COMPUTER ASSOCIATES INTERNATIONAL, INC.
$400,000,000
COMPUTER ASSOCIATES INTERNATIONAL, INC.
1 5/8% Convertible Senior Notes due 2009
December 6, 2002
Banc of America Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
XxXxxxxx Investments Inc.
Tokyo-Mitsubishi International plc
ABN AMRO Incorporated
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. Introductory. Computer Associates International, Inc., a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several initial purchasers named in Schedule I hereto (the "Purchasers") $400,000,000 principal amount of its 1 5/8% Convertible Senior Notes due 2009 (the "Firm Securities"). The Company also proposes to grant to the Purchasers an option to purchase up to $60,000,000 additional principal amount of such Notes (the "Option Securities" and, together with the Firm Securities, the "Offered Securities"). The Offered Securities will be convertible into shares of common stock of the Company, par value $.10 per share (the "Common Stock"). The Offered Securities are to be issued under an indenture, to be dated as of December 11, 2002 (the Indenture"), between the Company and State Street Bank and Trust Company, as Trustee. The Securities Act of 1933, as amended, is herein referred to as the "Securities Act". The Offered Securities and the Common Stock issuable upon conversion thereof will have the benefit of a Registration Rights Agreement (the "Registration Rights Agreement") between the Company and the Purchasers, pursuant to which the Company will agree to register the resale of the Offered Securities under the Securities Act subject to the terms and conditions specified therein. In addition, the Company will purchase from Bank of America, N.A., an affiliate of Banc of America Securities LLC ("BA"), call spread repurchase transaction pursuant to an Issuer Call Spread Repurchase Transaction, to be dated as of December 11, 2002, between the Company and BA (the "BA Issuer Call Spread Repurchase Transaction"), and the Company will purchase from Citibank, N.A., an affiliate of Xxxxxxx Xxxxx Xxxxxx Inc. ("Citibank"), call spread repurchase transaction pursuant to an Issuer Call Spread Repurchase Transaction, to be dated as of December 11, 2002, between the Company and Citibank (the "Citibank Issuer Call Spread Repurchase Transaction", and together with BA Issuer Call Spread Transaction, the "Issuer Call Spread Repurchase Transactions").
The Company hereby agrees with the several Purchasers as follows:
2 Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular relating to the Offered Securities to be offered by the Purchasers have been prepared by the Company. Such preliminary offering circular and offering circular as supplemented as of the date of this Agreement, and any other document approved by the Company for distribution to prospective purchasers in connection with the contemplated resale of the Offered Securities are hereinafter collectively referred to as the "Offering Document". On the date of this Agreement, the final Offering Document does not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Offering Document based upon written information furnished to the Company by any Purchaser through Banc of America Securities LLC, X.X. Xxxxxx Securities Inc. and Xxxxxxx Xxxxx Xxxxxx Inc. (the "Representatives") specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b). Except as disclosed in the Offering Document, on the date of this Agreement, the Company's Annual Report on Form 10-K most recently filed with the Securities and Exchange Commission (the "Commission") and all subsequent reports (collectively, the "Exchange Act Reports") which have been filed by the Company with the Commission or sent to shareholders pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), do not, in each case as of their respective dates, include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission thereunder.
(b) The Company has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Offering Document; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that all such failures to be so qualified and to be in good standing would not, in the aggregate, have a material adverse effect upon the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole (a "Material Adverse Effect").
(c) Each Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X under the Securities Act) of the Company has been duly incorporated and is a validly existing corporation in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Offering Document; and each Significant Subsidiary of the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that all such failures to be so qualified and to be in good standing would not, in the aggregate, have a Material Adverse Effect; all of the issued and outstanding capital stock of each Significant Subsidiary of the Company has been duly authorized and validly issued and is fully paid and nonassessable; and the capital stock of each Significant Subsidiary owned by the Company, directly or through subsidiaries, is owned free of liens, encumbrances and defects, other than any such liens, encumbrances and defects which would not have a Material Adverse Effect.
(d) All the outstanding shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise set forth in the Offering Document, all outstanding shares of capital stock of the subsidiaries are owned by the Company either directly or through one or more wholly-owned subsidiaries free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set forth in the Offering Document, and the capital stock of the Company, conforms in all material respects to the description thereof contained in the Offering Document; the outstanding shares of Common Stock have been duly and validly authorized and are fully paid and non-assessable; the shares of Common Stock initially issuable upon conversion of the Offered Securities have been duly and validly authorized and, when issued upon conversion against payment of the conversion price and in accordance with the terms of the Indenture, will be validly issued, fully paid and nonassessable; the Board of Directors of the Company has duly and validly adopted resolutions reserving such shares of Common Stock for issuance upon conversion; the holders of the outstanding shares of capital stock of the Company are not entitled to any preemptive or other rights to subscribe for the Offered Securities or the shares of Common Stock issuable upon conversion thereof; and, except as set forth in the Offering Document, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding.
(f) The statements in the Offering Document under the headings "Certain United States Federal Income Tax Consequences", "Description of Our Capital Stock" and "Description of the Notes" fairly summarize the matters therein described.
(g) The Indenture has been duly authorized by the Company; the Offered Securities have been duly authorized by the Company; and when the Offered Securities are delivered and paid for pursuant to this Agreement on the Closing Date (as defined below), (i) the Indenture will have been duly executed and delivered by the Company, (ii) the Indenture will conform to the description thereof contained in the final Offering Document and (iii) the Indenture and such Offered Securities will constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.
(h) The Registration Rights Agreement has been duly and validly authorized by the Company, and, upon its execution and delivery by the Company, and, assuming due authorization, execution and delivery by the Purchasers, will constitute the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.
