UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Item 1.01

Entry into a Material Definitive Agreement.

On June 14, 2016, Nu Skin Enterprises, Inc. (the "Company" or "Nu Skin") entered into an investment agreement (the "Investment Agreement") with Ping An ZQ China Growth Opportunity Limited ("Ping An ZQ"), a Cayman Island company owned by a consortium of investors led by Ping An of China Securities (Hong Kong) Company Ltd. and ZQ Capital Limited, relating to the issuance to Ping An ZQ of $210 million principal amount of convertible 4.75% senior notes, due 2020 (the "Notes"). The transactions contemplated by the Investment Agreement (the "Investment Transactions") are expected to close by June 21, 2016 (the "Closing"), subject to satisfaction of customary closing conditions as set forth in the Investment Agreement.

Issuance of Convertible Notes

The Notes are expected to be governed by an indenture (the "Indenture") between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), and will bear interest at a rate of 4.75% per annum, payable semiannually in cash. The notes will mature in 2020 subject to earlier conversion and will be general unsecured obligations of Nu Skin.

Beginning six months after their initial issuance, the Notes will be convertible at the holder's discretion at a conversion rate of 21.51 per $1,000 principal amount of the Notes (which represents an initial conversion price of $46.50 per share), in each case subject to customary anti-dilution adjustments. So long as the Notes are held by Ping An ZQ, any conversion of the Notes will be satisfied by cash in respect of the principal amount of Notes converted and any accrued and unpaid interest to such date and shares of the Company's common stock (the "Common Stock") in respect to all additional amounts. Conversion of Notes by any other holders may be into cash, Common Stock or a combination of cash and Common Stock, at the Company's option.

Upon a change in control of the Company or the failure of the Common Stock to be listed on certain stock exchanges, the holders of the Notes may require that the Company repurchase all or part of the principal amount of the Notes at a purchase price equal to 108% of the principal amount plus accrued and unpaid interest. In addition, the Company may redeem all or part of the principal amount of the Notes, at its option, at a purchase price equal to the principal amount plus accrued and unpaid interest, provided that the closing trading price of the Common Stock exceeds 180% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading day period preceding the Company's exercise of this redemption right (including the last three such trading days).

The Indenture will include customary events of default, which may result in the acceleration of the maturity of the Notes under the Indenture.

 

 

 

 

Standstill and Voting Obligations

Pursuant to the Investment Agreement, Ping An ZQ has agreed, subject to certain exceptions, that until the earliest of (i) the effective date of a change of control of the Company and (ii) the date Ping An ZQ and its affiliates collectively hold or beneficially own less than 50% of the Common Stock (on an as-converted basis) owned by Ping An ZQ immediately following the Closing (the "Standstill Period"), Ping An ZQ will not, among other things: (A) acquire any securities of the Company if, immediately after such acquisition, Ping An ZQ (together with its affiliates) would collectively own in the aggregate more than 15% of the then outstanding voting securities of the Company, (B) propose or seek to effect any tender or exchange offer, merger or other business combination involving the Company or its securities, or make any public statement with respect to such transaction, (C) make, or in any way participate in any "proxy contest" or other solicitation of proxies, (D) sell, transfer or otherwise dispose of any voting securities of the Company to any person who is (or will become upon consummation of such sale, transfer or other disposition) a beneficial owner of 10% or more of the outstanding voting securities of the Company, or (E) call or seek to call any meeting of stockholders or other referendum or consent solicitation.

In addition, Ping An ZQ has agreed to vote, at their election, any shares of Common Stock beneficially owned by it either (a) in accordance with the recommendations of the Board or (b) in proportion to the vote of the Company's other stockholders, at each meeting of stockholders of the Company or pursuant to any action by written consent.

Participation Rights

Pursuant to the Investment Agreement, the Company has agreed, subject to certain exceptions, that until such time as Ping An ZQ no longer has a representative or rights to have a representative on the Board, Ping An ZQ will have the option to purchase any or all of any proposed issuance by the Company of any equity security or instrument convertible into or exchangeable for any equity security; provided, that if such proposed issuance is expected to be purchased by only one group of investors Ping An ZQ may not elect to purchase less than all of such proposed issuance.

Conversion and Transfer Restrictions / Registration Rights

The Investment Agreement restricts Ping An ZQ's ability to transfer or convert the Notes to Common Stock, subject to certain exceptions specified in the Investment Agreement and summarized below.

Prior to the earlier of (i) the eighteen-month anniversary of the Closing, (ii) a change of control of the Company, (iii) the date the Company issues shares of Common Stock, or any security or instrument convertible into or exercisable or exchangeable for Common Stock, to any person or "group" (as such term is defined in Section 13(d)(3) of the Exchange Act) that results or, if converted, exercised or exchanged on the date of issuance, would result in such person or "group" (as such term is defined in Section 13(d)(3) of the Exchange Act) beneficially owning more than 10% of the outstanding Common Stock at the time of such issuance, (iv) the date the Company's stockholders fail to elect the director Ping An ZQ has nominated to the Board at any meeting of the stockholders of the Company at which such nominee has been nominated for election pursuant to the Investment Agreement, (v) the date on which the closing trading price of the Common Stock exceeds 180% of the then-current conversion price for 20 or more trading days in the 30 consecutive trading day period (including the last three such trading days), and (vi) the date the Company issues shares of Common Stock or any security or instrument convertible into or exercisable or exchangeable for Common Stock to any person at a price per share of Common Stock or at an effective price per share of Common Stock upon conversion, exercise or exchange thereof that is less than the then-current conversion price or enters into a definitive agreement for a transaction that, if consummated, would result in the foregoing, Ping An ZQ will be restricted from transferring or entering into an agreement that transfers the Notes or the economic consequences of ownership of the Notes.  Until the six-month anniversary of the Closing, Ping An ZQ is also prohibited from converting the Notes barring the public disclosure or announcement of the entry by the Company into a definitive agreement for a transaction that, if consummated, would result in a change in control. These restrictions shall not apply to, among others (x) transfers to affiliates or the Company or (y) pledges of the Notes or the satisfaction of obligations related to pledged Notes, in each case, in connection with one or more bona fide loan.

 

 

 

 

Subject to certain limitations, the Investment Agreement provides Ping An ZQ with certain registration rights for the shares of Common Stock issuable upon conversion of the Notes.

The foregoing description of the Investment Agreement is qualified in its entirety by reference to the Investment Agreement (including the form of Indenture attached as Exhibit A thereto), which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 2.03

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

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 3.02

Unregistered Sales of Equity Securities.

On June 14, 2016 the Company entered into the Investment Agreement, pursuant to which it agreed to sell $210 million principal amount of the Notes to Ping An ZQ in a private placement pursuant to a safe harbor from registration provided by Regulation S under the Securities Act of 1933, as amended. The Company will rely on this safe harbor based in part on representations made by Ping An ZQ in the Investment Agreement that it is not a U.S. Person for the purposes of Regulation S.

The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 7.01

Regulation FD Disclosure.

On June 15, 2016, the Company issued a press release announcing the Investment Transactions. A copy of this press release is attached hereto as Exhibit 99.1.

 

 

The information furnished pursuant to this Item 7.01 and Exhibit 99.1 hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.

Forward-looking Statements. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that represent the Company's current expectations and beliefs. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws and include, but are not limited to, the Investment Transactions; the anticipated timing for the closing of the Investment Transactions; statements of expectations regarding the Investment Transactions, including their benefits and its impact on shareholder value; and statements regarding the Company's anticipated use of proceeds and the timing of such use.  In some cases, you can identify these statements by forward-looking words such as "believe," "expect," "project," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could," "may," "might," the negative of these words and other similar words.

The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements or views expressed herein. These risks and uncertainties include, but are not limited to, any failure to meet the closing conditions or for the parties to consummate the Investment Transactions.

The Company's forward-looking statements contained herein are further qualified by a detailed discussion of associated risks set forth in the documents filed by the Company with the Securities and Exchange Commission. The forward-looking statements set forth the Company's beliefs as of the date that such information was first provided, and the Company assumes no duty to update the forward-looking statements contained in this release to reflect any change except as required by law.

Item 9.01

Financial Statements and Exhibits.

SIGNATURE

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

NU SKIN ENTERPRISES, INC.
(Registrant)

Ritch Wood
Chief Financial Officer

Date:  June 15, 2016

EXHIBIT INDEX

 

 

 

 

 

 

 

 

 

ARTICLE I 


DEFINITIONS

 

 

 

 

 

 

 

 

 

  "Agreement" shall have the meaning set forth in the preamble hereto.

 

  "Associate" shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act; provided that the Company and the Company's Subsidiaries will not be considered Associates of the Purchaser or any of its Affiliates.

 

  "Available" means, with respect to a Registration Statement, that such Registration Statement is effective and there is no stop order with respect thereto and such Registration Statement does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, such that such Registration Statement will be available for the resale of Registrable Securities.

 

  "Beneficially Own", "Beneficially Owned" or "Beneficial Ownership" shall have the meaning set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act, except that for purposes of this Agreement the words "within sixty days" in Rule 13d-3(d)(1)(i) shall not apply, to the effect that a person shall be deemed to be the Beneficial Owner of a security if that person has the right to acquire beneficial ownership of such security at any time.  Solely for purposes of determining the number of Conversion Shares issuable upon conversion of the Notes Beneficially Owned by the Purchaser and its Affiliates, the Notes shall be treated as if upon conversion the only settlement option under the Notes and Indenture were solely Physical Settlement (as defined in the Indenture). For the avoidance of doubt, for purposes of this Agreement, the Purchaser (or any other person) shall at all times be deemed to have Beneficial Ownership of Conversion Shares upon conversion of the Notes directly or indirectly held by them, irrespective of any non-conversion period specified in the Notes or this Agreement or any restrictions on transfer or voting contained in this Agreement.

 

  "Blackout Period" means in the event that the Company determines in good faith that any registration or sale pursuant to any registration statement would reasonably be expected to materially adversely affect or materially interfere with any bona fide financing of the Company or any material transaction under consideration by the Company or would require disclosure of information that has not been, and is not otherwise then required to be, disclosed to the public, the premature disclosure of which would adversely affect the Company in any material respect or the registration statement is otherwise not Available for use (in each case as determined by the Company in good faith after consultation with outside counsel), a period of up to sixty (60) days; provided that a Blackout Period may not be called by the Company more than twice in any period of twelve (12) consecutive months and the aggregate length of Blackout Periods in any period of twelve (12) consecutive months may not exceed one hundred and twenty (120) days.

 

 

 

  "Board of Directors" shall mean the board of directors of the Company.

 

  "Business Day" shall mean any day, other than a Saturday, Sunday or a day on which banking institutions in the City of New York, New York or Hong Kong are authorized or obligated by law or executive order to remain closed.

 

  "Change in Control" has the meaning set forth in the Indenture; provided, however, that clause (y) of the last paragraph of such definition in the Indenture shall be disregarded for all purposes under this Agreement other than clause (z) of Section 6.14.

 

  "Closing" shall have the meaning set forth in Section 2.02(a).

 

  "Closing Date" shall have the meaning set forth in Section 2.02(a).

 

  "Code" shall mean the Internal Revenue Code of 1986, as amended.

 

  "Company" shall have the meaning set forth in the preamble hereto.

 

  "Company Common Stock" shall mean the Class A common stock, par value $0.001 per share, of the Company.

 

  "Company Reports" shall have the meaning set forth in Section 3.01(g)(i).

 

  "Confidential Information" shall have the meaning set forth in Section 4.14(b).

 

  "Confidentiality Agreement" shall mean, collectively, the confidentiality agreements entered into by the Company, on the one hand, and certain Affiliates of the Purchaser, on the other hand, dated as of April 26, 2016, in each case as amended from time to time.

 

  "Conversion Price" has the meaning set forth in the Indenture.

 

  "Conversion Rate" has the meaning set forth in the Indenture.

 

  "Conversion Shares" shall mean the shares of Company Common Stock issuable or issued upon conversion of the Notes.

 

  "Covered Persons" shall have the meaning set forth in Section 4.07(f).

 

  "DGCL" shall mean the Delaware General Corporation Law.

 

  "Enforceability Exceptions" shall have the meaning set forth in Section 3.01(c).

 

 

 

  "Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as amended.

 

  "Excluded Securities" shall have the meaning set forth in Section 4.17.

 

  "Extraordinary Transaction" shall have the meaning set forth in Section 4.03(a)(v).

 

  "Free Writing Prospectus" shall have meaning set forth in Section 5.03(a)(v).

 

  "GAAP" shall mean U.S. generally accepted accounting principles.

 

  "Global Security" has the meaning set forth in the Indenture.

 

  "Governmental Entity" shall mean any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable self-regulatory organization.

 

  "Greater China" shall have meaning set forth in Section 3.01(q).

 

  "Hong Kong" means the Hong Kong Special Administrative Region of the People's Republic of China.

 

  "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

 

  "Indemnified Persons" shall have the meaning set forth in Section 5.05(a).

 

  "Indenture" shall mean an indenture in the form attached hereto as Exhibit A, as amended, supplemented or otherwise modified from time to time with the consent of the Purchaser and the Company prior to the Closing, it being agreed that the Company and the Purchaser shall consent to any changes required by the Trustee that do not adversely affect the Company or the Purchaser, or the Purchaser's financing sources, including with respect to timing and mechanics of transfers and exchanges of Securities and interests therein, in any material respect.

 

  "Initial Conversion Rate" shall have the meaning set forth in Section 4.12.

 

  "Intellectual Property" shall have the meaning set forth in Section 3.01(p).

 

  "Joinder" shall mean, with respect to any Person permitted to sign such document in accordance with the terms hereof, a joinder executed and delivered by such Person, providing such Person to have all the rights and obligations of the Purchaser under this Agreement, in the form and substance substantially as attached hereto as Exhibit B or such other form as may be agreed to by the Company and the Purchaser.

 

  "Losses" shall have the meaning set forth in Section 5.05(a).

 

 

 

 

  "Material Adverse Effect" shall mean any events, changes or developments that, individually or in the aggregate, have a material adverse effect on the business, financial condition or results of operations of (i) solely with respect to Section 3.01(q), the business conducted by the Company and its Subsidiaries, taken as a whole, in Greater China and (ii) otherwise with respect to all other provisions of this Agreement, the Company and its Subsidiaries, taken as a whole, in each case other than any event, change or development resulting from or arising out of the following:  (a) events, changes or developments generally affecting the economy, the financial or securities markets, or political, legislative or regulatory conditions, in each case in the United States or elsewhere in the world, (b) events, changes or developments in the industries in which the Company or any of its Subsidiaries conducts its business, (c) any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any rule, regulation, ordinance, order, protocol or any other law of or by any national, regional, state or local Governmental Entity, or market administrator, (d) any changes in GAAP or accounting standards or interpretations thereof, (e) earthquakes, any weather-related or other force majeure event or natural disasters or outbreak or escalation of hostilities or acts of war or terrorism, (f) the announcement or the existence of, compliance with or performance under, this Agreement or the transactions contemplated hereby, (g) any taking of any action at the request of the Purchaser, (h) any failure by the Company or any of its Subsidiaries to meet any financial projections or forecasts or estimates of revenues, earnings or other financial metrics for any period (provided that the exception in this clause (h) shall not prevent or otherwise affect a determination that any event, change, effect or development underlying such failure has resulted in a Material Adverse Effect so long as it is not otherwise excluded by this definition) or (i) any changes in the share price or trading volume of the Company Common Stock or in the Company's credit rating (provided that the exception in this clause (i) shall not prevent or otherwise affect a determination that any event, change, effect or development underlying such change has resulted in a Material Adverse Effect so long as it is not otherwise excluded by this definition); except, in each case with respect to subclauses (a) through (e), to the extent that such event, change or development disproportionately affects the Company and its Subsidiaries, taken as a whole, relative to other similarly situated companies in the industries in which the Company and its Subsidiaries operate.

 

  "Minimum Ownership Threshold" shall have the meaning set forth in Section 4.07(a).

 

  "Note" or Notes" shall have the meaning set forth in the preamble hereto.

 

  "NYSE" shall mean the New York Stock Exchange.

 

  "Offer Notice" shall have the meaning set forth in Section 4.17.

 

  "Participation Notice" shall have the meaning set forth in Section 4.17.

 

  "Participation Notice Period" shall have the meaning set forth in Section 4.17.

 

  "Permitted Derivative Transactions" has the meaning set forth in Section 4.02(a).

 

  "Permitted Loan" has the meaning set forth in Section 4.02(a).

 

 

 

 

  "Permitted Transfers" has the meaning set forth in Section 4.02(a).

 

  "Person" or "person" shall mean an individual, corporation, limited liability or unlimited liability company, association, partnership, trust, estate, joint venture, business trust or unincorporated organization, or a government or any agency or political subdivision thereof, or other entity of any kind or nature.

 

  "Plan of Distribution" means the plan of distribution substantially in the form attached hereto as Annex A.

 

  "PRC" means the People's Republic of China.

 

  "Prohibited Transfers" shall have the meaning set forth in Section 4.02(a).

 

  "Purchase Price" shall have the meaning set forth in Section 2.01.

 

  "Purchaser" and "Purchasers" shall have the meaning set forth in the preamble hereto.

 

  "Purchaser Affiliates" shall have the meaning set forth in Section 4.03(a).

 

  "Purchaser Designee" means the individual then serving on the Board of Directors pursuant to the exercise of the Purchaser's nomination rights pursuant to Section 4.07(a) and/or Purchaser's rights pursuant to Section 4.07(e), together with any designee of the Purchaser who is then standing for election to the Board pursuant to Sections 4.07(a) and (b) or who is being proposed for election by the Purchaser pursuant to Section 4.07(e).

 

  "Purchaser Global Security" has the meaning set forth in the Indenture.

 

  "Purchaser Indemnitors" shall have the meaning set forth in Section 4.11.

 

  "Registrable Securities" shall mean (i) the Conversion Shares, (ii) any Company Common Stock issued or distributed in respect of such Conversion Shares and (iii) any other equity securities received in respect of such Conversion Shares and Company Common Stock in a Change in Control (as defined in the Indenture) that is not a Change in Control (as defined in the Indenture) solely as a result of the last paragraph of such definition; provided that any such Conversion Shares, Company Common Stock or other equity securities (as applicable) will cease to be Registrable Securities upon the earliest of (a) when such Conversion Shares, Company Common Stock or other equity securities (as applicable) have been sold or otherwise disposed of pursuant to an effective Registration Statement or in compliance with Rule 144, (b) such Conversion Shares, Company Common Stock or other equity securities (as applicable) are held or Beneficially Owned by any Person that together with its Affiliates Beneficially Own less than the Minimum Ownership Threshold and such Conversion Shares, Company Common Stock or other equity securities (as applicable) are freely transferable under Rule 144 without regard to volume or manner of sale limits or public information requirements, or (c) when such Conversion Shares, Company Common Stock or other equity securities (as applicable) cease to be outstanding; provided, further, that any securities that have ceased to be Registrable Securities in accordance with the foregoing definition shall not thereafter become Registrable Securities and any securities that are issued or distributed in respect of securities that have ceased to be Registrable Securities are not Registrable Securities.

