EXHIBIT 10.21
SYNAPTICS INCORPORATED
$100,000,000
0.75% Convertible Senior Subordinated Notes due 2024
PURCHASE AGREEMENT
December 1, 2004
BEAR, XXXXXXX & CO. INC.
CREDIT SUISSE FIRST BOSTON LLC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Synaptics Incorporated, a Delaware corporation (the "Company"), hereby
confirms its agreement with you (the "Initial Purchasers"), as set forth below.
1. The Transactions. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchasers
$100,000,000 aggregate principal amount of its 0.75% Convertible Senior
Subordinated Notes due 2024 (the "Firm Notes"). In addition, the Company has
granted to the Initial Purchasers an option to purchase up to an additional
$25,000,000 aggregate principal amount of its 0.75% Convertible Senior
Subordinated Notes due 2024 (the "Optional Notes" and, together with the Firm
Notes, the "Notes"). The Notes shall be convertible into shares (the "Conversion
Shares") of common stock, par value $0.001 per share, of the Company (the
"Common Stock"), subject to and in accordance with the terms of the Notes. The
Notes will (i) have the terms and provisions which are described in the Offering
Memorandum (as defined below) under the heading "Description of Notes" and such
other terms as are customary and (ii) be issued pursuant to the provisions of
the Indenture (the "Indenture"), to be dated December 7, 2004, between the
Company and American Stock Transfer & Trust Company, as trustee (the "Trustee").
The Notes and the Conversion Shares are hereinafter referred to collectively as
the "Securities."
The sale of the Notes to the Initial Purchasers (the "Offering") will be
made without registration of the Securities under the Securities Act of 1933, as
amended (together with the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder, the "Securities Act"), in
reliance upon the exemption therefrom provided by Section 4(2) of the Securities
Act.
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum dated November 30, 2004 (the "Preliminary
Offering Memorandum") and an offering memorandum dated the date hereof (the
"Offering
Memorandum"), each setting forth information regarding the Company, the
Securities and the terms of the Offering and the transactions contemplated by
the Offering Documents (as defined below). The Preliminary Offering Memorandum
and the Offering Memorandum will incorporate by reference the Company's (i)
Annual Report on Form 10-K for the year ended June 30, 2004, (ii) Quarterly
Report on Form 10-Q for the quarter ended September 25, 2004, (iii) Proxy
Statement for the annual meeting of stockholders of the Company held on October
19, 2004, (iv) Current Reports on Form 8-K filed with the Commission on October
1, 2004 and October 13, 2004 (other than information in the documents that is
deemed not to be filed with the Commission) and (v) Registration Statements on
From 8-A filed on January 24, 2002 and August 16, 2002 (all such documents
listed in clauses (i) through (v) referred to herein as the "Incorporated
Documents"). Any references herein to the Preliminary Offering Memorandum or the
Offering Memorandum shall be deemed to include, in each case, all amendments and
supplements thereto and the Incorporated Documents and any amendments thereto.
The Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and initial resale of the Notes by the Initial Purchasers.
The Company understands that the Initial Purchasers propose to make an
offering of the Notes only on the terms and in the manner set forth in the
Offering Memorandum and Sections 3, 4 and 10 hereof as soon as the Initial
Purchasers deem advisable after this Agreement has been executed and delivered,
to persons in the United States whom the Initial Purchasers reasonably believe
to be qualified institutional buyers ("QIBs") as defined in Rule 144A under the
Securities Act, as such rule may be amended from time to time ("Rule 144A"), in
transactions under Rule 144A.
The Initial Purchasers and their direct and indirect transferees of the
Notes will be entitled to the benefits of the Registration Rights Agreement to
be dated as of December 7, 2004 among the parties hereto (the "Registration
Rights Agreement") pursuant to which the Company will agree, among other things,
to file (i) a registration statement (the "Registration Statement") on the
appropriate form with the Commission registering the Securities under the
Securities Act for resale and (ii) to use its reasonable best efforts to cause
the Registration Statement to be declared effective.
This Agreement, the Securities, the Registration Rights Agreement and the
Indenture are herein referred to as the "Offering Documents."
2. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with the Initial Purchasers that:
(a) The Preliminary Offering Memorandum as of its date does not,
and the Offering Memorandum, as of its date, as of the Closing Date and as
of the Additional Closing Date, if any (each as defined in Section 3
hereof), does not and will not, and any supplement or amendment to them
will not, contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein not
misleading, except that the representations and warranties set forth in
this Section 2(a) do not apply to
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statements or omissions that are 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 in the Preliminary Offering Memorandum or the Offering Memorandum or
any amendment or supplement thereto.
(b) The Preliminary Offering Memorandum and the Offering
Memorandum with respect to the Notes have been or will be prepared by the
Company for use by the Initial Purchasers in connection with the Offering.
No order or decree preventing the use of the Preliminary Offering
Memorandum or the Offering Memorandum or any amendment or supplement
thereto, or any order asserting that the transactions contemplated by this
Agreement are subject to the registration requirements of the Securities
Act, has been issued and no proceeding for that purpose has commenced or
is pending or, to the knowledge of the Company, is contemplated.
(c) Subsequent to the respective dates as of which information is
given in the Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum), except as
disclosed in the Offering Memorandum (or, if the Offering Memorandum is
not in existence, the most recent Preliminary Offering Memorandum), the
Company has not declared, paid or made any dividends or other
distributions of any kind on or in respect of its capital stock and there
has been no material adverse change or any development involving a
prospective material adverse change, whether or not arising from
transactions in the ordinary course of business, in (i) the business,
condition (financial or otherwise), results of operations, stockholders'
equity or properties of the Company and each subsidiary of the Company
listed on Exhibit A hereto (collectively, the "Subsidiaries";
individually, a "Subsidiary"), taken as a whole; (ii) the long-term debt
or capital stock of the Company and its Subsidiaries taken as a whole; or
(iii) the ability of the Company to consummate the Offering or any of the
other transactions contemplated by the Offering Documents. Since the date
of the latest balance sheet included or incorporated by reference in the
Offering Memorandum (or, if the Offering Memorandum is not in existence,
the most recent Preliminary Offering Memorandum), neither the Company nor
any Subsidiary has incurred or undertaken any liabilities or obligations,
whether direct or indirect, liquidated or contingent, matured or
unmatured, or entered into any transactions, including any acquisition or
disposition of any business or asset, which are material to the Company
and its Subsidiaries, taken as a whole, except for liabilities,
obligations and transactions which are disclosed in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum).
(d) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary Offering
Memorandum) under the caption "Capitalization" and, after giving effect to
the Offering, will be as set forth in the column headed "As Adjusted"
under the
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caption "Capitalization." All of the issued and outstanding shares of
capital stock of the Company are fully paid and non-assessable and have
been duly and validly authorized and issued, in compliance with all
applicable state, federal and foreign securities laws and not in violation
of or subject to any preemptive or similar right that does or will entitle
any person, upon the issuance or sale of any security, to acquire from the
Company or any Subsidiary any Common Stock or other security of the
Company or any Subsidiary or any security convertible into, or exercisable
or exchangeable for, Common Stock or any other such security (any
"Relevant Security").
(e) The Company has authorized and has reserved, and covenants to
continue to reserve, free of any preemptive or similar rights, a
sufficient number of authorized but unissued shares of Common Stock, to
satisfy the conversion rights of the Notes and issue the Conversion
Shares. The Conversion Shares have been duly authorized for issuance upon
conversion of the Notes, and upon conversion of the Notes in accordance
with their terms and the Indenture will be issued free of statutory and
contractual preemptive rights and are sufficient in number to meet the
current conversion requirements, and the Conversion Shares, when so
issued, will be duly and validly issued and fully paid and non-assessable,
will have been issued in compliance with all applicable state, federal and
foreign securities laws, will not have been issued in violation of or
subject to any preemptive or similar right existing on the date hereof
that does or will entitle any person to acquire any Relevant Security from
the Company or any Subsidiary upon issuance or sale of the Notes or the
Conversion Shares, and assuming the Registration Statement is effective,
will not be subject to any restriction upon the voting or transfer thereof
pursuant to applicable law or the Company's certificate of incorporation,
bylaws or governing documents or any agreement to which the Company or any
of its subsidiaries is a party or by which any of them may be bound.
(f) The Common Stock (including the Conversion Shares) conforms in
all material respects to the descriptions thereof contained in the
Offering Memorandum (or, if the Offering Memorandum is not in existence,
the most recent Preliminary Offering Memorandum). Except as disclosed in
the Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum), neither the
Company nor any Subsidiary has outstanding warrants, options to purchase,
or any preemptive rights or other rights to subscribe for or to purchase,
or any contracts or commitments to issue or sell, any Relevant Security.
All corporate action required to be taken by the Company for the issuance
and delivery of the Conversion Shares has been duly and validly taken.
Except as disclosed in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the Preliminary Offering Memorandum),
there are no outstanding subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or rights related to or
entitling any person to purchase or otherwise to acquire any shares of, or
any security convertible into or exchangeable or exercisable for, the
capital stock of, or other ownership interest in, the Company or the
Subsidiaries.
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(g) The Subsidiaries are the only subsidiaries of the Company
within the meaning of Rule 405 under the Securities Act. Except for the
Subsidiaries and Foveon, Inc., the Company holds no ownership or other
interest, nominal or beneficial, direct or indirect, in any corporation,
partnership, joint venture or other business entity. All of the issued
shares of capital stock of or other ownership interests in each Subsidiary
have been duly and validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the Company. Except
as described in the Preliminary Offering Memorandum and the Offering
Memorandum, all of the issued shares of capital stock of or other
ownership interests in each Subsidiary are free and clear of any lien,
charge, mortgage, pledge, security interest, claim, equity, trust or other
encumbrance, preferential arrangement, defect or restriction of any kind
whatsoever (any "Lien").
