3.50% CONVERTIBLE SENIOR NOTES
DUE 2029
MERRILL LYNCH,
PIERCE, FENNER & SMITH INCORPORATED
One Bryant Park
New York, New York 10036
J.P. MORGAN
SECURITIES INC.
383 Madison Avenue
New York, New York 10179
Sybase, Inc., a
Delaware corporation (the “ Company ”),
proposes, upon the terms and considerations set forth herein, to
issue and sell to you, as the initial purchasers (the “
Initial Purchasers ”), $350,000,000 in aggregate
principal amount of its 3.50% Convertible Senior Notes due 2029
(the “ Firm Notes ”). The Company also proposes
to issue and sell to you, at your option (the “ Option
”), $50,000,000 in aggregate principal amount of its 3.50%
Convertible Senior Notes due 2029 solely to cover over-allotments
(the “ Optional Notes ”). The Firm Notes and the
Optional Notes are hereinafter collectively referred to as the
“ Notes ”. The Notes will (i) have terms
and provisions that are summarized in the Offering Memorandum (as
defined below) and (ii) are to be issued pursuant to an
Indenture (the “ Indenture ”) to be entered into
between the Company and U.S. Bank National Association, as trustee
(the “ Trustee ”). Subject to certain conditions
set forth in the Indenture, the Notes shall be convertible, at the
option of the holders of the Notes, prior to maturity (unless
previously redeemed or otherwise purchased by the Company) into
cash or a combination of cash and shares of the Company’s
common stock, par value $0.001 per share (the “ Common
Stock ”). This is to confirm the agreement concerning the
purchase of the Notes from the Company by the Initial
Purchasers.
1.
Preliminary Offering Memorandum and Offering Memorandum . In
accordance with Section 3 hereof, the Notes will be offered
and sold to the Initial Purchasers without registration under the
Securities Act of 1933, as amended (the “ Act
”), in reliance on an exemption pursuant to Section 4(2)
under the Act. The Company has prepared a preliminary offering
memorandum, dated July 28, 2009 (the “ Preliminary
Offering Memorandum ”), and an offering memorandum, dated
July 29, 2009 (the “ Offering Memorandum ”),
setting forth information regarding the Company and the Notes. The
terms Preliminary Offering Memorandum and Offering Memorandum
include all documents and information incorporated therein by
reference. The Company hereby confirms that it has authorized the
use of the Disclosure Package (as defined below), including the
Preliminary Offering Memorandum and
the Offering
Memorandum, in connection with the offering and resale of the Notes
by the Initial Purchasers.
Any reference to
the Preliminary Offering Memorandum or the Offering Memorandum
shall be deemed to refer to and include the Company’s most
recent Annual Report on Form 10-K, as amended, and all subsequent
documents filed with the United States Securities and Exchange
Commission (the “ Commission ”) pursuant to
Section 13(a), 13(c) or 15(d) of the United States Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”), on or prior to the date of the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be. Any
reference to the Preliminary Offering Memorandum or the Offering
Memorandum, as the case may be, as amended or supplemented, as of
any specified date, shall be deemed to include any documents filed
with the Commission pursuant to Section 13(a), 13(c) or 15(d)
of the Exchange Act after the date of the Preliminary Offering
Memorandum or the Offering Memorandum, as the case may be, and
prior to such specified date. All documents filed under the
Exchange Act and so deemed to be included in the Preliminary
Offering Memorandum or the Offering Memorandum, as the case may be,
or any amendment or supplement thereto are hereinafter called the
“ Exchange Act Reports .” The Exchange Act
Reports, when they were or are filed (or, if an amendment with
respect to any such document was filed prior to the date hereof,
when such amendment was filed) with the Commission, conformed or
will conform in all material respects to the applicable
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder.
It is understood
and acknowledged that upon original issuance thereof, and until
such time as the same is no longer required under the applicable
requirements of the Act, the Notes (and all securities issued in
exchange therefor, in substitution thereof) shall bear the
following legend (along with such other legends as the Initial
Purchasers and their counsel reasonably deem necessary to comply
with applicable law):
“THE
OFFER AND SALE OF THIS SECURITY AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
SECURITIES ACT ”), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “
RESALE RESTRICTION TERMINATION DATE ”) THAT IS ONE
YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH SYBASE, INC.
