EXHIBIT 99.2
DOCUMENTUM, INC.
$125,000,000
4-1/2% CONVERTIBLE NOTES DUE 2007
PURCHASE AGREEMENT
April 1, 2002
April 1, 2002
UBS Warburg LLC
as Initial Purchaser
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
Documentum, Inc., a Delaware corporation (the "COMPANY") proposes to issue
and sell to UBS Warburg LLC (the "Initial Purchaser") $125,000,000 principal
amount of its 4-1/2% Convertible Notes due 2007 (the "FIRM SECURITIES") pursuant
to the terms and conditions stated herein. The Company also proposes to issue
and sell to the Initial Purchaser not more than an additional $18,750,000
principal amount of its 4-1/2% Convertible Notes due 2007 (the "ADDITIONAL
SECURITIES") if and to the extent that you shall have determined to exercise the
right granted in Section 2 hereof. The Firm Securities and the Additional
Securities are hereinafter collectively referred to as the "SECURITIES". The
Securities shall be issued under an Indenture dated as of April 5, 2002 (the
"INDENTURE") between the Company and Wilmington Trust Company, as Trustee (the
"TRUSTEE"). The Securities will be convertible into shares of Common Stock (par
value $0.001) (the "UNDERLYING SECURITIES").
The Company proposes to issue and sell the Securities to the Initial
Purchaser pursuant to an exemption under Section 4(2) of the Securities Act of
1933, as amended (the "SECURITIES ACT"), with the understanding that the Initial
Purchaser shall then offer and sell the Securities to qualified institutional
buyers in compliance with the exemption from registration provided by Rule 144A
under the Securities Act or in offshore transactions in reliance on Regulation S
under the Securities Act ("REGULATION S").
The Initial Purchaser and its direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement dated as of the date
hereof between the Company and the Initial Purchaser (the "REGISTRATION RIGHTS
AGREEMENT").
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum (the "PRELIMINARY MEMORANDUM") and will prepare
a final offering memorandum (the "FINAL MEMORANDUM" and, with the Preliminary
Memorandum, each an "OFFERING MEMORANDUM") including or incorporating by
reference a description of the terms of the Securities, the terms of the
offering and a description of the Company. As used herein, the term "Offering
Memorandum" shall include in each case the documents incorporated by reference
therein. The terms "SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein with
respect to either Offering Memorandum shall include all
documents deemed to be incorporated by reference in the Preliminary Memorandum
or Final Memorandum that are filed subsequent to the date of such Offering
Memorandum with the Securities and Exchange Commission (the "COMMISSION")
pursuant to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, the Initial Purchaser that:
(a) 1) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Offering Memorandum
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder and (ii) the Preliminary Memorandum does not contain and the
Final Memorandum, in the form used by the Initial Purchaser to confirm
sales and on the Closing Date (as defined in Section 4), will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in either Offering Memorandum based upon
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser expressly for use therein.
(b) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in each Offering Memorandum and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except where the failure
to so qualify would not have a material adverse effect on the business,
properties, financial condition or results of operation of the Company and
the subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
(c) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in each
Offering Memorandum and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect; all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and
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are owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Final
Memorandum.
(f) The shares of common stock outstanding prior to the issuance
of the Securities have been duly authorized and are validly issued, fully
paid and non-assessable. As of December 31, 2001, the Company had a
capitalization as set forth under the column heading entitled "Actual" in
the section of each Offering Memorandum entitled "Capitalization" and, as
adjusted to give effect to the offering of the Firm Securities and the
application of the net proceeds therefrom as described in the "Use of
Proceeds" section of each Offering Memorandum, the Company would, as of
December 31, 2001, have had a capitalization as set forth under the column
heading entitled "As Adjusted" in the section of each Offering Memorandum
entitled "Capitalization".
(g) The Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchaser in accordance with the
terms of this Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to the
effects of applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and equitable principles of general
applicability, and will be entitled to the benefits of the Indenture
pursuant to which such Securities are to be issued and the Registration
Rights Agreement.
(h) The Underlying Securities issuable upon conversion of the
Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the
Securities, will be validly issued, fully paid and non-assessable, and the
issuance of the Underlying Securities will not be subject to any
preemptive or similar rights.
