EXHIBIT 4.7
SIEBEL SYSTEMS, INC.
5 1/2% Convertible Subordinated Notes due September 15, 2006
____________
Purchase Agreement
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September 15, 1999
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
Banc of America Securities LLC,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC,
As representatives of the several Purchasers
Named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
Siebel Systems, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$300,000,000 principal amount of the Convertible Subordinated Notes specified
above, convertible into common stock, par value $0.001 ("Stock"), of the Company
(the "Securities").
The Purchasers and other holders (including subsequent transferees) of
Securities in registered form without coupons will be entitled to the benefits
of the registration rights agreement, to be dated as of the Time of Delivery (as
defined in Section 4) (the "Registration Rights Agreement"), by and among the
Company and the Purchasers, in the form attached hereto as Exhibit A. Pursuant
to the Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission") under the circumstances
set forth therein a shelf registration statement (the "Registration Statement")
pursuant to Rule 415 under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the resale of the Securities and shares of Stock
initially issuable upon conversion of the Securities by holders thereof, and to
use its reasonable efforts to cause such shelf registration statement to be
declared effective as provided therein.
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) (i) A preliminary offering circular, dated September 2, 1999
(the "Preliminary Offering Circular") and an offering circular, dated
September 15, 1999 (the "Offering Circular"), have been prepared in
connection with the offering of the Securities and the shares
of Stock issuable upon conversion thereof. The Preliminary Offering
Circular and the Offering Circular and any amendments or supplements
thereto did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by a Purchaser through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(ii) For purposes of this Agreement, the Company's most recent
Annual Report on Form 10-K and all subsequent documents filed by the
Company with the Commission pursuant to Section 13(a), 13(c) or 15(d) of
the United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or prior to the date of the Offering Circular or any
Time of Delivery hereunder, as the case may be, are hereinafter called the
"Exchange Act Reports". The Exchange Act Reports, when they were or are
filed with the Commission, conformed or will conform in all material
respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, and the
Exchange Act Reports did not and will not, as of their respective dates,
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iii) The information provided by the Company pursuant to Section
5(f) will not, at the date thereof, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(b) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Offering Circular any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Offering
Circular; and, since the respective dates as of which information is given
in the Offering Circular, there has not been any material decrease in the
capital stock or material increase in long-term debt of the Company or any
of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Offering Circular;
(c) The Company and its subsidiaries have good and marketable title
in fee simple to all material real property and good and marketable title
to all material personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as are described
in the Offering Circular or such as do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries;
and any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
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(d) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own or lease its properties and
conduct its business as described in the Offering Circular, and has been
duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(e) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the shares of Stock initially issuable upon conversion
of the Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions
of the Securities and the Indenture (as defined in Section I(f)), will be
duly and validly issued, fully paid and non-assessable and will conform to
the description of the Stock contained in the Offering Circular; and 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 (except for directors' qualifying shares and except as
otherwise set forth in the Offering Circular) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms and entitled to the benefits provided by the indenture to be dated
as of September 15, 1999 (the "Indenture") between the Company and Chase
Manhattan Bank and Trust Company, National Association, as Trustee (the
"Trustee"), under which they are to be issued, which will be substantially
in the form previously delivered to you; the Indenture has been duly
authorized and, when executed and delivered by the Company and the Trustee,
the Indenture will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indenture will conform to the
descriptions thereof in the Offering Circular and will be in substantially
the form previously delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations G, T, U, and X of the Board of Governors of the
Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might reasonably have been expected to cause or result
in stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;
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(i) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Registration
Rights Agreement, the Indenture and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
issue and sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except (i) as required pursuant to the
Registration Rights Agreement, (ii) for the approval of the Stock issuable
upon conversion of the Securities for quotation on the Nasdaq National
Market, and, (iii) such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
the Purchasers;
(j) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
material lease or other material agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(k) The statements set forth in the Offering Circular under the
captions "Description of the Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the caption "Underwriting", insofar as
they purport to describe the provisions of the documents referred to
therein, fairly present in all material respects such matters and documents
(to the same extent as would be required if the Offering Circular were a
prospectus included in a Registration Statement of the Company on Form S-1
under the Securities Act);
(l) Other than as set forth in the Offering Circular, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries or
on the ability of the Company to consummate the transactions contemplated
herein (a "Material Adverse Effect"); and, to the Company's knowledge, no