 

 

 

  "Registration Expenses" shall mean all expenses incurred by the Company in complying with Article V, including all registration, filing and listing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company and of a single counsel for the holders of Registrable Securities, fees and expenses incurred by the Company in connection with complying with state securities or "blue sky" laws, fees of the Financial Industry Regulatory Authority, Inc., all the Company's internal expenses, transfer taxes, and fees of transfer agents and registrars, but excluding any underwriting discounts and commissions, agency fees, brokers' commissions and transfer taxes, in each case to the extent applicable to the Registrable Securities of the selling holders; provided, that Registration Expenses shall not include more than $25,000 per offering of fees and disbursements of counsel and other advisors for the holders of Registrable Securities.

 

  "Registration Statement" shall mean any registration statement of the Company filed or to be filed with the SEC under the rules and regulations promulgated under the Securities Act, including the related prospectus, amendments and supplements to such registration statement, and including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.

 

  "Registration Termination Date" shall have the meaning set forth in Section 5.01(b).

 

  "Reimbursed Expenses" shall have the meaning set forth in Section 6.06.

 

  "Representatives" shall have the meaning set forth in Section 4.14(a).

 

  "Restricted Period" shall mean the period commencing on the Closing Date and ending on the earlier of (i) the date that is eighteen (18) months following the Closing Date, (ii) the consummation of any Change in Control, (iii) the date the Company issues shares of Company Common Stock, or any security or instrument convertible into or exercisable or exchangeable (as applicable) for Company Common Stock, to any Person or "group" (as such term is defined in Section 13(d)(3) of the Exchange Act) that results or, if converted, exercised or exchanged on the date of issuance, would result in such Person or "group" (as such term is defined in Section 13(d)(3) of the Exchange Act) Beneficially Owning more than 10% of the outstanding Company Common Stock at the time of such issuance (unless such issuance occurs in connection with the acquisition (whether by merger, consolidation, asset purchase, equity purchase or otherwise) of any Person by the Company or any of its Subsidiaries), (iv) the date the Company's stockholders fail to elect the Purchaser Designee to the Board at any meeting of the stockholders of the Company at which the Purchaser Designee has been nominated for election pursuant to Section 4.07 (unless, at the time of such meeting, the Company's obligation to nominate such Purchaser Designee pursuant to Section 4.07 has terminated pursuant to Section 4.07(g)), (v) the date that the Closing Sale Price (as defined in the Indenture) of the Company Common Stock for 20 or more Trading Days (as defined in the Indenture) (including the final three Trading Days) in the period of at least 30 consecutive Trading Days is equal to or exceeds 180% of the applicable Conversion Price on each applicable Trading Day, and (vi) the date the Company issues shares of Company Common Stock or any security or instrument convertible into or exercisable or exchangeable for Company Common Stock (in each case, other than an Excluded Security) to any Person at a price per share of Company Common Stock or at an effective price per share of Company Common Stock upon conversion, exercise or exchange thereof (as applicable) that is less than the Conversion Price or enters into a definitive agreement for a transaction that, if consummated, would result in the foregoing.

 

 

 

 

  "Rule 144" shall mean Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule.

 

  "Rule 405" shall mean Rule 405 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule.

 

  "SEC" shall mean the U.S. Securities and Exchange Commission.

 

  "Securities Act" shall mean the U.S. Securities Act of 1933, as amended.

 

  "Selling Holders" shall have the meaning set forth in Section 5.03(a)(i).

 

  "Specified Guidelines" shall have the meaning set forth in Section 4.07(c).

 

  "Specified Persons" shall have the meaning set forth in Section 6.12.

 

  "Standstill Period" shall mean, with respect to the Purchaser, the period commencing on the Closing Date and ending on the earlier of (i) the consummation of a Change in Control and (ii) the date that the Purchaser and its Affiliates collectively hold or Beneficially Own less than the Minimum Ownership Threshold.

 

  "Subject Securities" shall mean (i) the Notes, (ii) the Conversion Shares, and (iii) any securities issued as (or issuable upon the conversion, exercise or exchange of any warrant, right or other security that is issued as) a dividend, stock split, combination or any reclassification, recapitalization, merger, consolidation, exchange or any other distribution or reorganization with respect to, or in exchange for, or in replacement of, the securities referenced in clause (i) or (ii) (without giving effect to any election by the Company regarding settlement options upon conversion) above or this clause (iii).

 

  "Subsidiary" shall mean, with respect to any Person, any other Person of which 50% or more of the shares of the voting securities or other voting interests are owned or controlled, or the ability to select or elect 50% or more of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries, or by such first Person, or by such first Person and one or more of its Subsidiaries.

 

  "Take-Down Notice" shall have the meaning set forth in Section 5.02(c).

 

  "Target Registration Date" shall have the meaning set forth in Section 5.01(a).

 

 

 

  "Tax" or "Taxes" shall mean all federal, state, local, and foreign income, excise, gross receipts, gross income, ad valorem, profits, gains, property, capital, sales, transfer, use, payroll, employment, severance, withholding, duties, intangibles, franchise, backup withholding, value-added, and other taxes imposed by a Governmental Entity, together with all interest, penalties and additions to tax imposed with respect thereto.

 

  "Tax Return" shall mean a report, return or other document (including any amendments thereto) required to be supplied to a Governmental Entity with respect to Taxes.

 

  "Third Party" shall mean, with respect to the Purchaser, a Person other than the Purchaser or any of its Affiliates.

 

  "Third Party Tender/Exchange Offer" shall have the meaning set forth in Section 4.02(a).

 

  "Transaction Agreements" shall have the meaning set forth in Section 3.01(c).

 

  "Transactions" shall have the meaning set forth in Section 3.01(c).

 

  "Trustee" shall mean an institutional trustee to be selected by the Company with the consent of the Purchaser, which consent shall not be unreasonably withheld or delayed.

 

  "Underwritten Offering" shall mean a sale of Registrable Securities to an underwriter or underwriters for reoffering to the public.

 

  "Voting Stock" shall mean securities of any class or kind having the power to vote generally for the election of directors, managers or other voting members of the governing body of the Company or any successor thereto.

"WKSI" means a "well known seasoned issuer" as defined under Rule 405.

 

  Section 1.02 General Interpretive Principles.  Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders.  The name assigned to this Agreement and the article and section captions and table of contents used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof.  Whenever the words "include," "includes," or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation."  Unless otherwise specified, the terms "hereto," "hereof," "herein" and similar terms refer to this Agreement as a whole (including the exhibits, schedules and disclosure statements hereto), and references herein to Articles or Sections, Schedule, Exhibit or Annex refer to Articles or Sections, or Schedules, Exhibits or the Annex, of this Agreement.  The word "or" shall not be deemed exclusive.  For the avoidance of doubt, notwithstanding anything in this Agreement to the contrary, none of the Notes will have any right to vote or any right to receive any dividends or other distributions that are made or paid to the holders of the shares of Company Common Stock.

 

 

 

 

ARTICLE II 


SALE AND PURCHASE OF THE NOTES

  Section 2.01 Sale and Purchase of the Notes.

 

  (a) Subject to the terms and conditions of this Agreement, at the Closing the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase and acquire from the Company, the Notes in an aggregate principal amount set forth opposite the name of the Purchaser on Schedule I hereto for a purchase price equal to the principal amount of the Notes purchased by the Purchaser (the "Purchase Price").

 

  Section 2.02 Closing.

 

  (a) Subject to the satisfaction or waiver of the conditions precedent set forth in Sections 2.02(c) and (d), the closing (the "Closing") of the purchase and sale of the Notes hereunder shall take place at the offices of Simpson Thacher & Bartlett LLP located at 2475 Hanover St., Palo Alto, California 94304 (i) on June 17, 2016 (or such later Business Day on or before June 21, 2016 with respect to which the Company notifies the Purchaser in writing at least one Business Day in advance thereof) or (ii) at such other place, time or date as may be mutually agreed upon in writing by the Company and the Purchaser (the date on which the Closing actually occurs, the "Closing Date").

 

  (b) To effect the purchase and sale of Notes, upon the terms and subject to the conditions set forth in this Agreement, at the Closing:

 

(i)

The Company shall, and shall instruct the Trustee to, execute and deliver the Indenture at the Closing.  The Company shall deliver the fully executed Indenture to the Purchaser at the Closing, against payment in full by or on behalf of the Purchaser of the Purchaser's Purchase Price for the Notes being purchased by the Purchaser hereunder.

 

(ii)

The Company shall issue and deliver to the Purchaser the Notes being purchased by the Purchaser hereunder through the facilities of The Depository Trust Company, or at the option of the Purchaser, registered in the name of the Purchaser, against payment in full by or on behalf of the Purchaser of the Purchaser's Purchase Price for the Notes.

 

(iii)

The Purchaser shall cause a wire transfer to be made in same day funds to an account of the Company designated in writing by the Company to the Purchaser prior to the date hereof in an amount equal to the Purchaser's Purchase Price for the Notes being purchased by the Purchaser hereunder.

 

(iv)	The Purchaser shall deliver to the Company a duly completed and executed IRS Form W-8 or such other appropriate form.

 

   (c) The obligations of the Purchaser to purchase the Notes being purchased by the Purchaser hereunder are subject to the satisfaction or waiver of the following conditions as of the Closing:

 

 

 

  

(i)	the purchase and sale of the Notes pursuant to Section 2.02(b) shall not be prohibited or enjoined by any court of competent jurisdiction;

 

(ii)	the Company and the Trustee shall have executed the Indenture on the Closing Date and delivered the Indenture to the Purchaser and the Company shall have executed and delivered to the Purchaser the Notes being purchased by the Purchaser hereunder to the Purchaser;

 

(iii)

(A) the representations and warranties of the Company set forth in Sections 3.01(a), (c) and (e) shall be true and correct in all material respects on and as of the Closing Date, (B) the representations and warranties of the Company set forth in Section 3.01(h)(ii) shall be true and correct on and as of the Closing Date and (C) the representations and warranties of the Company set forth in Section 3.01 (other than Sections 3.01(a), (c), (e) and (h)(ii)) shall be true and correct on and as of the Closing Date (without giving effect to materiality, Material Adverse Effect, or similar phrases in the representations and warranties), except where the failure of such representations and warranties referenced in this clause (C) to be so true and correct, individually or in the aggregate, has not had and would not have a Material Adverse Effect;

 

(iv)	the Company shall have delivered to the Trustee, as custodian, the Purchaser Global Securities registered in the name of The Depository Trust Company and such Purchaser Global Securities shall be eligible for book-entry settlement with The Depository Trust Company;

 

(v)	the Company shall have performed and complied in all material respects with all agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing Date; and

 

(vi)	the Purchaser shall have received a certificate, dated the Closing Date, duly executed by a director or other authorized signatory of the Company on behalf of the Company, certifying that the conditions specified in Section 2.02(c)(iii) and (v) have been satisfied.

 

  (d)  the obligations of the Company to sell the Notes to the Purchaser are subject to the satisfaction or waiver of the following conditions as of the Closing:

 

  (i)   the purchase and sale of the Notes pursuant to Section 2.02(b) shall not be prohibited or enjoined by any court of competent jurisdiction;

 

 

(v)	the Company shall have received certificates, dated the Closing Date, duly executed by a director of the Purchaser on behalf of the Purchaser, certifying that the conditions specified in Section 2.02(d)(iii) and (iv) have been satisfied.

 

  Section 2.03 Termination.  If the Closing does not occur on or prior to 5:30 p.m. New York time on June 21, 2016, this Agreement shall automatically terminate and each of the parties hereto shall be relieved of its duties and obligations arising under this Agreement after the date of such termination; provided, that no such termination shall relieve any party hereto of liability for any breach or default under this Agreement prior to such termination.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

  Section 3.01 Representations and Warranties of the Company.  Except as disclosed in the Company Reports filed with or furnished to the SEC and publicly available prior to the date hereof (excluding in each case any disclosures set forth in the risk factors or "forward-looking statements" sections of such reports, and any other disclosures included therein to the extent they are predictive or forward-looking in nature), the Company represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date as follows:

 

(a)       Existence and Power.  The Company is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, operate and lease its properties, rights and assets and to carry on its business as it is being conducted on the date of this Agreement, and, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties, rights and assets or conducts any business so as to require such qualification.  Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each Subsidiary of the Company that is a "significant subsidiary" (as defined in Rule 1.02(w) of the SEC's Regulation S-X) has been duly organized and is validly existing in good standing (to the extent that the concept of "good standing" is recognized by the applicable jurisdiction) under the laws of its jurisdiction of organization.

 

(b)       Capitalization.  The authorized share capital of the Company consists of (x) 500,000,000 shares of Company Common Stock, (y) 100,000,000 shares of Class B common stock, par value $0.001 per share, of the Company and (z) 25,000,000  shares of preferred stock, par value $0.001 per share, of the Company.  As of June 13, 2016, there were (i) 55,935,827 shares of Company Common Stock issued and outstanding, no shares of Class B Common Stock of the Company issued and outstanding and no shares of preferred stock of the Company issued and outstanding (ii) options to purchase an aggregate of 6,789,421 shares of Company Common Stock issued and outstanding, (iii) 642,340 shares of Company Common Stock underlying the Company's restricted stock unit awards, and (iv) approximately 2,300,000 shares of Company Common Stock reserved for issuance under the Company's  employee or director employment, compensation and/or benefit plans, programs, policies, agreements or other arrangements.  Since January 1, 2016, (A) the Company has only issued options, restricted stock units or other rights to acquire shares of Company Common Stock in the ordinary course of business consistent with past practice and (B) the only shares of capital stock issued by the Company were pursuant to outstanding options, restricted stock units and other rights to purchase shares of Company Common Stock.  All outstanding shares of Company Common Stock are duly authorized, validly issued, fully paid and nonassessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right.  Except as set forth above, the Company has not issued any securities, the holders of which have the right to vote with the stockholders of Company on any matter.  Except as provided in this Agreement, the Notes and the Indenture and except as set forth in or contemplated by this Section 3.01(b), there are no existing options, warrants, calls, preemptive (or similar) rights, subscriptions or other rights, agreements or commitments obligating the Company to issue, transfer or sell, or cause to be issued, transferred or sold, any capital stock of the Company or any securities convertible into or exercisable or exchangeable for such capital stock and there are no current outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of its shares of capital stock.

 

 

 

 

 

 

 

(c)       Authorization.  The execution, delivery and performance of this Agreement, the Indenture and the Notes (the "Transaction Agreements") and the consummation of the transactions contemplated herein and therein (collectively, the "Transactions"), have been duly authorized by the Board of Directors and all other necessary corporate action on the part of the Company.  Assuming this Agreement constitutes the valid and binding obligation of the Purchaser, this Agreement is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the limitation of such enforcement by (A) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other laws affecting or relating to creditors' rights generally or (B) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law (the "Enforceability Exceptions").  On the Closing Date, the Indenture will be duly executed and delivered by the Company and, assuming the Indenture will be a valid and binding obligation of the Trustee, the Indenture will be a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.

 

(d)       General Solicitation; No Integration.  Neither the Company nor any other Person or entity authorized by the Company to act on its behalf has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of the Notes.  The Company has not, directly or indirectly, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which, to its knowledge, is or will be integrated with the Notes sold pursuant to this Agreement.

 

(e)       Valid Issuance.  The Notes have been duly authorized by all necessary corporate action of the Company.  When issued and sold against receipt of the consideration therefor, the Notes will be valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to the limitation of such enforcement by the Enforceability Exceptions.  The Company has available for issuance the maximum number of shares (including make-whole shares) of Company Common Stock initially issuable upon conversion of the Notes if such conversion were to occur immediately following Closing (assuming fully physical share settlement). The Conversion Shares to be issued upon conversion of the Notes in accordance with the terms of the Notes have been duly authorized, and when issued upon conversion of the Notes, all such Company Common Stock will be validly issued, fully paid and nonassessable and free of pre-emptive or similar rights.  The Company is a WKSI eligible to file a registration statement on Form S-3 under the Securities Act.

 

 

 

 

 

 

(f)        Non-Contravention/No Consents.  The execution, delivery and performance of the Transaction Agreements, the issuance of the Notes, the issuance of the Conversion Shares upon conversion of the Notes in accordance with their terms and the consummation by the Company of the Transactions, does not conflict with, violate or result in a breach of any provision of, or constitute a default under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, (i) the certificate of incorporation or bylaws of the Company, (ii) the Credit Agreement, dated as of October 9, 2014, by and among the Company and the guarantors, lenders and agents party thereto, as amended, or any other mortgage, note, indenture, deed of trust, lease, license, loan agreement or other agreement binding upon the Company or any of its Subsidiaries or (iii) any permit, government license, judgment, order, decree, ruling, injunction, statute, law, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, other than in the cases of clauses (ii) and (iii) as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Assuming the accuracy of the representations of the Purchaser set forth herein, other than (A) any required filings or approvals under the HSR Act or any foreign antitrust or competition laws, requirements or regulations in connection with the issuance of Conversion Shares upon the conversion of the Notes, (B) the filing of a Supplemental Listing Application with the NYSE, (C) any required filings pursuant to the Exchange Act or the rules of the SEC or the NYSE or (D) as have been obtained prior to the date of this Agreement, no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required on the part of the Company or any of its Subsidiaries in connection with the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Transactions (in each case other than the transactions contemplated by Article V), except for any consent, approval, order, authorization, registration, declaration, filing, exemption or review the failure of which to be obtained or made, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

    (g)         Reports; Financial Statements.

 

 

(i)             The Company has filed or furnished, as applicable, (A) its annual report on Form 10-K for the fiscal year ended December 31, 2015, (B) its quarterly report on Form 10-Q for its fiscal quarter ended March 31, 2016, (C) its proxy statement relating to the annual meeting of the stockholders of the Company held in 2016 and (D) all other forms, reports, schedules and other statements required to be filed or furnished by it with the SEC under the Exchange Act or the Securities Act since December 31, 2015 (collectively, the "Company Reports").  As of its respective date, and, if amended, as of the date of the last such amendment, each Company Report complied in all material respects as to form with the applicable requirements of the Securities Act and the Exchange Act, and any rules and regulations promulgated thereunder applicable to such Company Report.  As of its respective date, and, if amended, as of the date of the last such amendment, no Company Report contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.