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OR ANY
AFFILIATE OF SYBASE, INC. WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) ONLY (A) TO SYBASE, INC. OR ANY
PARENT OR SUBSIDIARY THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF SYBASE, INC. AND THE TRUSTEE’S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.”
You have agreed
with the Company that you will make offers and sales (the “
Exempt Resales ”) of the Notes purchased by you
hereunder on the terms set forth in the Disclosure Package and the
Offering Memorandum, as amended or supplemented, solely to persons
whom you reasonably believe to be “qualified institutional
buyers” as defined in Rule 144A under the Act (“
QIBs ”) in transactions meeting the requirements of
Rule 144A under the Act. Those persons specified in the
foregoing sentence are referred to herein as the (“
Eligible Purchasers ”). You will offer the Notes to
Eligible Purchasers initially at a price equal to 100% of the
principal amount thereof. Such price may be changed at any time
without notice.
This Agreement,
the Indenture and the Notes are referred to herein collectively as
the “ Operative Documents .”
2.
Representations, Warranties and Agreements of the Company .
The Company represents, warrants and agrees as follows:
(a) When
the Notes are issued pursuant to the Indenture and delivered in
accordance with this Agreement, such Notes will not be of the same
class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities
exchange registered under Section 6 of the Exchange Act, or
that are quoted in a United States automated inter-dealer quotation
system.
(b) The
Company is not, or after giving effect to the offering and sale of
the Notes and upon application of the proceeds as described under
the caption “Use of Proceeds” in
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the Disclosure
Package and the Offering Memorandum will not be, an
“investment company” or a company
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.
(c) Assuming
that your representations and warranties in Section 3(b) are true
and you comply with the agreements set forth therein, the purchase
and resale of the Notes by you and the conversion of the Notes into
the underlying securities, in each case, in the manner contemplated
by this Agreement, the Indenture and Disclosure Package and the
Offering Memorandum (including pursuant to the initial Exempt
Resales by you) is exempt from the registration requirements of the
Act. No form of general solicitation or general advertising within
the meaning of Regulation D (including, but not limited to,
advertisements, articles, notices or other communications published
in any newspaper, magazine or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising)
was used by the Company or any of its representatives (other than
you, as to whom the Company makes no representation) in connection
with the offer and sale of the Notes.
(d) Each
of the Disclosure Package and the Offering Memorandum, as of its
date, contains all the information specified in, and meeting the
requirements of Rule 144A(d)(4) under the Act.
(e) The
Disclosure Package and the Offering Memorandum have been prepared
by the Company for use by the Initial Purchasers in connection with
the Exempt Resales. No order or decree prohibiting the use of the
Disclosure Package or the Offering Memorandum, or any order
asserting that the transactions contemplated by this Agreement are
subject to the registration requirements of the Act has been issued
and no proceeding for that purpose has commenced or is pending or,
to the knowledge of the Company is contemplated.
(f) (i) Each
document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in either the Disclosure Package or
the Offering Memorandum complied or will comply when so filed (or,
if an amendment with respect to any such document was filed, when
such amendment was filed) in all material respects with the
Exchange Act and the applicable rules and regulations of the
Commission thereunder and (ii) the Preliminary Offering
Memorandum, the Offering Memorandum as of their respective dates
and the Offering Memorandum as of the Closing Date, did not or will
not at any time contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading,
except that this representation and warranty does not apply to
statements in or omissions from the Preliminary Offering Memorandum
and Offering Memorandum made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished to
the Company in writing by or on behalf of the Initial Purchasers
expressly for use therein, it being understood and agreed that the
only such information furnished by any Initial Purchaser consists
of the information described as such in Section 8
hereof.