such proceedings are threatened by governmental authorities or by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities
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Act) as securities which are listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system;
(n) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(o) The Company is not, and after giving effect to the offering and
sale of the Securities, will not be, an "investment company", as such term
is defined in the United States Investment Company Act of 1940, as amended
(the "Investment Company Act");
(p) Neither the Company, nor any person acting on its behalf has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities
Act (except that no representation or warranty is made with respect to the
Purchasers or any persons acting on their behalf);
(q) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to any
person any Securities, or any securities of the same or a similar class as
the Securities, other than Securities offered or sold to the Purchasers
hereunder. The Company will take reasonable precautions designed to insure
that any offer or sale, direct or indirect, in the United States or to any
U.S. person (as defined in Rule 902 under the Securities Act) of any
Securities or any substantially similar security issued by the Company,
within six months subsequent to the date on which the distribution of the
Securities has been completed (as notified to the Company by ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co.), is made under restrictions and other circumstances reasonably
designed not to affect the status of the offer and sale of the Securities
in the United States and to U.S. persons contemplated by this Agreement as
transactions exempt from the registration provisions of the Securities Act
(except that no representation or warranty is made with respect to the
Purchasers or any persons acting on their behalf);
(r) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Purchasers, or in connection with the
initial resale of the Securities by the Purchasers in accordance with this
Agreement, to register the Securities under the Securities Act or to
qualify an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act");
(s) The Securities have been designated PORTAL eligible securities in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc.;
(t) The Company has all requisite corporate power to enter into this
Agreement and the Registration Rights Agreement. This Agreement has been
and, as of the Time of Delivery, the Registration Rights Agreement will
have been, duly authorized, executed and delivered by the Company and upon
such execution by the Company (assuming the due authorization, execution
and delivery of such agreements by the other parties thereto) this
Agreement and the Registration Rights Agreement will constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with the terms hereof or thereof, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles, and except as the enforcement of indemnification and
contribution provisions hereof and thereof may be limited by applicable
law;
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(u) Except as disclosed in the Offering Circular, there are no
persons with registration rights or other similar rights to have any
securities of the Company (other than the Securities and the shares of
Stock issuable upon conversion thereof) registered under any Securities Act
registration statement;
(v) None of the holders of outstanding shares of capital stock of the
Company and no other person has or will have any preemptive or other rights
to purchase, subscribe for or otherwise acquire (i) the shares of Stock to
be issued upon conversion of the Securities or any rights to such shares
(other than those granted by the holders of the Securities) or (ii) as a
result of or in connection with the transactions contemplated by the
Indenture, this Agreement or the Registration Rights Agreement, any other
capital stock of the Company or rights thereto;
(w) Certain of the Company's directors and executive officers and
shareholders of the Company, in each case as listed on Exhibit B-1, will
have entered into a written agreement with the Company in the form of
Exhibit B hereto (each such agreement, a "Lock-up Agreement") by the Time
of Delivery, and executed originals of each Lock-up Agreement shall have
been delivered to you by such time;
(x) To the Company's knowledge, KPMG LLP, who have certified certain
financial statements of the Company and its subsidiaries, are independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder;
(y) The Company has reviewed its operations and those of its
subsidiaries and its and their interfaces with third-party systems to
evaluate the extent to which the business or operations of the Company or
any of its subsidiaries will be affected by the Year 2000 Problem. As a
result of such review, the Company represents and warrants that the
disclosure in the Offering Circular relating to the Year 2000 Problem is
accurate and complies in all material respects with the rules and
regulations under the Securities Act (to the same extent as would be
required if the Offering Circular were a prospectus included in a
Registration Statement of the Company on Form S-1 under the Securities
Act). The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical systems
of any kind will not, in the case of dates or time periods occurring after
December 31, 1999, function at least as effectively as in the case of dates
or time periods occurring prior to January 1, 2000;
(z) (i) The Company owns, or possesses adequate rights to use, all
material trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, domain names and copyrights necessary for the
conduct of its business and, except as set forth in the Offering Circular,
has not received any notice of any claim of conflict with any such rights
of others except as would not have a Material Adverse Effect; and (ii) to
the Company's knowledge, neither the Company nor any of its subsidiaries
have infringed or are infringing any trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, domain names or
copyrights, which infringement could reasonably be expected to result in
any Material Adverse Effect;
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(aa) (i) The Company owns or possesses adequate rights to use, all
material patents necessary for the conduct of its business; (ii) to the
Company's knowledge, no valid United States patent is or would be infringed
by the activities of the Company, except as would not have a Material
Adverse Effect; (iii) there are no actions, suits or judicial proceedings
pending relating to patents or proprietary information to which the Company
is a party or of which any property of the Company is subject, and, to the
knowledge of the Company, no actions, suits or judicial proceedings are
threatened in writing by governmental authorities or, except as set forth
in the Offering Circular, others, in each case except as would not result
in any Material Adverse Effect; and (iv) except as set forth in the