(i) Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by, and is a valid and
binding agreement of, the Company, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of equity,
and except as rights to indemnification and contribution under the
Registration Rights Agreement may be limited under applicable law.
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(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Securities will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture, the Registration Rights Agreement or
the Securities, except such as may be required by (i) the securities or
Blue Sky laws of the various states and applicable listing criteria of the
National Association of Securities Dealers, Inc. ("NASD") for its PORTAL
trading market ("PORTAL") in connection with the offer and sale of the
Securities and (ii) Federal and state securities laws and the applicable
listing requirements of NASD for its Nasdaq National Market with respect
to the Company's obligations under the Registration Rights Agreement.
(k) The audited financial statements and related notes thereto of
the Company incorporated by reference in each Offering Memorandum present
fairly in all material respects the consolidated financial position of the
Company and its subsidiaries as of the dates indicated and the results of
operations and cash flows of the Company and its subsidiaries for the
periods specified; such financial statements have been prepared in
conformity with generally accepted account principles ("GAAP") applied on
a consistent basis during the periods involved.
(l) Other than as disclosed in either Offering Memorandum, there
has not occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial or
otherwise, or in the business, properties, management, financial
condition, shareholders equity or results of operation of the Company and
its subsidiaries, taken as a whole, from the earlier of December 31, 2001
and the respective dates as of which information is given in each Offering
Memorandum provided to prospective purchasers of the Securities.
(m) There are no legal or governmental proceedings pending as to
which the Company or any of its subsidiaries has, indirectly or directly,
been served or otherwise received notice as of the date hereof or, to the
Company's reasonable best knowledge, otherwise pending or threatened to
which the Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is subject other
than proceedings accurately described in all material respects in each
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Offering Memorandum and proceedings that would not have a Material Adverse
Effect or would not materially affect the power or ability of the Company
to perform its obligations under this Agreement, the Indenture, the
Registration Rights Agreement or the Securities or to consummate the
transactions contemplated by the Final Memorandum.
(n) Except as described or incorporated by reference in each
Offering Memorandum, the Company and each subsidiary owns or possesses, or
have no reason to believe they cannot acquire on reasonable terms, such
licenses or other rights to use all material patents, patent applications,
trademarks, trademark applications, service marks, service xxxx
applications, trade names, copyrights, manufacturing processes, formulae,
trade secrets, know-how, franchises, and other material intangible
property and assets (collectively, "INTELLECTUAL PROPERTY") necessary to
the conduct of their businesses as described or incorporated by reference
in each Offering Memorandum, except where the failure to own, possess or
have the ability to acquire such licenses or other rights would not,
individually or in the aggregate, be expected to have a Material Adverse
Effect; and the Company has not received any written notice of
infringement or of conflict with rights or claims of others with respect
to any material Intellectual Property that, if determined adversely to the
Company, would, individually or in the aggregate have a Material Adverse
Effect;
(o) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), which are applicable to their
businesses, (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a Material Adverse Effect.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a Material
Adverse Effect.
(q) The Company is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
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described in the Final Memorandum will not be, required to register as an
"investment company" as such term are defined in the Investment Company
Act of 1940, as amended.
(r) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "AFFILIATE") of the
Company has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Securities Act) which is or will be integrated
with the sale of the Securities in a manner that would require the
registration under the Securities Act of the Securities or (ii) offered,
solicited offers to buy or sold the Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation
D under the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(s) None of the Company, its Affiliates or any person acting on
its or their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities and the Company and its Affiliates and any person acting on its
or their behalf have complied and will comply with the offering
restrictions requirement of Regulation S.
(t) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchaser in the manner
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended.
(u) The Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the Initial Purchaser, and the Initial Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, to purchase from the Company the Firm Securities at
a purchase price of 100% of the principal amount thereof (the "PURCHASE PRICE")
plus accrued interest, if any, to the Closing Date.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchaser the Additional Securities, and the Initial Purchaser
shall have the right to purchase, up to $18,750,000 principal amount of
Additional Securities at the Purchase Price plus accrued interest, if any, to
the date of payment and delivery. The Initial Purchaser may exercise this right
in whole or from time to time in part by giving written notice of each election
to exercise this option not later than 30 days after the date of this Agreement.