(h) Each of the Company and the Subsidiaries has been duly
organized and validly exists as a corporation, partnership, limited
liability company or, in the case of Synaptics Hong Kong Limited, a
company, in good standing under the laws of its jurisdiction of
organization. Each of the Company and the Subsidiaries has all requisite
power and authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary Offering
Memorandum), and to own, lease and operate its respective properties. Each
of the Company and the Subsidiaries is duly qualified to do business and
is in good standing as a foreign corporation, partnership, limited
liability company, or, in the case of Synaptics Hong Kong Limited, a
company, in each jurisdiction in which the character or location of its
properties (owned, leased or licensed) or the nature or conduct of its
business makes such qualification necessary, except for those failures to
be so qualified or in good standing which (individually and in the
aggregate) could not reasonably be expected to have a material adverse
effect on (i) the business, condition (financial or otherwise), results of
operations, stockholders' equity or properties of the Company and the
Subsidiaries, taken as a whole; (ii) the long-term debt or capital stock
of the Company or any Subsidiary; or (iii) the Offering or consummation of
any of the other transactions contemplated by the Offering Documents (any
such effect being a "Material Adverse Effect").
(i) The Company has the required corporate power and authority to
execute, deliver and perform its obligations under the Notes. The Notes
have been duly and validly authorized by the Company for issuance and,
when executed by the Company and authenticated by the Trustee in
accordance with the provisions of the Indenture and when delivered to and
paid for by the Initial Purchasers in accordance with the terms hereof,
will have been duly executed, issued and delivered and will constitute
valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable against the Company in
accordance with their terms except that the enforcement thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting
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creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding at
law or in equity) ((i) and (ii) collectively, the "Enforceability
Exceptions"). At the Closing Date, the Notes will be in the form
contemplated by the Indenture.
(j) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Indenture. The
Indenture has been duly and validly authorized by the Company and meets
the requirements for qualification under the Trust Indenture Act of 1939,
as amended (the "TIA"), and, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Trustee),
will constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms except that
the enforcement thereof may be limited by the Enforceability Exceptions.
(k) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the Registration Rights
Agreement. The Registration Rights Agreement has been duly and validly
authorized by the Company and when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Initial
Purchasers), will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms
except that the enforcement thereof may be limited by the Enforceability
Exceptions.
(l) The Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. This
Agreement has been duly and validly authorized, executed, and delivered by
the Company. The Securities, the Indenture and the Registration Rights
Agreement conform in all material respects to the descriptions thereof in
the Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum).
(m) There exists as of the date hereof (after giving effect to the
transactions contemplated by each of the Offering Documents) no event or
condition that would constitute a default or an event of default (in each
case as defined in each of the Offering Documents) under any of the
Offering Documents that would result in a Material Adverse Effect or
materially adversely affect the ability of the Company to consummate the
Offering and the other transactions contemplated by the Offering
Documents.
(n) The execution, delivery, and performance of this Agreement and
consummation of the transactions contemplated by the Offering Documents do
not and will not (i) conflict with, require consent under or result in a
breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any Lien upon
any property or assets of the Company or any Subsidiary pursuant to, any
indenture, mortgage, deed of trust,
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loan agreement or other agreement, instrument, franchise, license or
permit to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or their respective properties, operations or
assets may be bound other than pursuant to the terms of the Offering
Documents or (ii) violate or conflict with any provision of the
certificate or articles of incorporation, bylaws, certificate of
formation, limited liability company agreement, partnership agreement or
other organizational documents of the Company or any Subsidiary, or (iii)
violate or conflict with any law, rule, regulation, ordinance, directive,
judgment, decree or order of any judicial, regulatory or other legal or
governmental agency or body, domestic or foreign, except (in the case of
clauses (i) and (iii) above) as could not reasonably be expected to have a
Material Adverse Effect.
(o) Each of the Company and the Subsidiaries has all necessary
material consents, approvals, authorizations, orders, registrations,
qualifications, licenses, filings and permits of, with and from all
judicial, regulatory and other legal or governmental agencies and bodies
and all third parties, foreign and domestic (collectively, the
"Consents"), to own, lease and operate its properties and conduct its
business as it is now being conducted and as disclosed in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum), and each such Consent is valid
and in full force and effect, and neither the Company nor any Subsidiary
has received notice of any investigation or proceedings which results in
or, if decided adversely to the Company or any Subsidiary, could
reasonably be expected to result in, the revocation of, or imposition of a
materially burdensome restriction on, any Consent. Each of the Company and
the Subsidiaries is in compliance with all applicable laws, rules,
regulations, ordinances, directives, judgments, decrees and orders,
foreign and domestic (including, without limitation, the Xxxxxxxx-Xxxxx
Act of 2002 and the rules promulgated by the Commission thereunder),
except where failure to be in compliance could not reasonably be expected
to have a Material Adverse Effect. No Consent contains a materially
burdensome restriction not adequately disclosed in the Offering Memorandum
(or, if the Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum).
(p) No Consent of, with or from any judicial, regulatory or other
legal or governmental agency or body or any third party, foreign or
domestic, is required for the execution, delivery and performance of this
Agreement or consummation of the Offering and the other transactions
contemplated by the Offering Documents, including the issuance, sale and
delivery of the Notes (and the issuance of the Conversion Shares upon
conversion of the Notes), except such Consents as may be required under
state securities or blue sky laws and that the Commission must declare the
Registration Statement effective pursuant to the Registration Rights
Agreement.
(q) There is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or
foreign,
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pending to which the Company or any Subsidiary is a party or of which any
property, operations or assets of the Company or any Subsidiary is the
subject which, individually or in the aggregate, if determined adversely
to the Company or any Subsidiary, could reasonably be expected to have a
Material Adverse Effect; to the best of the Company's knowledge, no such
proceeding, litigation or arbitration is threatened or contemplated
against the Company or any Subsidiary; and the defense of all such
proceedings, litigation and arbitration against or involving the Company
or any Subsidiary could not reasonably be expected to have a Material
Adverse Effect.
(r) The financial statements and pro forma data, including the
notes thereto, and the supporting schedules included in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum) present fairly in all material
respects the financial position as of the dates indicated and the cash
flows and results of operations for the periods specified of the Company
and its consolidated subsidiaries for which financial statements are
included in the Offering Memorandum (or, if the Offering Memorandum is not
in existence, the most recent Preliminary Offering Memorandum); said
financial statements have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis
throughout the periods involved except as disclosed in the Offering
Memorandum; and the supporting schedules included in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum) present fairly in all material
respects the information required to be stated therein. No other financial
statements or supporting schedules are required to be included in the
Offering Memorandum (or, if the Offering Memorandum is not in existence,
the most recent Preliminary Offering Memorandum) if the Offering
Memorandum were included in a registration statement filed pursuant to the
Securities Act. The other financial and statistical information included
in the Offering Memorandum (or, if the Offering Memorandum is not in
existence, the most recent Preliminary Offering Memorandum) presents
fairly in all material respects the information included therein and,
unless otherwise disclosed, has been prepared on a basis consistent with
that of the financial statements that are included in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the most
recent Preliminary Offering Memorandum) and the books and records of the
respective entities presented therein and, to the extent such information
is a range, projection or estimate, is based on the good faith belief and
estimates of the Company. The financial information included in the
Incorporated Documents, including the information under Item 1
("Business"), Item 7 ("Management's Discussion and Analysis of Financial
Condition and Results of Operations") and Item 7A ("Quantitative and
Qualitative Disclosures About Market Risk") in the Form 10-K for the year
ended June 30, 2004 has been derived from the Company's consolidated
financial statements included in the Incorporated Documents or from the
Company's accounting books and records generally.
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(s) KPMG LLP and Ernst & Young LLP, which have examined certain of
such financial statements as set forth in their reports included in the
Offering Memorandum (or, if the Offering Memorandum is not in existence,
the most recent Preliminary Offering Memorandum), are independent
registered public accounting firms as contemplated by the Securities Act
and the Securities Exchange Act of 1934, as amended (together with the
rules and regulations of the Commission promulgated thereunder, the
"Exchange Act").
(t) The Offering Memorandum (or, if the Offering Memorandum is not
in existence, the most recent Preliminary Offering Memorandum) contains,
if any, all pro forma and as adjusted financial information and statements
which are required to be included or incorporated by reference in
accordance with Regulation S-X in the Offering Memorandum if the Offering
Memorandum were included in a registration statement filed pursuant to the
Securities Act. The pro forma and as adjusted financial information and
statements have been properly compiled and prepared in accordance with the
applicable requirements of the Securities Act and the Exchange Act and
includes all adjustments necessary to present fairly in accordance with
United States generally accepted accounting principles the pro forma and
as adjusted financial position of the respective entity or entities
presented therein at the respective dates indicated and their cash flows
and the results of operations for the respective periods specified.
(u) The Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and files reports with the
Commission on the XXXXX System. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and the outstanding shares of Common
Stock are listed for quotation on the Nasdaq National Market, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Commission or the Nasdaq
National Market is contemplating terminating such registration or listing.
(v) The Company has filed in a timely manner each document or
report required to be filed by it pursuant to the Exchange Act including,
without limitation, the Incorporated Documents; each such document or
report (including any financial statements) and any amendment thereto at
the time it was filed conformed to the requirements of the Exchange Act
and the Securities Act in all material respects; and none of such
documents or reports contained (or, when read together with the other
information in the Offering Memorandum, do contain) an untrue statement of
any material fact or omitted (or, when read together with the other
information in the Offering Memorandum, do omit) to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading as the case may be, and at all times up to and
including the Closing Date (and if any Optional Notes are purchased, the
Additional Closing Date), will not contain an untrue statement of a
material fact
9
or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein in the light of the
circumstances under which they were made not misleading.
(w) The Company maintains a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United
States generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv)
the recorded accounting for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(x) Neither the Company nor any of its affiliates (within the
meaning of Rule 144 under the Securities Act) has taken, directly or
indirectly, any action that constitutes or is designed to cause or result
in, or which could reasonably be expected to constitute, cause or result
in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Securities.
(y) None of the Company or any of the Subsidiaries or any of their
respective affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of any
"security" (as defined in the Securities Act) which is or could be
integrated with the sale of the Securities in a manner that would require
the registration under the Securities Act of the Securities or (ii)
engaged in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Securities Act) in
connection with the offering of the Securities or in any manner involving
a public offering within the meaning of Section 4(2) of the Securities
Act. Assuming the accuracy of the Initial Purchasers' representations and
warranties set forth in Section 10 hereof, the offer and sale of the Notes
to the Initial Purchasers in the manner contemplated by this Agreement and
the Offering Memorandum does not require registration under the Securities
Act and the Indenture does not require qualification under the TIA.