(g) The
term “ Disclosure Package ” shall mean
(i) the Preliminary Offering Memorandum, as amended or
supplemented at the Applicable Time (as defined below),
(ii) the Final Term Sheet (as defined herein) and
(iii) any other writings that the parties expressly
agree
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in writing to
treat as part of the Disclosure Package (“ Issuer Written
Information ”). As of 5:00 p.m., New York time, on the
date of execution and delivery of this Agreement (the “
Applicable Time ”), the Disclosure Package did 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 the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Disclosure Package made in
reliance upon and in conformity with information relating to the
Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein, it
being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the information
described as such in Section 8 hereof.
(h) The
market-related and customer data and estimates in the
Company’s annual report for the year ended December 31,
2008 filed on Form 10-K are based on or derived from sources that
the Company believes to be reasonable and accurate.
(i) The
Company and each of its subsidiaries have been duly incorporated
and are validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification (except such failures to
qualify or be in good standing that would not, either individually
or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole), and have all power and
authority necessary to own or hold their respective properties and
to conduct the businesses in which they are engaged; and none of
the subsidiaries of the Company (other than iAnywhere Solutions,
Inc., Sybase 365, LLC and Joe D Partners C.V.) is a
“significant subsidiary,” as such term is defined in
Rule 405 of the Rules and Regulations (as defined
herein).
(j) The
Company has an authorized capitalization as set forth in the
Disclosure Package and the Offering Memorandum, and all of the
issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable (except
for directors’ qualifying shares and except as set forth in
the Disclosure Package and the Offering Memorandum) and, to the
extent owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims. All of the
outstanding shares of capital stock of the Company have been issued
in compliance with federal and state securities laws. None of the
outstanding shares of capital stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights
to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights,
rights of first refusal or other rights to purchase, or equity or
debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries
other than those set forth or incorporated by reference in the
Disclosure Package and the Offering Memorandum. The description of
the Company’s stock option, stock bonus and other stock plans
or arrangements, and the options or other rights granted
thereunder, set forth or incorporated by reference in the
Disclosure Package and the Offering Memorandum accurately and
fairly presents and summarizes such plans, arrangements, options
and rights.
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(k) The
underlying securities issuable upon conversion of the Notes have
been duly authorized and reserved and, when issued upon conversion
of the Notes in accordance with the terms of the Notes and the
Indenture, will be validly issued, fully paid and non-assessable,
and the issuance of the underlying securities will not be subject
to any preemptive or similar rights.
(l) The
Company has all requisite corporate power and authority to enter
into the Indenture. The Indenture has been duly and validly
authorized by the Company, and upon its execution and delivery and,
assuming due authorization, execution and delivery by the Trustee,
will constitute the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights
generally and by general equitable principles and subject to
limitations on the availability of equitable relief, including
specific performance (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing;
and no qualification of the Indenture under the Trust Indenture Act
of 1939is required in connection with the offer and sale of the
Notes contemplated hereby or in connection with the initial Exempt
Resales by you.
(m) The
Indenture will conform in all material respects to the description
thereof in the Disclosure Package and the Offering
Memorandum.
(n) The
Company has all requisite corporate power and authority to issue
and sell the Notes. The Notes have been duly authorized by the
Company and, when duly executed by the Company in accordance with
the terms of the Indenture, assuming due authentication of the
Notes by the Trustee, upon delivery to the Initial Purchasers
against payment therefor in accordance with the terms hereof, will
be validly issued and delivered, and will constitute valid and
binding obligations of the Company entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their
terms, except as such enforceability may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and
other laws relating to or affecting creditors’ rights
generally and by general equitable principles and subject to
limitations on the availability of equitable relief, including
specific performance (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair
dealing.
(o) The
Notes will conform in all material respects to the description
thereof in the Disclosure Package and the Offering
Memorandum.
(p) The
Company has all requisite corporate power and authority to enter
into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(q) The
issue and sale of the Notes and the compliance by the Company with
all of the provisions of the Notes, the Indenture and this
Agreement and the consummation of the transactions contemplated
hereby and thereby (i) will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which
the
6
Company or any
of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject except for
such conflicts, breaches, violations or defaults which would not be
material to the Company and its subsidiaries, taken as a whole,
(ii) will not result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or
(iii) will not violate any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets; and no consent, approval, authorization
or order of, or filing, registration or qualification with any such
court or governmental agency or body is required for the issue and
sale of the Notes or the performance by the Company of its
obligations under this Agreement or the Indenture, except for such
consents, approvals, authorizations, orders, filings, registrations
or qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Notes by the Initial Purchasers or as may be expressly required by
the terms of this Agreement or the Indenture following the Closing
Date.
