6.07 of the Base Indenture shall also
not apply to actions for the conversion of Securities.
Section
9.02 Unconditional Right of
Holders to Convert.
In
addition to the unconditional rights set forth in Section 6.08 of the Base
Indenture, and notwithstanding any other provision in the Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional and
may not be impaired or affected without the consent of the Holder, to covert
their Securities in accordance with the terms of the Indenture and to bring suit
for the enforcement of their right to convert.
Section
9.03 Waiver
of Default and Events of Default.
37
In
addition to Section 6.13 of the Base Indenture, consent of each Holder is
required to waive any default or Event of Default resulting from the failure by
the Company to deliver cash, shares of Common Stock, or a combination thereof,
as the case may be, upon a conversion of the Securities.
ARTICLE
10
SATISFACTION
AND DISCHARGE
Article 8
of the Base Indenture does not apply and is superseded in its entirety by the
provisions of this Article.
Section
10.01 Satisfaction and
Discharge.
(a) This
Indenture shall cease to be of further effect, and the Trustee, on demand of and
at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
|
|
(i)
|
all
Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.08 of the Base
Indenture and (ii) Securities for whose payment money has theretofore
been deposited in trust and thereafter repaid to the Company as provided
in Section 10.03) have been delivered to the Trustee for
cancellation;
|
|
|
(ii)
|
the
Company has paid or caused to be paid all other sums payable hereunder by
the Company; and
|
|
|
(iii)
|
the
Company has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
|
Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company
to the Trustee under Section 7.07 of the Base Indenture and of the Paying
Agent, Registrar and authenticating agent under Section 7.01(h) of the Base
Indenture shall survive.
38
(b) The
Company may discharge its obligations to pay principal of, and interest, if any,
on, the Securities when all Securities not theretofore delivered to the Trustee
for cancellation
|
|
(i)
|
have
become due and payable, or
|
|
|
(ii)
|
will
become due and payable at the Final Maturity Date within one
year,
|
and the
Company, in the case of clause (i) or (ii) above, has delivered to
Holders or irrevocably deposited or caused to be irrevocably deposited with the
Paying Agent (other than the Company or any of its Affiliates) as trust funds in
trust for the purpose cash in an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and interest, to the date of such delivery or
deposit (in the case of Securities which have become due and payable) or to the
Final Maturity Date.
Section
10.02 Application of Trust
Money.
Subject
to the provisions of Section 10.03, the Paying Agent shall hold in trust,
for the benefit of the Holders of Securities, all money deposited with it
pursuant to Section 10.1(b) with respect to Securities and shall apply
the deposited money in accordance with this Indenture and the Securities to the
payment of the principal of, and any interest on, the Securities.
Section
10.03 Repayment to
Company.
The
Paying Agent shall promptly pay to the Company upon request any excess money
(i) deposited with them pursuant to Section 10.01(b) and
(ii) held by them at any time.
The
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years after
a right to such money has matured; provided, however, that the
Paying Agent, before being required to make any such payment, may at the expense
of the Company cause to be mailed to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified therein, which
shall be at least 30 days from the date of such mailing, any unclaimed balance
of such money then remaining will be repaid to the Company. After payment
to the Company, Holders entitled to money must look to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person.
Section
10.04 Reinstatement.
If the
Paying Agent is unable to apply any money in accordance with Section 10.02
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 10.01(b) until such time as the Paying Agent is
permitted to apply all such money in accordance with Section 10.02;
provided, however, that, if the Company has made any payment of the principal
of, or interest on, any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive any such payment from the money held by the Paying
Agent.
39
ARTICLE
11
MISCELLANEOUS
PROVISIONS
Section
11.01 Scope
of Supplemental Indenture.
The
changes, modifications and supplements to the Base Indenture effected by this
Supplemental Indenture shall only be applicable with respect to, and govern the
terms of, the Securities and shall not apply to any other Securities that may be
issued by the Company under the Base Indenture.
Section
11.02 Adoption, Ratification and
Confirmation.
The Base
Indenture, as supplemented and amended by this Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed, and this Supplemental Indenture
shall be deemed part of the Base Indenture in the manner and to the extent
herein and therein provided. The provisions of this Supplemental
Indenture shall, subject to the terms hereof, supersede the Base Indenture to
the extent the Base Indenture is inconsistent herewith.
Section
11.03 New
York Law to Govern.