Offering Circular or as would not result in any Material Adverse Effect,
the Company has not been notified in writing that the Company is infringing
or otherwise violating the patents or other intellectual property of others
and is not aware of any rights of third parties to any of the Company's
material patent applications, license patents or licenses that in any case
could affect materially the use thereof by the Company;
(bb) The Company carries, or is covered by, insurance as is customary
for companies similarly situated and engaged in similar businesses in
similar industries; and
(cc) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which might be expected to
have a Material Adverse Effect.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.25% of the principal amount thereof, plus accrued interest, if any,
from September 21, 1999 to the Time of Delivery hereunder, the principal amount
of Securities set forth opposite the name of such Purchaser in Schedule I
hereto.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A;
(b) It is an institution that is an "accredited investor" within the
meaning of Rule 501 under the Securities Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. (a) The Securities will be represented by one or more definitive
global Securities in book-entry form which will be deposited by or on behalf of
the Company with The Depository Trust Company ("DTC") or its designated
custodian. The Company will deliver the Securities to the Purchasers, against
payment by the Purchasers of the purchase price therefor by wire transfer to the
Company of Federal (same day) funds, by causing DTC to credit the Securities to
the account of the
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Purchasers at DTC. The Company will cause the certificates representing the
Securities to be made available to the Purchasers for checking at least twenty-
four hours prior to the Time of Delivery (as defined below) at the office of DTC
or its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, 7:00 a.m., San Francisco time, on September 21,
1999 or such other time and date as the Purchasers and the Company may agree
upon in writing. Such time and date for delivery of the Securities is herein
called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(j) hereof, will be delivered at such time and date at the
offices of ▇▇▇▇▇▇ Godward LLP, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery. A meeting will be held at the Closing
Location at 2:00 p.m., San Francisco time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make no
amendment or any supplement to the Offering Circular which shall be reasonably
disapproved by you promptly after reasonable notice thereof; and to furnish you
with copies thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such U.S. jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such U.S. jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process or taxation in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report in the Offering Circular, and
any amendment or supplement containing amendments to the financial statements
covered by such report, signed by the accountants, and additional copies thereof
in such quantities as you may from time to time reasonably request, and if, at
any time prior to the expiration of nine months after the date of the Offering
Circular, any event shall have occurred as a result of which the Offering
Circular 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
when such Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend or
supplement the Offering Circular, to notify you and upon your request to prepare
and furnish without charge to each Purchaser and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Offering Circular or a supplement to the Offering Circular which will correct
such statement or omission or effect such compliance;
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(d) During the period beginning from the date of the Offering Circular and
continuing until the date 90 days after the date of the Offering Circular, not
to offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially similar to the
Securities or the Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities other than (i) pursuant to
employee stock option plans and employee stock purchase plans existing on, or
upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement, or upon conversion of the
Securities, or (ii) the issuance by the Company of shares of the Stock as
consideration for acquisitions of businesses occurring after the date of the
Offering Circular, provided that each recipient of shares pursuant to this
clause (ii) agrees that all such shares remain subject to restrictions
substantially similar to those contained in this subsection; and that the
Company will use reasonable efforts to cause each person who has entered into a
Lock-up Agreement to comply therewith, will not grant any waivers or consents to
non-compliance therewith and will enforce its rights under each such agreement,
in each case unless and to the extent that it shall have obtained your prior
consent;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, for the benefit of holders from time to time of Securities, to
furnish at its expense, upon request, to holders of Securities and prospective
purchasers of securities information (the "Additional Issuer Information")
satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the
Securities Act;
(g) To use its reasonable efforts to cause the Securities to be eligible
for the PORTAL trading system of the National Association of Securities Dealers,
Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail;
(i) During a period of five years from the date of the Offering Circular,
provided any of the Securities are then outstanding, to furnish to you copies of
all reports or other communications (financial or other) furnished to
stockholders of the Company, and to deliver to you (i) as soon as they are
available, copies of any reports and financial statements furnished to or filed
with the Commission or any securities exchange on which the Securities or any
class of securities of the Company is listed, provided that any reports,
financial statements or other communications that are available by ▇▇▇▇▇ need
not be furnished; and (ii) such additional information concerning the business
and financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission);
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(j) During the period of two years after the Time of Delivery, the Company
will not, and will not permit any of its "affiliates" (as defined in Rule 144
under the Securities Act) to, resell any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any of them;
(k) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Offering Circular
under the caption "Use of Proceeds";
(l) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities; and
(m) To use its reasonable efforts to list, subject to notice of issuance,
the shares of Stock issuable upon conversion of the Securities on the Nasdaq
National Market.
