$850,000,000
CITRIX SYSTEMS, INC.
Zero Coupon Convertible Subordinated Debentures Due March 16, 2019
PURCHASE AGREEMENT
------------------
March 16, 1999
Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Citrix Systems, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Credit Suisse First Boston Corporation (referred to herein as
the initial "Purchaser" or "CSFBC") U.S.$ 850,000,000 principal amount at
maturity of its Zero Coupon Convertible Subordinated Debentures Due March 22,
2019 (the "Firm Securities") and also proposes to grant to the Purchaser an
option, exercisable from time to time by the Purchaser to purchase an aggregate
of up to an additional $280,000,000 principal amount at maturity ("Optional
Securities") of its Zero Coupon Convertible Subordinated Debentures Due March
22, 2019, each to be issued under an indenture, dated as of March 22, 1999 (the
"Indenture"), between the Company and State Street Bank and Trust Company, N.A.,
as Trustee. The Firm Securities and the Optional Securities which the Purchaser
may elect to purchase pursuant to Section 3 hereof are herein collectively
called the "Offered Securities". The United States Securities Act of 1933, as
amended, is herein referred to as the "Securities Act."
The Holders of the Offered Securities will be entitled to the benefits of a
Registration Rights Agreement of even date herewith among the Company and the
Purchaser (the "Registration Rights Agreement"), pursuant to which the Company
agrees to file a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") registering the resale of
the Offered Securities and the Underlying Shares (as defined below) issuable
upon conversion thereof under the Securities Act.
The Company hereby agrees with the Purchaser as follows:
2. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Purchaser that:
(a) A preliminary offering circular and an offering circular relating to
the Offered Securities to be offered by the Purchaser have been prepared by the
Company. Such preliminary offering circular (the "Preliminary Offering
Circular") and offering circular (the "Offering Circular"), as supplemented as
of the date of this Agreement, together with the documents incorporated by
reference therein, the documents listed in Schedule A hereto and any other
document approved by the Company for use in connection with the contemplated
resale of the Offered
Securities are hereinafter collectively referred to as the "Offering Document".
On the date of this Agreement, the Offering Document does not include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Offering Document based upon written
information furnished to the Company by CSFBC specifically for use therein, it
being understood and agreed that the only such information is that described as
such in Section 7(b) hereof. Except as disclosed in the Offering Document, on
the date of this Agreement, the Company's Annual Report on Form 10-K most
recently filed with the Commission and all subsequent reports (collectively, the
"Exchange Act Reports") which have been filed by the Company with the Commission
or sent to stockholders pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), do not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Such documents, when they were filed with the Commission, conformed
in all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(b) The Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Offering Document; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification.
(c) Each subsidiary of the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Offering Document; and
each subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification;
all of the issued and outstanding capital stock of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable; the Company is the sole record owner (except for directors
qualifying shares), directly or indirectly, of all of the capital stock of each
of its subsidiaries; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects. None of the Company's subsidiaries constitutes a
"significant subsidiary," as such term is defined in Rule 1-02(w) of Regulation
S-X promulgated by the Commission.
(d) The Indenture has been duly authorized by the Company; the Offered
Securities have been duly authorized by the Company; and when the Offered
Securities are delivered and paid for pursuant to this Agreement on each Closing
Date (as defined below), the Indenture will have been duly executed and
delivered by the Company, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description thereof
contained in the Offering Document and the Indenture and such Offered Securities
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(e) All outstanding shares of capital stock of the Company have been duly
authorized, validly issued, fully paid and are nonassessable and conform to the
description thereof contained in the Offering Document.
(f) When the Offered Securities are delivered and paid for pursuant to this
Agreement on each Closing Date (as defined below), such Offered Securities will
be convertible into the shares of Common Stock ("Underlying Shares") of the
Company in accordance with the terms of the Indenture; the Underlying Shares
initially issuable upon conversion of such Offered Securities have been duly
authorized and reserved for issuance upon such conversion and, when issued upon
such conversion, will be validly issued, fully paid and nonassessable; the
outstanding shares of Common
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Stock have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the Offering
Document; and the stockholders of the Company have no preemptive rights with
respect to the Offered Securities or the Underlying Shares. Except as set forth
in the Offering Document, the Company does not have outstanding, and at the
Closing Date the Company will not have outstanding, any options to purchase, or
any rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, (i) any
Offered Securities, or (ii) any shares of capital stock held by it in any
subsidiary, or any such warrants, convertible securities or obligations (except
shares issued or issuable pursuant to employee or director benefit plans after
the date as of which information with respect thereto is given in the Offering
Document).