(i) Each of the Issuer Call Spread Repurchase Transactions has been duly and validly authorized by the Company, and, upon its execution and delivery by the Company, and, assuming due authorization, execution and delivery by each of BA and Citibank, will constitute the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.
(j) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the performance by the Company of its obligations under this Agreement in connection with the issuance and sale of the Offered Securities by the Company to the Purchasers, except for (i) filings under state securities laws and (ii) the filing of a registration statement in accordance with the Registration Rights Agreement described in the Offering Document.
(k) The execution, delivery and performance of the Indenture, this Agreement, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions, and the issuance and sale of the Offered Securities hereunder and compliance with the terms and provisions hereof and thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any statute, any rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any Significant Subsidiary of the Company or any of their properties, (ii) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject or (iii) the charter or by-laws of the Company or any such subsidiary, except, in the case of clauses (i) and (ii) only, for any such breach, violation or default which would not have a Material Adverse Effect; and the Company has full corporate power and authority to authorize, issue and sell the Offered Securities.
(l) This Agreement has been duly authorized, executed and delivered by the Company.
(m) Except as disclosed in the Offering Document, the Company and its Significant Subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free of liens, encumbrances and defects and hold any leased real or personal property under valid and enforceable leases, except, in each case, those which would not have a Material Adverse Effect.
(n) The Company and its subsidiaries possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by them and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that would individually or in the aggregate have a Material Adverse Effect.
(o) No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Company, is imminent that would have a Material Adverse Effect.
(p) To the best knowledge of the Company, the Company and its Significant Subsidiaries own, possess or can acquire on terms that would not have a Material Adverse Effect, all material trademarks, trade names and other rights to inventions, know-how, patents, copyrights and confidential information (collectively, "intellectual property rights") currently employed by them in the business now operated by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that would reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.
(q) Except as disclosed in the Offering Document, neither the Company nor any of its Significant Subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, "environmental laws"), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and the Company is not aware of any pending investigation which could reasonably be expected to lead to such a claim.
(r) Except as disclosed in the Offering Document, there are no pending actions, suits or proceedings against or (to the best knowledge of the Company) affecting the Company, any of its Significant Subsidiaries or any of their respective properties that would individually or in the aggregate have a Material Adverse Effect, or would materially and adversely affect the ability of the Company to perform its obligations under the Indenture or this Agreement, or which are otherwise material in the context of the sale of the Offered Securities; and no such actions, suits or proceedings are, to the Company's knowledge, threatened.
(s) The financial statements included in the Offering Document present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis.
(t) Except as disclosed in the Offering Document, since the date of the latest audited financial statements included in the Offering Document there has been no material adverse change, nor any development or event which could reasonably be expected to result in a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole; and, except as disclosed in or contemplated by the Offering Document, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, other than dividends paid or made in the ordinary course of business of the Company which are consistent, in timing and amount, with past practice.
(u) The Company is not an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act of 1940, as amended (the "Investment Company Act"); and the Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Offering Document, will not be an "investment company" as defined in the Investment Company Act.
(v) No securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Offered Securities are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system.
(w) Assuming the accuracy of the representations and warranties of the Purchasers contained in Section 4 hereof, the offer and sale of the Offered Securities by the Company to the Purchasers in the manner contemplated by this Agreement will be exempt from the registration requirements of the Securities Act; and it is not necessary for such offer and sale to qualify an indenture in respect of the Offered Securities under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
(x) Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf (i) has, within the six-month period prior to the date hereof, offered or sold in the United States or to any U.S. person (as such terms are defined in Regulation S under the Securities Act) the Offered Securities or any security of the same class or series as the Offered Securities which offering or sale would be integrated with the sale of the Offered Securities in a manner that would require registration of the sale thereof to the Purchasers under the Securities Act or (ii) has offered or will offer or sell the Offered Securities (A) in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or (B) with respect to any such securities sold in reliance on Rule 903 of Regulation S ("Regulation S") under the Securities Act, by means of any directed selling efforts within the meaning of Rule 902(b) of Regulation S. The Company, its affiliates and any person acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S. The Company has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for this Agreement.
(y) Except as would not have a Material Adverse Effect (i) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and/or its affiliates has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"); (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and (iii) for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Purchasers, and the Purchasers agree, severally and not jointly, to purchase from the Company, at a purchase price of 97.5% of the principal amount thereof, plus accrued interest from December 11, 2002 to the Closing Date (as hereinafter defined), the principal amount of Firm Securities set forth opposite the name of each Purchaser in Schedule I hereto.
Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several Purchasers to purchase, severally and not jointly, the Option Securities at the same percentage of the principal amount thereof as the Purchasers paid for the Firm Securities, plus accrued interest, if any, from December 11, 2002 to the settlement date for the Option Securities (the "settlement date"). The option may be exercised in whole or in part at any time on or before the 30th day after the Closing Date upon written or telegraphic notice by the Representatives to the Company setting forth the principal amount of Option Securities as to which the Purchasers are exercising the option and the settlement date; provided, however, that the Purchasers may not exercise the option if exercising the option would cause the exemption under Rule 144A under the Securities Act ("Rule 144A") to become unavailable. Delivery of the Option Securities, and payment therefor, shall be made as provided in Section 3 hereof. The principal amount of Option Securities to be purchased by each Purchaser shall be the same percentage as such Purchaser is purchasing of the Firm Securities, subject to such adjustments as the Representatives shall deem advisable.