For the
avoidance of doubt, Section 10.11 of the Base Indenture (Governing Laws and
Submission to Jurisdiction) applies to the Indenture, which includes this
Supplemental Indenture and the Base Indenture.
Section
11.04 Notices.
Notices
may be provided to the Conversion Agent in the same manner, and at the same
address as the Paying Agent and Registrar as specified in Section 12.02 of the
Base Indenture.
Section
11.05 Officers’
Certificates.
The
officers’ certificate required by Section 4.04 of the Base Indenture shall be an
Officers’ Certificate as defined in the Base Indenture.
Section
11.06 Counterparts.
This
Supplemental Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
40
ARTICLE
12
SUPPLEMENTAL
INDENTURES
Section
12.01 Without Consent of
Holders.
In
addition to those matters set forth in Section 9.03 of the Base Indenture,
without the consent of each Securityholder affected, an amendment or waiver may
not:
(a) modify
the provisions with respect to the purchase right of Holders pursuant to Article
4 upon a Fundamental Change in a manner adverse to Holders;
(b) adversely
affect the rights of Holders to convert Securities other than as provided for
under Article 6 of this Supplemental Indenture; or
(c)
modify any provision with respect to Additional Tax Amounts.
ARTICLE
13
SINKING
FUND
There is
no sinking fund for the Securities. Section 6.01(c) and Article 11 of
the Base Indenture do not apply.
[Remainder of this page intentionally
left blank]
41
IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to
be duly executed as of the day and year first above written.
|
By:
|
/s/
Xxxxxx Xxxxxxxx
|
||
|
Name:
|
Xxxxxx Xxxxxxxx
|
||
|
Title:
|
Chief
Executive Officer
|
||
|
LAW
DEBENTURE TRUST COMPANY OF NEW YORK, as
Trustee
|
|||
|
By:
|
/s/
Xxxxx X. Xxxxxx
|
||
|
Name:
|
Xxxxx X. Xxxxxx | ||
|
Title:
|
Managing Director | ||
|
By:
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/s/
Xxxxxxx X. Xxxxxxxx, Xx.
|
||
|
Name:
|
Xxxxxxx X. Xxxxxxxx, Xx. | ||
|
Title:
|
Vice President | ||
|
DEUTSCHE
BANK TRUST COMPANY AMERICAS, as Registrar, Paying Agent and Conversion
Agent
|
|
By:
|
/s/
Xxxxx Xxxxxxx
|
||
|
Name:
|
Xxxxx Xxxxxxx | ||
|
Title:
|
Vice President | ||
|
By:
|
/s/
Xxxxx Xxxxxxxxxxxxx
|
||
|
Name:
|
Xxxxx Xxxxxxxxxxxxx | ||
|
Title:
|
Vice President | ||
EXHIBIT
A
[THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE
THEREOF.
UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO DRYSHIPS INC. (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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.](1)
_________________
(1) Include
for Global Security.
|
CUSIP:
000000XX0
|
No.
|
5.00%
CONVERTIBLE SENIOR NOTES DUE DECEMBER 1, 2014
DryShips
Inc., a Company organized in the Xxxxxxxx Islands (the “Company”, which term shall
include any successor corporation under the Indenture referred to on the reverse
hereof), promises to pay to [Cede & Co.] (2), or registered assigns,
the principal sum of [million] dollars
($
) on December 1, 2014 or such greater or lesser amount as is indicated on the
Schedule of Exchanges of Securities on the other side of this Security, and any
Additional Tax Amounts payable thereon.
This
Security is convertible as specified on the other side of this Security.
Additional provisions of this Security are set forth on the other side of this
Security.
[Signature
Page Follows]
__________________
(2) Include
for Global Security.
44
IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed on
the date written below.
|
By:
|
||||
|
Name:
|
||||
|
Title:
|
||||
|
By:
|
___________________________________
|
|||
|
Name:
|
||||
|
Title:
|
||||
|
Trustee’s
Certificate of Authentication: This is one of the Securities referred to
in the within-mentioned Indenture.
|
||||
|
LAW
DEBENTURE TRUST COMPANY OF NEW YORK,
|
||||
|
as
Trustee
|
||||
|
By:
|
||||
|
Authorized
Signatory
|
||||
|
Dated:
November 25, 2009(3)
|
||||
___________________
(3) [Note
for form of security: Or such other date on which additional Securities may be
issued pursuant to the terms of the Indenture.]