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
issue of the Securities and the shares of Stock issuable upon conversion of the
Securities and all other expenses in connection with the preparation, printing
and filing of the Preliminary Offering Circular and the Offering Circular and
any amendments and supplements thereto and the mailing and delivering of copies
thereof to the Purchasers and dealers; (ii) the cost of producing the Blue Sky
and Legal Investment Memoranda, if any, in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under state securities laws
as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Purchasers in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Securities; (v) the cost of
preparing the Securities; (vi) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; (vii) any cost incurred in
connection with the designation of the Securities for trading in PORTAL and the
listing of the shares of Stock issuable upon conversion of the Securities on the
Nasdaq National Market; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Purchasers will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Purchasers hereunder, as to the Securities to
be delivered at the Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Purchasers, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with respect to
such matters as you may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them to
pass upon such matters;
-11-
(b) ▇▇▇▇▇▇ Godward LLP, counsel for the Company, shall have furnished to
you their written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Delaware,
with full corporate power and authority to own or lease its properties and
conduct its business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; and the shares of Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with the
provisions of the Securities and the Indenture, will be duly and validly
issued and fully paid and non-assessable, and will conform to the
description of the Stock contained in the Offering Circular under the
caption "Description of Capital Stock";
(iii) To such counsel's knowledge, the Company has been duly
qualified as a foreign corporation and is in good standing as a foreign
corporation authorized to do business under the laws of each other
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on the Company;
(iv) Each Significant Subsidiary (as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act) of the Company listed in the
Company's most recent Annual Report on Form 10-K has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation; and all of the issued shares of capital
stock of each Significant Subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and (except for directors'
qualifying shares and except as otherwise set forth in the Offering
Circular) are owned of record directly or indirectly by the Company;
(v) To such counsel's knowledge and other than as set forth in the
Offering Circular, there are no legal or governmental proceedings pending
to which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is subject that would be
required to be described in the Offering Circular, to the same extent
required if the Offering Circular were a prospectus included in a
Registration Statement of the Company on Form S-1 under the Securities Act;
(vi) This Agreement and the Registration Rights Agreement have been
duly authorized, executed and delivered by the Company;
(vii) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms and entitled to the benefits provided by the Indenture, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Securities and the Indenture conform to
the descriptions thereof contained in the Offering
-12-
Circular under the caption "Description of the Notes" (such counsel being
entitled to rely on the opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ as to matters of New
York law);
(viii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery by
the Trustee, constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (such counsel being entitled to rely on the opinion of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ as to matters of New York law);
(ix) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument listed by the Company as an
exhibit to the Company's Annual Report on Form 10-K for the year ended
December 31, 1998, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the Company or
any statute or to such counsel's knowledge any rule or regulation of any
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties (except for the securities or
Blue Sky laws of the various states as to which such counsel need not
express any opinion) or, to such counsel's knowledge, any order of any
court entered against the Company or any of its subsidiaries;
(x) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required for
the offer and sale of the Securities or the consummation by the Company of
the transactions contemplated by this Agreement, the Registration Rights
Agreement or the Indenture, except such as may be required under the
Securities Act and Blue Sky laws of the various states in connection with
registration, pursuant to the Registration Rights Agreement, of the
Securities and the shares of Stock issuable upon conversion of the
Securities and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Purchasers;
(xi) The statements set forth in the Offering Circular under the
captions "Description of the Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the captions "Certain United States
Federal Income Tax Consequences", insofar as they purport to describe the
provisions of the laws and documents referred to therein, fairly present in
all material respects such legal matters and documents (to the same extent
as would be required if the Offering Circular were a prospectus included in
a Registration Statement of the Company on Form S-1 under the Securities
Act);
(xii) No registration of the Securities or the shares of Stock issued