 

 

 

 

 

 

 

(ii)            Each of the consolidated balance sheets, and the related consolidated statements of income, changes in stockholders' equity and cash flows, included in the Company Reports filed with the SEC under the Exchange Act (A) have been prepared from, and are in accordance with, the books and records of the Company and its Subsidiaries, (B) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates shown and the results of the consolidated operations, changes in stockholders' equity and cash flows of the Company and its consolidated Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth, subject, in the case of any unaudited financial statements, to normal recurring year-end audit adjustments, (C) have been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise set forth therein or in the notes thereto, and in the case of unaudited financial statements except for the absence of footnote disclosure, and (D) otherwise comply in all material respects with the requirements of the SEC.

 

(h)        Absence of Certain Changes.  Since January 1, 2016 until the date hereof, (i) the Company and its Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business, and (ii) no events, changes or developments have occurred that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect.

 

(i)         No Undisclosed Liabilities, etc.  As of the date hereof, there are no liabilities of the Company or any of its Subsidiaries that would be required by GAAP to be reflected on the face of the balance sheet, except (i) liabilities reflected or reserved against in the financial statements contained in the Company Reports, (ii) liabilities incurred since January 1, 2016 in the ordinary course of business and (iii) liabilities that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(j)        Compliance with Applicable Law.  Each of the Company and its Subsidiaries has complied in all respects with, and is not in default or violation in any respect of, any law, statute, order, rule, regulation, policy or guideline of any federal, state or local Governmental Entity applicable to the Company or such Subsidiary, and none of the Company or any of its Subsidiaries has received any notice of a default or violation of any such law, statute, order, rule, regulation, policy or guideline, in each case other than such non-compliance, defaults or violations that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect.

 

 

 

 

 

 

 

(k)        Legal Proceedings.  Neither the Company nor any of its Subsidiaries is a party to any, and there are no pending, or to the knowledge of the Company, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental investigations of any nature against the Company or any of its Subsidiaries (i) that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect or (ii) that challenge the validity of or seek to prevent the Transactions. As of the date hereof, neither the Company nor any of its Subsidiaries is subject to any order, judgment or decree of a Governmental Entity that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect.  As of the date hereof, except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, to the knowledge of the Company, there is no investigation or review pending or threatened by any Governmental Entity with respect to the Company or any of its Subsidiaries or with respect to the Transactions.

 

(l)         Investment Company Act.  The Company is not, and immediately after receipt of payment for the Notes will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

 

(m)       Taxes and Tax Returns.  Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect:

 

(iii)     the Company and each of its Subsidiaries has timely filed (taking into account all applicable extensions) all Tax Returns required to be filed by it, and all such Tax Returns were correct and complete in all respects, and the Company and each of its Subsidiaries has paid (or has had paid on its behalf) to the appropriate Governmental Entity all Taxes that are required to be paid by it, except, in each case, with respect to matters contested in good faith or for which adequate reserves have been established in accordance with GAAP; and

 

(iv)     there are no disputes pending, or claims asserted in writing, in respect of Taxes of the Company or any of its Subsidiaries for which reserves that are adequate under GAAP have not been established.

 

(n)       No Piggyback or Preemptive Rights.  Other than this Agreement, there are no contracts, agreements or understandings between the Company and any person granting such person the right (other than rights which have been waived in writing or otherwise satisfied) to (i) require the Company to include in any Registration Statement filed pursuant to Article V any securities other than the Registrable Securities or (ii) preemptive rights to subscribe for the Conversion Shares issuable upon conversion of the Notes, except in each case of (i) and (ii), as may have been duly waived.

 

 

 

 

 

(o)       Brokers and Finders.  None of the Company or any of its Subsidiaries has retained, utilized or been represented by, or otherwise become obligated to, any broker, placement agent, financial advisor or finder in connection with the transactions contemplated by this Agreement whose fees the Purchaser would be required to pay.

 

(p)       Intellectual Property.  Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, the Company and its Subsidiaries own or possess sufficient rights to use all patents, patent applications, inventions, copyrights, know-how, trade secrets, trademarks, service marks and trade names and other technology and intellectual property rights (collectively, "Intellectual Property") used in or necessary for the conduct of their respective businesses as currently conducted. To the Company's knowledge, the conduct of the respective businesses of the Company and its Subsidiaries does not infringe the Intellectual Property of others, and to the Company's knowledge, no third party is infringing any Intellectual Property owned by the Company or any of its Subsidiaries.

 

(q)       Greater China Business.  After evaluating guidance from government officials, reviewing the structure, operations and practices of the Company and its Subsidiaries and other direct selling companies in the PRC, Taiwan and Hong Kong (collectively, "Greater China"), and considering the advice of experts in the industry, to the Company's actual knowledge, (i) the conduct of business by the Company and its Subsidiaries in Greater China complies with applicable laws, regulations and orders, except for such failure to be in compliance that would not reasonably be expected to have a Material Adverse Effect, and (ii) there are no actions, investigations, proceedings or inquiries by any Governmental Entity with respect to the conduct of business by the Company and its Subsidiaries in Greater China that would reasonably be expected to have a Material Adverse Effect.

 

     (r)   No Additional Representations.

 

(v)       The Company acknowledges that the Purchaser makes no representation or warranty as to any matter whatsoever except as expressly set forth in Section 3.02 and in any certificate delivered by the Purchaser pursuant to this Agreement, and the Company has not relied on or been induced by such information or any other representations or warranties (whether express or implied or made orally or in writing) not expressly set forth in Section 3.02 and in any certificate delivered by the Purchaser pursuant to this Agreement.

 

(vi)      The Company acknowledges and agrees that, except for the representations and warranties expressly set forth in Section 3.02 and in any certificate delivered by the Purchaser pursuant to this Agreement, (i) no person has been authorized by the Purchaser to make any representation or warranty relating to the Purchaser or otherwise in connection with the transactions contemplated hereby, and if made, such representation or warranty must not be relied upon by the Company as having been authorized by the Purchaser, and (ii) any materials or information provided or addressed to the Company or any of its Affiliates or representatives are not and shall not be deemed to be or include representations or warranties of the Purchaser unless any such materials or information are the subject of any express representation or warranty set forth in Section 3.02 of this Agreement and in any certificate delivered by the Purchaser pursuant to this Agreement.

 

 

 

 

 

 

 

      Section 3.02 Representations and Warranties of the Purchaser.  The Purchaser represents and warrants to, and agrees with, the Company, as of the date hereof and as of the Closing Date, as follows:

 

      (a)  Organization; Ownership.

 

(i)     The Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority to own, operate and lease its properties and to carry on its business as it is being conducted on the date of this Agreement.

 

(ii)     The ownership information with respect to the Purchaser disclosed to the Company in writing prior to the date of this Agreement is true and correct.

 

      (b)  Authorization; Sufficient Funds; No Conflicts.

 

(i)      The Purchaser has full corporate power and authority to execute and deliver this Agreement and to consummate the Transactions to which it is a party.  The execution, delivery and performance by the Purchaser of this Agreement and the consummation of the Transactions to which it is a party have been duly authorized by all necessary corporate action on behalf of such party.  No other proceedings on the part of the Purchaser are necessary to authorize the execution, delivery and performance by the Purchaser of this Agreement and consummation of the Transactions. This Agreement has been duly and validly executed and delivered by the Purchaser.  Assuming this Agreement constitutes the valid and binding obligation of the Company, this Agreement is a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to the limitation of such enforcement by the Enforceability Exceptions.

 

(ii)      At and immediately prior to the Closing, the Purchaser will have, cash in immediately available funds sufficient to pay the Purchase Price payable by the Purchaser hereunder.  No more than 50% of the Purchase Price will be funded with proceeds obtained from a Permitted Loan.

 

(iii)      The execution, delivery and performance of this Agreement by the Purchaser, the consummation by the Purchaser of the Transactions to which it is a party and the compliance by the Purchaser with any of the provisions hereof and thereof will not conflict with, violate or result in a breach of any provision of, or constitute a default under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, (A) any provision of such party's organizational documents, (B) any mortgage, note, indenture, deed of trust, lease, license, loan agreement or other agreement binding upon the Purchaser or (C) any permit, government license, judgment, order, decree, ruling, injunction, statute, law, ordinance, rule or regulation applicable to the Purchaser or any of its Affiliates, other than in the cases of clauses (B) and (C) as would not reasonably be expected to materially and adversely affect or delay the consummation of the Transactions to which it is a party by the Purchaser.

 

 

 

 

 

 

(iv)      The payment and/or reimbursement of the Reimbursed Expenses by the Company will not violate the U.S. Foreign Corrupt Practices Act (15 U.S.C. §§ 78dd 1 et seq.), the U.K. Bribery Act 2010, or any other applicable anti-corruption law of a similar nature.

 

(c)        Consents and Approvals.  No consent, approval, order or authorization of, or registration, declaration or filing with, or exemption or review by, any Governmental Entity is required on the part of the Purchaser in connection with the execution, delivery and performance by the Purchaser of this Agreement and the consummation by the Purchaser of the Transactions to which it is a party, except for (i) any required filings or approvals under the HSR Act or any foreign antitrust or competition laws, requirements or regulations in connection with the issuance of the Conversion Shares upon the conversion of the Notes, (ii) any required filings pursuant to the Exchange Act or the rules of the SEC and (iii) any consent, approval, order, authorization, registration, declaration, filing, exemption or review the failure of which to be obtained or made, individually or in the aggregate, would not reasonably be expected to adversely affect or delay the consummation of the Transactions to which it is a party by the Purchaser.

 

      (d)    Securities Act Representations.

 

(i)         The Purchaser is an accredited investor (as defined in Rule 501 of the Securities Act) and is not a U.S. Person (as defined by Rule 902 of the Securities Act). The Purchaser is aware that the sale of the Notes is being made in reliance on a private placement exemption from registration under the Securities Act.  The Purchaser is acquiring the Notes (and any Conversion Shares issuable upon conversion of the Notes) in an offshore transaction (as defined in Rule 902 of the Securities Act) for its own account, and not with a view toward, or for sale in connection with, any distribution thereof in violation of any federal or state securities or "blue sky" law, or with any present intention of distributing or selling such Notes (or any Conversion Shares issuable upon conversion of the Notes) in violation of the Securities Act.  The Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in such Notes (and any Conversion Shares issuable upon conversion of the Notes) and is capable of bearing the economic risks of such investment.  The Purchaser has been provided a reasonable opportunity to undertake and has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement.

 

 

 

 

 

 

 

(ii)          Neither the Purchaser nor any of its Affiliates is acting in concert, and neither the Purchaser nor any of its Affiliates has any agreement or understanding, with any Person that is not an Affiliate of the Purchaser, and is not otherwise a member of a "group" (as such term is used in Section 13(d)(3) of the Exchange Act), with respect to the Company or its securities.

 

(e)          Brokers and Finders.  Except as previously disclosed to the Company in writing prior to the date of this Agreement, neither the Purchaser nor any of its Affiliates has retained, utilized or been represented by, or otherwise become obligated to, any broker, placement agent, financial advisor or finder in connection with the transactions contemplated by this Agreement whose fees the Company would be required to pay.

 

(f)          Ownership of Shares.  Neither the Purchaser nor any of its Affiliates Beneficially Own any shares of Company Common Stock (without giving effect to the issuance of the Notes hereunder) other than any shares of Company Common Stock that may be owned by directors, officers or other employees of the Purchaser or any of its Affiliates in their individual capacities.

 

(g)           No Additional Representations.

 

(i)        The Purchaser acknowledges that the Company does not make any representation or warranty as to any matter whatsoever except as expressly set forth in Section 3.01 and in any certificate delivered by the Company pursuant to this Agreement, and specifically (but without limiting the generality of the foregoing), that, except as expressly set forth in Section 3.01 and in any certificate delivered by the Company pursuant to this Agreement, the Company makes no representation or warranty with respect to (A) any matters relating to the Company, its Subsidiaries or any of its or its Subsidiaries' business, financial condition, results of operations, prospects or otherwise, (B) any projections, estimates or budgets delivered or made available to the Purchaser (or any of its Affiliates, officers, directors, employees or other representatives) of future revenues, results of operations (or any component thereof), cash flows or financial condition (or any component thereof) of the Company and its Subsidiaries or (C) the future business and operations of the Company and its Subsidiaries, and the Purchaser has not relied on or been induced by such information or any other representations or warranties (whether express or implied or made orally or in writing) not expressly set forth in Section 3.01 and in any certificate delivered by the Company pursuant to this Agreement.

 

(ii)        The Purchaser has conducted its own independent review and analysis of the business, operations, assets, liabilities, results of operations, financial condition and prospects of the Company and its Subsidiaries and acknowledges the Purchaser has been provided with sufficient access for such purposes.  The Purchaser acknowledges and agrees that, except for the representations and warranties expressly set forth in Section 3.01 and in any certificate delivered by the Company pursuant to this Agreement, (i) no person has been authorized by the Company to make any representation or warranty relating to itself or its business or otherwise in connection with the transactions contemplated hereby, and if made, such representation or warranty must not be relied upon by the Purchaser as having been authorized by the Company, and (ii) any estimates, projections, predictions, data, financial information, memoranda, presentations or any other materials or information provided or addressed to the Purchaser or any of its Affiliates or representatives are not and shall not be deemed to be or include representations or warranties of the Company unless any such materials or information are the subject of any express representation or warranty set forth in Section 3.01 of this Agreement and in any certificate delivered by the Company pursuant to this Agreement.

 

 

 

 

ARTICLE IV

ADDITIONAL AGREEMENTS

 

       Section 4.01  Taking of Necessary Action.  Each of the parties hereto agrees to use its reasonable efforts promptly to take or cause to be taken all action, and promptly to do or cause to be done all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the sale and purchase of the Notes hereunder, subject to the terms and conditions hereof and compliance with applicable law.  In case at any time before or after the Closing any further action is necessary or desirable to carry out the purposes of the sale and purchase of the Notes, the proper officers, managers and directors of each party to this Agreement shall take all such necessary action as may be reasonably requested by, and the sole expense of, the requesting party.

 

       Section 4.02  Restricted Period; Non-Conversion.

 

        (a)  During the Restricted Period, notwithstanding any rights provided in Article V, the Purchaser shall not, without the Company's prior written consent, directly or indirectly (including by reason of any dividend payable in securities issuance or transfer of equity interests, combination, recapitalization, reclassification, merger, consolidation or otherwise), (x) sell, offer, transfer, assign, mortgage, hypothecate, gift, pledge or dispose of, enter into or agree to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, gift, assignment or similar disposition (including any economic, beneficial or other interest therein) of (any of the foregoing, a "transfer"), any of the Notes or Conversion Shares or (y) enter into or engage in any hedge, swap, short sale, derivative transaction or other agreement or arrangement that transfers to any Third Party, directly or indirectly, in whole or in part, any of the economic consequences of ownership of the Notes or any Conversion Shares (such actions in clauses (x) and (y), "Prohibited Transfers"), other than, in the case of clause (x), Permitted Transfers, and in the case of clause (y), Permitted Derivative Transactions.  "Permitted Transfers" shall mean any (i) transfer to an Affiliate of the Purchaser that executes and delivers to the Company a Joinder becoming a Purchaser party to this Agreement and a duly completed and executed IRS Form W-9, W-8 or such other appropriate form as applicable, (ii) transfer to the Company or any of its Subsidiaries, (iii)  transfer to a Third Party for

 

 

 

 

 

 

 

 

 

cash solely to the extent that all of the net proceeds of such sale are used solely to satisfy a bona fide margin call or collateral pledge enforcement (i.e. posted as collateral) pursuant to a Permitted Loan, or repay a Permitted Loan to the extent necessary to satisfy a bona fide margin call or collateral pledge enforcement on such Permitted Loan or avoid a bona fide margin call or collateral pledge enforcement on such Permitted Loan in either case arising from a payment default under such indebtedness, (iv) transfer with the prior written consent of the Company, (v) tender of any Company Common Stock into a Third Party Tender/Exchange Offer, as defined below, (and any related conversion of Notes to the extent required to effect such tender or exchange) or any transfer effected pursuant to any merger, consolidation, recapitalization or similar transaction consummated by the Company (for the avoidance of doubt, if such Third Party Tender/Exchange Offer does not close for any reason, the restrictions on transfer contained herein shall continue to apply to any Conversion Shares received pursuant to the conversion of any Notes that had previously been converted to participate in any such tender or exchange offer), (vi) transfer of limited partnership, non-managing member limited liability company interests or similar non-controlling interests in a private equity or other investment fund or pooled investment vehicle managed or advised by any Affiliate of the Purchaser, (vii) transfer of shares of any Affiliate of Purchaser (x) that has publicly-traded shares listed on a securities exchange or (y) that is otherwise an operating company or a direct or indirect holding company thereof that in each case with respect to this clause (y) directly or indirectly holds meaningful assets in addition to equity interests in the Purchaser or (viii) issuance of an equity interest of the Purchaser, or right, warrant or similar instrument convertible or exchangeable into or exercisable for equity interests of the Purchaser, issued or granted to a lender in connection with a Permitted Loan.  "Third Party Tender/Exchange Offer" shall mean any tender or exchange offer made to all of the holders of Company Common Stock by a Third Party for a number of outstanding shares of Voting Stock that, if consummated, would result in a Change in Control solely to the extent that the Board of Directors has recommended such tender or exchange offer in a Schedule 14D-9 under the Exchange Act.  "Permitted Derivative Transactions" shall mean, after delivery of any Conversion Notice (as defined in the Indenture) in accordance with the terms of the Indenture, any hedge, swap, short sale, derivative transaction or transfer of any of the economic consequences of ownership of the Notes or any Conversion Shares that are the subject of such Conversion Notice.  Following the Restricted Period, the Purchaser shall not transfer any of the Notes or any Conversion Shares to any of its Affiliates that did not execute and deliver to the Company a Joinder becoming a Purchaser party to this Agreement or did not deliver to the Company a duly completed and executed IRS Form W-9, W-8 or such other appropriate form, as applicable.  Any purported Prohibited Transfer in violation of this Section 4.02 shall be null and void ab initio.  Notwithstanding the foregoing or anything in this Agreement to the contrary, the Purchaser (or an Affiliate of the Purchaser) shall be permitted to mortgage, hypothecate, and/or pledge the Notes and/or the Conversion Shares issuable or issued upon conversion of the Notes (or any interest therein) in respect of one or more bona fide purpose (margin) or bona fide non-purpose loans incurred prior to or on the date hereof (or any refinancing thereof) (each, a "Permitted Loan") for the purpose of the purchase and acquisition of the Notes pursuant to this Agreement.  Any Permitted Loan entered into by the Purchaser or its Affiliates shall be with one or more financial institutions and nothing contained in this Agreement shall prohibit or otherwise restrict the ability of any lender (or its securities' affiliate) or collateral agent to foreclose upon and sell, dispose of or otherwise transfer the Notes and/or the Conversion Shares received upon conversion of the Notes

 

 

 

 

following foreclosure on a Permitted Loan mortgaged, hypothecated and/or pledged to secure the obligations of the borrower following a payment default under a Permitted Loan, except that in respect of a Permitted Loan entered into after the date hereof that is a refinancing of any Permitted Loan incurred prior to or on the date hereof, during the Restricted Period, the foreclosure on such refinanced Permitted Loan shall not be deemed a Permitted Transfer hereunder unless an Event of Default (as defined under the Indenture) shall have first occurred and is continuing at the time of such foreclosure.  Notwithstanding the foregoing or anything to the contrary herein, in the event that any lender or other creditor under a Permitted Loan transaction (including any agent or trustee on their behalf) or any Affiliate of the foregoing exercises any rights or remedies in respect of the Notes or the Conversion Shares issuable or issued upon conversion of the Notes or any other collateral for any Permitted Loan, no lender, creditor, agent or trustee on their behalf or Affiliate of any of the foregoing (other than, for the avoidance of doubt, Purchaser or any of its Affiliates) shall be entitled to any rights or have any obligations or be subject to any transfer restrictions or limitations hereunder (including the rights or benefits provided for in Section 4.06 and Section 4.07), except and to the extent for those expressly provided for in Article V.