(r) There
are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the Act with respect
to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in any
securities being registered pursuant to any registration statement
filed by the Company under the Act.
(s) During
the six-month period preceding the date of the Offering Memorandum,
none of the Company or any other person acting on behalf of the
Company has offered or sold to any person any Notes, or any
securities of the same or a similar class as the Notes, other than
Notes offered or sold to the Initial Purchasers hereunder. The
Company will take reasonable precautions designed to ensure that
any offer or sale, direct or indirect, in the United States or to
any U.S. person (as defined in Rule 902 under the Act), of any
Notes or any substantially similar security issued by the Company,
within six months subsequent to the date on which the distribution
of the Notes has been completed (as notified to the Company by the
Initial Purchasers), is made under restrictions and other
circumstances reasonably designed not to affect the status of the
offer and sale of the Notes in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from
the registration provisions of the Act.
(t) Neither
the Company nor any of its subsidiaries has sustained, since the
date of the latest audited financial statements included in the
Offering Memorandum, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Disclosure Package and the Offering
Memorandum; and, since such date, there has not been any material
change in the stockholders’ equity (other than upon the
exercise of outstanding stock options), long-term debt (except
resulting from the issuance of the Notes) or other liabilities of
the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the management, condition, financial or
otherwise, stockholders’ equity, results of operations,
business or prospects of the Company and its subsidiaries, taken as
a whole (a “ Material Adverse Effect ”)
otherwise than as set forth or contemplated in the Disclosure
Package and the Offering Memorandum.
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(u) The
financial statements (including the related notes and supporting
schedules) included in the Disclosure Package and the Offering
Memorandum present fairly in all material respects the financial
condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated (or,
where an amendment with respect to any such document containing
such financial statements and incorporated by reference into the
Disclosure Package and the Offering Memorandum was filed pursuant
to the Exchange Act, at the dates and for the periods indicated as
so amended), and comply with applicable accounting requirements of
Regulation S-X and have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods involved except to the extent that
interim financial statements (i) are subject to normal
year-end adjustments that will not be, individually or in the
aggregate, material and adverse to the Company, or (ii) lack
footnotes. The financial data set forth in the Disclosure Package
and the Offering Memorandum under the captions “Selected
Financial Data” and “Capitalization” fairly
present the information set forth therein on a basis consistent
with that of the audited financial statements contained in the
Disclosure Package and the Offering Memorandum. The Company’s
ratios of earnings to fixed charges set forth in the Disclosure
Package and the Offering Memorandum have been calculated in
compliance with Item 503(d) of Regulation S-K under the
Act.
(v) Ernst
& Young LLP, who have expressed their opinion with respect to
the financial statements (which term as used in this Agreement
includes the related notes thereto) of the Company, whose report
appears in the Disclosure Package and the Offering Memorandum and
who have delivered the initial letter referred to in Section 7(g)
hereof, are independent registered public accountants as required
by the Act and the Exchange Act and the rules and regulations
promulgated thereunder (the “ Rules and Regulations
”).
(w) The
Company and each of its subsidiaries has good and marketable title
in fee simple to all real property and good and marketable title to
all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in
the Disclosure Package and the Offering Memorandum and such as do
not materially affect the value of the property of the Company and
its subsidiaries taken as a whole and do not materially interfere
with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all real property and
buildings held under lease by the Company or any of its
subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do
not materially interfere with the use made and proposed to be made
of such property and buildings by the Company or any of its
subsidiaries.
(x) Except
as disclosed in the Disclosure Package and the Offering Memorandum,
the Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies
engaged in similar businesses in similar industries and the Company
and its subsidiaries are in compliance with the terms of such
policies and instruments in all material respects.