45
5.00%
CONVERTIBLE SENIOR NOTES DUE DECEMBER 1, 2014
1. INTEREST
AMOUNTS
DryShips
Inc., a company organized in the Xxxxxxxx Islands (the “Company,” which term
shall include any successor corporation under the Indenture hereinafter referred
to), will pay interest at a rate of 5.00% per annum, on the principal amount of
this Security payable as provided in the Indenture, together with any additional
interest required to be paid under Section 6.02(b) of the Base Indenture, and
any Additional Tax Amounts thereon.
2. METHOD
OF PAYMENT
The
Company shall pay any interest on this Security to the person who is the Holder
of this Security at the close of business on May 15 or November 15, as the case
may be, next preceding the related interest payment date. The Holder must
surrender this Security to a Paying Agent to collect payment of principal.
Interest on the Security will be paid at a rate of 5.00% per annum, payable
semi-annually in arrears on June 1 and December 1 of each year, or if any such
day is not a Business Day, the immediately following Business Day, commencing
June 1, 2010. Interest is computed on the basis of a 360-day year
comprised of twelve 30-day months. In the event of the maturity,
conversion or purchase of the Security by the Company at the option of the
Holder, interest shall cease to accrue on the Security. However, the
Company will pay interest on the maturity date to a Holder of record of the
Security on the record date immediately preceding the stated maturity date
regardless of whether such Holder converts the Security.
The
Company will make all payments in respect of a Global Security registered in the
name of the Depository or its nominee to the Depository or its nominee, as the
case may be, by wire transfer of immediately available funds to the account of
the Depository or its nominee. The Company will make all payments in
respect of a Certificated Security (including principal and interest) in U.S.
dollars at the office of the Trustee. At the Company’s option, the Company
may make such payments by mailing a check to the registered address of each
Holder thereof as such address shall appear on the register or, if requested by
a Holder of more than $1,000,000 in aggregate principal amount of Securities, by
wire transfer of immediately available funds to the account specified by such
Holder.
3. PAYING
AGENT, REGISTRAR AND CONVERSION AGENT
Initially,
Deutsche Bank Trust Company Americas will act as Paying Agent, Registrar and
Conversion Agent. The Company may appoint and change any Paying Agent,
Conversion Agent or Registrar without notice, other than notice to the Trustee;
provided that the
Company will maintain at least one Paying Agent in the United States of
America. The Company or any of its Subsidiaries may, subject to certain
limitations set forth in the Indenture, act as Paying Agent or
Registrar.
46
4. INDENTURE,
LIMITATIONS
This
Security is one of a duly authorized issue of Securities of the Company
designated as its 5.00% Convertible Senior Notes due December 1, 2014 (the
“Securities”), issued under an Indenture, dated as of November 17, 2009
(together with the supplemental indenture dated November 25, 2009 and any other
supplemental indentures thereto, the “Indenture”), between the Company and the
Trustee. The terms of this Security include those stated in the Indenture and
those required by or made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended, as in effect on the date of the Indenture.
This Security is subject to all such terms, and the Holder of this Security is
referred to the Indenture and said Act for a statement of them.
The
Securities are senior unsecured obligations of the Company limited, except as
set forth in the Indenture, to up to $460,000,000 aggregate principal amount.
The Indenture does not limit other debt of the Company or any of its
Subsidiaries.
5. PURCHASE
OF SECURITIES AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE
At the
option of the Holder and subject to the terms and conditions of the Indenture,
the Company shall become obligated to purchase all or any part specified by the
Holder (so long as the principal amount of such part is $1,000 or an integral
multiple of $1,000 in excess thereof) of the Securities held by such Holder on a
date, determined by the Company in its sole discretion, that is not less than 20
Business Days and not more than 30 Business Days after the occurrence of a
Fundamental Change, at a purchase price equal to 100% of the principal amount
thereof, together with any accrued interest up to, but excluding, the
Fundamental Change Purchase Date, unless the Fundamental Change Purchase Date is
after a Record Date and on or prior to the related Interest Payment Date, in
which case interest accrued to the Interest Payment Date will be paid to Holders
of the Securities as of the preceding Record Date and the Fundamental Change
Purchase Price payable to any Holder surrendering such Holder’s Security for
purchase pursuant to Article 3 of the Indenture shall be equal to the
principal amount of Securities subject to purchase and will not include any
accrued and unpaid interest. The Fundamental Change Purchase Price shall
be payable in cash. The Holder shall have the right to withdraw any Fundamental
Change Purchase Notice (in whole or in a portion thereof that is $1,000 or an
integral multiple of $1,000 in excess thereof) at any time prior to
5:00 p.m., New York City time, on the Business Day immediately preceding
the Fundamental Change Purchase Date by delivering a written notice of
withdrawal to the Paying Agent in accordance with the terms of the
Indenture.