 

       (b)  Notwithstanding anything in this Agreement or elsewhere to the contrary, any sale of Company Common Stock pursuant to Article V shall be subject to any applicable limitations set forth in this Section 4.02 and Article V but shall not be subject to any policies, procedures or limitations (other than any applicable federal securities laws and any other applicable laws) otherwise applicable to the Purchaser Designee with respect to trading in the Company's securities and the Company acknowledges and agrees that such policies, procedures or limitations applicable to the Purchaser Designee shall not be violated by any such transfer pursuant to Article V, other than any applicable federal securities laws and any other applicable laws.

 

       (c)  Notwithstanding anything in the Notes or in the Indenture to the contrary, until the six (6) month anniversary of the Closing Date, no Purchaser (including any Party that signs a Joinder) shall, without the Company's prior written consent, convert (or give notice of conversion of) any of the Notes, irrespective of whether permitted pursuant to the terms of the Notes or the Indenture, except (i) in connection with a sale of Conversion Shares that is (A) not prohibited pursuant to this Section 4.02 and (B) not to an Affiliate of the Purchaser and (ii) following the public disclosure or announcement of the entry by the Company into a definitive agreement for a transaction that, if consummated, would result in a Change in Control.  In connection with a conversion covered by Section 4.02(c)(ii), and notwithstanding anything in the Indenture or the Notes to the contrary, the Company shall provide that such Conversion Shares shall be entitled to participate in the transactions contemplated by such definitive agreement in the same manner as the public shareholders of the Company Common Stock generally in their capacities as holders of Company Common Stock (except for any separate agreements in respect of such transaction between or among the other party to such transaction or any of its Affiliates, on the one hand, and any particular holder or holders of the Company Common Stock, on the other hand).  For the avoidance of doubt, notwithstanding anything in the Notes or in the Indenture to the contrary, the Company shall not be obligated to issue any Conversion Shares to the Purchaser or any of its Affiliates prior to the six (6) month anniversary of the Closing Date except as described in this Section 4.02(c).

 

       Section 4.03  Standstill.

 

 

 

 

       (a)  The Purchaser agrees that, during the Standstill Period, it shall not, and shall cause each of its Affiliates (collectively and individually, the Purchaser's "Purchaser's Affiliates") not to, directly or indirectly, in any manner, alone or in concert with others take any of the following actions without the prior consent of the Company (acting through a resolution of the Company's directors not including the Purchaser Designee):

 

(i)     make, engage in, or in any way participate in, directly or indirectly, any "solicitation" of proxies (as such terms are used in the proxy rules of the SEC but without regard to the exclusion set forth in Rule 14a-1(l)(2)(iv)) or consents to vote, or seek to advise, encourage or influence any person with respect to the voting of any securities of the Company for the election of individuals to the Board of Directors or to approve any proposals submitted to a vote of the stockholders of the Company that have not been authorized and approved, or recommended for approval, by the Board of Directors, or become a "participant" in any contested "solicitation" (as such terms are defined or used under the Exchange Act) for the election of directors with respect to the Company, other than a "solicitation" or acting as a "participant" in support of all of the nominees of the Board of the Directors at any stockholder meeting, or make or be the proponent of any stockholder proposal (pursuant to Rule 14a-8 under the Exchange Act or otherwise);

 

(ii)    form, join, encourage, influence, advise or in any way participate in any "group" (as such term is defined in Section 13(d)(3) of the Exchange Act) with any persons who are not Purchaser Affiliates with respect to any securities of the Company or otherwise in any manner agree, attempt, seek or propose to deposit any securities of the Company or any securities convertible or exchangeable into or exercisable for any such securities in any voting trust or similar arrangement, or subject any securities of the Company to any arrangement or agreement with respect to the voting thereof, except as expressly permitted by this Agreement;

 

(iii)    acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, whether by purchase, tender or exchange offer, through the acquisition of control of another person, by joining a partnership, limited partnership, syndicate or other group (including any group of persons that would be treated as a single "person" under Section 13(d) of the Exchange Act), through swap or hedging transactions or otherwise, any securities of the Company or any rights decoupled from the underlying securities that would result in the Purchaser (together with its Purchaser Affiliates), having Beneficial Ownership in more than 15% in the aggregate of the shares of the Company Common Stock outstanding as of such time (assuming all the Notes are converted on a fully physical settlement basis), excluding any issuance by the Company of shares of Company Common Stock or options, warrants or other rights to acquire Company Common Stock (or the exercise thereof) to the Purchaser Designee as compensation for his or her membership on the Board of Directors; provided that nothing herein will require any Notes or shares of Company Common Stock to be sold solely to the extent the Purchaser and its Purchaser Affiliates, collectively, exceed the ownership limit under this paragraph as the result of a share repurchase or any other Company actions that reduces the number of outstanding shares of Company Common Stock;

 

 

 

 

 

 

 

(iv)   transfer, directly or indirectly, through swap or hedging transactions or otherwise, the Notes or Company Common Stock Beneficially Owned by the Purchaser or its Purchaser Affiliates or any economic or voting rights decoupled from the underlying securities held by the Purchaser or its Purchaser Affiliates to any Third Party that, to the knowledge of the Purchaser and its Purchaser Affiliates at the time it enters into such transaction, would result in such Third Party, together with its Affiliates and Associates, having Beneficial Ownership in the aggregate of more than 10% of the shares of Company Common Stock outstanding at such time;

 

(v)   effect or seek to effect, offer or propose to effect, cause or participate in, or in any way knowingly assist or facilitate any other person to effect or seek, offer or propose to effect or participate in, any tender or exchange offer, merger, consolidation, acquisition, scheme of arrangement, business combination, recapitalization, extraordinary dividend or share repurchase, delisting or deregistration of any class of securities of the Company, reorganization, sale or acquisition of all or substantially all assets, liquidation, dissolution or other extraordinary transaction involving the Company or any of its Subsidiaries or joint ventures or any of their respective securities (each, an "Extraordinary Transaction"), or make any public statement with respect to an Extraordinary Transaction; provided, however, that this clause (v) shall not preclude the tender by the Purchaser or its Purchaser Affiliates of any securities of the Company into any Third Party Tender/Exchange Offer (and any related conversion of Notes to the extent required to effect such tender) or the vote by the Purchaser or its Purchaser Affiliates of any voting securities of the Company with respect to any Extraordinary Transaction in accordance with other provisions of this Agreement;

 

(vi)   (A) call or seek to call any meeting of stockholders of the Company, including by written consent, (B) seek representation on the Board of Directors, except as expressly set forth herein, (C) seek the removal of any member of the Board of Directors (other than the Purchaser Designee in accordance with Section 4.07), (D) solicit consents from stockholders or otherwise act or seek to act by written consent with respect to the Company, (E) conduct a referendum of stockholders of the Company or (F) make a request for any stockholder list or other Company books and records, whether pursuant to Section 220 of the DGCL or otherwise;

 

(vii)   make any public disclosure, announcement or statement regarding any intent, purpose, plan or proposal with respect to the Board of Directors, the Company, its management, policies or affairs, any of its securities or assets or this Agreement that is inconsistent with the provisions of this Section 4.03;

 

(viii)  enter into any discussions, negotiations, agreements or understandings with any Third Party with respect to any of the foregoing, or advise, assist, knowingly encourage or seek to persuade any Third Party to take any action or make any public statement with respect to any of the foregoing; or

 

                 (ix)    request, directly or indirectly, any amendment, modification or waiver of this Section 4.03 (including this clause (ix)).

 

 

 

 

 

      (b)   The foregoing provisions of Section 4.03(a) shall not be deemed to prohibit the Purchaser or any of its Purchaser Affiliates or any of their respective members' directors, executive officers, partners, employees, managing members, advisors or agents (acting in such capacity) from communicating privately with the Company's directors, officers or advisors, including requesting any amendment, modification or waiver of this Section 4.03, so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure; provided, that no such person may request, directly or indirectly, any amendment, modification or waiver of this Section 4.03 if such request relates to the taking of any action that is intended to, or would reasonably be expected to, result in a Change in Control.

 

      (c)   Nothing in this Section 4.03 shall (i) limit any action that may be taken by the Purchaser Designee acting solely as a director of the Company consistent with his or her fiduciary duties as a director of the Company if such action does not include any public announcement or disclosure by the Purchaser Designee or the Purchaser or a Purchaser Affiliate or (ii) preclude the Purchaser or any Purchaser Affiliate from participating in any Extraordinary Transaction or Change in Control transaction in the same manner as the public shareholders of the Company Common Stock generally in their capacities as holders of Company Common Stock.

 

      (d) Notwithstanding anything in this Section 4.03 to the contrary, if (i) the Company enters into a definitive agreement providing for a transaction that, if consummated, would result in a Change in Control and (ii) the Company had not, reasonably prior to entering into such definitive agreement, provided the Purchaser with a written notice inviting the Purchaser or a Purchaser Affiliate to make one or more proposal or offers to effect a transaction that would result in a Change in Control, then after the announcement of such transaction and prior to the earlier of any termination of such definitive agreement or Company stockholder approval of such definitive agreement, nothing in this Section 4.03 will prevent the Purchaser or any Purchaser Affiliate from (A) submitting to the Board of Directors one or more bona fide proposals or offers for an alternative transaction involving, directly or indirectly, the Purchaser or one or more of its Purchaser Affiliates, (B) pursuing and entering into any such alternative transaction with the Company and (C) taking any actions in furtherance of the foregoing, including actions relating to obtaining equity and/or debt financing for the alternative transaction as long as (x) any proposal or offer is conditioned on the proposed transaction being approved by the Board of Directors and (y) neither the Purchaser nor any Purchaser Affiliate makes any public announcement or disclosure of such proposal, offer or actions other than any filings and disclosures that may be required in filings with the SEC.  Without limiting Section 4.02, neither the Purchaser nor any Purchaser Affiliate shall be prohibited from electing to tender or exchange into any Third Party Tender/Exchange Offer.

 

      Section 4.04  Securities Laws.  The Purchaser acknowledges and agrees that, as of the Closing Date, the Notes (and the Conversion Shares that are issuable upon conversion of the Notes) have not been registered under the Securities Act or the securities laws of any state and that they may be sold or otherwise disposed of only in one or more transactions registered under the Securities Act and, where applicable, such laws, or as to which an exemption from the registration requirements of the Securities Act and, where applicable, such laws, is available.  The Purchaser acknowledges that, except as provided in Article V with respect to the Conversion Shares, the Purchaser has no right to require the Company or any of its Subsidiaries to register the Notes or the Conversion Shares that are issuable upon conversion of the Notes.

 

 

 

 

 

 

      Section 4.05  Lost, Stolen, Destroyed or Mutilated Securities.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any certificate for any security of the Company and, in the case of loss, theft or destruction, upon delivery of an undertaking by the holder thereof to indemnify the Company (and, if requested by the Company, the delivery of an indemnity bond sufficient in the judgment of the Company to protect the Company from any loss it may suffer if a certificate is replaced), or, in the case of mutilation, upon surrender and cancellation thereof, the Company will issue a new certificate or, at the Company's option, a share ownership statement representing such securities for an equivalent number of shares or another security of like tenor, as the case may be.

 

      Section 4.06  Antitrust Approval and Clearance. The Company and the Purchaser acknowledge that one or more filings under the HSR Act or foreign antitrust laws may be necessary or advisable in connection with the issuance of Conversion Shares upon conversion of the Notes. The Purchaser will promptly notify the Company if any such filing is required on the part of the Purchaser or any of its Affiliates or any successor thereto.  To the extent reasonably requested, the Company will, and the Purchaser will, and will cause its applicable Affiliates to, use reasonable efforts to cooperate in timely making or causing to be made all applications and filings under the HSR Act or any foreign antitrust requirements in connection with the issuance of Conversion Shares upon conversion of Notes held by the Purchaser or any of its Affiliates in a timely manner and as required by the law or set forth in the applicable procedures of the applicable jurisdiction; provided that, notwithstanding in this Agreement to the contrary, the Company shall not have any responsibility or liability for failure of the Purchaser or any of its Affiliates to comply with any applicable law.  For as long as there are Notes outstanding and owned by the Purchaser or its Affiliates, the Company shall as promptly as reasonably practicable provide (no more than once per calendar quarter) such information regarding the Company and its Subsidiaries as the Purchaser may reasonably request in order to determine what foreign antitrust requirements may exist with respect to any potential conversion of the Notes.  The Purchaser shall be responsible for the payment of the filing fees associated with any such applications or filings.

 

      Section 4.07  Board Nomination.

 

      (a)  The Company agrees to appoint Zheqing Shen to the Board of Directors as the initial Purchaser Designee effective no later than forty-five days after the Closing Date by taking all necessary action to increase the size of the Board of Directors unless there otherwise is a vacancy in the Board of Directors and in either event filling the vacancy thereby created with such individual.  Between the Closing and such appointment, Zheqing Shen shall be entitled to attend meetings of the Board of Directors as a non-voting observer and receive all notices of such meetings and related materials provided to the members of the Board of Directors (in each case, except to the extent that such attendance or receipt of notices or materials reasonably would be expected to result in the Company's inability to exercise attorney-client privilege).  The Company agrees that, subject to Section 4.07(c), the Purchaser shall have the right to nominate at each meeting or action by written consent at which individuals will be elected members of the Board of Directors one nominee selected by the Purchaser (for the avoidance of doubt, the Purchaser shall have a right to nominate a member to the Board of Directors if and only so long as the Purchaser and its Affiliates, collectively, do not fall below the Minimum Ownership Threshold (as defined below) at any point in time).  Notwithstanding the foregoing, the Purchaser shall not have a right to nominate any member to the Board of Directors from and after such time as the Purchaser and its Affiliates collectively hold or Beneficially Own less than 50% of the Conversion Shares Beneficially Owned by the Purchaser as of the Closing Date on an as-converted basis (assuming any Subject Securities Beneficially Owned by such Person and its Affiliates are converted on a fully physical settlement basis) (as equitably adjusted for any stock split, reverse stock split, recapitalization or similar event with respect to the Company Common Stock) (the "Minimum Ownership Threshold").

 

 

 

 

 

 

      (b)  Subject to the terms and conditions of this Section 4.07 and applicable law, the Company agrees to include the Purchaser Designee in its slate of nominees for election as directors of the Company at each of the Company's meetings of stockholders or action by written consent at which directors are to be elected and use its reasonable efforts to cause the election of the Purchaser Designee to the Board of Directors (for the avoidance of doubt, the Company will be required to use substantially the same level of efforts and provide substantially the same level of support as is used and/or provided for the other director nominees of the Company with respect to the applicable meeting of stockholders or action by written consent). For the avoidance of doubt, failure of the stockholders of the Company to elect any Purchaser Designee to the Board of Directors shall not affect the right of the Purchaser to nominate directors for election pursuant to this Section 4.07 in any future election of directors.

 

      (c)  Any Purchaser Designee must be a director of the Purchaser that is acceptable to the Nominating and Governance Committee of the Board of Directors (or any successor thereto) acting in good faith.  As a condition to any Purchaser Designee's appointment to the Board of Directors and nomination for election as a director of the Company at the Company's annual meetings of stockholders (A) the Purchaser and the Purchaser Designee must in all material respects provide to the Company (1) all information reasonably requested by the Company that is required to be or customarily disclosed for directors, candidates for directors, and their affiliates and representatives in a proxy statement or other filings under applicable law or regulation or stock exchange rules or listing standards, in each case, relating to their nomination or election as a director of the Company or the Company's operations in the ordinary course of business and (2) information reasonably requested by the Company in connection with assessing eligibility, independence and other criteria applicable to directors or satisfying compliance and legal or regulatory obligations, in each case, relating to their nomination or election as a director of the Company or the Company's operations in the ordinary course of business, with respect to the Purchaser, its Affiliates and the applicable Purchaser Designee, (B) the Purchaser Designee must be qualified to serve as a director of the Company under the DGCL, the rules of the NYSE and the applicable federal securities laws to the same extent as all other directors of the Company and (C) the Purchaser Designee must satisfy the requirements set forth in the Company's Corporate Governance Guidelines, code of conduct and securities trading policy (subject to Section 4.02), in each case as currently in effect (the "Specified Guidelines") with such changes thereto (or such successor policies) as are applicable to all other directors, as are adopted in good faith by the Board of Directors, and as are consistent with clause (d) below (for the avoidance of doubt, the Purchaser Designee shall be required to qualify as an independent director under applicable stock exchange rules and federal securities laws and regulations).  The Company will make all information requests pursuant to this Section 4.07(c) in good faith in a timely manner that allows the Purchaser and the Purchaser Designee a reasonable amount of time to provide such information, and will cooperate in good faith with the Purchaser and the Purchaser Designee in connection with their efforts to provide the requested information.