(y) The
Company and each of its subsidiaries own or possess adequate rights
to use (or in the case of patents, to exclude the use by others of)
all material patents, patent
8
applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights and licenses necessary for
the conduct of their respective businesses, except where the
failure to own, possess or acquire such rights would not reasonably
be expected to be material to the Company and its subsidiaries,
taken as a whole and have no reason to believe that the conduct of
their respective businesses will conflict, and have not received
any notice of any claim of conflict, with, any such rights of
others which would reasonably be expected be material to the
Company and its subsidiaries, taken as a whole.
(z) There
are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the
subject that, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to have a Material
Adverse Effect, and to the best of the Company’s knowledge,
no such proceedings are threatened in writing by governmental
authorities or others.
(aa) There
are no contracts or other documents (other than any Operative
Documents) that would be required to be filed as exhibits to a
Company registration statement pursuant to Item 601(b)(10) of
Regulation S-K that have not been described in the Disclosure
Package and the Offering Memorandum or filed or incorporated by
reference as an exhibit to a document incorporated by reference in
the Disclosure Package and the Offering Memorandum.
(bb) No
relationship, direct or indirect, that would be required to be
described in a Company registration statement pursuant to
Item 404 of Regulation S-K, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, that has
not been described in the Disclosure Package and the Offering
Memorandum.
(cc) No
labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company or any of
its subsidiaries, is imminent that could reasonably be expected to
have a Material Adverse Effect.
(dd) The
Company is in compliance in all material respects with all
presently applicable provisions of Section 407(d)(7) of the
Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
(“ ERISA ”); no “reportable event”
(as defined in ERISA) has occurred with respect to any
“pension plan” (as defined in ERISA) for which the
Company would have any material liability; the Company has not
incurred and does not expect to incur liability under
(i) Title IV of ERISA with respect to termination of, or
withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “ Code ”),
except in each case where such liability would not be material to
the Company and its subsidiaries, taken as a whole; and each
“pension plan” for which the Company would have any
material liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(ee) The
Company has filed all federal, state and local income and franchise
tax returns required to be filed through the date hereof or has
requested extensions thereof except
9
in any case in
which the failure so to file would not have a Material Adverse
Effect and except as set forth in or contemplated in the Disclosure
Package and the Offering Memorandum, and has paid all taxes
required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due
and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not have a
Material Adverse Effect and except as set forth in or contemplated
in the Disclosure Package and the Offering Memorandum.
(ff) Since
the date as of which information is given in the Preliminary
Offering Memorandum through the date hereof, and except as may
otherwise be disclosed in the Disclosure Package and the Offering
Memorandum, the Company has not (i) issued or granted any
securities (except pursuant to the exercise of outstanding stock
options), (ii) incurred any material liability or obligation,
direct or contingent, other than liabilities and obligations that
were incurred in the ordinary course of business,
(iii) entered into any material transaction not in the
ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(gg) The
Company (i) makes and keeps accurate books and records in
accordance with its financial and accounting policies in all
material respects and (ii) maintains internal accounting
controls designed to provide reasonable assurance that
(A) transactions are executed in accordance with
management’s authorization, (B) transactions are
recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets,
(C) access to its assets is permitted only in accordance with
management’s authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(hh) Neither
the Company nor any of its subsidiaries (i) is in violation of
its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred that, with notice or lapse of
time or both, would constitute such a material default, in the due
performance or observance of any term, covenant, condition or other
obligation contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets
may be subject or has failed to obtain or maintain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property
or to the conduct of its business.
(ii) Neither
the Company nor any of its subsidiaries, nor any director, officer,
agent, employee or other person associated with or acting on behalf
of the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment with corporate funds.