Any exercise notice shall specify the principal amount of Additional Securities
to be purchased by the
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Initial Purchaser and the date on which such Additional Securities are to be
purchased. Each purchase date must be at least two business day after the
written notice is given and may not be earlier than the Closing Date for the
Firm Securities nor later than ten business days after the date of such notice.
On each day, if any, that Additional Securities are to be purchased (an "OPTION
CLOSING DATE"), the Initial Purchaser agrees to purchase the principal amount of
Additional Securities specified in such notice.
The Company hereby agrees that, without the prior written consent of the Initial
Purchaser, it will not, during the period ending 90 days after the date of the
Final Memorandum, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock, or file or cause to be
declared effective (other than pursuant to contractual obligations existing as
of the date hereof) a registration statement under the Securities Act relating
to the offer and sale of any shares of Securities, Common Stock or other
securities convertible into or exercisable or exchangeable for Common Stock or
other rights to purchase Common Stock or any other securities of the Company
that are substantially similar to the Securities or Common Stock or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the common stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of common stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the sale of the Securities under this
Agreement or the issuance of the Underlying Securities upon conversion of the
Securities, (B) the issuance by the Company of any shares of common stock upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof, (C) the amendment or supplementation of existing
registration statements and the filing of a shelf registration statement
covering the Securities and the Underlying, Securities or the filing of a
registration statement on Form S-8 under the Securities Act, (D) the grant of
options to acquire common stock employees, consultants and directors of the
Company under stock option and stock purchase plans in effect and existing on
the date hereof, or (E) the issuance of common stock and options to acquire
common stock in connection with acquisitions of companies, businesses or select
assets of companies for a consideration not exceed $100,000,000 for all such
acquisitions in the aggregate, provided that any such common stock or options
issued in connection with such an acquisition (other than a stock-for-stock
acquisition of a corporation whose common stock is publicly traded on a
nationally recognized exchange) may not be resold pursuant to registration
statement filed prior to the end of the period ending 90 days after the date of
the Final Memorandum.
3. Terms of Offering. The Initial Purchaser has advised the Company
that the Initial Purchaser will make an offering of the Securities purchased by
the Initial Purchaser hereunder on the terms to be set forth in the Final
Memorandum,
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as soon as practicable after this Agreement is entered into as in the judgment
of the Initial Purchaser is advisable.
4. Payment and Delivery. Payment for the Firm Securities shall be made
to the Company in Federal or other funds immediately available against delivery
of such Firm Securities for the account of the Initial Purchaser at 10:00 a.m.,
New York City time, on April 5, 2002, or at such other time on the same or such
other date, not later than April 10, 2002, as shall be designated in writing by
the Company and the Initial Purchaser. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in against delivery of such
Additional Securities for the account of the Initial Purchaser at 10:00 a.m.,
New York City time, on the date specified in the corresponding notice described
in Section 2 or at such other time on the same or on such other date, in any
event not later than May 8, 2002, as shall be designated in writing by the
Company and the Initial Purchaser.
The Securities shall be in definitive form or global form, as specified by
the Initial Purchaser, and registered in such names and in such denominations as
the Initial Purchaser shall request in writing not later than one full business
day prior to the Closing Date or the applicable Option Closing Date, as the case
may be. The Securities shall be delivered to the Initial Purchaser on the
Closing Date or an Option Closing Date, as the case may be, for the account of
the Initial Purchaser, with any transfer taxes payable in connection with the
transfer of the Securities to the Initial Purchaser duly paid, against payment
of the Purchase Price therefor plus accrued interest, if any, to the date of
payment and delivery.
5. Conditions to the Initial Purchaser's Obligations. The obligation of
the Initial Purchaser to purchase and pay for the Firm Securities on the Closing
Date is subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date (or such other date as specified below):
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded the Company
or any of the Company's securities or in the rating outlook for the
Company by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) since December 31, 2001, there shall not have occurred
any change, or any development involving a prospective change, in
the condition, financial or otherwise, or in the earnings,
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business or operations of the Company and its subsidiaries, taken as
a whole, from that set forth in the Preliminary Memorandum provided
to prospective purchasers of the Securities that, in the judgment of
the Initial Purchaser, is material and adverse and that makes it, in
the judgment of the Initial Purchaser, impracticable to market the
Securities on the terms and in the manner contemplated in the Final
Memorandum.