 

 

 

 

      (d)  The Purchaser acknowledges that at all times while serving as a member of the Board of Directors, the Purchaser Designee, solely in his or her individual capacity, will be required to comply with all policies, procedures, processes, codes, rules, standards and guidelines applicable to all non-executive members of the Board of Directors that are included in the Specified Guidelines as currently in effect with such changes (or such successor policies) as are applicable to all other directors and as are not targeted towards, and are not disproportionately applicable to, the Purchaser Designee. Notwithstanding the foregoing, for so long as an Purchaser Designee is on the Board of Directors, without limiting Sections 4.02 or 4.03 in any respect, (i) the Company shall not implement or maintain any trading policy, equity ownership guidelines (including with respect to the use of Rule 10b5-1 plans and preclearance or notification to the Company of any trades in the Company's securities) or similar guideline or policy with respect to the trading of securities of the Company that applies to the Purchaser or its Affiliates (including a policy that limits, prohibits, restricts Purchaser or its Affiliates from entering into any hedging or derivative arrangements), in each case other than with respect to the Purchaser Designee solely in his or her individual capacity, except as provided herein, or that imposes confidentiality obligations on the Purchaser Designee that are inconsistent with Section 4.14 or the Confidentiality Agreement, (ii) any share ownership requirement for any Purchaser Designee serving on the Board of Directors will be deemed satisfied by the securities owned by the Purchaser and/or its Affiliates and under no circumstances shall any of such policies, procedures, processes, codes, rules, standards and guidelines impose any restrictions on the Purchaser's or its Affiliates' transfers of securities pursuant to Article V (except as otherwise provided therein with respect to Blackout Periods) and (iii) under no circumstances shall any policy, procedure, code, rule, standard or guideline applicable to the Board of Directors be violated by any Purchaser Designee (x) accepting an invitation to serve on another board of directors of a company whose principal line(s) of business do not compete with the principal line(s) of business of the Company or failing to notify an officer or director of the Company prior to doing so, or (y) receiving compensation from the Purchaser or any of its Affiliates, or (z) failing to offer his or her resignation from the Board of Directors except as otherwise expressly provided in this Agreement or pursuant to any majority voting policy adopted by the Board of Directors, and, in each case of (i), (ii) and (iii), it is agreed that any such policies in effect from time to time that purport to impose terms inconsistent with this Section 4.07 shall not apply to the extent inconsistent with this Section 4.07 (but shall otherwise be applicable to the Purchaser Designee).

 

      (e)  Subject to the terms and conditions of this Section 4.07, if a vacancy on the Board of Directors is created as a result of a Purchaser Designee's death, resignation, disqualification or removal for cause, or if the Purchaser desires to nominate a different individual pursuant to this Section 4.07 to replace any then-existing Purchaser Designee, then, at the request of the Purchaser, the Purchaser and the Company (acting through the Board of Directors) shall work together in good faith to fill such vacancy or replace such nominee as promptly as reasonably practical with a replacement Purchaser Designee subject to the terms and conditions hereof, and thereafter such individual shall as promptly as reasonably practical be appointed to the Board of Directors to fill such vacancy and/or be nominated as a Company nominee as a "Purchaser Designee" pursuant to this Section 4.07 (as applicable).

 

 

 

 

 

      (f)  To the fullest extent permitted by the DGCL and subject to any express agreement that may from time to time be in effect, the Company agrees that the Purchaser Designee, the Purchaser and any Affiliate or any portfolio company thereof (collectively, "Covered Persons") may, and shall have no duty not to, (i) invest in, carry on and conduct, whether directly, or as a partner in any partnership, or as a joint venturer in any joint venture, or as an officer, director, stockholder, equity holder or investor in any person, or as a participant in any syndicate, pool, trust or association, any business of any kind, nature or description, whether or not such business is competitive with or in the same or similar lines of business as the Company or any of its Subsidiaries, (ii) do business with any client, customer, vendor or lessor of any of the Company or its Affiliates, and/or (iii) make investments in any kind of property in which the Company may make investments. To the fullest extent permitted by the DGCL, the Company renounces any interest or expectancy to participate in any business or investments of any Covered Person as currently conducted or as may be conducted in the future, and waives any claim it may have against a Covered Person.  The Company agrees that in the event that a Covered Person acquires knowledge of a potential transaction or matter which may constitute a corporate opportunity for both (x) the Covered Person outside of his or her capacity as a member of the Board of Directors and (y) the Company or its Subsidiaries, the Covered Person shall not have any duty to offer or communicate information regarding such corporate opportunity to the Company or its Subsidiaries. To the fullest extent permitted by the DGCL, the Company hereby renounces any interest or expectancy in any potential transaction or matter of which the Covered Person acquires knowledge, except for any corporate opportunity which is expressly offered to a Covered Person in writing in his or her capacity as a member of the Board of Directors, and waives any claim against each Covered Person arising from the fact that such Covered Person (A) pursues or acquires any corporate opportunity for its own account or the account of any Affiliate or other person, (B) directs, recommends, sells, assigns or otherwise transfers such corporate opportunity to another person or (C) does not communicate information regarding such corporate opportunity to the Company; provided, that, in each such case, that any corporate opportunity which is expressly offered to a Covered Person in writing in his or her capacity as a member of the Board of Directors shall belong to the Company.   The Company hereby acknowledges and agrees to indemnify any Purchaser Designee for actions brought against them for activities contemplated by this Section 4.07(f) and advance expenses of such Purchaser Designee in connection with the defense thereof, in each case solely in their capacity as a director of the Company, to the fullest extent permitted under the laws of the State of Delaware and the Company's Certificate of Incorporation.

 

     (g)  The Company's obligations under this Section 4.07 with respect to any Purchaser Designee shall terminate and the Purchaser shall have no designation or nomination rights hereunder with respect to the Purchaser Designee if (i) the Purchaser and its Purchaser Affiliates, collectively, cease to hold or Beneficially Own the Minimum Ownership Threshold or (ii) the Purchaser or any of its Purchaser Affiliates, including any Purchaser Designee, is determined by a final, non-appealable order of a court having competent jurisdiction to be in material breach of any of Sections 4.02 or 4.03, and in such case the Purchaser Designee shall promptly offer to resign from the Board of Directors (and, if requested by the Company, promptly deliver his written resignation to the Board of Directors (which shall provide for his immediate resignation), it being understood that it shall be in the Board of Directors' sole discretion whether to accept or reject such resignation).  If any Purchaser Designee ceases to satisfy in all material respects the conditions and obligations set forth in clauses (c) through (d) of this Section 4.07, the Company may notify the Purchaser thereof and promptly following such notification, (x) the Purchaser Designee shall promptly offer to resign from the Board of Directors (and, if requested by the Company, promptly deliver his written resignation to the Board of Directors (which shall provide for his immediate resignation), it being understood that it shall be in the Board of Directors' sole discretion whether to accept or reject such resignation) and (y) the Purchaser shall be entitled to fill the vacancy created thereby in accordance with Section 4.07(e).  The Purchaser agrees to cause, and agrees to cause its Affiliates to cause, any Purchaser Designee to resign from the Board of Directors if the applicable Purchaser Designee fails to resign if and when requested pursuant to this clause (g).

 

 

 

 

 

     (h)  For the avoidance of doubt, notwithstanding anything in this Agreement or the Notes to the contrary, transferees of the Notes and/or the shares of Company Common Stock (other than Affiliates of the Purchaser who sign a Joinder) shall not have any rights pursuant to this Section 4.07.

 

     Section 4.08  Financing Cooperation.  In connection with any Permitted Loan, the Company will provide such cooperation and assistance as may be reasonably requested by the Purchaser from time to time in connection with any mortgage, hypothecation and/or pledge of the Notes and/or the Conversion Shares issuable or issued upon conversion of the Notes (or any interest therein) as security for the lenders with respect to such Permitted Loan, so long as such cooperation and assistance will not unreasonably disrupt the operation of the business of the Company and its Subsidiaries; provided, however, that the Company shall not be obligated to execute or deliver any documentation in connection therewith other than any acknowledgment of receipt of a notice of mortgage, hypothecation and/or pledge of the Notes and/or the Conversion Shares issuable or issued upon conversion of the Notes (or any interest therein).  Anything in the preceding sentence to the contrary notwithstanding, the Company's obligation to provide any cooperation or assistance as may be requested by the Purchaser under this Section 4.08 is conditioned on (x) the Purchaser delivering to the Company a copy of the loan agreement for the Permitted Loan and (y) the Purchaser certifying to the Company in writing that (i) the loan agreement with respect to which the Security Documents is being delivered constitutes a Permitted Loan being entered into in accordance with this Agreement, the Purchaser has pledged the Notes and/or the Conversion Shares (or any interest therein) as collateral to the lenders under such Permitted Loan and that the execution of such Permitted Loan and the terms thereof do not violate the terms of this Agreement, (ii) to the extent applicable, whether the registration rights under Article V are being assigned to the lenders under that Permitted Loan, (iii) that an Event of Default (as contemplated under the Permitted Loan) constitutes the only circumstances under which the lenders under the Permitted Loan may foreclose on the Notes and/or the Conversion Shares (or any interest therein) and (iv) the Purchaser acknowledges and agrees that the Company will be relying on such certificate when entering into the Security Documents and any inaccuracy in such certificate will be deemed a breach of this Agreement.  Purchaser acknowledges and agrees that the statements and agreements of the Company in any Security Documents are solely for the benefit of the applicable lenders party thereto and that in any dispute between the Company and the Purchaser under this Agreement the Purchaser shall not be entitled to use the statements and agreements of the Company in any Security Documents against the Company.

 

 

 

 

 

     Section 4.09  Certain Tax Matters.  Notwithstanding anything herein to the contrary, the Company shall have the right to deduct and withhold from any payment or distribution made with respect to the Notes (including the issuance of Conversion Shares upon conversion of the Notes) and/or any Conversion Shares issued upon conversion of the Notes such amounts as are required to be deducted or withheld with respect to the making of such payment or distribution (or issuance) under any applicable Tax law.  To the extent that any amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes of this Agreement as having been paid to the person in respect of which such deduction or withholding was made.  In the event the Company previously remitted any amounts to a Governmental Entity on account of Taxes required to be deducted or withheld in respect of any payment or distribution (or deemed distribution) on any Notes, the Company shall be entitled to offset any such amounts against any amounts otherwise payable in respect of such Notes (including the issuance of shares of Company Common Stock upon conversion of the Notes) and/or any Conversion Shares issued upon conversion of the Notes.

 

     Section 4.10  Section 16 Matters.  If the Company becomes a party to a consolidation, merger or other similar transaction or if there is any event or circumstance that may result in the Purchaser, its Affiliates and/or the Purchaser Designee being deemed to have made a disposition or acquisition of equity securities of the Company or derivatives thereof for purposes of Section 16 of the Exchange Act, and if any Purchaser Designee is serving on the Board of Directors at such time or has served on the Board of Directors during the preceding six months (i) the Board of Directors or a committee thereof composed solely of two or more "non-employee directors" as defined in Rule 16b-3 of the Exchange Act will pre-approve such acquisition or disposition of equity securities of the Company or derivatives thereof for the express purpose of exempting the Purchaser's, its Affiliates' and any Purchaser Designee's interests (in each case for the Purchaser and/or its Affiliates, to the extent such persons may be deemed to be "directors by deputization") in such transaction from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder and (ii) if the transaction involves (A) a merger or consolidation to which the Company is a party and the Company Common Stock is, in whole or in part, converted into or exchanged for equity securities of a different issuer, (B) a potential acquisition or deemed acquisition, or disposition or deemed disposition, by the Purchaser, its Affiliates, and/or any Purchaser Designee of equity securities of such other issuer or derivatives thereof and (C) an Affiliate or other designee of the Purchaser or its Affiliates will serve on the board of directors (or its equivalent) of such other issuer pursuant to the terms of an agreement to which the Company is a party (or if the Purchaser notifies the Company of such service a reasonable time in advance of the closing of such transactions), then if the Company requires that the other issuer pre-approve any acquisition of equity securities or derivatives thereof for the express purpose of exempting the interests of any director or officer of the Company or any of its subsidiaries in such transactions from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder, the Company shall require that such other issuer pre-approve any such acquisitions of equity securities or derivatives thereof for the express purpose of exempting the interests of the Purchaser's, its Affiliates' and any Purchaser Designee's (in each case for the Purchaser and/or its Affiliates, to the extent such persons may be deemed to be "directors by deputization" of such other issuer) in such transactions from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder.  If any Purchaser Designee is granted any equity or equity-based awards by the company in connection with his or her service on the Board of Directors (or any committee thereof), (x) the  Board of Directors acknowledges that, immediately upon grant of such award, the Purchaser Designee may assign all rights, title and interest in the shares of Company Common Stock underlying such award to any Affiliate of Purchaser and (y) the Board of Directors or a committee thereof composed solely of two or more "non-employee directors" (as defined in Rule 16b-3 of the Exchange Act) will pre-approve the grant of such awards (and any such subsequent assignment thereof to any Affiliate of Purchaser) to be exempt to the maximum extent legally permitted for purposes of Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder or any other rule or regulation thereunder.

 

 

 

 

     Section 4.11  D&O Indemnification / Insurance Priority Matters.  The Purchaser Designee shall be eligible to enter into an indemnification agreement with the Company on terms that are no less favorable to such director than the most favorable indemnification agreement entered into by the Company with any of its other directors from time to time.  The Company acknowledges and agrees that any Purchaser Designees who are partners, members, employees, advisors or consultants of the Purchaser or its Affiliates may have certain rights to indemnification, advancement of expenses and/or insurance provided by the applicable Purchaser or Affiliate thereof (collectively, the "Purchaser Indemnitors").  The Company acknowledges and agrees that the Company shall be the indemnitor of first resort with respect to any indemnification, advancement of expenses and/or insurance provided in the Company's certificate of incorporation, bylaws and/or indemnification agreement (including Section 5.05 hereof) to any Purchaser Designee in his or her capacity as a director of the Company or any of its subsidiaries (such that the Company's obligations to such indemnitees in their capacities as directors are primary and any obligation of the Purchaser Indemnitors to advance expenses or to provide indemnification or insurance for the same expenses or liabilities incurred by such indemnitees are secondary).  Such indemnitees shall, in their capacities as directors, be entitled to all the rights to indemnification, advancement of expenses and entitled to insurance to the extent provided under (i) the certificate of incorporation and/or bylaws of the Company as in effect from time to time and/or (ii) such other agreement (including Section 5.05 hereof), if any, between the Company and such indemnitees, without regard to any rights such indemnitees may have against the Purchaser Indemnitors.  No advancement or payment by the Purchaser Indemnitors on behalf of such indemnitees with respect to any claim for which such indemnitees have sought indemnification, advancement of expenses or insurance from the Company in their capacities as directors shall affect the foregoing and the Purchaser Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such indemnitees against the Company.

 

     Section 4.12  Conversion Price Matters.  The Conversion Price on the Closing Date will equal $46.50 and the Conversion Rate on the Closing Date (the "Initial Conversion Rate") shall be the quotient (rounded to four decimal places) of $1,000 divided by such Conversion Price; provided, that if any event shall occur between the date hereof and the Closing Date (inclusive) that would have resulted in an adjustment to the Conversion Rate pursuant to Article 10 of the Indenture if the Notes had been issued and outstanding since the date hereof, the Conversion Price and the Initial Conversion Rate shall be adjusted in the same manner as would have been required by Article 10 of the Indenture if the Notes had been issued and outstanding since the date hereof and the Conversion Price and the Initial Conversion Rate shall reflect such adjustment.

 

 

 

 

 

 

     Section 4.13  Voting.  (a) During the Standstill Period, the Purchaser shall take such action (including, if applicable, through the execution of one or more written consents if stockholders of the Company are requested to vote through the execution of an action by written consent in lieu of any such annual or special meeting of stockholders of the Company) at each meeting of the stockholders of the Company as may be required so that all shares of issued and outstanding Company Common Stock Beneficially Owned, directly or indirectly, by it and/or by any of its Purchaser Affiliates are voted in the same manner ("for," "against," "withheld," "abstain" or otherwise) either (i) as recommended by the Board of Directors to the other holders of Company Common Stock (including with respect to director elections so long as the Purchaser Designee is included on the election slate) or (ii) in the same proportion as all votes cast by the stockholders of the Company other than the Purchaser and its Affiliates, and (b) the Purchaser shall, and shall (to the extent necessary to comply with this Section 4.13) cause its Purchaser Affiliates to, be present, in person or by proxy, at all meetings of the stockholders of the Company so that all shares of issued and outstanding Company Common Stock Beneficially Owned by it or them from time to time may be counted for the purposes of determining the presence of a quorum and voted in accordance with the preceding clause (a) at such meetings (including at any adjournments or postponements thereof).

 

     Section 4.14  Confidentiality.

 

     (a)  The Purchaser acknowledges that Confidential Information has been and may in the future be made available to it in connection with its investment in the Company.  The Purchaser agrees that it shall, and shall cause any person to whom Confidential Information is disclosed pursuant to clause (i) below (collectively, "Representatives") to, keep the Confidential Information confidential and use the Confidential Information solely in connection with its investment in the Company.  The Purchaser further acknowledges and agrees that it shall not disclose any Confidential Information to any person, except that Confidential Information may be disclosed (i) to any of the Purchaser's Affiliates or any of the Purchaser's or its Affiliates' respective directors, officers, employees, agents, advisors, attorneys, accountants, consultants, investment bankers or financing sources (or agents or trustees utilized by such financing sources) who reasonably require access to such information in connection with the Purchaser's investment in the Company, including to the extent related to the tax treatment and tax structure of the Transactions, who in each case have been informed of the confidential nature of the Confidential Information, (ii) in the event and to the extent that the Purchaser or any of its Representatives is required to disclose any Confidential Information by applicable law, legal process or other legal compulsion, whether or not in connection with any proceeding by or before a court of law or Governmental Entity (provided that it or such Representative shall (to the extent not prohibited by applicable law) give the Company prompt written notice of such requirement (and in any event prior to any disclosure of Confidential Information in connection therewith) so that the Company may seek an appropriate order or other remedy protecting such Confidential Information from disclosure or waive compliance with the terms of this Section 4.14 (and it or such Representative shall use reasonable efforts to cooperate with the Company to obtain such protective order or other remedy, at the Company's expense)), (iii) to any person to whom the Purchaser in good faith is contemplating a transfer of the Notes or Conversion Shares or in connection with any Permitted Loan; provided that such transfer would not be in violation of the provisions of this Agreement and such potential transferee is advised of the confidential nature of such information and agrees to be bound by a confidentiality agreement enforceable by the Company and consistent with the provisions of this Section 4.14, or (iv) to any regulatory authority or rating agency to which the Purchaser or any of its Affiliates is subject if and to the extent such information is requested by such authority or agency in an inspection, audit, review or investigation by such authority or agency of the Purchaser or such Affiliate that is not specifically directed at the Confidential Information, the Company or any of its Subsidiaries; provided that such authority or agency is advised of the confidential nature of such information and is requested to maintain the confidentiality of such information;  and provided further that the Purchaser or such Affiliate shall (to the extent not prohibited by applicable law) give the Company prompt written notice of such requirement (and in any event prior to any disclosure of Confidential Information in connection therewith) so that the Company may seek an appropriate order or other remedy protecting such Confidential Information from disclosure or waive compliance with the terms of this Section 4.14 (and the Purchaser or such Representative shall use reasonable efforts to cooperate with the Company to obtain such protective order or other remedy, at the Company's expense).  The Purchaser shall be responsible for any actions taken by any of its Representatives of the applicable provisions of this Section 4.14 as if the Purchaser had taken such actions.