(jj) Except
for such matters as would not, individually or in the aggregate,
either reasonably be expected to result in a Material Adverse
Effect or require disclosure in the
10
Offering
Memorandum, the Company and any of its subsidiaries (1) are
conducting and have conducted their businesses, operations and
facilities in compliance with Environmental Laws (as defined
below); (2) possess, and are in compliance with, any and all
permits, licenses or registrations required under Environmental Law
(“Environmental Permits”); (3) will not require
material expenditures to maintain such compliance with
Environmental Law or their Environmental Permits or to remediate,
clean up, abate or remove any Hazardous Substance (as defined
below); and (4) are not subject to any pending or, to the
knowledge of the Company or any of its subsidiaries, threatened
claim or other legal proceeding under any Environmental Laws
against the Company or its subsidiaries, and have not been named as
a “potentially responsible party” under or pursuant to
any Environmental Law. As used in this paragraph, “
Environmental Laws ” means any and all applicable
federal, state, local, and foreign laws, ordinances, regulations
and common law, or any administrative or judicial order, consent,
decree or judgment thereof, relating to pollution or the protection
of human health or the environment, including, without limitation,
those related to (i) emissions, discharges, releases or threatened
releases of, or exposure to, Hazardous Substances, (ii) the
generation, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances,
or (iii) the investigation, remediation or cleanup of any
Hazardous Substances. As used in this paragraph, “
Hazardous Substances ” means pollutants, contaminants
or hazardous, dangerous, toxic, biohazardous or infectious
substances, materials or wastes, or any other chemical substance
regulated under Environmental Laws.
(kk) None
of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the
Notes), will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder,
including, without limitation, Regulations T, U and X of the Board
of Governors of the Federal Reserve System.
(ll) The
statements set forth in the Disclosure Package and the Offering
Memorandum under the caption “Description of Notes,”
insofar as they purport to constitute a summary of the terms of the
Notes and under the captions “Capitalization” and
“Description of Capital Stock” insofar as they purport
to describe the provisions of the laws and documents referred to
therein, are accurate in all material respects.
(mm) Prior
to the date hereof, neither the Company nor any of its directors,
officers or controlled affiliates nor any person acting on its or
their behalf (other than you, as to whom the Company makes no
representation) has taken any action that is designed to or that
has constituted or that might have been expected to cause or result
in unlawful stabilization or manipulation of the price of any
security of the Company in connection with the offering of the
Notes.
(nn) The
minute books and records of the Company and its subsidiaries
relating to proceedings of their respective shareholders, boards of
directors, and committees of their respective boards of directors
made available to Wilson Sonsini Goodrich & Rosati,
Professional Corporation, counsel for the Initial Purchasers, are
their original minute books and records or are true, correct and
complete copies thereof, with respect to all proceedings of said
shareholders, boards of directors and committees since
January 1, 2005 through the date hereof. In the event that
definitive minutes have not been prepared with respect to any
proceedings of such
11
shareholders,
boards of directors or committees, the Company has made available
to Wilson Sonsini Goodrich & Rosati, Professional Corporation
originals or true, correct and complete copies of draft minutes or
written agendas relating thereto, which drafts and agendas, if any,
reflect all events that occurred in connection with such
proceedings.
(oo) All
instruments, records, agreements and other documents requested in
Wilson Sonsini Goodrich & Rosati, Professional
Corporation’s document request letter have been provided or
summarized to, or made available for inspection by Wilson Sonsini
Goodrich & Rosati, Professional Corporation.
(pp) The
Company is subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act.
(qq) The
Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the
Exchange Act), which (i) are designed to provide reasonable
assurance that material information relating to the Company,
including its consolidated subsidiaries, is made known to the
Company’s principal executive officer and its principal
financial officer by others within those entities; (ii) have
been evaluated for effectiveness as of a date within 90 days
prior to the date of the Company’s most recent annual or
quarterly report; and (iii) are effective in all material
respects to perform the functions for which they were
established.
(rr) Based
on the most recent evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant
deficiency in the design or operation of internal controls which
could adversely affect the Company’s ability to record,
process, summarize and report financial data or any material
weaknesses in internal controls; or (ii) any fraud, whether or
not material, that involves management or other employees who have
a significant role in the Company’s internal
controls.
(ss) The
Company has not paid or agreed to pay to any person any
compensation for soliciting another person to purchase any Notes or
shares of common stock issuable upon conversion thereof (except as
contemplated in this Agreement).
(tt) The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules,
regulations or guidelines issued, administered or enforced by any
governmental agency (collectively, the “ Money Laundering
Laws ”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator with respect to the Money Laundering Laws, to which the
Company or any of its subsidiaries is a party, is pending or, to
the best knowledge of the Company, threatened.