(g) Except for registration rights that have been waived in writing on or
prior to the date of this Agreement, no holder of securities of the Company has
rights to the registration of any securities of the Company because of the
filing of the Registration Statement.
(h) Except as disclosed in the Offering Document, there are no contracts,
agreements or understandings between the Company and any person that would give
rise to a valid claim against the Company or Purchaser for a brokerage
commission, finder's fee or other like payment.
(i) No consent, approval, authorization, or order of, or filing with, any
governmental agency or body or any court is required for the performance by the
Company of its obligations under this Agreement, the Indenture and the
Registration Rights Agreement, except as may be required under state securities
or Blue Sky laws and except as many be required by Federal securities laws with
respect to the Company's obligations under the Indenture and the Registration
Rights Agreement.
(j) The execution, delivery and performance of this Agreement, the
Indenture, and the Registration Rights Agreement, and the issuance and sale of
the Offered Securities and compliance with the terms and provisions hereof and
thereof will not result in a breach or violation of any of the terms and
provisions of, or constitute a material default under, any statute, any rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement, indenture, mortgage, loan
agreement, note or lease or other instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary is bound or
to which any of the properties of the Company or any such subsidiary is subject,
or the charter or by-laws of the Company or any such subsidiary, and the Company
has full power and authority to authorize, issue and sell the Offered
Securities.
(k) This Agreement has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general equity
principles.
(l) The Registration Rights Agreement has been duly authorized by the
Company and on the Closing Date will have been duly executed and delivered by
the Company, conforms to the description contained in the Offering Document and
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors rights and to general equity principles.
(m) Except as disclosed in the Offering Document, the Company and its
subsidiaries have good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens, encumbrances
and defects that would materially affect the value thereof or materially
interfere with the use made or to be made thereof by them; and except as
disclosed in the Offering Document, the Company and its subsidiaries hold any
leased real or personal property
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under valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(n) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a whole or on
the Company's ability to perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement or the Offered Securities
("Material Adverse Effect").
(o) No labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent that might have a
Material Adverse Effect. Except as disclosed in the Offering Document, the
Company is not a party to any collective bargaining agreement the breach of
which by the Company might have a Material Adverse Effect.
(p) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect. All such intellectual property
rights are valid and enforceable and, to the knowledge of the Company and its
subsidiaries, are not being infringed by any third parties which infringement
would individually or in the aggregate have a Material Adverse Effect. To the
knowledge of the Company, the Company's and its subsidiaries' present use of any
of the intellectual property rights does not infringe on any rights of third
parties or conflict with any asserted rights of others that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect.
(q) Neither the Company nor any of its subsidiaries is in violation of its
charter or by-laws, or in material default (nor has an event occurred which with
notice or lapse of time or both would constitute a default or acceleration) in
the performance of any obligation, agreement or condition contained in any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement or other evidence of indebtedness, lease,
contract or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or their respective properties
is bound or affected and neither the Company nor any of its subsidiaries is in
violation of any judgment, ruling, decree, order, franchise, license or permit
or any statute, rule or regulation applicable to the business or properties of
the Company or any of its subsidiaries, where such violation would have a
Material Adverse Effect.
(r) Neither the Company nor any of its subsidiaries is in violation of any
statute, any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal or release
of hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware of any
pending investigation which might lead to such a claim.
(s) Except as disclosed in the Offering Document, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective
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properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect, or which are otherwise material in the context of the sale of the
Offered Securities; and no such actions, suits or proceedings are threatened or,
to the Company's knowledge, contemplated.