Delivery of and payment for the Firm Securities and the Option Securities (if the option provided for in Section 3 hereof shall have been exercised on or before the third business day prior to the Closing Date) shall be made at 10:00 A.M., New York City time, on December 11, 2002, or, with respect to Option Securities only, at such time on such later date (not later than January 10, 2003) as the Representatives shall designate, in each case, which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Offered Securities being herein called the "Closing Date"). Delivery of the Offered Securities shall be made to the Representatives for the respective accounts of the several Purchasers against payment by the several Purchasers through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to the account specified by the Company. Delivery of the Offered Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 3 hereof is exercised after the third business day prior to the Closing Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representatives on the date specified by the Representatives (which shall be within three business days after exercise of said option), for the respective accounts of the several Purchasers, against payment by the several Purchasers through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to the account specified by the Company. If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representatives on the settlement date, and the obligation of the Purchasers to purchase the Option Securities shall be conditioned upon receipt of, supplemental options, certificates and letters confirming as of such date the options, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Representations by Purchasers; Resale by Purchasers. (a) Each Purchaser severally represents and warrants to the Company that it is an "accredited investor" within the meaning of Regulation D under the Securities Act.
(b) Each Purchaser severally acknowledges that the Offered Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements of the Securities Act. Each Purchaser severally represents and agrees that it has offered and sold the Offered Securities, and will offer and sell the Offered Securities as part of its distribution at any time, only in accordance with Rule 903 or Rule 144A under the Securities Act. Accordingly, neither such Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or will engage in any directed selling efforts with respect to the Offered Securities, and such Purchaser, its affiliates and all persons acting on its or their behalf have complied and will comply with the offering restrictions requirement of Regulation S set forth in Exhibit A hereto. Each Purchaser severally agrees that, at or prior to confirmation of sale of the Offered Securities, other than a sale pursuant to Rule 144A, such Purchaser will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases the Offered Securities from it a confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons as part of their distribution at any time, except in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meanings given to them by Regulation S."
Terms used in this subsection (b) have the meanings given to them by Regulation S.
(c) Each Purchaser severally agrees that it and each of its affiliates has not entered and will not enter into any contractual arrangement with respect to the distribution of the Offered Securities except for any such arrangements with the other Purchasers or affiliates of the other Purchasers or with the prior written consent of the Company.
(d) Each Purchaser severally agrees that it and each of its affiliates will not offer, solicit offers or sell the Offered Securities in the United States by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising. Each Purchaser severally agrees, with respect to resales made in reliance on Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such resale or otherwise prior to settlement of such resale a notice to the effect that the resale of such Offered Securities has been made in reliance upon the exemption from the registration requirements of the Securities Act provided by Rule 144A.
(e) Each Purchaser severally represents and agrees that (i) it is a person outside the United Kingdom or it is a person of a kind described in Article 19(5) or in sub-paragraphs (a) to (d) of Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2001 (the "FPO"); (ii) it has not offered or sold and will not offer or sell any Offered Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended; (iii) it has only directed and will only direct this offering circular to persons outside the United Kingdom or persons of a kind described in Article 19(5) or in sub-paragraphs (a) to (d) of Article 49(2) of the FPO and it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of any Offered Securities in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (iv) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Offered Securities in, from or otherwise involving the United Kingdom.
The Purchasers propose to offer the Offered Securities to investors initially at the offering price to investors set forth in the final Offering Document.
5. Certain Agreements of the Company. The Company agrees with several Purchasers that:
(a) The Company will advise the Representatives promptly of any proposal to amend or supplement the Offering Document and will not effect such amendment or supplementation without each of the Representatives' consent (which shall not be unreasonably withheld or delayed). If, at any time prior to the completion of the initial resale of the Offered Securities by the Purchasers, any event occurs as a result of which the Offering Document as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company promptly will notify the Representatives of such event and promptly will prepare, at its own expense, an amendment or supplement which will correct such statement or omission. Neither the Representatives' consent to, nor the Purchasers' delivery to offerees or investors of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to the Representatives copies of any preliminary offering circular, the Offering Document and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Representatives request, and the Company will furnish to the Representatives as of the date hereof five copies of the final Offering Document signed by a duly authorized officer of the Company. At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act and the outstanding Offered Securities or Common Stock issuable upon conversion thereof constitute "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company will promptly furnish or cause to be furnished to the Representatives (and, upon request, to each of the other Purchasers) and, upon request of holders and prospective purchasers of such restricted securities, to such holders and purchasers, copies of the information required to be delivered to holders and prospective purchasers of such restricted securities pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto) in order to permit compliance with Rule 144A in connection with resales by such holders of such restricted securities. The Company will pay the expenses of printing and distributing to the Purchasers all such documents.
(c) The Company will arrange for the qualification of the Offered Securities for sale and the determination of their eligibility for investment under the laws of such jurisdictions in the United States as the Representatives designate and will continue such qualifications in effect so long as required for the resale of the Offered Securities by the Purchasers, provided that the Company will not be required to qualify as a foreign corporation or to file a general consent to service of process in any such state.
(d) During the period of five years hereafter (to the extent that the Offered Securities are then outstanding), the Company will furnish to the Representatives and, upon request, to each of the other Purchasers, as soon as practicable after the end of each fiscal year, a copy of its annual report to shareholders for such year; and the Company will furnish to the Representatives and, upon request, to each of the other Purchasers, as soon as available, a copy of each periodic or current report and any definitive proxy statement of the Company filed with the Commission under the Exchange Act or distributed by the Company to its shareholders.
(e) During the period of two years after the Closing Date, the Company will, upon request, furnish to the Representatives, each of the other Purchasers and any holder of Offered Securities or Common Stock issuable upon conversion thereof a copy of the restrictions on transfer applicable to the Offered Securities or Common Stock issuable upon conversion thereof.
(f) During the period of two years after the Closing Date, 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 Offered Securities or Common Stock issuable upon conversion thereof that have been reacquired by any of them.
(g) During the period of two years after the Closing Date, the Company will not be or become, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.
(h) Any information provided by the Company to publishers of publicly available databases about the terms of the Offered Securities shall include a statement that the Offered Securities have not been registered under the Securities Act and are subject to restrictions under Rule 144A under the Securities Act and Regulation S.