6. CONVERSION
A Holder
of a Security may convert the principal amount of such Security (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into cash, shares of Common Stock, or a combination thereof, at the Company’s
election, at any time prior to the close of business on December 1, 2014,
subject to the conditions, if any, set forth in Section 6.01 of the
Supplemental Indenture; provided, however, that, if
the Security is subject to purchase upon a Fundamental Change, the conversion
right will terminate at the close of business on the Business Day immediately
preceding the Fundamental Change Purchase Date for such Security or such earlier
date as the Holder presents such Security for purchase (unless the Company shall
default in making the Fundamental Change Purchase Price when due, in which case
the conversion right shall terminate at the close of business on the date such
default is cured and such Security is purchased).
47
The
initial Conversion Price is $7.19 per share of Common Stock, and the initial
Conversion Rate is 139.0821 shares of Common Stock, in each case subject to
adjustment under certain circumstances as provided in the Indenture. No
fractional shares will be issued upon conversion; in lieu thereof, the Company
will pay cash in an amount determined by multiplying the Daily VWAP of a full
share of Common Stock on the last Trading Day of such Conversion Period by the
fractional amount and rounding the product to the nearest whole cent.
Whether fractional shares are issuable upon a conversion will be determined on
the basis of the total number of Securities that the Holder is then converting
into cash and Common Stock, if any, and the aggregate number of shares, if any,
of Common Stock issuable upon such conversion.
To
convert a Security, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to a Conversion Agent,
(b) surrender the Security to a Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by a Registrar or a
Conversion Agent and (d) pay any transfer or similar tax, if required. A
Holder may convert a portion of a Security equal to $1,000 or any integral
multiple thereof. In the case of a Security held by the Depository, such
conversion shall be done in accordance with the applicable rules and
procedures of the Depository.
A
Security in respect of which a Holder had delivered a Fundamental Change
Purchase Notice exercising the option of such Holder to require the Company to
purchase such Security may be converted only if the Fundamental Change Purchase
Notice is withdrawn in accordance with the terms of the Indenture.
7. DENOMINATIONS,
TRANSFER, EXCHANGE
The
Securities are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000. A Holder may transfer or exchange Securities
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes or other governmental charges that may be imposed in relation
thereto by law or permitted by the Indenture.
8. PERSONS
DEEMED OWNERS
The
Holder of a Security may be treated as the owner of it for all
purposes.
9. UNCLAIMED
MONEY
If money
for the payment of principal, or interest, if any, remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Company at its
written request, subject to applicable unclaimed property law. After that,
Holders entitled to money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another
person.
48
10. AMENDMENT,
SUPPLEMENT AND WAIVER
Subject
to certain exceptions set forth in the Indenture, the Securities and the
Indenture may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and an existing default or Event of Default with respect to the
Securities and its consequence or compliance with any provision of the
Securities or the Indenture may be waived in a particular instance with the
consent of the Holders of a majority in aggregate principal amount of the
Securities then outstanding. Without the consent of or notice to any Holder, the
Company and the Trustee may amend or supplement the Indenture or the Securities
to, among other things, cure any ambiguity, defect or inconsistency or make any
other change that does not adversely affect the rights of any
Holder.
11. CALCULATIONS
IN RESPECT OF SECURITIES
Except to
the extent provided therein, the Company will be responsible for making all
calculations called for under the Indenture and the Securities. These
calculations include, but are not limited to, determinations of the Closing Sale
Price of the Common Stock, adjustments to the Conversion Price, any accrued
interest payable on the Securities, the Conversion Price and the Conversion
Rate. The Company will make these calculations in good faith and, absent
manifest error, the calculations will be final and binding on Holders of the
Securities. The Company will provide to each of the Trustee, the Paying
Agent and the Conversion Agent a schedule of its calculations, and the Trustee,
the Paying Agent and the Conversion Agent are entitled to rely conclusively upon
the accuracy of such calculations without independent verification. The
Trustee will forward the Company’s calculations to any Holder of the Securities
upon the request of such Holder.
12. SUCCESSOR
ENTITY
When a
successor corporation assumes all the obligations of its predecessor under the
Securities and the Indenture in accordance with the terms and conditions of the
Indenture, the predecessor corporation (except in certain circumstances
specified in the Indenture) shall be released from those
obligations.