(z) Except as described in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the most recent Preliminary
Offering Memorandum), no holder of any Relevant Security has any rights to
require registration of any Relevant Security as part or on account of, or
otherwise in connection with, the Offering and any of the other
transactions contemplated by the Offering Documents, and any such rights
so disclosed have been effectively waived by the holders thereof, and any
such waivers remain in full force and effect.
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(aa) Each of the Company and the Subsidiaries is not now and, after
sale of the Notes, as contemplated hereunder and application of the net
proceeds of such sale as described in the Offering Memorandum under the
caption "Use of Proceeds," will not be an "investment company" or be
controlled by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(bb) No relationship, direct or indirect, exists between or among
the Company or any affiliate of the Company, on the one hand, and any
director, officer, stockholder, customer or supplier of the Company or any
affiliate of the Company, on the other hand, which is required by the
Exchange Act to be described in the Company's annual and/or quarterly
reports on Form 10-K and 10-Q, as applicable, which is not so described as
required in such reports. There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business)
or guarantees of indebtedness by the Company to or for the benefit of any
of the officers or directors of the Company or any of their respective
family members. The Company has not, in violation of the Xxxxxxxx-Xxxxx
Act, directly or indirectly, including through a Subsidiary, extended or
maintained credit, arranged for the extension of credit, or renewed an
extension of credit, in the form of a personal loan to or for any director
or executive officer of the Company.
(cc) Each of the Company and the Subsidiaries owns or leases all
such properties as are necessary to the conduct of its business as
presently operated and as proposed to be operated as described in the
Offering Memorandum (or, if the Offering Memorandum is not in existence,
the Preliminary Offering Memorandum). The Company and the Subsidiaries
have 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 except such as are described in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
Preliminary Offering Memorandum) or such as do not (individually or in the
aggregate) materially affect the value of such property or interfere with
the use made or proposed to be made of such property by the Company and
the Subsidiaries; and any real property and buildings held under lease or
sublease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material
to, and do not interfere with, the use made and proposed to be made of
such property and buildings by the Company and the Subsidiaries. Neither
the Company nor any Subsidiary has received any notice of any claim
adverse to its ownership of any real or personal property or of any claim
against the continued possession of any real property, whether owned or
held under lease or sublease by the Company or any Subsidiary.
(dd) Each of the Company and the Subsidiaries owns or has the right
to all Intellectual Property Rights necessary for the conduct of its
respective business as being conducted and as described in the Offering
Memorandum (or, if the Offering Memorandum is not in existence, the
Preliminary Offering
11
Memorandum). Each of the Company and the Subsidiaries have no reason to
believe that the conduct of their respective businesses does or will
conflict with, and have not received any notice of any claim of conflict
with, any such rights of others, except any such conflict that would not
have a Material Adverse Effect. For purposes hereof, "Intellectual
Property Rights" means any or all of the following and all rights in: (i)
all United States and foreign patents and utility models and applications
therefor and all reissues, divisions, re-examinations, renewals,
extensions, provisionals, continuations and continuations-in-part thereof,
and equivalent or similar rights anywhere in the world in inventions and
discoveries including without limitation invention disclosures; (ii) all
trade secrets and other rights in know-how and confidential or proprietary
information; (iii) all copyrights, copyrights registrations and
applications therefor and all other copyright rights corresponding thereto
throughout the world; (iv) all industrial designs and any registrations
and applications therefor throughout the world; (v) all rights in domain
names and applications and registrations therefore; (vi) all trade names,
logos, trade dress, common law trademarks and service marks, trademark and
service xxxx registrations and applications therefor and all goodwill
associated therewith throughout the world; and (vii) any similar,
corresponding or equivalent rights to any of the foregoing anywhere in the
world. To the best of the Company's knowledge, all material technical
information developed by and belonging to the Company or any Subsidiary
which has not been patented has been kept confidential. All of the pending
applications for any Intellectual Property Rights owned by the Company or
any Subsidiary have been duly filed, prosecution for applications has been
attended to and all maintenance and related fees have been paid. None of
the Company's or any Subsidiary's software is, in whole or in part,
subject to the provisions of any open source or quasi-open source or
similar license agreement that would require the Company or a Subsidiary
to make source code available to third parties or to publish source code.
Neither the Company nor any Subsidiary has made any submission or
suggestion to, and is not subject to any agreement with, standards bodies
or other entities that would obligate the Company or the Subsidiary to
grant licenses to or otherwise impair its control of its Intellectual
Property Rights. Except as described in the Preliminary Offering
Memorandum and the Offering Memorandum, neither the Company nor any
Subsidiary has granted or assigned to any other person or entity any right
to manufacture, have manufactured, assemble or sell the current products
and services of the Company and the Subsidiaries or those products and
services described in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the Preliminary Offering Memorandum).
There is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the Company's or any
Subsidiary's rights in or to any Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such
claim; and there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others that the Company or any
Subsidiary infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and the
Company is unaware of any other fact which would form a
12
reasonable basis for any such claim, except as could not reasonably be
expected to have a Material Adverse Effect . The Company and each
Subsidiary has obtained all approvals necessary for exporting the
Company's or Subsidiary's products outside the United States or in
accordance with all applicable United States export control regulations,
and importing the products into any country in which the products are now
sold or licensed for use, and all such export and import approvals in the
United States and throughout the world are valid, current, outstanding and
in full force and effect, except for approvals the absence of which could
not reasonably be expected to have a Material Adverse Effect.
(ee) The Company and the Subsidiaries maintain insurance in such
amounts and covering such risks as the Company reasonably considers
adequate for the conduct of its business and the value of its properties
and as is, to the Company's knowledge, customary for companies engaged in
similar businesses in similar industries, all of which insurance is in
full force and effect, except where the failure to maintain such insurance
could not reasonably be expected to have a Material Adverse Effect. There
are no material claims by the Company or any Subsidiary under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause. The Company
reasonably believes that it will be able to renew its existing insurance
as and when such coverage expires or will be able to obtain replacement
insurance adequate for the conduct of the business and the value of its
properties at a cost that could not reasonably be expected to have a
Material Adverse Effect.
(ff) The Company has in effect insurance covering the Company, its
directors and officers for liabilities or losses arising in connection
with this Offering, including, without limitation, liabilities or losses
arising under the Securities Act, the Exchange Act, and applicable foreign
securities laws.
(gg) Each of the Company and the Subsidiaries has accurately
prepared in all material respects and timely filed all federal, state,
foreign and other tax returns that are required to be filed by it and has
paid or made provision for the payment of all taxes, assessments,
governmental or other similar charges, including without limitation, all
sales and use taxes and all taxes which the Company or any Subsidiary is
obligated to withhold from amounts owing to employees, creditors and third
parties, with respect to the periods covered by such tax returns (whether
or not such amounts are shown as due on any tax return), except for such
failures that could not reasonably be expected to have a Material Adverse
Effect. No deficiency assessment with respect to a proposed adjustment of
the Company's or any Subsidiary' federal, state, local or foreign taxes is
pending or, to the best of the Company's knowledge, threatened. The
accruals and reserves on the books and records of the Company and the
Subsidiaries in respect of tax liabilities for any taxable period not
finally determined are adequate to meet any assessments and related
liabilities for any such period and, since June 30, 2004, the Company and
the Subsidiaries have not incurred any liability for taxes other than in
the ordinary course of its business. There is no tax Lien,
13
whether imposed by any federal, state, foreign or other taxing authority,
outstanding against the assets, properties or business of the Company or
any Subsidiary, except for Liens that could not reasonably be expected to
have a Material Adverse Effect.
(hh) No labor disturbance by the employees of the Company or any
Subsidiary exists or, to the best of the Company's knowledge, is imminent,
which could reasonably be expected to have a Material Adverse Effect.
(ii) No "prohibited transaction" (as defined in either Section 406
of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the "Code")), "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or other event of the kind described in
Section 4043(b) of ERISA (other than events with respect to which the
30-day notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan for which the Company
or any Subsidiary would have any material liability; each employee benefit
plan for which the Company or any Subsidiary would have any liability is
in compliance in all material respects with applicable law, including
(without limitation) ERISA and the Code; the Company has not incurred and
does not expect to incur liability under Title IV of ERISA with respect to
the termination of, or withdrawal from, any "pension plan"; and each plan
for which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or by failure to act, which could reasonably
be expected to cause the loss of such qualification.
(jj) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of any
kind of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any Subsidiary (or, to the Company's knowledge,
any other entity for whose acts or omissions the Company is or may be
liable) upon any other property now or previously owned or leased by the
Company or any Subsidiary, or upon any other property, which would be a
violation of or give rise to any liability under any applicable law, rule,
regulation, order, judgment, decree or permit relating to pollution or
protection of human health and the environment ("Environmental Law").
There has been no disposal, discharge, emission or other release of any
kind onto such property or into the environment surrounding such property
of any toxic or other wastes or other hazardous substances with respect to
which the Company or any Subsidiary has knowledge. Neither the Company nor
any Subsidiary has agreed to assume, undertake or provide indemnification
for any liability of any other person under any Environmental Law,
including any obligation for cleanup or remedial action. There is no
pending or, to the Company's knowledge, threatened administrative,
regulatory or judicial action, claim or notice of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any Subsidiary.
14
(kk) Neither the Company nor any Subsidiary nor, to the Company's
knowledge, any of its employees or agents has at any time during the last
five years (i) made any unlawful contribution to any candidate for foreign
office, or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the
United States or any jurisdiction thereof.
(ll) Neither the Company nor any Subsidiary (i) is in violation of
its certificate or articles of incorporation, bylaws, certificate of
formation, limited liability company agreement, partnership agreement or
other organizational documents, (ii) is in default under, and no event has
occurred which, with notice or lapse of time or both, would constitute a
default under or result in the creation or imposition of any Lien upon any
of its property or assets pursuant to, any 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 property or assets is
subject or (iii) is in violation in any respect of any law, rule,
regulation, ordinance, directive, judgment, decree or order of any
judicial, regulatory or other legal or governmental agency or body,
foreign or domestic, except violations or defaults that could not
(individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect and except (in the case of clause (ii) alone) for
any Lien disclosed in the Offering Memorandum (or, if the Offering
Memorandum is not in existence, the most recent Preliminary Offering
Memorandum).