(i) The Company will reserve and keep available at all times, free of preemptive rights, the full number of shares of Common Stock issuable upon conversion of the Offered Securities.
(j) The Company will not for a period of 90 days following the date and time that this Agreement is executed and delivered by the parties hereto (the "Execution Time"), without the prior written consent of each of the Representatives, offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any Affiliate (as such term is defined in Rule 501(b) of Regulation D) of the Company or any person in privity with the Company or any Affiliate of the Company), directly or indirectly, or file (or participate in the filing of) a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and regulations of the Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction; provided, however, that (i) the Company may issue and sell Common Stock pursuant to any employee stock option plan, stock ownership or purchase plan or dividend reinvestment plan of the Company in effect at the Execution Time, (ii) the Company may issue Common Stock issuable upon the conversion of securities or the exercise of warrants outstanding at the Execution Time, (iii) the Company may file registration statements pursuant to the Registration Rights Agreement and may issue Common Stock upon conversion of the Offered Securities and (iv) the Company may purchase call spread repurchase transactions pursuant to the Issuer Call Spread Repurchase Transactions.
(k) The Company will refuse, and will cause all applicable trustees and transfer agents to refuse, to register any transfer of Offered Securities or shares of Common Stock issuable upon conversion of Offered Securities if such transfer is not made in accordance with the provisions of Regulation S under the Securities Act, pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from the registration requirements of the Securities Act; provided that the provisions of this paragraph shall not be applicable to any Offered Security or share of Common Stock which has been transferred pursuant to an effective registration statement or Rule 144 under the Securities Act and, as a result of which, or otherwise, is no longer subject to restrictions on transfer under the Securities Act.
(l) All of the Offered Securities and shares of Common Stock issuable upon conversion thereof will contain a legend to the effect that the transfer thereof is prohibited except in accordance with the provisions of Regulation S, pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from registration under the Securities Act and that hedging transactions involving those Offered Securities or shares may not be conducted unless in compliance with the Securities Act; provided that such legend may be removed if such Offered Securities or shares have been transferred pursuant to an effective registration statement or Rule 144 under the Securities Act, and, as a result of which, or otherwise, is no longer subject to restrictions on transfer under the Securities Act.
(m) Between the date hereof and the Closing Date, the Company will not do or authorize any act or thing that would result in an adjustment of the conversion price.
(n) The Company will pay all expenses incidental to the performance of its obligations under this Agreement, the Indenture and the Registration Rights Agreement, including (i) the fees and expenses of the Trustee and its professional advisers; (ii) all expenses in connection with the execution, issue, authentication, packaging and initial delivery of the Offered Securities, the preparation and printing of this Agreement, the Offered Securities, the Indenture, the Registration Rights Agreement, the Offering Document and amendments and supplements thereto, and any other document relating to the issuance, offer, sale and delivery of the Offered Securities; (iii) the cost of any advertising approved by the Company in connection with the issue of the Offered Securities; (iv) for any expenses (including fees and disbursements of counsel) incurred in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions in the United States as the Representatives designate and the printing of memoranda relating thereto (v) for any fees charged by investment rating agencies for the rating of the Offered Securities, (vi) for expenses incurred in distributing preliminary offering circulars and the Offering Document (including any amendments and supplements thereto) to the Purchasers and (vii) for expenses incurred in connection with admitting the Offered Securities for trading in the PORTAL Market. The Company will also pay or reimburse the Purchasers (to the extent incurred by them) for all travel expenses of the Purchasers and the Company's officers and employees and any other expenses of the Purchasers and the Company in connection with attending or hosting meetings with prospective purchasers of the Offered Securities from the Purchasers. Notwithstanding the foregoing, the Purchasers shall reimburse the Company for certain expenses incurred in connection with the offering and sale of the Offered Securities, to the extent separately agreed between the Company and the Purchasers.
(o) In connection with the offering, until the Representatives shall have notified the Company and the other Purchasers of the completion of the resale of the Offered Securities, neither the Company nor any of its affiliates has or will, either alone or with one or more other persons, bid for or purchase for any account in which it or any of its affiliates has a beneficial interest any Offered Securities or attempt to induce any person to purchase any Offered Securities; and neither it nor any of its affiliates will make bids or purchases for the purpose of creating actual, or apparent, active trading in, or of raising the price of, the Offered Securities.
(p) Neither the Company, nor any of its Affiliates, nor any person acting on its or their behalf will engage in any directed selling efforts with respect to the Securities, and each of them will comply with the offering restrictions requirement of Regulation S. Terms used in this paragraph have the meanings given to them by Regulation S.
6. Conditions of the Obligations of the Purchasers. The obligations of the several Purchasers to purchase and pay for the Offered Securities will be subject to the accuracy of the representations and warranties on the part of the Company herein, to the accuracy of the statements of officers of the Company made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the date of this Agreement, of KPMG LLP confirming that they are independent public accountants within the meaning of the Securities Act and the applicable published rules and regulations thereunder ("Rules and Regulations") and to the effect that:
(i) in their opinion the financial statements examined by them and included in the Exchange Act Reports comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 71, Interim Financial Information, on the unaudited financial statements included in the Exchange Act Reports;
(iii) on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the Exchange Act Reports do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with generally accepted accounting principles;
(B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than three business days prior to the date of this Agreement, there was any change in the capital stock (except for the issuance of common stock pursuant to stock options exercised), increase in long-term debt or any decreases in excess of 10% in consolidated net current assets or stockholders' equity of the Company and its subsidiaries, as compared with amounts shown on the latest balance sheet included in the Exchange Act Reports; or
(C) for the period from the closing date of the latest income statement included in the Exchange Act Reports to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year, in consolidated net revenues or increases in total or per share amounts of net loss;
except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Offering Document or Exchange Act Reports disclose have occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Offering Document and the Exchange Act Reports (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company and its subsidiaries subject to the internal controls of the Company's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) a change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Representatives, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market, or (ii) (A) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole which, in the judgment of a majority in interest of the Purchasers including the Representatives, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Offered Securities as contemplated in the Offering Document; (B) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (C) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (D) any banking moratorium declared by U.S. federal or, New York authorities; (E) any material disruption or suspension of securities settlement or clearance services; or (F) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the judgment of a majority in interest of the Purchasers including the Representatives, the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Offered Securities as contemplated in the Offering Document.