 

 

 

 

 

     (b)  For purposes hereof, "Confidential Information" shall mean any information concerning the Company or any of its Subsidiaries or the business, products, markets, condition (financial or otherwise), operations, assets, liabilities, results of operations cash flows or prospects of the Company or any of its Subsidiaries (whether prepared by the Company or otherwise) that is furnished or has been furnished (regardless of the manner in which it is or has been furnished) by or on behalf of the Company to the Purchaser or any of its Representatives at any time (whether before, on or after the Closing Date) in connection with the Purchaser's investment in the Company and all notes, analyses, compilations, forecasts, studies, emails or other documents (in whatever form maintained) prepared by the Purchaser or any of its Representatives that contain or reflect such information (in whole or in part); provided that the term "Confidential Information" does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by the Purchaser or any of its Representatives in violation of this Section 4.14, (ii) was within the Purchaser's or its Representatives' possession prior to it being furnished to the Purchaser or its Representatives by or on behalf of the Company; provided that the source of such information was not known by the Purchaser or any of its Representatives to be bound by a confidentiality agreement or other contractual, legal or fiduciary obligation of confidentiality with respect to such information, or (iii) becomes available to the Purchaser or its Representatives on a non-confidential basis from a source other than the Company; provided that such source is not known by the Purchaser or any of its Representatives to be bound by a confidentiality agreement or other contractual, legal or fiduciary obligation of confidentiality with respect to such information.

 

     (c)  Notwithstanding anything to the contrary contained herein, nothing contained herein shall prevent or restrict (A) the Purchaser's or its Representatives' use (subject, to the extent possible, to a protective order) of Confidential Information in connection with the assertion of any claim against, or the defense of any claim by, the Company or any of its Subsidiaries, or (B) the Purchaser or its Representatives from communicating with their respective investors and potential investors to the extent reasonably required to fulfill their informational and reporting obligations to such persons; provided that the recipients of such information are subject to a customary obligation to keep such information confidential.

 

 

 

 

     (d)  The Purchaser and the Company hereby agree that the Confidentiality Agreement shall terminate at the Closing without further force or effect, except with respect to Transaction Information, with respect to which the Confidentiality Agreement shall continue in full force and effect in accordance with its terms.

 

     Section 4.15  NYSE Listing; WKSI Status.  The Company shall use commercially reasonable efforts to (a) cause the Conversion Shares issuable upon the conversion of the Notes to be approved for listing on the NYSE, subject to official notice of issuance, and (b) maintain its status as a WKSI.

 

     Section 4.16  Par Value. While the Purchaser owns any Notes, the Company will not, without the consent of the Purchaser, increase the par value per share of the Company Common Stock to above $0.001 per share

 

     Section 4.17  Participation Rights.  Until such time as there is no Purchaser Designee serving on the Board of Directors and the Purchaser is no longer entitled to designate a director nominee pursuant to Section 4.07, notwithstanding Section 4.03, whenever the Company or any of its Subsidiaries proposes to issue, directly or indirectly (including, through any underwriters) any Additional Securities that are not Excluded Securities (such proposed issuance, an "Additional Investment") (provided, however, that if such Additional Securities are Company Common Stock or any equity security or instrument that is convertible into, or exercisable or exchangeable for, Company Common Stock, then this Section 4.17 shall only apply if the price per share of Company Common Stock or the effective price per share of Company Common Stock upon the conversion, exercise or exchange thereof (as applicable) is less than the Conversion Price), the Company will provide written notice of such proposed issuance to the Purchaser (an "Offer Notice") at least twenty (20) Business Days prior to the proposed date of the purchase agreement, investment agreement or other agreement (the "Additional Investment Agreement"). Each Offer Notice shall include the applicable purchase price per security for such Additional Investment, the aggregate amount of the proposed Additional Investment and the other material terms and conditions of such Additional Investment, including the proposed closing date. The Offer Notice shall constitute the Company's offer to issue such Additional Investment to the Purchaser substantially on the terms and conditions specified in the Offer Notice, which offer shall be irrevocable for fifteen (15) Business Days following the date the Offer Notice is received by the Purchaser (the "Participation Notice Period"). The Purchaser may irrevocably elect to purchase all (but not less than all) of the Additional Securities on the terms proposed if such proposed Additional Investment is expected by the Company in good faith to be made to only one group of Affiliated investors or irrevocably elect to purchase any or all of the Additional Securities on the terms proposed if such proposed Additional Investment is expected by the Company in good faith to be made to more than one group of Affiliated investors. If the Purchaser irrevocably elects to purchase such Additional Investment specified in the Offer Notice in accordance with this Section 4.17,

 

 

 

 

 

 

the Purchaser shall deliver to the Company during the Participation Notice Period a written notice stating the aggregate amount of the proposed Additional Investment that the Purchaser offers to purchase (the "Participation Notice"). If the Purchaser does not deliver a Participation Notice during the Participation Notice Period (or if, prior to the expiration of the Participation Notice Period, the  Purchaser delivers to the Company a written notice declining to participate in the Additional Investment specified in the Offer Notice), the Purchaser shall be deemed to have waived its right to participate in such Additional Investment under this Section 4.17 and the Company shall thereafter be free to issue during the 80 Business Day period following the expiration of the Participation Notice Period (or the receipt by the Company of a written notice from the Purchaser declining to participate in such Additional Investment) such proposed Additional Investment to one or more third parties at a price no more favorable to, and on such other terms and conditions no more favorable in any material respect to, any such third party than those set forth in the Offer Notice, unless otherwise agreed by the Purchaser and the Company. Any obligation of the Company and the Purchaser to participate in any Additional Investment shall in all cases be conditioned on applicable antitrust clearance or approval under antitrust or other applicable law, and the closing date for such Additional Investment by the Purchaser shall not occur until the later of (x) at least eleven (11) Business Days after the Purchaser's receipt of such clearance or approval or the Purchaser's waiver of such conditions and (y) at least eleven (11) Business Days after the Company and the Purchaser enter into the Additional Investment Agreement in respect of such Additional Investment, in each case of (x) and (y), unless otherwise agreed by the Purchaser and the Company.  For the avoidance of doubt, the Company and its Subsidiaries shall not be obligated to consummate any Additional Investment unless and until an Additional Investment Agreement has been executed by the Company and the Purchaser.  The Purchaser may from time to time designate one or more of its Affiliates through which the participation right in this Section 4.17 may be exercised.  The issuance of "Additional Securities" means the issuance of any equity security, or instrument convertible into or exchangeable for any equity security, of the Company or any of its Subsidiaries, or the granting of any option, warrant, commitment or right by the Company or any of its Subsidiaries with respect to any of the foregoing. The issuance of "Excluded Securities" means any issuance of (i) Additional Securities as consideration to the selling Persons in an acquisition by the Company or its Subsidiaries of a business or asset owned by such Persons, (ii) Additional Securities to a third-party financial institution in connection with a bona fide borrowing by the Company or its Subsidiaries, (iii) Additional Securities to the Company's directors, employees, advisors or consultants (including as a result of the exercise of any option to subscribe for, purchase or otherwise acquire shares of Company Common Stock or upon the vesting or delivery of any award of restricted stock units (including performance-based restricted stock units) that corresponds to Company Common Stock and/or an option to subscribe for, purchase or otherwise acquire shares of Company Common Stock), (iv) Additional Securities by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, (v) Additional Securities in connection with any stock split, stock combination, stock dividend, distribution or recapitalization affecting all of the holders within each class or series of the Company's shares proportionately, (vi) Additional Securities in a bona fide underwritten public offering (including a marketed "Rule 144A" and/or Regulation S offering of debt or equity securities to qualified institutional buyers through one or more initial purchasers) and (vii) Additional Securities issued upon the conversion, exchange or exercise of Additional Securities previously issued in compliance with this Section 4.17. If the Purchaser elects to purchase the Additional Securities pursuant to this Section 4.17, the Purchaser, at its sole expense, shall make any filings required in connection with such participation under antitrust or other applicable law promptly following the delivery to the Company of the corresponding Participation Notice and shall use reasonable efforts to obtain applicable antitrust clearance and/or approval under antitrust or other applicable laws.

 

 

 

 

 

 

 

     Section 4.18  Transfers of Purchaser Global Securities. The Purchaser agrees that (i) except in the case of a foreclosure under a Permitted Loan pursuant to which the lender thereunder is obligated to exchange the foreclosed interest in the Purchaser Global Security for a Global Security other than the Purchaser Global Security, Purchaser and its Affiliates will only transfer their interests in the Purchaser Global Security to a Third Party if such Person receives such transferred interest in a Global Security other than the Purchaser Global Security and (ii) Purchaser and its Affiliates may only transfer an interest in the Purchaser Global Security to an Affiliate of Purchaser if such Affiliate continues to hold such transferred interest in the Purchaser Global Security and not any other Global Security.

 

ARTICLE V 

REGISTRATION RIGHTS

 

     Section 5.01  Registration Statement.

 

     (a)   The Company will prepare and file and use reasonable efforts to cause to be declared effective or otherwise become effective pursuant to the Securities Act in each case no later than the earlier of (x) fifteen (15) Business Days from the last date of the Restricted Period and (y) the date that is eighteen (18) months following the Closing Date (the "Target Registration Date") a Registration Statement in order to provide for resales of Registrable Securities to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, which Registration Statement will (except to the extent the SEC objects in written comments upon the SEC's review of such Registration Statement) include the Plan of Distribution.  In addition, the Company will from time to time use reasonable efforts to file such additional Registration Statements to cover resales of any Registrable Securities that are not registered for resale pursuant to a pre-existing Registration Statement and will use its reasonable efforts to cause such Registration Statement to be declared effective or otherwise to become effective under the Securities Act and, subject to Section 5.02, will use its reasonable efforts to keep the Registration Statement continuously effective under the Securities Act at all times until the Registration Termination Date.  Any Registration Statement filed pursuant to this Article V shall cover only Registrable Securities, shall be on Form S-3 (or a successor form) if the Company is eligible to use such form and shall be an automatically effective Registration Statement if the Company is a WKSI.

 

     (b)   Subject to the provisions of Section 5.02 and further subject to the availability of a Registration Statement on Form S-3 (or any successor form thereto) to the Company pursuant to the Securities Act and the rules and interpretations of the SEC, the Company will use its reasonable efforts to keep the Registration Statement (or any replacement Registration Statement) continuously effective until the earlier of (such earlier date, the "Registration Termination Date"): (i) the date on which all Registrable Securities covered by the Registration Statement have been sold thereunder in accordance with the plan and method of distribution disclosed in the prospectus included in the Registration Statement and (ii) there otherwise cease to be any Registrable Securities.

 

 

 

 

 

 

     (c)   Notwithstanding anything herein to the contrary, during such period of time from and after the Target Registration Date that the Company ceases to be eligible to file or use a Registration Statement on Form S-3 (or any successor form thereto), upon the written request of any holder of Registrable Securities, the Company shall use its reasonable efforts to file a Registration Statement on Form S-1 (or any successor form) under the Securities Act covering the Registrable Securities of the requesting party and use reasonable efforts to cause such Registration Statement to be declared effective pursuant to the Securities Act as soon as reasonably practicable after filing thereof and file and cause to become effective such amendments thereto as are necessary in order to keep such Registration Statement continuously available_.  Each such written request must specify the amount and intended manner of disposition of such Registrable Securities; provided, that the minimum amount of such Registrable Securities shall be $50,000,000.  Any Registration Statement required to be filed pursuant to this Section 5.01(c) shall not be required to cover the Registrable Securities to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.  When the Company regains ability to file a Registration Statement on Form S-3 covering the Registrable Securities it shall as promptly as practicably do so in accordance with Section 5.01(a).

 

     Section 5.02  Registration Limitations and Obligations.

 

     (a)   Subject to Section 5.01, the Company will use reasonable efforts to prepare such supplements or amendments (including a post-effective amendment), if required by applicable law, to each applicable Registration Statement and file any other required document so that such Registration Statement will be Available at all times during the period for which such Registration Statement is, or is required pursuant to this Agreement to be, effective; provided, that no such supplement, amendment or filing will be required during a Blackout Period.  In order to facilitate the Company's determination of whether to initiate a Blackout Period, the Purchaser shall give the Company notice of any proposed sale of Registrable Securities pursuant to the Registration Statement at least two (2) Business Days (or, if two Business Days is not practicable, one (1) Business Day) prior to the proposed date of sale (which notice shall not bind the Purchaser to make any sale).

 

     (b)   Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providing written notice to the holders of Registrable Securities, to require such holders of Registrable Securities to suspend the use of the prospectus for sales of Registrable Securities under the Registration Statement during any Blackout Period; provided, for purposes of this Section 5.02, the Company shall only be obligated to provide written notice to any holder or Beneficial Owner of Registrable Securities of any such Blackout Period, or the certificate described in the third sentence of this Section 5.02(b), if such holder or Beneficial Owner has specified in writing to the Company for purposes of receiving such notice such holder's or Beneficial Owner's address, contact and fax number information.  No sales may be made under the applicable Registration Statement during any Blackout Period.  In the event of a Blackout Period, the Company shall (x) deliver to the holders of Registrable Securities a certificate signed by the chief executive officer, chief financial officer or general counsel of the Company confirming that the conditions described in the definition of Blackout Period are met (but which certificate need not specify the nature of the event causing such conditions to have been met), which certificate shall contain an approximation of the anticipated delay, and (y) notify each holder of Registrable Securities promptly upon each of the commencement and the termination of each Blackout Period, which notice of termination shall be delivered to each holder of Registrable Securities no later than the close of business of the last day of the Blackout Period.  In connection with the expiration of any Blackout Period and without any further request from a holder of Registrable Securities, the Company to the extent necessary and as required by applicable law shall as promptly as reasonably practicable prepare supplements or amendments, including a post-effective amendment, to the Registration Statement or the prospectus, or any document incorporated therein by reference, or file any other required document so that the Registration Statement will be Available.  A Blackout Period shall be deemed to have expired when the Company has notified the holders of Registrable Securities that the Blackout Period is over and the Registration Statement is Available. Notwithstanding anything in this Agreement to the contrary, the absence of an Available Registration Statement at any time from and after the Target Registration Date shall be considered a Blackout Period and subject to the limitations therein.

 

 

 

 

 

     (c)   At any time that a Registration Statement is effective and prior to the Registration Termination Date, if a holder of Registrable Securities delivers a notice to the Company (a "Take-Down Notice") stating that it intends to sell at least $50,000,000 of Registrable Securities held by such holder and its Affiliates, in each case, pursuant to the Registration Statement, then, the Company shall amend or supplement the Registration Statement as may be necessary and to the extent required by law so that the Registration Statement remains Available in order to enable such Registrable Securities to be distributed in an Underwritten Offering (subject to Section 5.02(b)).  In connection with any Underwritten Offering of Registrable Securities for which a holder delivers a Take-Down Notice and satisfies the dollar thresholds set forth in first sentence above, and where the Take-Down Notice contemplates reasonable and customary marketing efforts not to exceed twenty-four (24) hours by the Company and the underwriters, the Company will use reasonable efforts to cooperate and make its senior officers available for participation in such marketing efforts (which marketing efforts will not, for the avoidance of doubt, include a "road show" requiring such officers to travel outside of the city in which they are primarily located).  The holder of Registrable Securities that delivered the applicable Take-Down Notice shall select the underwriter(s) for each Underwritten Offering; provided that the managing underwriter(s) (if there is only one underwriter, such underwriter shall be deemed to be the managing underwriter) shall be reasonably acceptable to the Company. The Company shall select the counsel for the managing underwriter(s); provided that such counsel shall be reasonably acceptable to the underwriter(s) and the holder of Registrable Securities that delivered the applicable Take-Down Notice. Such holder shall determine the pricing of the Registrable Securities offered pursuant to any such Registration Statement, including the underwriting discount and fees payable by such holder to the underwriters in such Underwritten Offering.  Such holder shall reasonably determine the timing of any such registration and sale.  Such holder shall determine the applicable underwriting discount and other financial terms, and the holder of the Registrable Securities participating in the Underwritten Offering shall be solely responsible for all such discounts and fees payable to such underwriters in such Underwritten Offering for the Registrable Securities sold by such holders.  Without the consent of the applicable holder of Registrable Securities subject to an Underwritten Offering, no Underwritten Offering pursuant to this Agreement shall include any securities other than Registrable Securities.

 

 

 

 

 

 

 

     (d)   Notwithstanding anything herein to the contrary, (i) if holders of Registrable Securities engage or propose to engage in a "distribution" (as defined in Regulation M under the Exchange Act) of Registrable Securities, such holders shall discuss the timing of such distribution with the Company reasonably prior to commencing such distribution, and (ii) such distribution must not be for less than $50,000,000 of Registrable Securities held by such holders.

 

     (e)   In connection with a distribution of Registrable Securities in which a holder of Registrable Securities is selling at least $75,000,000 of Registrable Securities, the Company shall, to be extent requested by managing underwriter(s) of such a distribution, be subject to a restricted period of the same length of time as such holder agrees with the managing underwriter(s) (but not to exceed 90 days) during which the Company may not offer, sell or grant any option to purchase Company Common Stock (in the case of an offering of Company Common Stock or securities convertible or exchangeable for Company Common Stock) and any debt securities (in the case of an offering of debt securities) of the Company, subject to customary carve-outs that include, but are not limited to, (i) issuances pursuant to the Company's employee or director stock plans and issuances of shares upon the exercise of options or other equity awards under such stock plans and (ii) in connection with acquisitions, joint ventures and other strategic transactions.

 

     Section 5.03  Registration Procedures.