(mm) Except as described in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the most recent Preliminary
Offering Memorandum), none of the Company or any of the Subsidiaries is in
default under any of the contracts described in the Offering Memorandum
(or, if the Offering Memorandum is not in existence, the most recent
Preliminary Offering Memorandum), has received a notice or claim of any
such default or has knowledge of any breach of such contracts by the other
party or parties thereto, except such defaults or breaches as would not,
individually or in the aggregate, have a Material Adverse Effect.
(nn) None of the Company or the Subsidiaries has taken or will take
any action that would cause this Agreement or the issuance or sale of the
Securities to violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect, or as the same may
hereafter be in effect, on the Closing Date (and, if any Optional Notes
are purchased, as of the Additional Closing Date).
(oo) (i) Immediately after the consummation of the Offering, the
fair value and present fair saleable value of the assets of the Company
and the Subsidiaries will exceed the sum of their stated liabilities and
identified contingent liabilities; and (ii) the Company and the
Subsidiaries are not, nor will they be, after giving effect to the
execution, delivery and performance of the
15
Offering Documents and the consummation of the transactions contemplated
thereby, (a) left with unreasonably small capital with which to carry on
their businesses as is proposed to be conducted, (b) unable to pay their
debts (contingent or otherwise) as they mature or (c) insolvent.
(pp) No securities of the Company or any of the Subsidiaries are of
the same class (within the meaning of Rule 144A under the Securities Act)
as the Notes.
(qq) The statistical, industry-related and market-related data
included in the Offering Memorandum (or, if the Offering Memorandum is not
in existence, the most recent Preliminary Offering Memorandum) are based
on or derived from sources which the Company reasonably and in good faith
believes are reliable, and such data agree with the sources from which
they are derived.
(rr) The Company has not distributed and, prior to the later to
occur of the (i) Closing Date (and, if any Optional Notes are purchased,
the Additional Closing Date) and (ii) completion of the distribution of
the Notes, will not distribute any offering material in connection with
the offering and sale of the Notes other than the Preliminary Offering
Memorandum and the Offering Memorandum.
(ss) The certificates for the shares of Common Stock (including the
Conversion Shares) conform to the requirements of the Nasdaq National
Market and the Delaware General Corporation Law.
(tt) The Company is in material compliance with applicable
provisions of the Xxxxxxxx-Xxxxx Act that are effective and is actively
taking steps to ensure that it will be in compliance with other applicable
provisions of the Xxxxxxxx-Xxxxx Act upon the effectiveness of such
provisions.
(uu) The Company has implemented the "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange
Act) required in order for the Chief Executive Officer and Chief Financial
Officer of the Company to engage in the review and evaluation process
mandated by the Exchange Act. The Company's "disclosure controls and
procedures" are reasonably designed to ensure that all information (both
financial and non-financial) required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the specified time periods, and
that all such information is accumulated and communicated to the Company's
management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the Chief Executive Officer
and Chief Financial Officer of the Company required under the Exchange Act
with respect to such reports.
(vv) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operation - Critical Accounting
16
Policies and Estimates" in the Incorporated Documents accurately and fully
describes (i) accounting policies which the Company believes are the most
important in the portrayal of the financial condition and results of
operations of the Company and its consolidated subsidiaries and which
require management's most difficult, subjective or complex judgments
("critical accounting policies"); (ii) judgments and uncertainties
affecting the application of critical accounting policies; and (iii)
explanation of the likelihood that materially different amounts would be
reported under different conditions or using different assumptions.
(ww) The Company's senior management and audit committee have
reviewed and agreed with the selection, application and disclosure of
critical accounting policies and have consulted with the Company's
independent accountants with regard to such disclosure.
(xx) The section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources" in the Incorporated Documents fully and fairly describes in all
material respects (i) all material trends, demands, commitments, events,
uncertainties and risks, and the potential effects thereof, that the
Company believes would materially affect liquidity and are reasonably
likely to occur; and (ii) all off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on the financial
condition, changes in financial condition, revenues or expenses, results
of operations, liquidity, capital expenditures or capital resources of the
Company and the Subsidiaries taken as a whole.
(yy) Since the date of the filing of the Company's Annual Report on
Form 10-K for the year ended June 30, 2004, the Company's auditors and the
audit committee of the board of directors of the Company (or persons
fulfilling the equivalent function) have not been advised of (i) any
significant deficiencies in the design or operation of internal controls
which adversely affect the Company's ability to record, process, summarize
and report financial data nor any material weaknesses in internal
controls; and (ii) fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal controls.
(zz) Since the date of the filing of the Company's Annual Report on
Form 10-K for the year ended June 30, 2004, there have been no significant
changes in internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with regard to
significant deficiencies.
(aaa) Except as disclosed in the Offering Memorandum (or, if the
Offering Memorandum is not in existence, the Preliminary Offering
Memorandum), there are no outstanding guarantees or other contingent
obligations of the Company or any Subsidiary that could reasonably be
expected to have a Material Adverse Effect.
17
Any certificate signed by or on behalf of the Company and delivered to the
Initial Purchasers or to counsel for the Initial Purchasers shall be deemed to
be a representation and warranty by the Company to each Initial Purchaser as to
the matters covered thereby.
3. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions
herein set forth, the Company agrees to issue and sell to the Initial
Purchasers, and the Initial Purchasers, severally and not jointly, agree
to purchase from the Company, at 97% of their principal amount, the
respective aggregate principal amounts of the Firm Notes set forth on
Schedule 1 hereto.
(b) In addition, on the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions
herein set forth, the Company hereby grants an option to the Initial
Purchasers, to purchase up to $25,000,000 in aggregate principal amount of
Optional Notes from the Company at the same price as the purchase price to
be paid by the Initial Purchasers for the Firm Notes, plus accrued
interest, if any, from the Closing Date to the Additional Closing Date (as
hereinafter defined). The option granted hereunder may be exercised at any
time, on or before the thirteenth day following the date of the Offering
Memorandum upon notice by the Initial Purchasers to the Company, which
notice may be given from time to time on one or more occasions. Such
notice shall set forth (i) the amount (which shall be an integral multiple
of $1,000 in aggregate principal amount at issuance) of Optional Notes as
to which the Initial Purchasers are exercising the option and (ii) the
time, date and place at which such Optional Notes will be delivered (which
time and date may be simultaneous with, but not earlier than, the Closing
Date (as defined in Section 3 below) and in such case, the term "Closing
Date" shall refer to the time and date of delivery of the Firm Notes and
the Optional Notes). Such time and date of delivery, if subsequent to the
Closing Date, is called the "Additional Closing Date." The Additional
Closing Date must be not later than eight full business days after the
date the Initial Purchasers exercise the option, with the actual date
determined by the Initial Purchasers, nor in any event later than twelve
days following the initial Closing Date. The Initial Purchasers may cancel
the option at any time prior to its expiration by giving written notice of
such cancellation to the Company.
(c) One or more certificates in definitive form for the Firm Notes
that the Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Initial Purchasers request upon notice to the Company at least 48 hours
prior to the Closing Date, shall be delivered by or on behalf of the
Company, against payment by or on behalf of the Initial Purchasers of the
purchase price therefor by wire transfer of immediately available funds to
the account of the Company previously designated by it in writing. Such
delivery of and payment for the Firm
18
Notes shall be made at the offices of Xxxxxx & Xxxxxxx LLP, 000
Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, at 9:00 a.m., New York
time, on December 7, 2004, or at such date as the Initial Purchasers and
the Company may agree upon, such time and date of delivery against payment
being herein referred to as the "Closing Date." The Company will make such
certificate or certificates for the Notes available for inspection by the
Initial Purchasers at the offices in Menlo Park, California of Xxxxxx &
Xxxxxxx LLP at least 24 hours prior to the Closing Date.
(d) Delivery to the Initial Purchasers of and payment for the
Optional Notes shall be made on the Additional Closing Date in the same
manner and in the same office and at the same time of days as payment for
the Firm Notes.
4. Offering by the Initial Purchasers. The Initial Purchasers propose
to make an offering of the Notes at the price and upon the terms set forth in
the Offering Memorandum as soon as practicable after this Agreement is entered
into and as in the judgment of the Initial Purchasers is advisable.
5. Certain Covenants. For purposes of this Section 5, "Closing Date"
shall refer to the Closing Date for the Firm Notes and any Additional Closing
Date for the Optional Notes. The Company covenants and agrees with the Initial
Purchasers that:
(a) The Company will not amend or supplement the Preliminary
Offering Memorandum or the Offering Memorandum or any amendment or
supplement thereto of which the Initial Purchasers shall not previously
have been advised and furnished a copy for a reasonable period of time
prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given their consent (which consent shall not be
unreasonably withheld or delayed). The Company will promptly, upon the
reasonable request of the Initial Purchasers or counsel to the Initial
Purchasers, make any amendments or supplements to the Offering Memorandum
that may be reasonably necessary or advisable in connection with the
resale of the Notes by the Initial Purchasers.
(b) The Company will cooperate with the Initial Purchasers in
arranging for the qualification of the Notes for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchasers may designate and will continue such qualifications in effect
for as long as may be necessary to complete the distribution of the Notes
by the Initial Purchasers; provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or
to execute a general consent to service of process in any jurisdiction or
to take any other action that would subject it to general service of
process or to taxation in respect of doing business in any jurisdiction in
which it is not otherwise subject.
19
(c) If, at any time prior to the completion of the resale by the
Initial Purchasers of the Notes, any event shall occur as a result of
which it is necessary, in the opinion of counsel for the Initial
Purchasers, to amend or supplement the Offering Memorandum in order to
make such Offering Memorandum not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if
for any other reason it shall be necessary to amend or supplement the
Offering Memorandum in order to comply with applicable laws, rules or
regulations, the Company shall (subject to Section 5(a)) forthwith amend
or supplement such Offering Memorandum at its own expense so that, as so
amended or supplemented, such Offering Memorandum will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading and will
comply with all applicable laws, rules or regulations.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel to the Initial Purchasers as many copies of the
Offering Memorandum or any amendment or supplement thereto as the Initial
Purchasers or their counsel may reasonably request.