(c) The Purchasers shall have received an opinion, dated the Closing Date, of Xxxxxx X. Xxxxxx, Esq., Senior Vice President and General Counsel of the Company, that (subject to acceptable assumptions and qualifications):
(i) The Company and each of its Significant Subsidiaries has been duly incorporated and is an existing corporation in good standing under the laws of the jurisdiction in which it is organized, with corporate power and authority to own its properties and conduct its business as described in the Offering Document and Exchange Act Reports; and the Company and each of its Significant Subsidiaries is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except to the extent that all failures to be so qualified or in good standing, in the aggregate, would not have a Material Adverse Effect;
(ii) To such counsel's knowledge, neither the Company nor any of its subsidiaries (A) is in violation of its charter or by-laws, (B) is in default, and no event has occurred, which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in any material agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (C) is in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain any license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business except, in the case of clauses (B) and (C), for those defaults, violations or failures which, either individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect;
(iii) To the best of such counsel's knowledge and other than as set forth in the Offering Document, there are no pending actions, suits or proceedings against the Company, any of its Significant Subsidiaries or any of their respective properties that would reasonably be expected to have a Material Adverse Effect; and, to the best of such counsel's knowledge, no such proceedings are threatened by governmental authorities or threatened by others;
(iv) Each of this Agreement, the Indenture, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions has been duly authorized, executed and delivered by the Company; the Offered Securities have been duly authorized, executed, issued and delivered and conform to the description thereof contained in the Offering Document; assuming that each of the Indenture, the Offered Securities, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions has been duly authorized, executed and delivered by each party thereto (other than the Company) and that, in the case of the Offered Securities, the Offered Securities have been duly authenticated and paid for by the Purchasers pursuant to this Agreement, each of the Indenture, the Offered Securities, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles;
(v) All the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid, non-assessable and not subject to any preemptive or similar rights;
(vi) The execution, delivery and performance of the Indenture, this Agreement, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions and the issuance and sale of the Offered Securities by the Company to the Purchasers and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (i) any material agreement or instrument to which the Company or any of its Significant Subsidiaries is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject or (ii) the charter or by-laws of the Company or any such subsidiary, and the Company has full power and authority to authorize, issue and sell the Offered Securities as contemplated by this Agreement, except, in the case of clause (i) only, for any such breach, violation or default which would not have a Material Adverse Effect;
(vii) The Company is not an "investment company" within the meaning of and subject to regulation under the Investment Company Act of 1940, as amended;
(viii) The Company's authorized equity capitalization is as set forth in the Offering Document, and the capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in the Offering Document; the Board of Directors of the Company has duly and validly adopted a resolution, reserving such shares of Common Stock for issuance upon conversion; and the holders of the outstanding shares of capital stock of the Company are not entitled to any preemptive or other rights to subscribe for the Offered Securities or the shares of Common Stock issuable upon the conversion thereof; and
(ix) Such counsel have no reason to believe that the Offering Document or any amendment or supplement thereto, or any Exchange Act Report, contained (as of its respective date and, in the case of the final Offering Document, as of the date hereof and as of the Closing Date) any untrue statement of a material fact or omitted 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; the descriptions in the Offering Document and the Exchange Act Reports of legal and governmental proceedings and contracts and other documents are accurate in all material respects and fairly present in all material respects the information; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained in the Offering Document and the Exchange Act Reports or the statements in the Offering Document under the heading "Certain United States Federal Income Tax Consequences".