(uu) Neither
the Company nor any of its subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or affiliate of
the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control
of the U.S. Treasury Department (“ OFAC ”); and
the Company will not directly
12
or indirectly
use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(3)
Purchase of the Notes by the Initial Purchasers, Agreements to
Sell, Purchase and Resell. (a) The Company hereby agrees,
on the basis of the representations, warranties and agreements of
the Initial Purchasers contained herein and subject to all the
terms and conditions set forth herein, to issue and sell to the
Initial Purchasers and, upon the basis of the representations,
warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the
Initial Purchasers agree, severally and not jointly, to purchase
from the Company, at a purchase price of 97.50% of the principal
amount thereof, the principal amount of Notes set forth opposite
the name of such Initial Purchaser in Schedule I hereto. The
Company shall not be obligated to deliver any of the securities to
be delivered hereunder except upon payment for all of the
securities to be purchased as provided herein.
(b) Each
of the Initial Purchasers, severally and not jointly hereby
represents and warrants to the Company that it will offer the Notes
for sale upon the terms and conditions set forth in this Agreement
and in the Offering Memorandum. Each of the Initial Purchasers
hereby represents and warrants to, and agrees with, the Company
that such Initial Purchaser: (i) is a QIB with such knowledge
and experience in financial and business matters as are necessary
in order to evaluate the merits and risks of an investment in the
Notes; (ii) is purchasing the Notes pursuant to a private sale
exempt from registration under the Act; (iii) in connection
with the initial Exempt Resales by you, will solicit offers to buy
the Notes only from, and will offer to sell the Notes only to, the
Eligible Purchasers in accordance with this Agreement and on the
terms contemplated by the Offering Memorandum and (iv) will
not offer or sell the Notes, nor has it offered or sold the Notes
by, or otherwise engaged in, any form of general solicitation or
general advertising (within the meaning of Regulation D,
including, but not limited to, advertisements, articles, notices or
other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising). The Initial Purchasers have
advised the Company that they will offer the Notes to Eligible
Purchasers at a price initially equal to 100% of the principal
amount thereof, plus accrued interest, if any, from the date of
issuance of the Notes. Such price may be changed by the Initial
Purchasers at any time without notice.
The Initial
Purchasers understand that the Company and, for purposes of the
opinions to be delivered to the Initial Purchasers pursuant to
Sections 7(c), 7(d), 7(e), and 7(f) hereof, counsel to the
Company and counsel to the Initial Purchasers, will rely upon the
accuracy and truth of the foregoing representations, warranties and
agreements and the Initial Purchasers hereby consent to such
reliance.
4.
Delivery of the Notes and Payment Therefor .
(a) Delivery of and payment for the Firm Notes shall be made
at the office of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, 650 Page Mill Road, Palo Alto, CA 94304, at
10:00 A.M., New York City Time, on the Closing Date (such date
and time of delivery and payment for the Firm Notes being
called
13
the “
First Closing Date ”). The place of closing for the
Notes and the Closing Date may be varied by agreement between the
Initial Purchasers and the Company.
The Notes will be
delivered to the Initial Purchasers, or the Trustee as custodian
for The Depository Trust Company (“ DTC ”),
against payment by or on behalf of the Initial Purchasers of the
purchase price therefor by wire transfer in immediately available
funds to an account designated by the Company, by causing DTC to
credit the Notes to the respective accounts of the Initial
Purchasers at DTC. The Notes will be evidenced by one or more
global securities in definitive form (the “ Global
Notes ”) and will be registered in the name of Cede &
Co. as nominee of DTC. A facsimile copy of the Notes to be
delivered to the Initial Purchasers shall be made available to the
Initial Purchasers for inspection not later than 3:00 P.M., New
York City time, on the business day next preceding the Closing
Date.