(e) During the period of three years from the Closing Date, the
Company will furnish to the Initial Purchasers (a) as soon as available, a
copy of each report and other communication (financial or otherwise) of
the Company mailed to the Trustee or the holders of the Notes,
stockholders or any national securities exchange on which any class of
securities of the Company may be listed other than materials filed with
the Commission and (b) from time to time such other information concerning
the Company and the Subsidiaries as the Initial Purchasers may reasonably
request.
(f) The Company will apply the net proceeds from the sale of the
Notes materially as set forth under "Use of Proceeds" in the Offering
Memorandum.
(g) None of the Company or any of its respective Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Securities Act) which could
be integrated with the sale of the Notes in a manner which would require
the registration under the Securities Act of the Notes.
(h) For so long as the Notes constitute "restricted" securities
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will not, and will not permit any of the Subsidiaries to, offer to sell
the Notes or solicit any offer to buy the Notes by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
20
(i) For so long as any of the Notes remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act and not able to be sold in their entirety under Rule 144
under the Securities Act (or any successor provision), the Company will
make available, upon request, to any seller of such Notes the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Company
is then subject to Section 13 or 15(d) of the Exchange Act.
(j) During the period from the Closing Date until two years after
the Closing Date, without the prior written consent of the Initial
Purchasers, the Company will not, and will not permit any of its
"affiliates" (as defined in Rule 144 under the Securities Act) to, resell
any of the Securities which constitute "restricted securities" under Rule
144 that have been reacquired by any of them.
(k) The Company will not take any action prohibited by Regulation
M under the Exchange Act, in connection with the distribution of the
Securities contemplated hereby.
(l) The Company will (i) permit the Notes to be included for
quotation on the PORTAL Market and (ii) permit the Notes to be eligible
for clearance and settlement through The Depository Trust Company.
(m) The Company will use its best efforts to list the Conversion
Shares for quotation on the Nasdaq National Market as promptly as
practicable but in no event later than the time that the Registration
Statement is declared effective in accordance with the Registration Rights
Agreement.
(n) The Company will, at all times, reserve and keep available,
free of preemptive rights, enough shares of Common Stock for the purpose
of enabling the Company to satisfy its obligations to issue the Conversion
Shares upon conversion of the Notes.
(o) During the period of 60 days from the date of the Offering
Memorandum, without the prior written consent of the Initial Purchasers,
the Company (i) will not, directly or indirectly, issue, offer, sell,
agree to issue, offer or sell, solicit offers to purchase, grant any call
option, warrant or other right to purchase, purchase any put option or
other right to sell, pledge, borrow or otherwise dispose of any Relevant
Security, or make any announcement of any of the foregoing, (ii) will not
establish or increase any "put equivalent position" or liquidate or
decrease any "call equivalent position" (in each case within the meaning
of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder) with respect to any Relevant Security, and (iii)
will not otherwise enter into any swap, derivative or other transaction or
arrangement that transfers to another, in whole or in part, any economic
consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration, other than the sale of Notes as
contemplated by this Agreement, the issuance of the Conversion
21
Shares, and the Company's issuance of Common Stock upon (i) the exercise
of currently outstanding options; and (ii) the grant and exercise of
options under, or the issuance and sale of shares pursuant to, employee
stock option or employee stock purchase plans in effect on the date
hereof, each as described in the Offering Memorandum. The Company will not
file a registration statement under the Securities Act in connection with
any transaction by the Company or any person that is prohibited pursuant
to the foregoing, except for (i) the Company's filing of registration
statements pursuant to the Registration Rights Agreement, and (ii)
registration statements on Form S-8 relating to employee benefit plans or
on Form S-4 relating to corporate reorganizations or other transactions
under Rule 145.
6. Expenses. Whether or not the Offering is consummated or this
Agreement is terminated (pursuant to Section 12 or otherwise), the Company
agrees to pay the following costs and expenses and all other costs and expenses
incident to the performance by the Company of its obligations hereunder: (i) the
negotiation, preparation, printing, typing, reproduction, execution and delivery
of this Agreement and of the other Offering Documents, any amendment or
supplement to or modification of any of the foregoing and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith; (ii) the preparation, printing or reproduction of each Preliminary
Offering Memorandum, the Offering Memorandum and each amendment or supplement to
any of them; (iii) the delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Offering Memorandum
and all amendments or supplements to any of them as may be reasonably requested
for use in connection with the offering and sale of the Notes; (iv) the
preparation, printing, authentication, issuance and delivery of certificates for
the Notes and the Conversion Shares, including any stamp taxes in connection
with the original issuance and sale of the Securities and trustees' fees; (v)
the reproduction and delivery of this Agreement and the other Offering
Documents, the preliminary and supplemental "Blue Sky" memoranda and all other
agreements or documents reproduced and delivered in connection with the offering
of the Securities; (vi) the registration or qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several states
(including filing fees and the reasonable fees, expenses and disbursements of
counsel to the Initial Purchasers relating to such registration and
qualification); (vii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to and
related communications with prospective purchasers of the Notes; (viii) the fees
and expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel, if any) for the Company; (ix) fees and
expenses of the Trustee including fees and expenses of its counsel; (x) all
expenses and listing fees incurred in connection with the application for
quotation of the Notes on the PORTAL Market; (xi) all expenses and listing fees
incurred in connection with the application for listing for quotation of the
Conversion Shares on the Nasdaq National Market; (xii) all expenses incurred in
connection with the performance of the Company's obligations under the
Registration Rights Agreement; and (xiii) any fees charged by investment rating
agencies for the rating of the Notes.
7. Conditions of the Initial Purchasers' Obligations. For purposes of
this Section 7, "Closing Date" shall refer to the Closing Date for the Firm
Notes and any
22
Additional Closing Date for the Optional Notes. The obligations of the Initial
Purchasers to purchase and pay for the Notes are subject to the absence from any
certificates or opinions furnished to the Initial Purchasers pursuant to this
Section 7 of any misstatement or omissions and to the following additional
conditions unless waived in writing by the Initial Purchasers:
(i) The Initial Purchasers shall have received an opinion of
counsel in form and substance satisfactory to the Initial Purchasers and
Xxxxxx & Xxxxxxx LLP, counsel to the Initial Purchasers, dated the Closing
Date, of Xxxxxxxxx Traurig, LLP, counsel to the Company, substantially in
the form of Exhibit B hereto.
(ii) The Initial Purchasers shall have received opinions of counsel
in form and substance satisfactory to the Initial Purchasers and Xxxxxx &
Xxxxxxx LLP, counsel to the Initial Purchasers, dated the Closing Date, of
(i) Deacons, counsel to Synaptics Hong Kong Limited, (ii) Xxxxxxx Xxxxxx &
Higham, counsel to Synaptics (UK) Limited and (iii) Xxxxx Xxxxx Xxxxxx,
counsel to Synaptics Holding GmbH, substantially in the form of Exhibit C
hereto.
(iii) The Initial Purchasers shall have received an opinion of
counsel in form previously delivered to the Initial Purchasers and in
substance satisfactory to the Initial Purchasers and Xxxxxx & Xxxxxxx LLP,
counsel to the Initial Purchasers, dated the Closing Date, of Xxxxxxxxx
Xxxxxx & Xxxxxx, P.C., intellectual property counsel to the Company.
(iv) Upon the request of the Initial Purchasers, the Initial
Purchasers shall have received an opinion of counsel in form and substance
satisfactory to the Initial Purchasers and Xxxxxx & Xxxxxxx LLP, counsel
to the Initial Purchasers, dated the Closing Date, of Beresford & Co.,
intellectual property counsel to Synaptics (UK) Limited.
(v) The Initial Purchasers shall have received an opinion, dated
the Closing Date, of Xxxxxx & Xxxxxxx LLP, counsel to the Initial
Purchasers, with respect to the sufficiency of certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchasers may require.
(vi) The Initial Purchasers shall have received from KPMG LLP,
independent public accountants for the Company, a "comfort" letter dated
the date hereof and the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers and Xxxxxx & Xxxxxxx LLP, counsel
to the Initial Purchasers.
(vii) The Initial Purchasers shall have received from Ernst & Young
LLP, independent public accountants for the Company, a "comfort" letter
dated the Closing Date, in the form of Exhibit D hereto.
23
(viii) The Initial Purchasers shall have received from each of the
officers and directors listed on Schedule 2 hereto an executed Lock-Up
Agreement in substantially in the form of Exhibit E hereto.
(ix) The representations and warranties of the Company contained in
this Agreement shall be true and correct on and as of the Closing Date;
the Company shall have complied in all material respects with all
agreements and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date.
(x) None of the issuance and sale of the Securities pursuant to
this Agreement or any of the transactions contemplated by any of the other
Offering Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued; and
there shall not have been any legal action, statute, order, decree or
other administrative proceeding enacted, instituted or threatened against
the Company or against the Initial Purchasers relating to the issuance of
the Securities or the Initial Purchasers' activities in connection
therewith or any other transactions contemplated by this Agreement or the
Offering Memorandum, or the other Offering Documents.
(xi) Subsequent to the date of this Agreement and since the date of
the most recent financial statements in the Offering Memorandum (exclusive
of any amendment or supplement thereto after the date hereof), there shall
not have occurred (i) any change, or any development involving a
prospective change, in or affecting the general affairs, management,
business, condition (financial or other), properties or results of
operations of the Company or any of the Subsidiaries, not contemplated by
the Offering Memorandum that is, in the judgment of the Initial
Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering of the Securities on the terms
and in the manner contemplated by the Offering Documents, or (ii) any
event or development relating to or involving the Company or any of the
Subsidiaries, or any of their respective officers or directors, that makes
any statement made in the Offering Memorandum untrue in any material
respect or that, in the opinion of the Company and its counsel or the
Initial Purchasers and their counsel, require the making of any addition
to or change in the Offering Memorandum in order to state a material fact
required by any applicable law, rule or regulation to be stated therein or
necessary in order to make the statements made therein not misleading.