(t) The financial statements included in the Offering Document present
fairly the financial position of the Company and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied on a
consistent basis. No other financial statement or schedules of the Company are
required by the Act, the Exchange Act, the rules and regulations of the
Commission under the Securities Act ("Rules and Regulations") or the rules and
regulations of the Commission under the Exchange Act ("Exchange Act Rules and
Regulations") to be included or incorporated in the Offering Document. Ernst &
Young LLP, who has reported on certain of such financial statements, are
independent accountants as required by the Securities Act, the Rules and
Regulations, the Exchange Act and the Exchange Act Rules and Regulations, as
applicable.
(u) Except as disclosed in the Offering Document, since the date of the
latest audited financial statements included or incorporated by reference in the
Offering Document there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Offering Document, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock, other than the two-for-one stock split authorized by the
Company on March 1, 1999 and payable on or about March 25, 1999 to holders of
record of Common Stock as of March 17, 1999.
(v) The Company is not an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940, as amended
(the "Investment Company Act"); and the Company is not and, after giving effect
to the offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Offering Document, will not be an
"investment company" as defined in the Investment Company Act.
(w) The Company and its affiliates have not taken and will not take,
directly or indirectly any action resulting in a violation of Regulation M
promulgated under the Exchange Act with respect to the transactions contemplated
by this Agreement.
(x) No securities of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as the Offered Securities are listed on any national
securities exchange registered under Section 6 of the Exchange Act or quoted in
a U.S. automated inter-dealer quotation system.
(y) The offer and sale of the Offered Securities in the manner contemplated
by this Agreement will be exempt from the registration requirements of the
Securities Act by reason of Section 4(2) thereof, and, assuming compliance by
the Purchaser with Section 4(d) hereof, the resale by the Purchaser pursuant to
Section 4(b) hereof will be exempt from the registration requirements of the
Securities Act by reason of Rule 144A; and it is not necessary to qualify an
indenture in respect of the Offered Securities under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act") in connection with
the offer, sale, and delivery of the Offered Securities to the Purchaser in the
manner contemplated by this Agreement.
(z) Neither the Company, nor any of its affiliates, nor any person acting
on its or their behalf (i) has, within the six-month period prior to the date
hereof, offered or sold the Offered Securities or any security of the same class
or series as the Offered Securities or (ii) has offered or will offer or sell
the Offered Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act. The
Company has not
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entered and will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except for this Agreement.
(aa) The Company is subject to Section 13 or 15(d) of the Exchange Act.
(bb) There are no issues related to the Company's or any of its
subsidiaries' preparedness for the Year 2000 that (i) are of a character
required to be described or referred to in the Exchange Act Reports and the
Offering Document or (ii) might reasonably be expected to result in any Material
Adverse Effect. All internal computer systems and each Constituent Component (as
defined below) of those systems and all computer-related products and each
Constituent Component of those products owned by the Company and each of its
Subsidiaries will, by December 31, 1999, comply in all material respects with
the Year 2000 Qualification Requirements. "Year 2000 Qualification Requirements"
means that the internal computer systems and each Constituent Component of those
systems and all computer-related products of each Constituent Component of those
products of the Company and each of its subsidiaries (i) have been reviewed to
confirm that they store, process (including sorting and performing mathematical
operations, calculations and computations), input and output data containing
date and information correctly regardless of whether the date contains dates and
times before, on or after January 1, 2000, (ii) have been designed or modified
to ensure date and time entry recognition, calculations that accommodate same
century formulas and multi-century formulas, and will not cause abnormal ending
scenario within the application or generate incorrect values or invalid results
involving such dates, (iii) accurately process any date rollover, and (iv)
accept and respond to year date input in a manner that resolves any ambiguities
as to the century. "Constituent Component" means all software (including
operating systems, programs, packages and utilities), firmware, hardware,
networking components, and peripherals provided as part of the configuration.
(cc) The Company and its subsidiaries have filed all Federal, State, local
and foreign income tax returns which have been required to be filed and have
paid all taxes indicated by said returns and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith. All tax liabilities have been adequately provided for
in the financial statements of the Company.
(dd) The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ee) The Company and its subsidiaries carry, or are covered by, insurance
in such amounts and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar industries.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Company,
U.S.$850,000,000, principal amount at maturity of Firm Securities at a purchase
price of $344.0687 per $1,000 principal amount at maturity thereof.