(b) Subject
to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby
grants the Option to each of the Initial Purchasers to purchase for
the purpose of covering over-allotments, severally and not jointly,
at the purchase price equal to 97.50% of the principal amount
thereof that portion of the aggregate principal amount of Optional
Notes as to which such Option shall have been exercised (to be
adjusted by the Initial Purchasers so as to eliminate fractional
Notes) determined by multiplying such aggregate principal amount of
Optional Notes by a fraction, the numerator of which is the maximum
principal amount of Firm Notes which such Initial Purchaser is
entitled to purchase as set forth opposite the name of such Initial
Purchaser in Schedule I hereto and the denominator of
which is the maximum principal amount of Firm Notes which all of
the Initial Purchasers are entitled to purchase hereunder. The
maximum aggregate principal amount of Optional Notes which all of
the Initial Purchasers are entitled to purchase hereunder is
$50,000,000. At any time on or before the thirtieth day after the
date of this Agreement (but not more than once), the Option may be
exercised by written notice being given to the Company by the
Initial Purchasers. Such notice shall set forth the aggregate
principal amount of Optional Notes as to which the Option is being
exercised, the names in which the Optional Notes are to be
registered, the denominations in which the Optional Notes are to be
issued and the date and time, as determined by the Initial
Purchasers, when the Optional Notes are to be issued.
The date of
delivery of and payment for the Optional Notes, being hereafter
referred to as an “ Optional Closing Date ,”
which may be the First Closing Date (the First Closing Date and the
Optional Closing Date, if any, being sometimes referred to as a
“ Closing Date ”), shall be determined by the
Initial Purchasers but shall not be earlier than two full business
days or later than five full business days after written notice of
the election to purchase the Optional Notes is given. Delivery of
the Optional Notes shall be made to the Initial Purchasers for the
respective account of the Initial Purchasers against payment by the
Initial Purchasers of the purchase price thereof to or upon the
order of the Company by wire transfer or transfers in immediately
available funds to an account designated by the Company.
5.
Agreements of the Company . The Company agrees with each of
the Initial Purchasers as follows:
(a) The
Company will furnish to the Initial Purchasers, without charge, by
the second business day after the date of the Offering Memorandum,
such number of copies of the
14
Disclosure
Package and the Offering Memorandum as may then be amended or
supplemented as they may reasonably request.
(b) The
Company will not make any amendment or supplement to the Disclosure
Package or to the Offering Memorandum of which the Initial
Purchasers shall not previously have been advised or to which they
shall reasonably object after being so advised.
(c) The
Company consents to the use, in accordance with the securities or
Blue Sky laws of the jurisdictions in which the Notes are offered
by the Initial Purchasers and by dealers, prior to the date of the
Offering Memorandum, of each Preliminary Offering Memorandum so
furnished by the Company. The Company consents to the use of the
Disclosure Package and the Offering Memorandum in accordance with
the securities or Blue Sky laws of the jurisdictions in which the
Notes are offered by the Initial Purchasers and by all dealers to
whom Notes may be sold, in connection with the offering and sale of
the Notes.
(d) If,
at any time prior to completion of the distribution of the Notes by
the Initial Purchasers to Eligible Purchasers, any event occurs or
information becomes known that, in the judgment of the Company or
in the opinion of counsel for the Initial Purchasers, should be set
forth in the Disclosure Package and the Offering Memorandum so that
the Disclosure Package and the Offering Memorandum do not include
any untrue statement of material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the
Disclosure Package and the Offering Memorandum in order to comply
with any law, the Company will forthwith prepare an appropriate
supplement or amendment thereto, and will expeditiously furnish to
the Initial Purchasers and dealers a reasonable number of copies
thereof.
(e) The
Company will take such actions as reasonably requested by the
Initial Purchasers and with their counsel in connection with the
qualification of the Notes for offering and sale by the Initial
Purchasers under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may reasonably request and
will file such consents to service of process or other documents
reasonably necessary or appropriate in order to effect such
qualification; provided , that in no event shall the Company
be obligated to qualify to do business in any jurisdiction where it
is not now so qualified or to take any action that would subject it
to taxation or service of process in suits, other than those
arising out of the offering or sale of the Notes, in any
jurisdiction where it is not now so subject. The Company will
advise the Initial Purchasers promptly of the suspension of the
qualification or registration of (or any such exemption relating
to) the Notes for offering, sale or trading in any jurisdiction or
any initiation or, the Co
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