 

     (a)   In connection with the registration of any Registrable Securities under the Securities Act and in connection with any distribution of Registered Securities pursuant thereto as contemplated by this Agreement (including any sale referred to in any Take-Down Notice), the Company shall as promptly as reasonably practicable, subject to the other provisions of this Agreement:

 

(i)       subject to the provisions of Section 5.01(a), use reasonable efforts to prepare and file with the SEC a Registration Statement to effect such registration in accordance with the intended method or methods of distribution of such securities and thereafter use reasonable efforts to cause such Registration Statement to become and remain effective pursuant to the terms of this Article V; provided, however, that the Company may discontinue any registration of its securities which are not Registrable Securities at any time prior to the effective date of the Registration Statement relating thereto; provided, further, that before filing such registration statement or any amendments or supplements thereto, including any prospectus supplements in connection with a sale referred to in a Take-Down Notice (but excluding amendments and supplements that do nothing more than name Selling Holders (as defined below) and provide information with respect thereto), the Company will furnish to the holders which are including Registrable Securities in such registration ("Selling Holders") and the lead managing underwriter(s), if any, copies of all such documents proposed to be filed, which documents will be subject to the review and reasonable comment (which comments will be considered in good faith by the Company) of the counsel (if any) to such holders and counsel (if any) to such underwriter(s), and other documents reasonably requested by any such counsel, including any comment letters from the SEC, and, if requested by any such counsel, provide such counsel and the lead managing underwriter(s), if any, reasonable opportunity to participate in the preparation of such Registration Statement and each prospectus (including any prospectus supplement) included or deemed included therein and such other opportunities to conduct a customary and reasonable due diligence investigation (in the context of a registered underwritten offering) of the Company, including reasonable access to (including responses to any reasonable inquiries by the lead managing underwriter(s) and their counsel) the Company's books and records, officers, accountants and other advisors, provided that the same is not disruptive to the business of the Company; provided that such persons shall first agree in writing with the Company that any information that is reasonably designated by the Company as confidential at the time of delivery shall be kept confidential by such persons subject to customary exceptions;

 

 

 

 

 

 

 

(ii)      at or before any Registration Statement is declared or otherwise becomes effective, qualify the Indenture under the Trust Indenture Act of 1939, as amended, and appoint a new trustee under the Indenture to the extent such qualification requires the appointment of a new trustee thereunder;

 

(iii)    subject to Section 5.02, prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary and to the extent required by applicable law to keep such Registration Statement effective and Available pursuant to the terms of this 0;

 

(iv)   if requested by the lead managing underwriter(s), promptly include in a prospectus supplement or post-effective amendment such information as the lead managing underwriter(s), if any, and such holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or such post-effective amendment as soon as reasonably practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 5.03(a)(iv) that are not, in the opinion of counsel for the Company, in compliance with applicable law;

 

(v)   furnish to the Selling Holders and each underwriter, if any, of the securities being sold by such Selling Holders such number of conformed copies of such Registration Statement and of each amendment and supplement thereto, such number of copies of the prospectus and any prospectus supplement contained in or deemed part of such Registration Statement (including each preliminary prospectus supplement) and each free writing prospectus (as defined in Rule 405 of the Securities Act) (a "Free Writing Prospectus") utilized in connection therewith and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents as such Selling Holders and underwriter(s), if any, may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Selling Holders;

 

(vi)    use reasonable efforts to cause such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed;

 

 

 

 

 

 

 

(vii)   use reasonable efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement;

 

(viii)  as promptly as practicable notify in writing the holders of Registrable Securities and the underwriters, if any, of the following events:  (A) the filing of the Registration Statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective amendment to such Registration Statement or any Free Writing Prospectus utilized in connection therewith, and, with respect to such Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) any request by the SEC or any other U.S. or state Governmental Entity for amendments or supplements to such Registration Statement or the prospectus, (C) the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings by any person for that purpose, (D) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or "blue sky" laws of any jurisdiction or the initiation or threat of any proceeding for such purpose, (E) if at any time the representations and warranties of the Company contained in any agreement (including any underwriting agreement) related to such registration cease to be true and correct in any material respect, and (F) upon the happening of any event that makes any statement made in such Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such registration statement, prospectus or documents so that, in the case of such Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make  the statements therein not misleading, and that in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, in the case of clause (F), that such notice need not include the nature or details concerning such event;

 

(ix)  use reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest reasonable practicable date, except that the Company shall not for any such purpose be required to (A) qualify generally to do business as a foreign corporation or as a dealer in securities in any jurisdiction wherein it would not but for the requirements of this clause (ix) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction or (C) file a general consent to service of process in any such jurisdiction;

 

(x)  cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority, Inc.;

 

 

 

 

 

 

 

 

(xi)  prior to any public offering of Registrable Securities, use reasonable efforts to register or qualify or cooperate with the Selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the applicable state securities or "blue sky" laws of those jurisdictions within the United States as any holder reasonably requests in writing to keep each such registration or qualification (or exemption therefrom) effective until the Registration Termination Date; provided, that the Company will not be required to (A) qualify generally to do business as a foreign corporation or as a dealer in securities in any jurisdiction wherein it would not but for the requirements of this clause (xi) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction or (C) file a general consent to service of process in any such jurisdiction;

 

(xii)  use reasonable efforts to cooperate with the holders to facilitate the timely preparation and delivery of certificates or book-entry securities representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statements, which certificates or book-entry securities shall be free, to the extent permitted by the Indenture and applicable law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such holders may request in writing; and in connection therewith, if required by the Company's transfer agent, the Company will promptly after the effectiveness of the Registration Statement cause to be delivered to its transfer agent when and as required by such transfer agent from time to time, any authorizations, certificates, directions and other evidence required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without legend upon sale by the holder of such shares of Registrable Securities under the Registration Statement; and

 

(xiii) agrees with each holder of Registrable Securities that, in connection with any Underwritten Offering or other resale pursuant to the Registration Statement in accordance with the terms hereof, it will use reasonable efforts to negotiate in good faith and execute all customary indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements (in each case on terms reasonably acceptable to the Company), including using reasonable efforts to procure customary legal opinions and auditor "comfort" letters.

 

      (b)  The Company may require each Selling Holder and each underwriter, if any, to (i) furnish the Company in writing such information regarding each Selling Holder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably request in writing to complete or amend the information required by such Registration Statement and/or any other documents relating to such registered offering, and (ii) execute and deliver, or cause the execution or delivery of, and to perform under, or cause the performance under, any agreements and instruments reasonably requested by the Company to effectuate such registered offering, including, without limitation, opinions of counsel and questionnaires.  If the Company requests that the holders of Registrable Securities take any of the actions referred to in this Section 5.03(b), such holders shall take such action promptly and as soon as practicable following the date of such request.

 

 

 

 

 

 

     (c)  Each Selling Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clauses (B), (C), (D), (E) and (F) of Section 5.03(a)(viii), such Selling Holder shall forthwith discontinue such Selling Holder's disposition of Registrable Securities pursuant to the applicable Registration Statement and prospectus relating thereto until such Selling Holder is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus. The Company shall use reasonable efforts to cure the events described in clauses (B), (C), (D), (E) and (F) of Section 5.03(a)(viii) so that the use of the applicable prospectus may be resumed at the earliest reasonably practicable moment.

Section 5.04 Expenses.  The Company shall pay all Registration Expenses in connection with a registration pursuant to this Article V, provided that each holder of Registrable Securities participating in an offering shall pay all applicable underwriting fees, discounts and commissions, agency fees, brokers' commissions and transfer taxes, if any, on the Registrable Securities sold by such holder, and similar charges.

 

     Section 5.05  Registration Indemnification.

 

     (a)   The Company agrees, without limitation as to time, to indemnify and hold harmless, to the fullest extent permitted by law, each Selling Holder and its Affiliates and their respective officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys, advisors and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such Selling Holder or such other indemnified Person and the officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys, advisors and agents of each such controlling Person, each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such underwriter (collectively, the "Indemnified Persons"), from and against all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonable attorneys' fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the "Losses"), as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any  Registration Statement, prospectus or preliminary prospectus or Free Writing Prospectus, in each case related to such Registration Statement, or any amendment or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (without limitation of the preceding portions of this Section 5.05(a)) will reimburse each such Selling Holder, each of its Affiliates, and each of their respective officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys, advisors and agents and each such Person who controls each such Selling Holder and the officers, directors, members, shareholders, employees, managers, partners, accountants, attorneys, advisors and agents of each such controlling Person, each such underwriter and each such Person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss, damage, liability or action, except insofar as the same are caused by any information regarding a holder of Registrable Securities or underwriter furnished in writing to the Company by any such person or any selling holder or underwriter expressly for use therein.

 

 

 

 

 

 

     (b)  In connection with any Registration Statement in which a Selling Holder is participating, without limitation as to time, each such Selling Holder shall, severally and not jointly, indemnify the Company, its directors and officers, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company, from and against all Losses, as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of material fact contained in the Registration Statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (without limitation of the preceding portions of this Section 5.05(b)) will reimburse the Company, its directors and officers and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss, damage, liability or action, in each case solely to the extent, but only to the extent, that such untrue statement or omission is made in such registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information regarding the Selling Holder furnished to the Company by such Selling Holder for inclusion in such registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto.

 

     (c)  Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been actually and materially prejudiced by such failure to provide such notice on a timely basis.

 

     (d)  In any case in which any such action is brought against any indemnified party, the indemnified party shall promptly notify in writing the indemnifying party of the commencement thereof, and the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and acknowledging the obligations of the indemnifying party with respect to such proceeding, the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party or a conflict of interest otherwise exists or (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or would reasonably be expected to be materially prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for the expenses incurred in connection with retaining one separate legal counsel (for the avoidance of doubt, for all indemnified parties in connection therewith)).  For the avoidance of doubt, notwithstanding any such assumption by an indemnifying party, the indemnified party shall have the right to employ separate counsel in any such matter and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party except as provided in the previous sentence.  An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent (which consent shall not be unreasonably withheld, conditioned or delayed).  No matter shall be settled by an indemnifying party without the consent of the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such claim or proceeding, (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party and (z) is settled solely for cash for which the indemnified party would be entitled to indemnification hereunder. The failure of an indemnified party to give notice to an indemnifying party of any action brought against such indemnified party shall not relieve the indemnifying party of its obligations or liabilities pursuant to this Agreement, except to the extent such failure adversely prejudices the indemnifying party.

 

 

 

 

 

 

     (f)  If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons, in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, the Persons' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances.  It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by pro rata or per capita allocation that does not take into account the equitable considerations referred to in the immediately preceding sentence.  Notwithstanding any other provision of this Agreement, no holder of Registrable Securities shall be required to contribute, in the aggregate, any amount in excess of its net proceeds from the sale of the Registrable Securities subject to any actions or proceedings over the amount of any damages, indemnity or contribution that such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation.

 

 

 

 

 

 

     (g)   The indemnification and contribution agreements contained in this Section 5.05 are in addition to any liability that the indemnifying party may have to the indemnified party and do not limit other provisions of this Agreement that provide for indemnification.

 

     Section 5.06  Facilitation of Sales Pursuant to Rule 144.  For as long as the Purchaser, any of its Affiliates or any Lender for any Permitted Loan Beneficially Owns Notes or any Conversion Shares to the extent it shall be required to do so under the Exchange Act, the Company shall use reasonable efforts to timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144) and submit all required Interactive Data Files (as defined in Rule 11 of Regulation S-T of the Commission), and shall use reasonable efforts to take such further necessary action as any holder of Subject Securities may reasonably request in connection with the removal of any restrictive legend on the Subject Securities being sold, all to the extent required from time to time to enable such holder to sell the Subject Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144.

 

ARTICLE VI

MISCELLANEOUS

 

     Section 6.01  Survival of Representations and Warranties.  All covenants and agreements contained herein, other than those to the extent their terms apply in whole or in part after the Closing (which shall survive the Closing to such extent), shall terminate as of the Closing, provided nothing herein shall relieve any party of liability for any breach of such covenant or agreement before it terminated.  Except for the warranties and representations contained in clauses (a), (b), (c), (d) and (e) of Section 3.01 and the representations and warranties contained in Section 3.02, which shall survive the Closing indefinitely, the warranties and representations made herein shall survive for twelve (12) months following the Closing Date and shall then expire; provided that nothing herein shall relieve any party of liability for any inaccuracy or breach of such representation or warranty to the extent that any good faith allegation of such inaccuracy or breach is made in writing prior to such expiration.

 

     Section 6.02  Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, by facsimile, sent by overnight courier or sent via email (with receipt confirmed) as follows:

 

                                  (a) If to the Company, to:

 

                                  Nu Skin Enterprises, Inc.
                                  75 West Center Street

                                  Provo, Utah 84601
                                  Attention:  General Counsel

                                  Fax:  +(801) 345-3899

                                  Email:  madorny@nuskin.com

 

 

 

 

 

                                 With a copy (which shall not constitute actual or constructive notice) to:

 

                                 Simpson Thacher & Bartlett LLP

                                 2475 Hanover Street

                                 Palo Alto, CA 94304

                                 Attention:  Kevin P. Kennedy

                                       Chad Skinner

                                 Fax:  +1 (650) 251-5002

                                 Email:  KKennedy@stblaw.com

                                 and

 

                                 (b) If to the Purchaser, to:

 

                                 Ping An ZQ China Growth Opportunity Limited
                                 20/F, One International Finance Centre

                                 One Harbour View Street

                                 Central, Hong Kong
                                 Attention:  Mr. Shen Zheqing

                                 Fax:  +1 650 735 0153

                                 Email:  shen@zqcap.com

 

                                 With a copy (which shall not constitute actual or constructive notice) to:

 

                                 Paul Hastings LLP
                                 21-22/F, Bank of China Tower

                                 1 Garden Road

                                 Hong Kong
                                 Attention:  Douglas C. Freeman

                                 Fax:  (+852) 3192-9730

                                 Email:  douglasfreeman@paulhastings.com

 

or to such other address or addresses as shall be designated in writing.  All notices shall be deemed effective (a) when delivered personally (with written confirmation of receipt, by other than automatic means, whether electronic or otherwise), (b) when sent by facsimile (with written confirmation of receipt, by other than automatic means, whether electronic or otherwise) or (c) one (1) Business Day following the day sent by overnight courier.

 

     Section 6.03  Entire Agreement; Third Party Beneficiaries; Amendment.  This Agreement, together with the Confidentiality Agreement, sets forth the entire agreement between the parties hereto with respect to the Transactions, and is not intended to and shall not confer upon any person other than the parties hereto, their successors and permitted assigns any rights or remedies hereunder, provided that (i) Section 4.07(f) and Section 4.11 shall be for the benefit of and fully enforceable by the Purchaser Designee, (ii) Section 5.05 shall be for the benefit of and fully enforceable by each of the Indemnified Persons and (iii) Section 6.12 shall be for the benefit of and fully enforceable by each of the Specified Persons.  Any provision of this Agreement may be amended or modified in whole or in part at any time by an agreement in writing between the parties hereto executed in the same manner as this Agreement.  No failure on the part of any party to exercise, and no delay in exercising, any right shall operate as a waiver thereof nor shall any single or partial exercise by any party of any right preclude any other or future exercise thereof or the exercise of any other right.

 

 

 

 

 

     Section 6.04  Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute any original, but all of which together shall constitute one and the same document.  Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in "portable document format" (".pdf") form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document will have the same effect as physical delivery of the paper document bearing the original signature.

 

     Section 6.05  Public Announcements.  No press release or public announcement related to this Agreement or the transactions contemplated herein shall be issued or made by the Purchaser or any of its Affiliates without the prior written approval of the Company, unless required by law (based on the advice of counsel) in which case the Company shall have the right to review and reasonably comment on such press release, announcement or communication prior to issuance, distribution or publication.  Notwithstanding the foregoing (but subject to the terms of the Confidentiality Agreement), the Purchaser and its Affiliates shall not be restricted from communicating with their respective investors and potential investors in connection with marketing, informational or reporting activities; provided that the recipient of such information is subject to a customary obligation to keep such information confidential. The Company may issue or make one or more press releases or public announcements (in which case the Purchaser shall be provided with reasonable advance notice and opportunity and shall have the right to review and reasonably comment on such press release, announcement or communication prior to issuance, distribution or publication) and may file this Agreement with the SEC and may provide information about the subject matter of this Agreement in connection with equity or debt issuances, share repurchases, or marketing, informational or reporting activities.

 

     Section 6.06  Expenses.  At or promptly after the Closing, the Company will pay or reimburse the reasonable and documented out-of-pocket fees and expenses incurred by the Purchaser in connection with the due diligence, negotiation and documentation of the Transactions, in an amount not to exceed $3,900,000.  If this Agreement terminates in accordance with Section 2.03 and at such time the Purchaser has not willfully breached any of its obligations under this Agreement, the Company will pay or reimburse the reasonable and documented out-of-pocket fees and expenses incurred by the Purchaser in connection with the due diligence, negotiation and documentation of the Transactions, in an amount not to exceed $250,000.  Any amounts paid or reimbursed by the Company pursuant to the two previous sentences shall constitute "Reimbursed Expenses".  In the event of litigation between the Company and the Purchaser relating to this Agreement, upon the issuance of a final non-appealable order by a court of competent jurisdiction, the non-prevailing party will reimburse the prevailing party for the reasonable and documented out-of-pocket costs and expenses (including legal fees and expenses) incurred by it in connection therewith.  Except as otherwise expressly provided herein, each party hereto shall bear its own costs and expenses (including attorneys' fees) incurred in connection with this Agreement and the Transactions.

 

 

 

 

 

     Section 6.07  Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the Company's successors and assigns and the Purchaser's successors and assigns, and no other person; provided, the Company may not assign its respective rights or delegate its respective obligations under this Agreement, whether by operation of law or otherwise, and any assignment by the Company in contravention hereof shall be null and void; provided, that (i) any Affiliate of the Purchaser who after the Closing Date executes and delivers a Joinder and is a permitted transferee hereunder of any Notes or Conversion Shares shall be deemed a Purchaser hereunder and have all the rights and obligations of the Purchaser, (ii) if the Company consolidates or merges with or into any Person and the Company Common Stock is, in whole or in part, converted into or exchanged for securities of a different issuer, then, subject to Section 6.14, as a condition to such transaction the Company will cause such issuer to assume all of the Company's rights and obligations under this Agreement in a written instrument delivered to the Purchaser, and (iii) the rights of a holder of Registrable Securities under Article V may be transferred but only together with Subject Securities (x) in a transfer of (1) Notes in an aggregate principal amount of at least $50,000,000 and (2) Conversion Shares issued or issuable upon conversion of at least $50,000,000 in aggregate principal amount of Notes or (y) to an Affiliate of the transferor that executes and delivers to the Company a Joinder (subject to Section 4.02(a)).  For the avoidance of doubt, no Third Party to whom any of the Notes or Conversion Shares are transferred shall have any rights or obligations under this Agreement except (and then only to the extent of) any rights and obligations under Article V to the extent transferable in accordance with this Section 6.07.

 

     Section 6.08  Governing Law; Jurisdiction; Waiver of Jury Trial.

 

     (a)   This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.  In addition, each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined in the Supreme Court of the State of New York, County of New York or the United States Federal District Court sitting for the Southern District of New York.  Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts.  Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 6.08(a), (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable law, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.  Each of the parties hereby agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 6.02 shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby.

 

 

 

 

 

     (b)  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS CONTAINED IN THIS SECTION 6.08.

 

     Section 6.09  Severability.  If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect provided that the economic and legal substance of, any of the Transactions is not affected in any manner materially adverse to any party.  In the event of any such determination, the parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as possible the original intent and purpose hereof.  To the extent permitted by law, the parties hereby to the same extent waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

 

     Section 6.10  Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  Accordingly, each party agrees that in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this Agreement, the non-breaching party shall be entitled (in addition to any other remedy that may be available to it, whether in law or equity) to obtain (i) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (ii) an injunction restraining such breach or threatened breach.  Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award of specific performance is not an appropriate remedy for any reason at law or in equity.  Any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction.