13. DEFAULTS
AND REMEDIES
Under the
Indenture, an “Event of Default” with respect to Securities shall occur
if:
(a) the
Company defaults in the payment of any principal of any Security at Maturity
(including, following a Fundamental Change), including any Additional Tax
Amounts (if any) thereon;
(b) the
Company defaults in the payment of any interest on any Security, including any
Additional Tax Amounts (if any) thereon, when it becomes due and payable, and
continuance of such default for a period of 30 days (unless the entire amount of
such payment is deposited by the Company with the Trustee or with a Paying Agent
that is not an affiliate of the Company prior to the expiration of such period
of 30 days);
49
(c) the
Company fails to pay the cash and deliver the shares of Common Stock, if any,
representing the Conversion Obligation (including any Additional Shares and any
Additional Tax Amounts (if any) thereon) upon conversion of any Security within
the time period required by the provisions of this Indenture;
(d) the
Company fails to perform or comply with any of its other covenants or agreements
contained in the Securities or in this Indenture (other than a covenant or
agreement a default in whose performance or whose breach is specifically dealt
with in clauses (i), (ii) or (iii) of this definition) and the default
continues for 60 days after notice is given as specified below;
(e) any
indebtedness under any Instrument with a principal amount then, individually or
in the aggregate, outstanding in excess of $50,000,000, whether such
indebtedness now exists or shall hereafter be created, is not paid at Maturity
or when otherwise due or is accelerated, and such indebtedness is not
discharged, or such default in payment or acceleration is not cured or
rescinded, within a period of 30 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal amount of
the outstanding Securities of that Series a written notice specifying such
default and requiring the Company to cause such indebtedness to be discharged or
cause such default to be cured or waived or such acceleration to be rescinded or
annulled and stating that such notice is a “Notice of Default” hereunder. A
payment obligation (other than indebtedness under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company or any
Subsidiary or under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any Subsidiary) shall not be deemed to have
matured, come due, or been accelerated to the extent that it is being disputed
by the relevant obligor or obligors in good faith;
(f) the
Company or any Subsidiary fails to pay one or more final and non-appealable
judgments entered by a court or courts of competent jurisdiction, the aggregate
uninsured or unbonded portion of which is in excess of $50,000,000, if the
judgments are not paid, discharged, waived or stayed within 30
days;
(g) the
Company defaults in the payment of the purchase price of any Security when the
same becomes due and payable, including any Additional Tax Amounts (if any)
thereon;
(h) the
Company fails to provide a Fundamental Change Purchase Notice when required by
Section 4.01 of the Supplemental Indenture;
(i) the
Company or any Subsidiary of the Company, pursuant to or within the meaning of
any Bankruptcy Law: (i) commences a voluntary case or proceeding; (ii) consents
to the entry of an order for relief against it in an involuntary case or
proceeding; (iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or (iv) makes a general assignment for the
benefit of its creditors; or (v) or generally is unable to pay its debts as the
same become due; or
50
(j) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that: (i) is for relief against the Company or any of its Subsidiaries in an
involuntary case or proceeding; (ii) appoints a Custodian of the Company or any
of its Subsidiaries for all or substantially all of the property of the Company
or any such Subsidiary; or (iii) orders the liquidation of the Company or any of
its Subsidiaries; and the case of each of clause (i), (ii) and (iii), the
order or decree remains unstayed and in effect for 60 consecutive
days.
A default
under clause (d) above is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding notify the Company and the Trustee, in
writing of the default, and the Company does not cure the default within 60 days
after receipt of such notice. If an Event of Default with respect to
the Securities (other than as a result of certain events of bankruptcy,
insolvency or reorganization specified in the Indenture) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may declare all unpaid principal of,
and accrued and unpaid interest on to the date of acceleration, the Securities
of that Series then outstanding (if not then due and payable) to be due and
payable upon any such declaration, and the same shall become and be immediately
due and payable. If an Event of Default specified in clause (i) or
(j) above occurs, all unpaid principal of the Securities then outstanding,
and all accrued and unpaid interest thereon to the date of acceleration, shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
Holders
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or any interest) if it determines that
withholding notice is in their interests. The Company is required to file
periodic reports with the Trustee as to the absence of default.