(d) The Purchasers shall have received an opinion, dated the Closing Date, of Xxxxxxxxx & Xxxxxxx, special counsel to the Company, that (subject to acceptable assumptions and qualifications):
(i) Assuming that each of the Indenture, the Offered Securities, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions has been duly authorized, executed and delivered by each party thereto (other than the Company) and that, in the case of the Offered Securities, the Offered Securities have been authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Purchasers pursuant to this Agreement, each of the Indenture, the Offered Securities, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws of general applicability relating to or affecting creditors' rights and to general equity principles;
(ii) No consent, approval, authorization or order of, or filing with, any United States federal, New York or, to the extent required under the General Corporation Law of the State of Delaware, Delaware governmental agency or body is required in connection with the issuance or sale of the Offered Securities by the Company to the Purchasers, except such as may be required under state securities laws;
(iii) The execution, delivery and performance by the Company of the Indenture, this Agreement, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions and the issuance and sale by the Company of the Offered Securities and compliance with the terms and provisions thereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (A) any United States federal or New York statute or, to the best of such counsel's knowledge, rule or regulation, (B) the Delaware General Corporation Law or (C) the charter or by-laws of the Company;
(iv) Each of this Agreement, the Indenture, the Registration Rights Agreement and the Issuer Call Spread Repurchase Transactions has been duly authorized, executed and delivered by the Company; the Offered Securities have been duly authorized, executed, issued and delivered by the Company; the shares of Common Stock into which the Offered Securities are convertible have been duly authorized, and when issued upon conversion of the Offered Securities will be validly issued, fully paid and nonassessable and not subject to any statutory preemptive rights or, to the knowledge of such counsel, any other similar rights;
(v) Assuming (A) the accuracy of the representations and warranties of the Company in Sections 2(r) and (t) hereof, (B) the accuracy of the representations and warranties of the Purchasers in Section 4 hereof, (C) compliance in all material respects with the offering and transfer procedures and restrictions in this Agreement and the Offering Document, (D) the accuracy of the representations and warranties specified in the Offering Document as being made by each of the purchasers (the "Initial Resale Purchasers") to whom the Purchasers initially resell the Offered Securities and (E) the receipt by each Purchaser and Initial Resale Purchaser of a copy of the Offering Document prior to the sale of the Notes, it is not necessary in connection with (1) the offer, sale and delivery of the Offered Securities by the Company to the several Purchasers pursuant to this Agreement or (2) the initial resales of the Offered Securities by the several Purchasers to the Initial Resale Purchasers pursuant to Rule 144A in the manner contemplated by this Agreement and the Offering Document to register the Offered Securities or the Common Stock issuable upon conversion thereof under the Securities Act or to qualify an indenture in respect thereof under the Trust Indenture Act (it being understood that no opinion need be expressed by such counsel as to (x) any initial resale of the Offered Securities other than pursuant to Rule 144A or Regulation S or (y) any subsequent resale of the Offered Securities);
(vi) The statements made in the Offering Document under the captions "Description of the Notes" and "Description of Our Capital Stock", insofar as they purport to constitute summaries of certain terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects;
(vii) The statements in the Offering Document under the heading "Certain United States Federal Income Tax Consequences", to the extent that they constitute summaries of matters of United States federal law or regulation or of legal conclusions, have been reviewed by such counsel and fairly summarize the matters described therein in all material respects; and
(viii) Such counsel have no reason to believe that the Offering Document or any amendment or supplement thereto, or any Exchange Act Report, contained (as of its respective date and, in the case of the final Offering Document, as of the date hereof and as of the Closing Date) any untrue statement of a material fact or omitted 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; the descriptions in the Offering Document and the Exchange Act Reports of legal and governmental proceedings and contracts and other documents are accurate in all material respects and fairly present in all material respects the information; it being understood that such counsel need express no opinion as to the financial statements or other financial data contained in the Offering Document and the Exchange Act Reports.
(e) The Purchasers shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Purchasers, such opinion or opinions, dated the Closing Date, with respect to the incorporation of the Company, the validity of the Offered Securities, the Offering Document, the exemption from registration for the offer and sale of the Offered Securities by the Company to the several Purchasers and the resales by the several Purchasers as contemplated hereby and other related matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(f) The Purchasers shall have received a certificate, dated the Closing Date, of the President or any Vice President and a principal financial or accounting officer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that the representations and warranties of the Company in this Agreement are true and correct, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, and that, at the Closing Date, since the date of this Agreement or subsequent to the date of the most recent financial statements in the Exchange Act Reports there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Offering Document or as described in such certificate.
(g) The Purchasers shall have received a letter, dated the Closing Date, of KPMG LLP which meets the requirements of subsection (a) of this Section, except that (A) the specified date referred to in such subsection will be a date not more than three business days prior to the Closing Date for the purposes of this subsection and (B) such letter may be in the form of a "bring-down" letter.
(h) The Purchasers shall have received a counterpart of the Registration Rights Agreement which shall have been executed and delivered by a duly authorized officer of the Company.
(i) The Indenture shall have been duly executed and delivered by the Company and the Trustee, and the Offered Securities shall have been duly executed and delivered by the Company and duly authenticated by the Trustee.
(j) At the date of this Agreement, the Representatives shall have received an executed lockup agreement in the form attached hereto as Exhibit B from each of the persons listed on Schedule II hereto.
(k) The Offered Securities shall have been designated as PORTAL-eligible securities in accordance with the rules and regulations of NASD, and the Offered Securities shall be eligible for clearance and settlement through the Depository Trust Company.
(l) Each of BA and Citibank shall have received a counterpart of the Issuer Call Spread Repurchase Transactions which shall have been executed and delivered by the Company, and each of BA and Citibank shall have received the premiums due under the Issuer Call Spread Repurchase Transactions.
The Company will furnish the Purchasers with such conformed copies of such opinions, certificates, letters and documents as the Purchasers reasonably request. The Representatives may in their sole discretion waive on behalf of the Purchasers compliance with any conditions to the obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (b) The Company will indemnify and hold harmless each Purchaser against any losses, claims, damages or liabilities, joint or several, to which such Purchaser may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular or the Exchange Act Reports, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser (including, without limitation, the fees and expenses of a single counsel (in addition to any local counsel) to all Purchasers and any other indemnified persons in connection with any proceeding or related proceedings) in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Purchaser through the Representatives specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; and provided, further, that with respect to any untrue statement or alleged untrue statement in or omission or alleged omission from any preliminary offering circular, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Purchaser that sold the Offered Securities concerned to the person asserting any such losses, claims, damages or liabilities, to the extent that such sale was an initial resale by such Purchaser and any such loss, claim, damage or liability of such Purchaser results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Offered Securities to such person, a copy of the Offering Document (exclusive of any material included therein but not attached thereto) if the Company had previously furnished copies thereof to such Purchaser and any such untrue statement was corrected in such Offering Document.
(b) Each Purchaser will severally and not jointly indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Offering Document, or any amendment or supplement thereto, or any related preliminary offering circular, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Purchaser through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Purchaser consists of: (i) the last paragraph at the bottom of the cover page concerning the terms of the offering by the Purchasers, (ii) the legend concerning stabilization appearing in the fourth paragraph on page 3 and (iii) and the information appearing in the eleventh paragraph under the caption "Plan of Distribution".