upon conversion of the Securities under the Securities Act, and no
qualification of an indenture under the Trust Indenture Act with respect to
the Securities, is required for the offer and sale by the Company and the
offer and initial resale of the Securities by the Purchasers in the manner
contemplated by this Agreement assuming (i) the accuracy of, and compliance
with, the Purchasers'
-13-
representations and agreements contained in Section 3 of the Purchase
Agreement, (ii) the accuracy of the representations of the Company set
forth in Sections 1(m), 1(n), 1(p) and 1(q) of the Purchase Agreement and
(iii) the Securities are sold pursuant to the Offering Circular; and
(xiii) The Company is not an "investment company", as such term is
defined in the Investment Company Act;
Subject to the final sentence of this paragraph, such counsel shall
also state that they have no reason to believe that the Offering Circular
and any further amendments or supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements, including
supporting schedules and other financial data derived from accounting
records and included therein, as to which such counsel need express no
opinion) contained as of its date or contains as of such Time of Delivery
an untrue statement of a material fact or omitted or omits, as the case may
be, to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Such counsel will be required to provide the statement described in this
paragraph only if counsel for the Purchasers is concurrently providing a
similar statement to the Purchasers pursuant to Section 7(a).
The opinion of ▇▇▇▇▇▇ Godward LLP described in this Section 7(b) shall
be rendered to you at the request of the Company and shall so state
therein. In providing the statement with respect to the matters covered in
the last paragraph of Section 7(b), ▇▇▇▇▇▇ Godward LLP may state that its
statement and belief are based upon its participation in the preparation,
together with the Purchasers, Purchaser's counsel and the Company's
independent accountants, of the Offering Circular and any amendments and
supplements thereto and review and discussion of the contents thereof, but
are without independent check or verification except as specified;
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at such Time of Delivery, KPMG LLP shall have furnished to
you a letter or letters, dated the respective dates of delivery thereof, in form
and substance satisfactory to you, to the effect set forth in Annex I hereto;
(d) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Circular, the effect of which, in any such case described in clause (i) or (ii),
is in the judgment of the Purchasers so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in this Agreement and in
the Offering Circular;
-14-
(e) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the Nasdaq National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular;
(g) The Securities shall have been designated for trading on PORTAL;
(h) Each Lock-up Agreement shall have been duly executed and delivered to
the Company and you, and there shall have occurred no breach of any Lock-up
Agreement;
(i) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed, subject to notice of issuance, on the Nasdaq National
Market; and
(j) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request.
8. (a) 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 otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Offering Circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall 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 or omission or alleged omission made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein.
(b) Each Purchaser will 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
-15-
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Circular or the Offering Circular, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact or necessary to make the statements therein 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 any
Preliminary Offering Circular or the Offering Circular or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such Purchaser through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
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 Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits 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 (or actions in respect
thereof), as well as any other relevant
-16-
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 underwriting discounts and
commissions received by the Purchasers, in each case as set forth in the
Offering Circular. 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 on the one hand or the Purchasers on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include 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 subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to
investors were offered to investors 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
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 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; and the obligations of the
Purchasers under this Section 8 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 officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by
any Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
-17-
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of ▇▇▇▇▇▇▇, Sachs &
Co., ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular,
-18-
Attention: Director, Legal Affairs; provided, however, that any notice
to a Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Purchaser at its address set forth
in its Purchasers' Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
-19-
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.
Very truly yours,
SIEBEL SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer and
Senior Vice President, Finance and
Administration
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
BANC OF AMERICA SECURITIES LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
By: /s/ ▇▇▇▇▇▇▇, Sachs & Co.