(xii) The Initial Purchasers shall have received certificates, dated
the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (in their capacities as such), to the
effect that:
a. All of the representations and warranties of the Company
set forth in this Agreement are true and correct as if made on
24
and as of the Closing Date and, as of the Closing Date all
agreements, conditions and obligations of the Company to be
performed, satisfied or complied with hereunder on or prior the
Closing Date have been duly performed, satisfied or complied with.
b. The issuance and sale of the Notes pursuant to this
Agreement and the Offering Memorandum and the consummation of the
transactions contemplated by the Offering Documents have not been
enjoined (temporarily or permanently) and no restraining order or
other injunctive order has been issued and there has not been any
legal action, order, decree or other administrative proceeding
instituted or, to such officers' knowledge, threatened against the
Company relating to the issuance of the Securities or the Initial
Purchasers' activities in connection therewith or in connection with
any other transactions contemplated by this Agreement or the
Offering Memorandum or the other Offering Documents.
c. Subsequent to the date of this Agreement and since the
date of the most recent financial statements in the Offering
Memorandum (exclusive of any amendment or supplement thereto after
the date hereof), there has not occurred (i) any material change, or
any development involving a prospective material change, in the
general affairs, management, business, condition (financial or
other), properties or results of operations of the Company or any of
the Subsidiaries, not contemplated by the Offering Memorandum, or
(ii) any event or development relating to or involving the Company
or any of the Subsidiaries, or any of their respective officers or
directors that makes any statement made in the Offering Memorandum
untrue in any material respect or that requires the making of any
addition to or change in the Offering Memorandum in order to state a
material fact required by any applicable law, rule or regulation to
be stated therein or necessary in order to make the statements made
therein not misleading.
d. At the Closing Date and after giving effect to the
consummation of the transactions contemplated by the Offering
Documents, there exists no Default or Event of Default (as defined
in the Indenture).
(xiii) Each of the Offering Documents and each other agreement or
instrument executed in connection with the transactions contemplated
thereby shall be reasonably satisfactory in form and substance to the
Initial Purchasers and shall have been executed and delivered by all the
respective parties thereto and shall be in full force and effect, and
there shall have been no material amendments, alterations, modifications
or waivers of any provision thereof since the date of this Agreement.
25
(xiv) All proceedings taken in connection with the issuance of the
Notes and the transactions contemplated by this Agreement, the other
Offering Documents and all documents and papers relating thereto shall be
reasonably satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers. The Initial Purchasers and counsel to the Initial
Purchasers shall have received copies of such papers and documents as they
may reasonably request in connection therewith, all in form and substance
reasonably satisfactory to them.
(xv) The Notes shall have been approved for trading on The PORTAL
Market.
(xvi) Since the date of this Agreement, there shall not have been
any announcement by any "nationally recognized statistical rating
organization," as defined for purposes of Rule 436(g) under the Securities
Act, that (A) it is downgrading its rating assigned to any debt securities
of the Company, or (B) it is reviewing its rating assigned to any debt
securities of the Company with a view to possible downgrading, or with
negative implications, or direction not determined.
(xvii) On or before the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by the Company
and such agreement shall be in full force and effect.
(xviii) The Company shall have furnished or caused to be furnished
to the Initial Purchasers such further certificates and documents as the
Initial Purchasers shall have reasonably requested.
(xix) At the Closing Date, the Company and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof and the Notes shall have been
duly executed and delivered by the Company and duly authenticated by the
Trustee.
All such opinions, certificates, letters, schedules, documents or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel to the Initial Purchasers. The Company shall
furnish to the Initial Purchasers such conformed copies of such opinions,
certificates, letters, schedules, documents and instruments in such quantities
as the Initial Purchasers shall reasonably request.
8. Indemnification.
(a) The Company shall indemnify and hold harmless (i) each Initial
Purchaser, (ii) each person, if any, who controls an Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of each of the Initial Purchasers or
any controlling person, from and
26
against any and all losses, liabilities, claims, damages and expenses
whatsoever as incurred (including but not limited to attorneys' fees and
any and all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, liabilities, claims, damages or
expenses (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Preliminary Offering Memorandum or the Offering
Memorandum, or in any supplement thereto or amendment thereof, or (B) any
materials or information provided to investors by, or with the approval
of, the Company in connection with the marketing of the Securities,
including any road show or investor presentations made to investors by the
Company (whether in person or electronically) ("Marketing Materials"), or
(ii) the omission or alleged omission to state in the Preliminary Offering
Memorandum or the Offering Memorandum, or in any supplement thereto or
amendment thereof, or in any Marketing Materials, a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not be liable in any
such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial
Purchasers expressly for use therein. The parties acknowledge and agree
that such information provided by or on behalf of the Initial Purchasers
consists solely of the material identified in Section 16 hereof. This
indemnity agreement will be in addition to any liability that the Company
may otherwise have, including under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless (i) the Company, (ii) each person, if any, who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, and (iii) the officers, directors,
partners, employees, representatives and agents of the Company, against
any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any
claim whatsoever and any and all amounts paid in settlement of any claim
or litigation), joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only
27
to the extent, that any such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or
on behalf of such Initial Purchaser expressly for use therein; provided,
however, that in no case shall any Initial Purchaser be liable or
responsible for any amount in excess of the discounts and commissions
received by such Initial Purchaser. The parties acknowledge and agree that
such information provided by or on behalf of the Initial Purchasers
consists solely of the material identified in Section 16 hereof. This
indemnity will be in addition to any liability that the Initial Purchasers
may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the
commencement thereof (but the failure so to notify an indemnifying party
shall not relieve it from any liability which it may have under this
Section 8). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate, at its own expense
in the defense of such action, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense
thereof with counsel satisfactory to such indemnified party; provided,
however, that counsel to the indemnifying party shall not (except with the
written consent of the indemnified party) also be counsel to the
indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii)
the indemnifying parties shall not have employed counsel to take charge of
the defense of such action within a reasonable time after notice of
commencement of the action, (iii) the indemnifying party does not
diligently defend the action after assumption of the defense, or (iv) such
indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties
(in which case the indemnifying party or parties shall not have the right
to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses of one counsel, in
addition to local counsel, shall be borne by the indemnifying parties. No
indemnifying party shall, without the prior written consent of the
indemnified parties, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened claim,
investigation, action or proceeding in respect of which indemnity or
contribution may be or could have been sought by an indemnified party
under this Section 8 or Section 9 hereof (whether or not the
28
indemnified party is an actual or potential party thereto), unless (x)
such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such
claim, investigation, action or proceeding and (ii) does not include a
statement as to or an admission of fault, culpability or any failure to
act, by or on behalf of the indemnified party, and (y) the indemnifying
party confirms in writing its indemnification obligations hereunder with
respect to such settlement, compromise or judgment.
9. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 8 is for any reason held to
be unavailable from an indemnifying party or is insufficient to hold harmless a
party indemnified thereunder, the Company, on the one hand, and the Initial
Purchasers, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, liabilities, claims, damages and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Initial
Purchasers, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) to which the Company and the Initial Purchasers
may be subject, in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Notes or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 8, in
such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, shall be deemed to be in the same proportion as (i) the total
proceeds from the offering of the Notes (net of discounts but before deducting
expenses) received by the Company bear to (ii) the discounts and commissions
received by the Initial Purchasers, respectively. The relative fault of the
Company, on the one hand, and of the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 8 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation,
29
or any investigation or proceeding by any judicial, regulatory or other legal or
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 9, (i) in no case shall
any Initial Purchaser be required to contribute any amount in excess of the
amount by which the discounts and commissions applicable to the Notes purchased
by such Initial Purchaser pursuant to this Agreement exceeds the amount of any
damages which such Initial Purchaser has otherwise been required to pay by
reason of any untrue or alleged untrue statement or omission or alleged omission
and (ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 9, (A) each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act and (B) the respective officers, directors, partners, employees,
representatives and agents of any Initial Purchaser or any controlling person
shall have the same rights to contribution as such Initial Purchaser, and (1)
each person, if any, who controls any Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act and (2) the officers,
directors, employees, representatives and agents of the Company shall have the
same rights to contribution as the Company, subject in each case to clauses (i)
and (ii) of this Section 9. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section 9, notify such party or
parties from whom contribution may be sought, but the failure to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 9 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its prior written consent, provided that such written
consent was not unreasonably withheld or delayed. The Initial Purchasers'
obligations to contribute pursuant to this Section 9 are several in proportion
to the respective principal amount of the Notes purchased by each of the Initial
Purchasers hereunder and not joint.
10. Offering of Securities; Restrictions on Transfer. Each Initial
Purchaser represents and warrants as to itself only that it is a QIB. Each
Initial Purchaser agrees with the Company as to itself only that (i) it has not
and will not solicit offers for, or offer or sell, the Securities by any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act; and (ii) it
has and will solicit offers for the Securities only from, and will offer the
Securities only to, persons within the United States whom such Initial Purchaser
reasonably believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to such Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A and, in each case, in transactions under
Rule 144A.
11. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and
30
the Initial Purchasers set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall remain in full force and
effect, regardless of (i) any investigation made by or on behalf of the Company,
any of its officers or directors, the Initial Purchasers or any controlling
person referred to in Sections 8 and 9 hereof and (ii) delivery of and payment
for the Notes, and shall be binding upon and shall inure to the benefit of, any
successors, assigns, heirs, or personal representatives of the Company, the
Initial Purchasers and indemnified parties referred to in Section 8 hereof. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6, 8, 9, 11 and 12 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
12. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given in the event
that the Company has failed, refused or been unable to satisfy all conditions on
its part to be performed or satisfied hereunder on or prior to the Closing Date
or if, at or prior to the Closing Date or at or prior to the Additional Closing
Date, as the case may be:
(i) any domestic or international event or act or occurrence
has materially disrupted, or in the opinion of the Initial Purchasers will
in the immediate future materially disrupt, the market for the Company's
securities or securities in general;
(ii) trading on the New York Stock Exchange or the Nasdaq
National Market, shall have been suspended or made subject to material
limitations, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange or the Nasdaq National Market, or
by order of the Commission or other regulatory body or governmental
authority having jurisdiction;
(iii) a banking moratorium has been declared by any state or
federal authority or if any material disruption in commercial banking or
securities settlement or clearance services shall have occurred;
(iv) (A) there shall have occurred any outbreak or escalation
of hostilities or acts of terrorism involving the United States or there
is a declaration of a national emergency or war by the United States, or
(B) there shall have been any other calamity or crisis or any change in
political, financial or economic conditions, if the effect of any such
event in (A) or (B), in the judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering, sale and
delivery of the Firm Notes or the Optional Notes, as the case may be, on
the terms and in the manner contemplated by the Offering Memorandum; or
(v) any debt securities of the Company shall have been
downgraded or placed on any "watch list" for possible downgrading by any
31
"nationally recognized statistical rating organization" as defined for
purposes of Rule 436(g) under the Securities Act.