(c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above, except to the extent that the indemnifying party is prejudiced thereby. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (it being understood that, except with the consent of the indemnified party, the indemnifying party and the indemnified party shall have separate counsel), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party (which shall not be unreasonably withheld or delayed), effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action. The indemnifying party shall not be liable for any settlement of any proceeding without its consent (which shall not be unreasonably withheld or delayed).
(d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Offered Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers from the Company under this Agreement. The relative fault 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 Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses (including, without limitation, the fees and expenses of a single counsel (in addition to any local counsel) to all Purchasers and any other indemnified persons in connection with any proceeding or related proceedings) reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities purchased by it were resold exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers' obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in their obligations to purchase Offered Securities hereunder and the aggregate principal amount of Offered Securities that such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the total principal amount of Offered Securities, the Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Securities by other persons, including any of the Purchasers, but if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Purchasers agreed but failed to purchase. If any Purchaser or Purchasers so default and the aggregate principal amount of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of Offered Securities and arrangements satisfactory to the Representatives and the Company for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Purchaser or the Company, except as provided in Section 9. As used in this Agreement, the term "Purchaser" includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a defaulting Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Purchasers set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Purchaser, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Offered Securities by the Purchasers is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the respective obligations of the Company and the Purchasers pursuant to Section 7 shall remain in effect. If the purchase of the Offered Securities by the Purchasers is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in Section 6(b)(i) or in clause (C) (other than a suspension of trading of the securities of the Company), (D) or (E) of Section 6(b)(ii), the Company will reimburse the Purchasers for all out-of-pocket expenses (including the reasonable fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to the Purchasers, c/o Banc of America Securities LLC, 0 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxxx, X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxx, and Xxxxxxx Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel, or, if sent to the Company, will be mailed or delivered and confirmed to it at One Xxxxxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention: Treasurer; provided, however, that any notice to a Purchaser pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to such Purchaser at the following addresses:
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Banc of America Securities LLC |
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X.X. Xxxxxx Securities Inc. |
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000 Xxxx Xxxxxx |
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9th Floor |
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Facsimile: 000-000-0000 |
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Attention: Xxxxx X. Xxxxxx |
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Xxxxxxx Xxxxx Xxxxxx Inc. |
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000 Xxxxxxxxx Xxxxxx |
|
Facsimile: 000-000-0000 |
|
Attention: General
Counsel |
|
000 Xxxxxxxx Xxxxxx |
|
Cleveland, OH 44114 |
|
Facsimile: 000-000-0000 |
|
Attention: Legal Department |
|
Tokyo-Mitsubishi International plc |
|
Legal Department |
|
0 Xxxxxxxxx |
|
London EC2M 2AA |
|
England |
|
Facsimile: 00-00-0000-0000 |
|
Attention: Xxxxx
Xxxxxxx |
|
New York, New York 10055 |
|
Facsimile:
000-000-0000 |
11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder, except that holders of Offered Securities shall be entitled to enforce the agreements for their benefit contained in the second and third sentence of Section 5(b) hereof against the Company as if such holders were parties thereto.
12. Representation of Purchasers. The Representatives will act for the several Purchasers in connection with this purchase, and any action under this Agreement taken by you jointly or by the Representatives will be binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.
Each party hereto hereby submits to the non-exclusive jurisdiction of the federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
If the foregoing is in accordance with the Purchasers' understanding of our agreement, kindly sign and return to us one of the counterparts hereof, whereupon it will become a binding agreement between the Company and the several Purchasers in accordance with its terms.
|
Very truly yours, |
|
|
|
|
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Banc of America Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
XxXxxxxx Investments Inc.
Tokyo-Mitsubishi International plc
ABN AMRO Incorporated
By Banc of America
Securities LLC
By ___________________________
Name:
Title:
By X.X. Xxxxxx
Securities Inc.
By ___________________________
Name:
Title:
By Xxxxxxx Xxxxx
Xxxxxx Inc.
By ___________________________
Name:
Title:
SCHEDULE I
|
|
Principal Amount of Firm Securities to be Purchased |
|
|
|
|
Banc of America Securities LLC |
$115,200,000 |
|
X.X. Xxxxxx Securities Inc. |
115,200,000 |
|
Xxxxxxx Xxxxx Xxxxxx Inc. |
115,200,000 |
|
McDonald Investments Inc. |
20,000,000 |
|
Tokyo-Mitsubishi International plc |
20,000,000 |
|
ABN AMRO Incorporated |
14,400,000 |
|
Total |
$400,000,000 |
SCHEDULE II
List of persons
subject to the lock-up agreements
Executive Officers and Directors
|
Name |
Position |
|
Xxxxxx Xxxxx |
President, Chief Executive Officer and Chairman of the Board of Directors |
|
Xxxxxxx X. Xxxxx |
Executive Vice President-Research and Development and Director |
|
The Xxxxxxxxx Xxxxxxx X. X'Xxxxx |
|
|
Xxxxxxx Xxxx |
Director |
|
Xxx X. Xxxxxx |
Director |
|
Xxxxxx X. Xx Xxxxx |
Director |
|
Xxxxxx X. Xxxxxxxx |
Director |
|
Xxxxx X. Xxxxxxx |
Director |
|
Xxxx Xxxxx Xxxxx |
Director |
|
Xxxxxx X. Xxxxx |
Director |
|
Xxxxxxx X. Xxxxxxxxxxxx |
Director |
|
Xxx Xxx |
Executive Vice President-Finance and Chief Financial Officer |
|
Xxxxxxx Xxxxxxxx |
Executive Vice President and General Manager-Sales |
|
Xxxx Xxxxx |
Executive Vice President-Sales Support |
|
Xxxxxx X. Xxxxxx |
Senior Vice President and General Counsel |
|
Xxxxxxx X. XxXxxxx |
Senior Vice President and Secretary |
|
Xxxx Xxxxxxxxxxx |
Vice President and Treasurer |
EXHIBIT A
Selling Restrictions
for Offers and
Sales outside the United States