(b) The Initial Purchaser shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 5(a)(i) and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Initial Purchaser shall have received on the Closing Date
an opinion of Xxxxxx Godward LLP, outside counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit A. Such opinion shall
be rendered to the Initial Purchaser at the request of the Company and
shall so state therein.
(d) The Initial Purchaser shall have received on the Closing Date
an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Initial Purchaser,
dated the Closing Date, to the effect set forth in Exhibit B.
(e) The Initial Purchaser shall have received on each of the date
hereof and the Closing Date a letter, dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Initial Purchaser, from Xxxxxx Xxxxxxxx LLP, independent public
accountants, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in or
incorporated by reference into each Offering Memorandum; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(f) The "lock-up" agreements, each substantially in the form of
Exhibit C hereto, between the Initial Purchaser and certain officers and
directors of the Company relating to sales and certain other dispositions
of shares of common stock or certain other securities, delivered to the
Initial Purchaser on or before the date hereof, shall be in full force and
effect on the Closing Date.
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The obligation of the Initial Purchaser to purchase Additional Securities
hereunder is subject to the delivery to the Initial Purchaser on the applicable
Option Closing Date of such documents as the Initial Purchaser may reasonably
request with respect to the good standing of the Company, the due authorization,
execution and authentication and issuance of the Additional Securities to be
sold on such Option Closing Date and other matters related to the execution and
authentication and issuance of such Additional Securities.
6. Covenants of the Company. In further consideration of the agreements
of the Initial Purchaser contained in this Agreement, the Company covenants with
the Initial Purchaser as follows:
(a) To furnish to the Initial Purchaser in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c), as many copies of the Final Memorandum, any documents
incorporated by reference therein and any supplements and amendments
thereto as the Initial Purchaser may reasonably request.
(b) Before amending or supplementing either Offering Memorandum,
to furnish to the Initial Purchaser a copy of each such proposed amendment
or supplement and not to use any such proposed amendment or supplement to
which the Initial Purchaser reasonably objects.
(c) If, during such period after the date hereof and prior to the
date on which all of the Securities shall have been sold by the Initial
Purchaser, any event shall occur or condition exist as a result of which
it is necessary to amend or supplement the Final Memorandum so that it
does not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances when the Final
Memorandum is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Initial Purchaser, it is necessary to amend or
supplement the Final Memorandum to comply with applicable law, forthwith
to prepare and furnish, at its own expense, to the Initial Purchaser,
either amendments or supplements to the Final Memorandum so that the
statements in the Final Memorandum as so amended or supplemented will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances when the Final Memorandum is
delivered to a purchaser, not misleading, or so that the Final Memorandum,
as amended or supplemented, will comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Initial
Purchaser shall reasonably request, provided that the Company shall not
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be required to qualify as a foreign corporation or to file a general
consent to service of process or taxation in any such jurisdiction.
(e) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of its obligations under
this Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
issuance and sale of the Securities and all other fees or expenses in
connection with the preparation of each Offering Memorandum and all
amendments and supplements thereto, including all printing costs
associated therewith, and the delivering of copies thereof to the Initial
Purchaser, in the quantities herein above specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Initial Purchaser, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or legal investment
memorandum in connection with the offer and sale of the Securities under
state securities laws and all expenses in connection with the
qualification of the Securities for offer and sale under state securities
laws as provided in Section 6(d) hereof, including filing fees, (iv) any
fees charged by rating agencies for the rating of the Securities, (v) the
fees and expenses, if any, incurred in connection with the admission of
the Securities for trading in PORTAL or any appropriate market system,
(vi) the costs and charges of the Trustee and any transfer agent,
registrar or depositary, (vii) the cost of the preparation, issuance and
delivery of the Securities, (viii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Securities,
including, without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, (ix)
the document production charges and expenses associated with printing this
Agreement and (x) all other cost and expenses incident to the performance
of the obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8, and the last paragraph of Section 10,
the Initial Purchaser will pay all of their costs and expenses, including
fees and disbursements of their counsel, transfer taxes payable on resale
of any of the Securities by them and any advertising expenses connected
with any offers they may make.