(b) Subject to paragraph (c) below, termination of this
Agreement pursuant to this Section 12 shall be without liability of any
party to any other party except as provided in Section 11 hereof.
(c) If this Agreement shall be terminated pursuant to any of
the provisions hereof (other than clauses (i)-(v) above), or if the sale
of the Notes provided for herein is not consummated because any condition
to the obligations of the Initial Purchasers set forth herein is not
satisfied, the Company will, subject to demand by the Initial Purchasers,
reimburse the Initial Purchasers for all out-of-pocket expenses (including
the fees and expenses of their counsel), incurred by the Initial
Purchasers in connection herewith.
13. Notices. All communications hereunder shall be in writing and, if
sent to the Initial Purchasers, shall be hand delivered, mailed by first-class
mail, couriered by next-day air courier or telecopied and confirmed in writing
to the Initial Purchasers c/o Bear Xxxxxxx & Co. Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Parish, Equity Capital Markets, and
with a copy to Xxxxxx & Xxxxxxx LLP, 000 Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxxxxxx. If sent to the Company, shall be
delivered, mailed, couriered or telecopied and confirmed in writing, to
Synpatics Incorporated, 0000 Xxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx X. Xxx, and with a copy to Xxxxxxxxx Traurig, LLP, 0000 X.
Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxx.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon each Initial Purchaser and the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control the Initial
Purchasers within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and (ii) the indemnities of the Initial Purchasers contained
in Section 8 of this Agreement shall also be for the benefit of the directors of
the Company, its officers, employees and agents and any person or persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act. No purchaser of Notes from the Initial
Purchasers will be deemed a successor because of such purchase.
15. No Waiver; Modifications in Writing. No failure or delay on the part
of the Company or any Initial Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative
32
and are not exclusive of any remedies that may be available to the Company or
any Initial Purchaser at law or in equity or otherwise. No waiver of or consent
to any departure by the Company or any Initial Purchaser from any provision of
this Agreement shall be effective unless signed in writing by the party entitled
to the benefit thereof; provided that notice of any such waiver shall be given
to each party hereto as set forth below. Except as otherwise provided herein, no
amendment, modification or termination of any provision of this Agreement shall
be effective unless signed in writing by or on behalf of the Company and each
Initial Purchaser. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Initial Purchasers from the
terms of any provision of this Agreement shall be effective only in the specific
instance and for the specific purpose for which made or given. Except where
notice is specifically required by this Agreement, no notice to or demand on the
Company in any case shall entitle the Company to any other or further notice or
demand in similar or other circumstances.
16. Information Supplied by the Initial Purchasers. The statements set
forth in the third paragraph, fifth sentence of the tenth paragraph and eleventh
paragraph under the heading "Plan of Distribution" constitute the only
information furnished by the Initial Purchasers to the Company for purposes of
Sections 2(a), 8(a) and 8(b) hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
33
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement among the Company and the
Initial Purchasers.
Very truly yours,
SYNAPTICS INCORPORATED,
a Delaware corporation
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and Chief
Executive Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
BEAR, XXXXXXX & CO. INC.
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Managing Director
CREDIT SUISSE FIRST BOSTON LLC
By: /s/Xxxx Xxxx
Name: Xxxx Xxxx
Title: Managing Director
34
Schedule 1
Principal Amount
Initial Purchasers of Notes
------------------ ----------------
Bear, Xxxxxxx & Co. Inc.................................. $ 60,000,000
Credit Suisse First Boston LLC .......................... $ 40,000,000
Total................................................ $100,000,000
============
Schedule 2
Xxxxxxx Xxx
Xxxxx Xxx, Ph.D.
Xxxxxx Xxxxx
Xxxx Xxxxxxx
Xxx Xxxxx
Xxxxx XxXxxxxx
Xxxxxxx Xxxxx, Ph.D.
Xxx Xxxxx
Xxxxx Xxx
Xxxxxxxx Xxxxxx
Xxxxx X. Greeslin
Xxxxxxx X. Xxxxxxxx
W. Xxxxxx Van Dell
36
Exhibit A
Subsidiaries
Synaptics International, Inc.
Synaptics (UK) Limited
Synaptics Hong Kong Limited
Synaptics Holding GmbH
Synaptics LLC
Exhibit B
Form of Opinion of Xxxxxxxxx Traurig LLP
1. Each of the Company and Synaptics International, Inc. and Synaptics LLC (the
"Subsidiaries") has been duly organized and validly exists as a corporation or,
in the case of Synaptics LLC, a limited liability company, in good standing
under the laws of its jurisdiction of incorporation, with the corporate or
limited liability power and authority to own its properties and conduct its
business as described in or incorporated by reference into the Preliminary
Offering Memorandum and the Offering Memorandum. Each of the Company and its
Subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing that will not in the aggregate have a material adverse effect on the
condition (financial or otherwise), results of operations, business or
properties of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect").
2. The Company has an authorized capitalization as set forth in the Preliminary
Offering Memorandum and the Offering Memorandum. All of shares of Common Stock
outstanding on the date of the Offering Memorandum have been duly and validly
authorized and issued, are fully paid and non assessable, and were not issued in
violation of any preemptive right or similar rights under (i) the Company's
Certificate of Incorporation or Bylaws, (ii) the Delaware General Corporation
Law or, (iii) to the best of such counsel's knowledge, the terms or provisions
of any material document, agreement, or other instrument to which the Company is
a party. Except as described in or incorporated by reference into the Offering
Memorandum, to such counsel's knowledge, there are (i) no outstanding securities
of the Company convertible into or evidencing the right to purchase or subscribe
for any shares of capital stock of the Company, (ii) no outstanding or
authorized options, warrants, calls, subscriptions, rights, commitments, or any
other instruments or agreements of any character obligating the Company to issue
any shares of its capital stock or any securities convertible into or evidencing
the right to purchase or subscribe for any shares of such stock, and (iii) no
agreements or understandings with respect to the voting, sale or transfer of any
shares of capital stock of the Company to which the Company is a party.
3. All of the outstanding shares of capital stock or other equity securities of
each Subsidiary are owned of record and beneficially, directly or indirectly, by
the Company, free and clear of all Liens and limitations on voting rights and
are duly authorized, validly issued, fully paid and non-assessable, and have not
been issued in violation of any preemptive or similar rights under (i) the
applicable Subsidiary's organizational documents, (ii) the laws of its
jurisdiction of organization or, (iii) to the best of such counsel's knowledge,
the terms or provisions of any material document, agreement, or other instrument
to which the applicable Subsidiary is a party. Except as described in or
incorporated by reference into the Offering Memorandum, to such counsel's
knowledge, there are (i) no outstanding or authorized options, warrants, calls,
subscriptions, rights,
38
commitments or other instruments or agreements of any character obligating the
Company or any Subsidiary to issue any shares of capital stock of any Subsidiary
or any securities convertible into or evidencing the right to purchase or
subscribe for any shares of such stock, and (ii) no agreements or understandings
with respect to the voting, sale, or transfer of any shares of capital stock of
any Subsidiary. Except as described in or incorporated by reference into the
Offering Memorandum, to such counsel's knowledge, there are no outstanding
contractual obligations of the Company or any Subsidiary to repurchase, redeem,
or otherwise acquire any outstanding shares of capital stock or other ownership
interests of any Subsidiary or to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any Subsidiary or any
other entity.
4. The Company has the corporate power and authority to execute and deliver the
Purchase Agreement and the Registration Rights Agreement and to perform its
obligations thereunder; each of the Purchase Agreement and the Registration
Rights Agreement has been duly and validly authorized, executed, and delivered
by the Company; the Registration Rights Agreement constitutes the legal, valid,
and binding obligation of the Company, enforceable in accordance with its terms,
except that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws now or hereafter
in effect relating to or affecting creditors' rights generally; (ii) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding at law or in equity) and (iii) as any rights to indemnity or
contribution hereunder may be limited by federal or state securities laws and
public policy considerations ((i); (ii) and (iii) collectively, the
"Enforceability Exceptions").
5. The Notes have been duly authorized by the Company and, when executed by the
Company and authenticated by the Trustee in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers in accordance
with the terms of the Purchase Agreement, will be legal, valid, and binding
obligations of the Company, enforceable in accordance with their terms, except
that the enforcement thereof may be limited by the Enforceability Exceptions,
and will be entitled to the benefits of the Indenture and the Registration
Rights Agreement.
6. The Conversion Shares reserved for issuance 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, will be validly issued, fully paid,
and non-assessable, and the issuance of the Conversion Shares will not be
subject to any preemptive or similar rights under (i) the Company's Certificate
of Incorporation or Bylaws, (ii) Delaware General Corporation Law or, (iii) to
the best of such counsel's knowledge, under the terms or provisions of any
material document, agreement, or other instrument to which the Company is a
party.
7. The Company has the corporate power and authority to execute and deliver the
Indenture and to perform its obligations thereunder; the execution, and delivery
of the Indenture has been duly and validly authorized, executed and delivered by
the Company and (assuming the due authorization, execution, and delivery by the
Trustee) constitutes a
39
valid and binding instrument of the Company enforceable in accordance with its
terms, except that the enforcement thereof may be limited by the Enforceability
Exceptions.
8. Each of the Indenture, the Registration Rights Agreement and the Securities
conform in all material respects to the description thereof contained in the
Offering Memorandum.