The Company will deliver against payment of the purchase price the Firm
Securities in the form of one or more permanent global Debentures in definitive
form (the "Firm Global Securities") deposited with the Trustee as custodian for
The Depository Trust Company ("DTC") and registered in the name of Cede & Co.,
as nominee for DTC. Interests in any Firm Global Securities will be held only in
book-entry form through DTC, except in the limited circumstances described in
the Offering Document. Payment for the Firm Global
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Securities shall be made by the Purchaser in Federal (same day) funds by wire
transfer to an account at a bank acceptable to the Purchaser drawn to the order
of the Company at the office of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street
Tower, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, at 10:00 A.M., New York
time, on March 22, 1999, or at such other time not later than seven full
business days thereafter as the Purchaser and the Company determine, such time
being herein referred to as the "First Closing Date", against delivery to the
Trustee as custodian for DTC of the Firm Global Securities representing all of
the Firm Securities. The certificates representing the Firm Global Securities
will be made available for checking at the office of CSFBC at least 24 hours
prior to the First Closing Date.
In addition, upon written notice from the Purchaser given to the Company from
time to time not more than 30 days subsequent to the date of this Agreement, the
Purchaser may purchase all or less than all of up to U.S.$280,000,000 principal
amount at maturity of the Optional Securities at a purchase price of $344.0687
per $1,000 principal amount at maturity thereof. The Company agrees to sell to
the Purchaser the number of Optional Securities specified in such notice and the
Purchaser agrees to purchase such Optional Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time (during the
30 day period set forth above) and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by the Purchaser to the
Company.
Each time for the delivery of and payment for the Optional Securities, being
herein referred to as the "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by the
Purchaser but shall not be later than seven full business days after written
notice of election to purchase Optional Securities is given. The Company will
deliver against payment of the purchase price the Optional Securities being
purchased on each Optional Closing Date in the form of one or more permanent
global Securities in definitive form (each, an "Optional Global Security")
deposited with the Trustee as custodian for DTC and registered in the name of
Cede & Co., as nominee for DTC. Payment for such Optional Securities shall be
made by the Purchaser in Federal (same day) funds by wire transfer to an account
at a bank acceptable to the Purchaser drawn to the order of the Company against
delivery to the Trustee as custodian for DTC of the Optional Global Securities
representing all of the Optional Securities being purchased on such Optional
Closing Date.
4. Representations by Purchaser; Resale by Purchaser. (a) The Purchaser
represents and warrants to the Company that it is an "accredited investor"
within the meaning of Regulation D under the Securities Act.
(b) The Purchaser acknowledges that the Offered Securities have not been
registered under the Securities Act and may not be offered or sold within the
United States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. The Purchaser
represents and agrees that it has not offered or sold, and will not offer or
sell, any Offered Securities, except to qualified institutional buyers within
the meaning of Rule 144A under the Securities Act.
(c) The Purchaser agrees that it and each of its affiliates has not entered
and will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except with the prior written consent of
the Company.
(d) The Purchaser agrees that it and each of its affiliates will not offer
or sell the Offered Securities in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act, including, but not limited to (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. The Purchaser agrees, with respect to resales made in reliance on
Rule 144A of any of the Offered Securities, to deliver either with the
confirmation of such resale or otherwise prior to settlement of such resale a
notice to the
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effect that the resale of such Offered Securities has been made in reliance upon
the exemption from the registration requirements of the Securities Act provided
by Rule 144A.
5. Certain Agreements of the Company. The Company agrees with the Purchaser
that:
(a) The Company will advise CSFBC promptly of any proposal to amend or
supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent. If, at any time prior to the completion
of the resale of the Offered Securities by the Purchaser, any event occurs as a
result of which the Offering Document as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Company promptly
will notify CSFBC of such event and promptly will prepare, at its own expense,
an amendment or supplement which will correct such statement or omission.