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated with
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the sale of the Securities in a manner which would require the
registration under the Securities Act of the Securities.
(g) Not to solicit any offer to buy or offer or sell the
Securities or the Underlying Securities by means of any form of general
solicitation or general advertising (as those terms are used in Regulation
D under the Securities Act) or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act.
(h) While any of the Securities or the Underlying Securities
remain "restricted securities" within the meaning of the Securities Act,
to make available, upon request, to any seller of such Securities the
information specified in Rule 144A(d)(4) under the Securities Act, unless
the Company is then subject to Section 13 or 15(d) of the Exchange Act.
(i) If requested by the Initial Purchaser, to use commercially
reasonable efforts to permit the Securities to be designated PORTAL
securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to trading in
the PORTAL Market.
(j) None of the Company, its Affiliates or any person acting on
its or their behalf (other than the Initial Purchaser) will engage in any
directed selling efforts (as that term is defined in Regulation S) with
respect to the Securities, and the Company and its Affiliates and each
person acting on its or their behalf (other than the Initial Purchaser)
will comply with the offering restrictions requirement of Regulation S.
(k) During the period of two years after the Closing Date or any
Option Closing Date, if later, the Company will not, and will not permit
any of its affiliates (as defined in Rule 144 under the Securities Act) to
resell any of the Securities or the Underlying Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any of
them.
(l) Not to take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Securities
contemplated hereby.
7. Offering of Securities; Restrictions on Transfer. (a) The Initial
Purchaser represents and warrants that it is a qualified institutional buyer as
defined in Rule 144A under the Securities Act (a "QIB"). The Initial Purchaser
agrees with the Company that (i) it will not solicit offers for, or offer or
sell, such Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (ii) it will solicit offers for such Securities only from,
and will offer such Securities only to, persons that it reasonably believes to
be (A) in the case of
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offers inside the United States, QIBs and (B) in the case of offers outside the
United States, to persons other than U.S. persons ("FOREIGN PURCHASERS," which
term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for foreign beneficial owners (other than
an estate or trust)) in reliance upon Regulation S under the Securities Act
that, in each case, in purchasing such Securities are deemed to have represented
and agreed as provided in the Final Memorandum under the caption "Transfer
Restrictions."
(b) The Initial Purchaser represents, warrants and agrees with
respect to offers and sales outside the United States that:
(i) it understands that no action has been or will be taken
in any jurisdiction by the Company that would permit a public
offering of the Securities, or possession or distribution of either
Offering Memorandum or any other offering or publicity material
relating to the Securities, in any country or jurisdiction where
action for that purpose is required;
(ii) the 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 Rule 144A or Regulation S under the Securities
Act or pursuant to another exemption from the registration
requirements of the Securities Act;
(iii) it has offered the Securities and will offer and sell
the Securities (A) as part of their distribution at any time and (B)
otherwise until one year after the later of the commencement of the
offering and the Closing Date (or any Option Closing Date, if
later), only in accordance with Rule 903 of Regulation S or as
otherwise permitted in Section 7(a); accordingly, neither the
Initial Purchaser, its Affiliates nor any persons acting on its or
their behalf have engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the
Securities, and the Initial Purchaser, its Affiliates and any such
persons have complied and will comply with the offering restrictions
requirement of Regulation S;
(iv) it (A) has not offered or sold and, prior to the date
six months after the Closing Date, will not offer or sell any
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; (B) has complied and will comply with all
applicable provisions of the Financial Services and
13
Markets Act 2000 (the "FSMA") with respect of anything done by it in
relation to the Securities in, from or otherwise involving the
United Kingdom, and (C) 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 FSMA) received by
it in connection with the issue or sale of the Securities in
circumstances in which section 21(1) of the FSMA does not apply to
the Company;
(v) It agrees that, at or prior to confirmation of sales of
the Securities, it will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the restricted period a
confirmation or notice to substantially the following effect;
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933
(the "Securities Act") and may not be offered and
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 one year after the later of the commencement
of the offering and the final closing date, except
in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act.