9. No consent, approval, authorization, or qualification of or with any federal
or state court, governmental agency, or body is required for the issue and sale
of the Notes and the issuance of the Conversion Shares; the execution and
delivery by the Company of the Purchase Agreement, the Registration Rights
Agreement, or the Indenture; the consummation by the Company of the transactions
contemplated thereby or the performance by the Company of its obligations
thereunder, except for (i) such as shall be obtained under the Securities Act
with respect to the Company's obligations under the Registration Rights
Agreement, (ii) such as may be required under state securities or blue sky laws
in connection with the purchase and distribution of the Securities (as to which
such counsel expresses no opinion), and (iii) such as are required by the rules
and regulations of the NASD.
10. To the best of such counsel's knowledge, there are no judicial, regulatory
or other legal or governmental proceedings pending to which the Company or any
of the Subsidiaries is a party or of which any property of the Company or the
Subsidiaries is the subject that are required to be described in the Offering
Memorandum and are not so described and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
11. The execution and delivery by the Company of the Purchase Agreement, the
Indenture, the Registration Rights Agreement; and the Notes and the performance
by the Company of its obligations thereunder do not (A) conflict with or result
in a breach of any of the terms and provisions of, or constitute a default (or
an event which with notice or lapse of time, or both, would constitute a
default) under, or result in the creation or imposition of any lien, charge, or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan
agreement, or any other agreement, instrument, franchise, license, or permit
known to such counsel to which the Company or any of its Subsidiaries is a party
or by which any of the Company or any of its Subsidiaries or their respective
properties or assets may be bound or (B) violate or conflict with any provision
of the certificate of incorporation or by-laws of the Company or any of its
Subsidiaries, or, to the best of such counsel's knowledge, any judgment, decree,
order, statute, rule, or regulation of any court or any judicial, regulatory, or
other legal or governmental agency or body.
12. Assuming (i) the representations of the Initial Purchasers and the Company
contained in the Purchase Agreement are true and correct, (ii) compliance by the
Initial Purchasers and the Company with their respective covenants set forth in
the Purchase Agreement and (iii) the accuracy of the representations and
warranties made in accordance with the Purchase Agreement and the Offering
Memorandum by purchasers to whom the Initial Purchasers initially resell the
Notes, it is not necessary in connection
40
with the offer, sale and delivery of the Notes to the Initial Purchasers
pursuant to the Purchase Agreement or the initial resale of the Notes by the
Initial Purchases to "qualified institutional buyers" (as such term is defined
under Rule 144A under the Securities Act), in the manner contemplated by the
Purchase Agreement and described in the Offering Memorandum, to register the
Securities under the Securities Act of 1933, as amended, or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended.
13. The Company is not and, after giving effect to the offering and sale of the
Notes and the application of the proceeds thereof as described in the Offering
Memorandum, will not be required to register as an "investment company" as
defined in the Investment Company Act of 1940, as amended.
14. When the Notes are issued and delivered pursuant to the Purchase Agreement,
none of the Notes will be of the same class (within the meaning of Rule 144A
under the Securities 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 U.S. automated inter-dealer quotation system.
15. The statements in the Offering Memorandum under the captions "Description of
Notes", "Description of Capital Stock", "Notice to Investors," "Plan of
Distribution", and "Transfer Restrictions", insofar as such statements
constitute summaries of the legal matters, documents, or proceedings referred to
therein, fairly present the information called for with respect to such legal
matters, documents, or proceedings.
16. The statements in the Offering Memorandum under the caption "Material U.S.
Federal Income Tax Considerations," insofar as such statements constitute
matters of law or legal conclusions, are correct in all material respects.
17. Each document incorporated by reference in the Offering Memorandum (except
for the financial statements and related schedules included therein as to which
such counsel need express no opinion) complied as to form when filed with the
Commission in all material respect with the Exchange Act and the rules and
regulations of the Commission promulgated thereunder.
In addition, such opinion shall also contain a statement that such counsel
has participated in conferences with officers and representatives of the
Company, representatives of the independent auditors for the Company, and the
Initial Purchasers at which the contents of the Offering Memorandum and related
matters were discussed and, no facts have come to the attention of such counsel
that would lead such counsel to believe that Offering Memorandum (including the
documents incorporated by reference therein), as of its date (or any amendment
thereof or supplement thereto made prior to the Closing Date as of the date of
such amendment or supplement) and as of the Closing Date, contained or contains
an untrue statement of a material fact or omitted or omits to state any 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 (it
being understood that such counsel need express no belief or opinion with
respect to the
41
financial statements and schedules and other financial data included or
incorporated by reference therein).
42
Exhibit C
Form of Legal Opinion of each of the Company's Subsidiaries
1. Each of the Company's Subsidiaries has been duly organized and validly exists
as a corporation in good standing under the laws of its jurisdiction of
incorporation, with full power and authority to own its properties and conduct
its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum. Each of the Company's Subsidiaries is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification necessary, except for
those failures to be so qualified or in good standing which will not in the
aggregate have a Material Adverse Effect.
2. All of the outstanding shares of capital stock or other equity securities of
each Subsidiary are owned of record and beneficially, directly or indirectly, by
the Company, free and clear of all Liens and limitations on voting rights and
are duly authorized, validly issued, fully paid and non-assessable, and have not
been issued in violation of any preemptive or similar rights under (i) the
applicable Subsidiary's organizational documents, (ii) the laws of its
jurisdiction of organization or, (iii) to the best of such counsel's knowledge,
the terms or provisions of any material document, agreement or other instrument
to which the applicable Subsidiary is a party. To the best of such counsel's
knowledge, there are (i) no outstanding or authorized options, warrants, calls,
subscriptions, rights, commitments or other instruments or agreements of any
character obligating the Company or any Subsidiary to issue any shares of
capital stock of any Subsidiary or any securities convertible into or evidencing
the right to purchase or subscribe for any shares of such stock, and (ii) no
agreements or understandings with respect to the voting, sale or transfer of any
shares of capital stock of any Subsidiary. To the best of such counsel's
knowledge, there are no outstanding contractual obligations of any Subsidiary to
repurchase, redeem or otherwise acquire any outstanding shares of capital stock
or other ownership interests of any Subsidiary or to provide funds to or make
any investment (in the form of a loan, capital contribution or otherwise) in any
Subsidiary or any other entity.
3. To the best of such counsel's knowledge, other than as set forth in the
Offering Memorandum, there are no judicial, regulatory or other legal or
governmental proceedings pending to which any of the Company's Subsidiaries is a
party or of which any property of the Subsidiaries is the subject that are
required to be described in the Offering Memorandum and are not so described
and, to the best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others
43
Exhibit D
Form of Comfort Letter from Ernst & Young LLP
44
Exhibit E
Form of Lock-Up Agreement
November ___, 2004
Bear, Xxxxxxx & Co. Inc.
Credit Suisse First Boston LLC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Equity Capital Markets
Synaptics Incorporated Lock-Up Agreement
Ladies and Gentlemen:
This letter agreement (this "Agreement") relates to the proposed offering
(the "Offering") by Synaptics Incorporated, a Delaware corporation (the
"Company"), of its convertible senior subordinated notes (the "Notes") in an
aggregate principal amount of up to $115 million (including the Initial
Purchasers' option).
In order to induce you (the "Initial Purchasers") to purchase Notes in the
Offering, the undersigned hereby agrees that, without the prior written consent
of Bear, Xxxxxxx & Co. Inc. and Credit Suisse First Boston LLC, during the
period from the date hereof until sixty (60) days from the date of the final
offering memorandum for the Offering (the "Lock-Up Period"), the undersigned (a)
will not, directly or indirectly, offer, sell, agree to offer or sell, solicit
offers to purchase, grant any call option or purchase any put option with
respect to, pledge, borrow or otherwise dispose of any Relevant Security (as
defined below), and (b) will not establish or increase any "put equivalent
position" or liquidate or decrease any "call equivalent position" with respect
to any Relevant Security (in each case within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder), or otherwise enter into any swap, derivative or other
transaction or arrangement that transfers to another, in whole or in part, any
economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by delivery of Relevant Securities, other
securities, cash or other consideration. As used herein "Relevant Security"
means the common stock, par value $0.001 per share (the "Common Stock"), of the
Company and any other equity security of the Company or any of its subsidiaries
and any security convertible into, or exercisable or exchangeable for, any
Common Stock or other such equity security.
After the initial date of delivery of the Notes, the foregoing
restrictions shall not apply to the disposition of up to an aggregate of 10,000
shares of Common Stock that may be sold by the Company's officers and directors,
provided that the Chief Executive Officer of the Company shall determine, in his
sole discretion, (i) which officers and directors shall
45
be entitled to sell shares in accordance with the foregoing limitation, and (ii)
the number of shares that each such officer or director shall be entitled to
sell. [In addition, after the date of the final offering memorandum, the
foregoing restrictions shall exclude shares of Common Stock that may continue to
be sold or otherwise disposed of by the undersigned pursuant to a preexisting
Rule 10b5-1 Trading Plan entered into on [________].](1)
The undersigned hereby authorizes the Company during the Lock-Up Period to
cause any transfer agent for the Relevant Securities to decline to transfer, and
to note stop transfer restrictions on the stock register and other records
relating to, Relevant Securities for which the undersigned is the record holder
and, in the case of Relevant Securities for which the undersigned is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities. The undersigned hereby further agrees
that, without the prior written consent of Bear, Xxxxxxx & Co. Inc. and Credit
Suisse First Boston LLC, during the Lock-up Period the undersigned (x) will not
file or participate in the filing with the Securities and Exchange Commission of
any registration statement (except for the registration statement pursuant to
that certain Registration Rights Agreement among the Company and the Initial
Purchasers dated as of the initial date of delivery of the Notes), or circulate
or participate in the circulation of any preliminary or final prospectus or
other disclosure document with respect to any proposed offering or sale of a
Relevant Security and (y) will not exercise any rights the undersigned may have
to require registration with the Securities and Exchange Commission of any
proposed offering or sale of a Relevant Security.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement and that this Agreement
constitutes the legal, valid and binding obligation of the undersigned,
enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with enforcement
hereof. Any obligations of the undersigned shall be binding upon the successors
and assigns of the undersigned from the date first above written.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Delivery of a signed copy of this letter by
facsimile transmission shall be effective as delivery of the original hereof.
Very truly yours,
By: ______________________________________
Print Name: _______________________________
---------------------
(1) To be included for the officers and directors that have a preexisting Rule
10b5-1 Trading Plan.
46