 

     Section 6.11  Headings.  The headings of Articles and Sections contained in this Agreement are for reference purposes only and are not part of this Agreement.

 

     Section 6.12  Non-Recourse.  This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against the entities that are expressly named as parties hereto and their respective successors and assigns (including any Person that executes and delivers a Joinder).  Except as set forth in the immediately preceding sentence, no past, present or future director, officer, employee, incorporator, member, partners, stockholder, Affiliate, agent, attorney, advisor or representative of any party hereto (collectively, the "Specified Persons") shall have any liability for any obligations or liabilities of any party hereto under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby.

 

 

 

 

     Section 6.13  Actions of Purchaser.  If at any time there are two or more Purchasers as contemplated by clause (i) of the proviso to Section 6.07 and any consent, approval or action of the Purchaser is required at any time pursuant to this Agreement, such consent, approval or action shall be deemed given if the initial Purchaser provides such consent, approval or action.

 

     Section 6.14  Termination.  Notwithstanding anything to the contrary contained herein, this Agreement, and all rights and obligations of the parties to this Agreement provided herein, shall terminate, and be of no further force or effect, upon the earlist of: (i) the occurrence of a Change in Control, (ii) the consummation of a repurchase of all of the outstanding Notes under Section 3.01 of the Indenture, (iii) the consummation of a redemption by the Company of all of the outstanding Notes in accordance with Article 13 of the Indenture, (iv) full settlement of all of the outstanding Notes upon the maturity of the Notes and (v) the Purchasers ceasing to Beneficially Own any Subject Securities, in each case other than (x) any liability of a party arising out of a breach of this Agreement by such party that occurred prior to such termination, (y) the rights and obligations provided in Section 4.07(f), Section 4.10, Section 4.11, Section 4.14, Section 5.05, Section 6.05 and Section 6.06, which shall survive termination of this Agreement, and (z) in the event of a transaction that would be a Change in Control but for the application of clause (y) of the last paragraph of such definition, the rights and obligations in Article V, which shall survive termination of this Agreement.

 

[Remainder of page intentionally left blank.]

 

 

 

 

53

 

 

 

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

NU SKIN ENTERPRISES, INC.

By: _________________________________
Name:
Title:

 

 

 

 

 

 

 

PING AN ZQ CHINA GROWTH OPPORTUNITY LIMITED

By: _________________________________
Name:
Title:

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

 

 

FORM OF INDENTURE

 

 

Term	Defined in Section
"Authorized Officers"	14.01(c)
"Cash Settlement"	10.02(a)
"Clause A Distribution"	10.06(c)
"Clause B Distribution"	10.06(c)
"Clause C Distribution"  "Combination Settlement"	10.06(c) 10.02(a)
"Common Stock Private Placement Legend"	2.17(b)
"Conversion Agent"	2.03
"Conversion Obligation"	10.01(a)
"Distributed Property"	10.06(c)
"effective date"	10.06(j)
"Electronic Means"	14.01(b)
"Event of Default"	6.01
"Fundamental Change Notice"	3.01(b)
"Fundamental Change Repurchase Date"	3.01(a)
"Fundamental Change Repurchase Price"	3.01(a)
"Fundamental Change Repurchase Right"	3.01(a)
"Global Security"	2.01
"Instructions"	14.01(c)
"Merger Event"	10.11
"Participants"	2.15(a)
"Paying Agent"	2.03
"Physical Settlement"	10.02(a)
"Redemption Date"	13.01
"Redemption Price"	13.01
"Reference Property"	10.11
"Registrar"	2.03
"Repurchase Upon Fundamental Change"	3.01(a)
"Resale Restriction Termination Date"	2.17(a)
"Securities"	Preamble
"Security Private Placement Legend"  "Settlement Amount"  "Settlement Notice"	2.17(a) 10.02(a)(iv) 10.02(a)(iii)
"Spin-Off"	10.06(c)
"Trigger Event"……………………………………	10.06(c)
"Valuation Period"…………………………………	10.06(c)
"Voting Stock"………………………………………	1.01 (Definition of "Change in Control")

(b)

Upon the transfer, exchange or replacement of Securities not bearing the Security Private Placement Legend, unless the Company notifies the Trustee in writing otherwise, the Trustee shall deliver Securities that do not bear the Security Private Placement Legend.  Upon the transfer, exchange or replacement of Securities bearing the Security Private Placement Legend, the Trustee shall deliver only Securities that bear the Security Private Placement Legend unless (i) the requested transfer, exchange or replacement is after the Resale Restriction Termination Date, (ii) there is delivered to the Trustee and the Company an Opinion of Counsel reasonably satisfactory to the Company and addressed to the Company to the effect that no registration under the Securities Act is required in connection with such transfer, exchange or replacement of such Securities in connection with any re-sales of such Securities on the date of such opinion or (iii) such Security has been sold pursuant to an effective registration statement under the Securities Act and the Holder selling such Securities has delivered to the Registrar a notice in the form of Exhibit C hereto.

(c)

By its acceptance of any Security or any Common Stock bearing the Security Private Placement Legend or the Common Stock Private Placement Legend, each holder thereof acknowledges the restrictions on transfer of such security set forth in this Indenture and in the Security Private Placement Legend or Common Stock Private Placement Legend, as applicable, and agrees that it will transfer such security only as provided in this Indenture and as permitted by applicable law.

 

 

 The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.15 or this Section 2.16 in accordance with its customary document retention policies.  The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

(d)

The Company may, to the extent permitted by law, purchase the Securities in the open market or by tender offer at any price or by private agreement without giving prior notice to Holders.  The Company may, at its option, surrender to the Trustee for cancellation any Securities the Company purchases in this manner. Securities surrendered to the Trustee for cancellation may not be reissued or resold and shall be promptly cancelled pursuant to Section 2.11.

(a)

Each Global Security and Physical Security that constitutes a Restricted Security shall bear the legend (the "Security Private Placement Legend") as set forth in Exhibit B-1A on the face thereof until the date such Securities no longer constitute Restricted Securities as reasonably determined by the Company in good faith and evidenced by an Officers' Certificate (such date, the "Resale Restriction Termination Date").

 No transfer of any Security prior to the Resale Restriction Termination Date will be registered by the Registrar unless the applicable box on the Form of Assignment has been checked.

 Any Security (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of such Security for exchange to the Trustee in accordance with the provisions of this Article 2, be exchanged for a new Security or Securities, of like tenor and aggregate principal amount, which shall not bear the Security Private Placement Legend required by this Section 2.17(a) and shall not be assigned a restricted CUSIP number. In addition, on or after the Resale Restriction Termination Date, upon the request of any Holder and upon surrender of its Security for exchange, the Company shall exchange a Physical Security with the Security Private Placement Legend for a Physical Security without Security Private Placement Legend so long as the Holder covenants to the Company that it will offer, sell, pledge or otherwise transfer such Security in compliance with the Securities Act.  The Company shall be entitled to instruct the Trustee in writing to cancel any Global Security as to which such restrictions on transfer shall have expired in accordance with their terms for exchange, and, upon such instruction, the Trustee shall provide evidence of cancellation of such Global Security; and any new Global Security exchanged therefor shall not bear the Security Private Placement Legend specified in this Section 2.17(a) and shall not be assigned a restricted CUSIP number. The Company shall promptly notify the Trustee in writing upon the occurrence of the Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Securities or any Common Stock issued upon conversion of the Securities has been declared effective under the Securities Act.

 

 

(b)

Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of such Security, if any, shall, if such shares constitute Restricted Securities at their time of issuance, bear the legend (the "Common Stock Private Placement Legend") as set forth in Exhibit B-1B unless such Common Stock have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or have been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing.

(c)	Each Global Security shall also bear the legend as set forth in Exhibit B-2.

 

(i)

delivery to the Company (if it is acting as its own Paying Agent), or to a Paying Agent designated by the Company for such purpose in the Fundamental Change Notice, no later than the Close of Business on the Business Day immediately preceding the Fundamental Change Repurchase Date, of a Repurchase Notice, in the form set forth in the Securities or any other form of written notice substantially similar thereto, in each case, duly completed and signed, with appropriate signature guarantee, stating:

(A)	the certificate number(s) of the Securities that the Holder will deliver to be repurchased, if such Securities are Physical Securities;

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

 

 

 

 

 

(C)	that such principal amount of Securities are to be repurchased pursuant to the terms and conditions specified in this Section 3.01; and

(ii)

delivery to the Company (if it is acting as its own Paying Agent), or to a Paying Agent designated by the Company for such purpose in the Fundamental Change Notice, at any time after the delivery of such Repurchase Notice, of such Securities (together with all necessary endorsements) with respect to which the Fundamental Change Repurchase Right is being exercised, if such Securities are Physical Securities, or book-entry transfer of the Securities, if the Securities are Global Securities, in compliance with the Applicable Procedures;

provided, however, that if such Fundamental Change Repurchase Date is after a Record Date for the payment of an installment of interest and on or before the related Interest Payment Date, then the full amount of accrued and unpaid interest, if any, to, but excluding, such Interest Payment Date shall be paid on such Interest Payment Date to the Holder of record of such Securities at the Close of Business on such Record Date (without any surrender of such Securities by such Holder), and the Fundamental Change Repurchase Price shall not include any accrued but unpaid interest.

 If such Securities are held in book-entry form through the Depository, the delivery of any Securities, Repurchase Notice, Fundamental Change Notice or notice of withdrawal pursuant to the second immediately succeeding paragraph shall comply with the Applicable Procedures.

 Notwithstanding anything herein to the contrary, any Holder that has delivered the Repurchase Notice contemplated by this Section 3.01(a) to the Company (if it is acting as its own Paying Agent) or to a Paying Agent designated by the Company for such purpose in the Fundamental Change Notice shall have the right to withdraw such Repurchase Notice by delivery, at any time prior to the Close of Business on the Business Day immediately preceding the Fundamental Change Repurchase Date (or, if there shall be a Default in the payment of the Fundamental Change Repurchase, at any time during which such Default is continuing), of a written notice of withdrawal to the Company (if acting as its own Paying Agent) or the Paying Agent, which notice shall be delivered in accordance with, and contain the information specified in, Section 3.01(b)(x).

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

(b)

On or before the 20th Business Day after the consummation of a Fundamental Change, the Company shall send, or cause to be sent, to all Holders of the Securities in accordance with Section 14.01 a notice (the "Fundamental Change Notice") of the occurrence of such Fundamental Change and the Fundamental Change Repurchase Right arising as a result thereof.  The Company shall deliver a copy of the Fundamental Change Notice to the Trustee at the time such notice is delivered to the Holders.  Each Fundamental Change Notice shall state:

(i)	the events causing the Fundamental Change;

 

 

 

 

(ii)	the date of the Fundamental Change;

(iii)

the Fundamental Change Repurchase Date;

(iv)	the last date on which the Fundamental Change Repurchase Right may be exercised, which shall be the Business Day immediately preceding the Fundamental Change Repurchase Date;

(v)	the Fundamental Change Repurchase Price;

(vi)	the names and addresses of the Paying Agent and the Conversion Agent;

(vii)

the procedures that a Holder must follow to exercise the Fundamental Change Repurchase Right;

(viii)

that the Fundamental Change Repurchase Price for any Security as to which a Repurchase Notice has been given and not withdrawn will be paid no later than the later of such Fundamental Change Repurchase Date and the time of book-entry transfer or delivery of the Security (together with all necessary endorsements);

(ix)

that, except as otherwise provided herein with respect to a Fundamental Change Repurchase Date that is after a Record Date for the payment of an installment of interest and on or before the related Interest Payment Date, on and after such Fundamental Change Repurchase Date (unless there shall be a Default in the payment of the Fundamental Change Repurchase Price), interest on Securities subject to Repurchase Upon Fundamental Change will cease to accrue, and all rights of the Holders of such Securities shall terminate, other than the right to receive, in accordance herewith, the Fundamental Change Repurchase Price;

(x)

that a Holder will be entitled to withdraw its election in the Repurchase Notice prior to the Close of Business on the Business Day immediately preceding the Fundamental Change Repurchase Date, or such longer period as may be required by law, delivered in the same manner as the related Repurchase Notice was delivered and setting forth the name of such Holder, a statement that such Holder is withdrawing its election to have Securities purchased by the Company on such Fundamental Change Repurchase Date pursuant to a Repurchase Upon Fundamental Change, the certificate number(s) of such Securities to be so withdrawn (if such Securities are Physical Securities) the principal amount of the Securities of such Holder to be so withdrawn, which amount must be $1,000 or an integral multiple thereof and the principal amount, if any, of the Securities of such Holder that remain subject to the Repurchase Notice delivered by such Holder in accordance with this Section 3.01, which amount must be $1,000 or an integral multiple thereof; provided, however, that if there shall be a Default in the payment of the Fundamental Change Repurchase Price, a Holder shall be entitled to withdraw its election in the Repurchase Notice at any time during which such Default is continuing;

 

 

 

 

 

 

 

 

(xi)	the Conversion Rate and any adjustments to the Conversion Rate that will result from such Fundamental Change;

(xii)

that Securities with respect to which a Repurchase Notice is given by a Holder may be converted pursuant to Article 10 only if such Repurchase Notice has been withdrawn in accordance with this Section 3.01 or the Company defaults in the payment of the Fundamental Change Repurchase Price; and

(xiii)

the CUSIP number or numbers, as the case may be, of the Securities.

 At the Company's request, upon prior notice reasonably acceptable to the Trustee, the Trustee shall send such Fundamental Change Notice in the Company's name and at the Company's expense; provided, however, that the form and content of such Fundamental Change Notice shall be prepared by the Company.

 No failure of the Company to give a Fundamental Change Notice shall limit any Holder's right pursuant hereto to exercise a Fundamental Change Repurchase Right.

(c)

Subject to the provisions of this Section 3.01, the Company shall pay, or cause to be paid, the Fundamental Change Repurchase Price with respect to each Security as to which the Fundamental Change Repurchase Right shall have been exercised to the Holder thereof no later than the later of the Fundamental Change Repurchase Date and the time of book-entry transfer or when such Security is surrendered to the Paying Agent together with any necessary endorsements.

(d)

The Company shall, in accordance with Section 2.14, deposit with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust in accordance with Section 2.04) money, in funds immediately available on the Fundamental Change Repurchase Date, sufficient to pay the Fundamental Change Repurchase Price upon Repurchase Upon Fundamental Change for all of the Securities that are to be repurchased by the Company on such Fundamental Change Repurchase Date pursuant to a Repurchase Upon Fundamental Change.  The Paying Agent shall, promptly after delivering the Fundamental Change Repurchase Price to Holders entitled thereto and upon written demand by the Company, return to the Company as soon as practicable, any money in excess of the Fundamental Change Repurchase Price.

(e)

Once the Fundamental Change Notice and the Repurchase Notice have been duly given in accordance with this Section 3.01, the Securities to be repurchased pursuant to a Repurchase Upon Fundamental Change shall, on the Fundamental Change Repurchase Date, become due and payable in accordance herewith, and, on and after such date (unless there shall be a Default in the payment of the Fundamental Change Repurchase Price), except as otherwise provided herein with respect to a Fundamental Change Repurchase Date that is after a Record Date for the payment of an installment of interest and on or before the related Interest Payment Date, such Securities shall cease to bear interest (whether or not book-entry transfer of the Securities has been made or the Securities have been delivered to the Paying Agent), and all rights of the relevant Holders of such Securities shall terminate, other than the right to receive, in accordance herewith, such consideration and any other applicable rights under those sections set forth in the proviso in Section 8.01.

(f)

Securities with respect to which a Repurchase Notice has been duly delivered in accordance with this Section 3.01 may be converted pursuant to Article 10 only if such Repurchase Notice has been withdrawn in accordance with this Section 3.01 or the Company defaults in the payment of the Fundamental Change Repurchase Price.

 

 

 

 

 

 

(g)

If any Security shall not be paid on the Fundamental Change Repurchase Date upon book-entry transfer or surrender thereof for Repurchase Upon Fundamental Change, the principal of, and accrued and unpaid interest on, such Security shall, until paid, bear interest, payable in cash, at the rate borne by such Security plus 6% per annum, and such Security shall be convertible pursuant to Article 10 if any Repurchase Notice with respect to such Security is withdrawn pursuant to this Section 3.01.

(h)

Any Security that is to be submitted for Repurchase Upon Fundamental Change only in part shall be delivered pursuant to this Section 3.01 (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or its attorney duly authorized in writing, with a notarization or medallion guarantee), and the Company shall promptly execute, and the Trustee shall promptly authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, of the same tenor and in aggregate principal amount equal to the portion of such Security not duly submitted for Repurchase Upon Fundamental Change.

(i)

Notwithstanding anything herein to the contrary, except in the case of an acceleration resulting from a Default relating to the payment of the Fundamental Change Repurchase Price, there shall be no purchase of any Securities pursuant to this Section 3.01 on any date if, on such date, the principal amount of the Securities shall have been accelerated in accordance with this Indenture and such acceleration shall not have been rescinded on or prior to such date in accordance with this Indenture.  The Paying Agent will promptly return to the respective Holders thereof any Securities held by it during the continuance of such an acceleration.

(j)

In connection with any Repurchase Upon Fundamental Change, the Company shall, to the extent required (i) comply with the provisions of Rule 13e-4, Rule 14e-1,  Regulation 14E under the Exchange Act, and with all other applicable laws; (ii) file a Schedule TO or any other schedules required under the Exchange Act or any other applicable laws; and (iii) otherwise comply with all applicable United States federal and state securities laws in connection with any offer by the Company to repurchase the Securities; provided that any time period specified in this Article 3 shall be extended to the extent necessary for such compliance.

 

 

 

 The Company shall pay, in cash, interest on any overdue amount (including, but not limited to unpaid principal, interest, repurchase amounts and Settlement Amounts, and to the extent permitted by applicable law, overdue interest) at the rate borne by the Securities plus 6% per annum.

 The Company will maintain, or cause to be maintained, an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture (other than the type contemplated by Section 14.09(c)) may be served, provided that such office or agency may instead be at the principal office of the Company located in the United States (and, notwithstanding the final sentence of this Section 4.02, shall initially be at such office until the Company notifies the Trustee otherwise).

 The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

 

 The Company hereby initially designates the Corporate Trust Office of the Trustee as an agency of the Company in accordance with Section 2.03.

(b)

Delivery of such reports, information and documents to the Trustee pursuant to this Section 4.03 is for informational purposes only, and the Trustee's receipt of such shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officers' Certificates).

(c)	The Trustee shall have no obligation or duty to determine or monitor whether the Company has delivered reports in accordance with this Section 4.03.

 

 

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