Terms used above have the meaning given to them by
Regulation S."
Terms used in this Section 7(b) have the meanings given to them by Regulation S.
8. Indemnity and Contribution. 3) The Company agrees to indemnify and
hold harmless the Initial Purchaser, each person, if any, who controls the
Initial Purchaser within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, and each affiliate of Initial Purchaser
within the meaning of Rule 405 under the Securities Act from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in either Offering
Memorandum (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchaser furnished to
the Company in writing by the Initial Purchaser expressly for use therein. For
purposes of this Section 8(a), the parties
14
hereto agree that the only information relating to the Initial Purchaser
furnished to the Company in writing by the Initial Purchaser for use in either
Offering Memorandum are the following portions of each Offering Memorandum: (i)
the fourth sentence of the fourth to last paragraph of the section titled "Plan
of Distribution" and (ii) the second to last paragraph of the section titled
"Plan of Distribution".
(b) Initial Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to the Initial Purchaser, but only with
reference to information relating to the Initial Purchaser furnished to
the Company in writing by the Initial Purchaser expressly for use in
either Offering Memorandum or any amendments or supplements thereto. For
purposes of this Section 8(b), the parties hereto agree that the only
information relating to the Initial Purchaser furnished to the Company in
writing by the Initial Purchaser for use in either Offering Memorandum are
the following portions of each Offering Memorandum: (i) the fourth
sentence of the fourth to last paragraph of the section titled "Plan of
Distribution" and (ii) the second to last paragraph of the section titled
"Plan of Distribution".
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a) or 8(b), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel)
for all such indemnified parties and that all such fees and expenses shall
be reimbursed as they are incurred. Such firm shall be designated in
writing
15
by UBS Warburg LLC, in the case of parties indemnified pursuant to Section
8(a), and by the Company, in the case of parties indemnified pursuant to
Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement
or judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to
the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding 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
claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a)
or 8(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause 8(d)(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 8(d)(i) above but also
the relative fault of the Company on the one hand and of the Initial
Purchaser on the other hand in connection with the statements or omissions
that 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 Initial Purchaser on the
other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from
the offering of the Securities (before deducting expenses) received by the
Company and the total discounts and commissions received by the Initial
Purchaser, in each case as set forth in the Final Memorandum, bear to the
aggregate offering price of the Securities. The relative fault of the
Company on the one hand and of the
16
Initial Purchaser on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Initial Purchaser
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company and the Initial Purchaser agree that it would not
be just or equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in
Section 8(d) shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, the
Initial Purchaser shall not be required to contribute any amount in excess
of the amount by which the total price at which the Securities resold by
it in the initial placement of such Securities were offered to investors
exceeds the amount of any damages that the Initial Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The remedies provided for in this
Section 8 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Initial Purchaser, any
person controlling the Initial Purchaser or any affiliate of the Initial
Purchaser or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for
any of the Securities.
9. Termination. The Initial Purchaser may terminate this Agreement by
notice given to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade or other relevant exchanges, (ii) trading of any
securities of the Company shall have been suspended on any exchange or
17
in any over-the-counter market, (iii) a material disruption in securities
settlement, payment or clearance services in the United States or other relevant
jurisdiction shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred an outbreak or escalation of hostilities or acts
of terrorism involving the United States or the declaration by the United States
of a national emergency or war, or any change in financial markets, or any
calamity or crisis that, in the judgment of the Initial Purchaser, is material
and adverse and which, singly or together with any other event specified in this
clause (v), makes it, in the judgment of the Initial Purchaser, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Securities on the
terms and in the manner contemplated in the Final Memorandum.
10. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Initial Purchaser, because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company shall be unable to perform its obligations under this Agreement, the
Company will reimburse the Initial Purchaser for all out-of-pocket expenses
(including the fees and disbursements of its counsel) reasonably incurred by the
Initial Purchaser in connection with this Agreement or the offering contemplated
hereunder.
11. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
18
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
DOCUMENTUM, INC.
By: /s/ Xxx X. Xxxxx
------------------------------------
Name: Xxx X. Xxxxx
Title: Executive Vice President and
Chief Financial Officer
Accepted as of the date hereof
UBS WARBURG LLC
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Executive Director