-------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Purchasers
-20-
SCHEDULE I
Principal Amount of
Securities to be
Purchaser Purchased
--------- ---------
▇▇▇▇▇▇▇, Sachs & Co............................. $180,000,000
Banc of America Securities LLC.................. 60,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC...................... 60,000,000
------------
Total........................................... $300,000,000
============
ANNEX I
Pursuant to Section 7(c) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable published
rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included in the Offering
Circular comply as to form in all material respects with the applicable
requirements of the Exchange Act and the related published rules and
regulations;
(iii) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such five
fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering Circular, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular are not in conformity with generally
accepted accounting principles applied on the basis substantially
consistent with the basis for the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements
referred to in clause (A) and any unaudited income statement data and
balance sheet items included in the Offering Circular and referred to
in clause (B) were not determined on a basis substantially consistent
with the basis for the audited consolidated financial statements
included in the Offering Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Offering Circular) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Offering
Circular except in each case for changes, increases or decreases which
the Offering Circular discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs
(iii) and (iv) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Offering Circular, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
I-2
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
[SEE EXHIBIT 4.8]
EXHIBIT B
Siebel Systems, Inc.
Lock-Up Agreement
Dated as of September 15, 1999
▇▇▇▇▇▇▇, Sachs & Co.
Banc of America Securities LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Siebel Systems, Inc. - Lock-Up Agreement
----------------------------------------
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into a Purchase Agreement on behalf of the
several Purchasers named in Schedule I to such agreement (collectively, the
"Purchasers"), with Siebel Systems, Inc., a Delaware corporation (the
"Company"), providing for an offering of Convertible Subordinated Notes (the
"Notes") of the Company that will be convertible into shares of the Common Stock
of the Company (the "Common Stock").
In consideration of the agreement by the Purchasers to offer and sell the
Notes, and of other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the undersigned agrees that, during the period
beginning from the date of the final Offering Circular covering the offering of
the Notes and continuing to and including the date 90 days after the date of
such final Offering Circular (the "Lock-Up Period"), the undersigned will not
offer, sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise dispose of, or exercise any registration rights with
respect to, any shares of Common Stock, or any options or warrants to purchase
any shares of Common Stock, or any securities convertible into, exchangeable for
or that represent the right to receive shares of Common Stock, whether now owned
or hereinafter acquired, owned directly by the undersigned (including holding as
a custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission (the
"SEC") (collectively the "Undersigned's Shares").
The foregoing restriction is expressly agreed to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or which
reasonably could be expected to lead to or result in a sale or disposition of
the Undersigned's Shares even if such shares would be disposed of by someone
other than the undersigned. Such prohibited hedging or other transactions would
include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with respect to any
of the Undersigned's Shares or with respect to any security that includes,
relates to, or derives any significant part of its value from such shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, (iii) with the prior written consent of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on behalf of
the Purchasers or, (iv) during the final 30 days of the Lock-Up Period, with the
prior written consent of the Company, in its sole discretion, the undersigned
may transfer up to ten percent (10%) of the Undersigned's Shares (including for
the purpose of this computation all shares of Common Stock owned, directly or
indirectly, by the undersigned, together with all shares of Common Stock
underlying options to purchase Common Stock held by the undersigned that are
outstanding as of the date hereof (whether vested or unvested)) without
restriction pursuant to this Lock-Up Agreement. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, if the undersigned is a corporation, the corporation may transfer the
capital stock of the Company to any wholly-owned subsidiary of such corporation;
provided, however, that in any such case, it shall be a condition to the
-------- -------
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Agreement and there shall be no further transfer of such capital stock except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value. The undersigned now has, and, except
as contemplated by clause (i), (ii), (iii) or (iv) above, or as contemplated by
the immediately preceding sentence, for the duration of this Lock-Up Agreement
will have, good and marketable title to the Undersigned's Shares, free and clear
of all liens, encumbrances, and claims whatsoever. The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of the Undersigned's Shares
except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Purchasers are relying
upon this Lock-Up Agreement in proceeding toward consummation of the offering.
The undersigned further understands that this Lock-Up Agreement is irrevocable
and shall be binding upon the undersigned's heirs, legal representatives,
successors, and assigns.
Very truly yours,
________________________________________
Exact Name of Shareholder
________________________________________
Authorized Signature
________________________________________
Title
-2-
EXHIBIT B-1
List of persons to sign
Lock-Up Agreements:
------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Consulting
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. House
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