Under the
terms of the Indenture, at the election of the Company in its sole discretion,
the sole remedy for an Event of Default relating to the failure to comply with
Section 4.02 of the Base Indenture, and for any failure to comply with the
requirements of Section 314(a)(1) of the TIA, will consist, for the
180 days after the occurrence of such an Event of Default, exclusively of the
right to receive additional interest on the notes at a rate equal to 0.50% per
annum of the aggregate principal amount of the Securities then outstanding up
to, but not including, the 181st day thereafter (or, if applicable, the earlier
date on which the Event of Default relating to the reporting obligations is
cured or waived). Any such additional interest will be paid and calculated
in the manner set forth in the Indenture.
14. TRUSTEE
DEALINGS WITH THE COMPANY
Law
Debenture Trust Company of New York, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
51
15. NO
RECOURSE AGAINST OTHERS
A
director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder of this Security by accepting this
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of this Security.
16. AUTHENTICATION
This
Security shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the other side of this
Security.
17. ABBREVIATIONS
AND DEFINITIONS
Customary
abbreviations may be used in the name of the Holder or an assignee, such as: TEN
COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian) and UGMA (= Uniform Gifts to Minors Act).
All terms
defined in the Indenture and used in this Security but not specifically defined
herein are used herein as so defined.
18. INDENTURE
TO CONTROL; GOVERNING LAW
In the
case of any conflict between the provisions of this Security and the Indenture,
the provisions of the Indenture shall control. This Security shall be governed
by, and construed in accordance with, the laws of the State of New
York.
The
Company will furnish to any Holder, upon written request and without charge, a
copy of the Indenture. Requests may be made to the address of the Company set
forth in Section 12.02 of the Base Indenture.
52
ASSIGNMENT
FORM
To assign
this Security, fill in the form below:
I or we
assign and transfer this Security to
|
(Insert
assignee’s soc. sec. or tax I.D. no.)
|
|||
|
(Print
or type assignee’s name, address and zip code)
|
|||
|
and
irrevocably appoint
|
|||
|
agent
to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
|
|||
|
Your
Signature:
|
|||
|
Date:
|
|||
|
(Sign
exactly as your name appears on the other side of this
Security)
|
|||
|
*Signature
guaranteed by:
|
|||
|
By:
|
|||
_______________________
|
*
The signature must be guaranteed by an institution that is a member of one
of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New
York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange
Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.
|
53
CONVERSION
NOTICE
|
To
convert this Security into Common Stock of the Company, check the box:
|
|||
|
To
convert only part of this Security, state the principal amount to be
converted (must be $1,000 or a integral multiple of $1,000):
$ .
|
|||
|
If
you want the stock certificate made out in another person’s name, fill in
the form below:
|
|||
|
(Insert
assignee’s soc. sec. or tax I.D. no.)
|
|||
|
(Print
or type assignee’s name, address and zip code)
|
|||
|
Your
Signature:
|
|||
|
Date:
|
|||
|
(Sign
exactly as your name appears on the other side of this
Security)
|
|||
|
*Signature
guaranteed by:
|
|||
|
By:
|
|||
____________________
|
*
The signature must be guaranteed by an institution that is a member of one
of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New
York Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange
Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.
|
54
OPTION
TO ELECT REPURCHASE UPON A FUNDAMENTAL CHANGE
To:
DryShips Inc.
The
undersigned registered owner of this Security hereby irrevocably acknowledges
receipt of a notice from DryShips Inc. (the “Company”) as to the occurrence
of a Fundamental Change with respect to the Company and requests and instructs
the Company to redeem the entire principal amount of this Security, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security at a purchase price equal to the Fundamental Change Purchase Price,
payable in Cash.
|
Dated:
|
|||
|
Signature(s) must
be guaranteed by a qualified guarantor institution with membership in an
approved signature guarantee program pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934.
|
|||
|
Signature
Guaranty
|
|||
|
Principal
amount to be redeemed
(in
an integral multiple of $1,000, if less than all):
|
|||
NOTICE:
The signature to the foregoing Election must correspond to the Name as written
upon the face of this Security in every particular, without alteration or any
change whatsoever.
55
SCHEDULE
OF EXCHANGES OF NOTES
The
following exchanges, redemptions, repurchases or conversions of a part of this
global Security have been made:
|
Principal
Amount
of
this Global Security
Following
Such
Decrease
Date
of
Exchange (or Increase)
|
Authorized
Signatory
of
Trustee
|
Amount
of Decrease in
Principal
Amount
of
this Global Security
|
Amount
of
Increase
in
Principal
Amount
of
this Global Security
|
|||
56