(1) (a) The Offered Securities and the Common Stock issuable upon conversion thereof have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act or unless registered under the Securities Act. Each Purchaser, severally and not jointly, represents and agrees that, except as otherwise permitted by Section 4(a)(i) of the Agreement to which this is an exhibit, it has offered and sold the Offered Securities, and will offer and sell the Offered Securities, (i) as part of their distribution at any time; and (ii) otherwise until one year after the later of the commencement of the offering and the Closing Date, only in accordance with Rules 903 or 904 of Regulation S or pursuant to an effective registration statement under the Securities Act. Accordingly, each Purchaser represents and agrees that neither it, nor any of its Affiliates nor any person acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Offered Securities, and that it and they have complied and will comply with the offering restrictions requirement of Regulation S under the Securities Act. Each Purchaser, severally and not jointly, agrees that it will not engage, directly or indirectly, in hedging transactions with regard to the Offered Securities or the shares of Common Stock issuable upon conversion thereof prior to the expiration of one year after the later of the commencement of the offering and the Closing Date unless in compliance with the Securities Act. Each Purchaser, severally and not jointly, agrees that, at or prior to the confirmation of sale of Offered Securities (other than a sale of Offered Securities pursuant to Section 4(a)(i) of the Agreement to which this is an exhibit or pursuant to an effective registration statement under the Securities Act), it shall have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Offered Securities from it during the one-year distribution compliance period a confirmation or notice to substantially the following effect:
"The Securities covered hereby and the shares of Common Stock issuable upon conversion thereof have not been registered under the U.S. Securities Act of 1933 (the "Act") and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until on year after the later of the commencement of the offering and December 11, 2002, except in either case in accordance with Regulation S or Rule 144A under the Act or pursuant to an effective registration statement under the Act. Hedging transactions with regard to the Securities or the shares of Common Stock issuable upon conversion of the Securities may not be conducted, directly or indirectly, prior to the expiration of one year after the later of the commencement of the offering and December 11, 2002 unless in compliance with the Act. Terms used above have the meanings given to them by Regulation S."
(b) Each Purchaser also represents and agrees that it has not entered and will not enter into any contractual arrangement with any distributor with respect to the distribution of the Offered Securities, except with its Affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by Regulation S.
(2) Each Purchaser severally represents and agrees that (i) it is a person outside the United Kingdom or it is a person of a kind described in Article 19(5) or in sub-paragraphs (a) to (d) of Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2001 (the "FPO"); (ii) it has not offered or sold and will not offer or sell any Offered Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, as amended; (iii) it has only directed and will only direct this offering circular to persons outside the United Kingdom or persons of a kind described in Article 19(5) or in sub-paragraphs (a) to (d) of Article 49(2) of the FPO and it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of any Offered Securities in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (iv) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Offered Securities in, from or otherwise involving the United Kingdom.
EXHIBIT B
Form of Lock-Up Agreement
December 5, 2002
Banc of America Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
as Representatives of the Initial
Purchasers (the "Initial Purchasers")
to be
named in the Purchase Agreement
referred to below
c/oBanc of America Securities LLC
0 Xxxx 00xx Xxxxxx
New York, New York 10019
and
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
New York, NY 10172
and
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
New York, New York 10013
Re: Proposed Offering by Computer Associates International, Inc.
Dear Sirs:
The undersigned, an executive officer and/or director of Computer Associates International, Inc., a Delaware corporation (the "Company"), understands that Banc of America Securities LLC, X.X. Xxxxxx Securities Inc., Xxxxxxx Xxxxx Xxxxxx Inc. and the other Initial Purchasers propose to enter into a Purchase Agreement (the "Purchase Agreement") with the Company providing for the offering of Convertible Senior Notes of the Company. In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder and/or an officer and/or director of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with you and each other Initial Purchaser that the undersigned will not, and will cause any trust in respect of which the undersigned exercises sole investment authority not to, offer, sell, contract to sell, pledge or otherwise dispose of, or file (or participate in the filing of) a registration statement with the Securities and Exchange Commission (the "Commission") in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder with respect to, any shares of capital stock of the Company or any securities convertible or exercisable or exchangeable for such capital stock, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of the Purchase Agreement without the prior written consent of Banc of America Securities LLC, X.X. Xxxxxx Securities Inc. and Xxxxxxx Xxxxx Xxxxxx Inc.; provided, however, that (i) the undersigned may participate in the filing of any registration statement which the Company is permitted to file pursuant to the Purchase Agreement, (ii) this agreement shall not apply to securities of the Company acquired by the undersigned subsequent to the date hereof pursuant to open-market transactions, (iii) this agreement shall not apply to transactions in securities of the Company which have been pledged by the undersigned as security in transactions effective prior to the date hereof, or to secure lines of credit existing prior to the date hereof or replacing lines of credit existing prior to the date hereof, (iv) this agreement shall not apply to securities of the Company held by any "charitable trust" as such term is defined under Section 501(c)(3) of the Internal Revenue Code; and (v) this agreement shall not apply to any "cashless exercise" of options in securities of the Company or any "net exercise" of options in securities of the Company, provided, however, that no such transaction shall involve the sale of securities of the Company into the open market.
If for any reason the Purchase Agreement shall be terminated prior to the Closing Date (as defined in the Purchase Agreement) or if the Purchase Agreement is not executed on or prior to December 11, 2002, the agreement set forth above shall likewise be terminated.
This agreement shall be governed by and construed in accordance with the laws of the State of New York. References herein to "capital stock" of the Company include, without limitation, common stock of the Company.
Very truly yours,
Signature:
Print Name:
