Summary of VOLCANO CORP - Yahoo! Finance

Entry into a Material Definitive Agreement, Termination of a Material Definitive Agr

Item 1.01 Entry into a Material Definitive Agreement.

Over-Allotment Exercise and Closing of 1.75% Convertible Senior Note Offering

On December 10, 2012, Volcano Corporation (the "Company") closed its offering of $400.0 million aggregate principal amount of 1.75% Convertible Senior Notes due 2017 (the "Firm Notes") and an additional $60.0 million aggregate principal amount of 1.75% Convertible Senior Notes due 2017 pursuant to the exercise by J.P. Morgan Securities LLC and Goldman, Sachs & Co. (the "Underwriters") of their over-allotment option on December 5, 2012 (the "Option Notes" and, together with the Firm Notes, the "Notes") pursuant to an Underwriting Agreement entered into by and between the Company and the Underwriters on December 4, 2012 (the "Underwriting Agreement").

Indenture and Notes

In connection with the closing, on December 10, 2012, the Company issued and sold to the Underwriters the Notes pursuant to the Underwriting Agreement.

The Notes are governed by the Indenture, dated as of September 20, 2010 (the "Base Indenture") between the Company and Wells Fargo Bank, N.A., as trustee (the "Trustee"), as supplemented by the Second Supplemental Indenture, dated as of December 10, 2012 (the "Second Supplemental Indenture" and, together with the Base Indenture, the "Indenture").

Interest on the Notes will accrue from December 10, 2012 and will be payable semiannually in arrears on June 1 and December 1 of each year, beginning June 1, 2013, at a rate of 1.75% per year. The Notes are the Company's general unsecured obligations.

Prior to August 7, 2017, the Notes will be convertible, at the option of the holders thereof, only under the following circumstances:

Х during any fiscal quarter commencing after March 31, 2013 (and only during such fiscal quarter), if the last reported sale price of the Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day;

Х during the five business day period after any ten consecutive trading day period (the "Measurement Period") in which, for each trading day of such Measurement Period, the trading price per $1,000 principal amount of Notes on such trading day was less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the applicable conversion rate on such trading day; or

Х upon the occurrence of specified distributions and corporate events.

On or after August 7, 2017, until the close of business on the second scheduled trading day immediately preceding the maturity date, the Notes will be convertible at the applicable conversion rate at any time, irrespective of the foregoing circumstances.

The conversion rate for the Notes initially equals 30.4612 shares of common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $32.83 per share of common stock), subject to adjustment. Upon conversion, holders will receive up to the principal amount of the converted Notes in cash and any excess conversion value in shares of the Company's common stock. The amount of cash and the number of shares of the Company's common stock, if any, will be based on daily settlement amounts over an 80 trading day observation period. In addition, upon a Make-Whole Fundamental Change (as defined in the Indenture), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its Notes in connection with such Make-Whole Fundamental Change. If the Company undergoes a Fundamental Change (as defined in the Indenture), holders may require the Company to repurchase their Notes in whole or in part for cash at a price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.

The Indenture provides that an Event of Default (as defined in the Indenture) will occur if: (a) the Company defaults in any payment of interest on any Note when due and payable and the default continues for a period of 30 days; (b) the Company defaults in the payment of principal of any Note when due and payable at its stated maturity, upon any required repurchase, upon declaration of acceleration or otherwise; (c) the Company fails to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a holder's conversion right and such failure continues for three business days;
(d) the Company fails to give a fundamental change notice or notice of a specified distribution or corporate transaction, in each case when due under the Indenture; (e) the Company fails to comply with its obligations Article 5 of the Second Supplemental Indenture; (f) the Company fails for 60 days after written notice from the Trustee or the holders of at least 25% in principal amount of the Notes then outstanding has been received to comply with any of its other agreements contained in the Notes or the Indenture; (g) the Company or any of its Significant Subsidiaries (as defined in the Indenture) defaults with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $17.5 million in the aggregate of the Company and/or any such Significant Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable; or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, unless, in either case, such indebtedness is discharged or such acceleration is cured, waived, rescinded, stayed or annulled within a period of 30 days after becoming due and payable; (h) certain events of bankruptcy, insolvency, or reorganization of the Company or any Significant Subsidiary occur; or (i) a final judgment for the payment of $17.5 million or more (excluding any amounts covered by insurance) is rendered against the Company or any of its Significant Subsidiaries, which judgment is not discharged or stayed within 60 days after
(i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished.

If certain bankruptcy and insolvency-related Events of Default occur, the principal of, and accrued and unpaid interest on, all of the then outstanding Notes shall automatically become due and payable. If an Event of Default other than certain bankruptcy and insolvency-related Events of Default occurs and is . . .