Neither CSFBC's consent to, nor its delivery to offerees or investors of, any
such amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any preliminary offering
circular, the Offering Document and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as CSFBC
requests, and the Company will furnish to CSFBC on the date hereof three copies
of the Offering Document. At any time when the Company is not subject to Section
13 or 15(d) of the Exchange Act, the Company will promptly furnish or cause to
be furnished to CSFBC and, upon request of holders and prospective purchasers of
the Offered Securities, to such holders and purchasers, copies of the
information required to be delivered to holders and prospective purchasers of
the Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act (or
any successor provision thereto) in order to permit compliance with Rule 144A in
connection with resales by such holders of the Offered Securities. The Company
will pay the expenses of printing and distributing to the Purchaser all such
documents.
(c) The Company will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for investment
under the laws of such jurisdictions in the United States and Canada as CSFBC
designates and will continue such qualifications in effect so long as required
for the resale of the Offered Securities by the Purchaser, provided that the
Company will not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state.
(d) During the period of two years hereafter, the Company will furnish to
CSFBC, as soon as practicable after the end of each fiscal year, a copy of its
annual report to stockholders for such year; and the Company will furnish to
CSFBC (i) as soon as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the Exchange Act or
mailed to stockholders, and (ii) from time to time, such other information
concerning the Company as CSFBC may reasonably request.
(e) During the period of two years after the last Closing Date, the Company
will, upon request, furnish to CSFBC and any holder of Offered Securities a copy
of the restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the last Closing Date, the Company
will not, and will not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to, resell any of the Offered Securities that have
been reacquired by any of them.
(g) During the period of two years after the last Closing Date, the Company
will not be or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act.
(h) The Company will pay all expenses incidental to the performance of its
obligations under this Agreement, the Indenture, and the Registration Rights
Agreement, including (i) the fees and
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expenses of the Trustee and its professional advisers; (ii) all expenses in
connection with the execution, issue, authentication, packaging and initial
delivery of the Offered Securities, the preparation and printing of this
Agreement, the Registration Rights Agreement, the Offered Securities, the
Indenture, the Offering Document and amendments and supplements thereto, and any
other document relating to the issuance, offer, sale and delivery of the Offered
Securities; (iii) the cost of qualifying the Offered Securities for trading in
The PortalSM Market ("PORTAL") and any expenses incidental thereto; (iv) the
cost of any advertising approved by the Company in connection with the issue of
the Offered Securities, (v) for any expenses (including fees and disbursements
of counsel) incurred in connection with qualification of the Offered Securities
for sale under the laws of such jurisdictions in the United States and Canada as
CSFBC designates and the printing of memoranda relating thereto, (vi) any fees
charged by investment rating agencies for the rating of the Securities, and
(vii) expenses incurred in distributing preliminary offering circulars and the
Offering Document (including any amendments and supplements thereto) to the
Purchaser. Each of the Purchaser and the Company agree to pay for all travel
expenses of its respective officers and employees in connection with the
offering, and to the extent that either of such parties shall have paid for any
such travel expenses incurred by the other's officer's and employees, such party
shall be reimbursed by the other for such expenses. The Company will also pay or
reimburse the Purchaser (to the extent incurred by the Purchaser) for all
expenses in connection with hosting meetings with prospective purchasers of the
Offered Securities from the Purchaser.
(i) In connection with the offering, until CSFBC shall have notified the
Company of the completion of the resale of the Offered Securities, neither the
Company nor any of its affiliates has or will, either alone or with one or more
other persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Offered Securities or attempt to induce
any person to purchase any Offered Securities; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating actual, or
apparent, active trading in, or of raising the price of, the Offered Securities.
(j) For a period of 90 days after the date of the initial offering of the
Offered Securities by the Purchaser, the Company will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, any United
States dollar-denominated debt securities issued or guaranteed by the Company
and having a maturity of more than one year from the date of issue. The Company
will not at any time offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act to cease to be applicable to the offer and
sale of the Offered Securities.
(k) The Company agrees that, without the prior written consent of CSFBC, it
will not, during the period ending 90 days after the date of this Agreement, (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 the Company's common stock, par value $.001 per share (the "Common
Stock") or any securities convertible into or exercisable or exchangeable for
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
Offered Securities under this Agreement or (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 of which CSFBC has been
advised in writing.
(l) The Company will cause to be delivered to the Purchaser an agreement
(in substantially the form attached hereto on Schedule B) dated on or before the
date of this Agreement from the Company's directors, and executive officers and
Microsoft Corporation to the effect that such person or entity will not (A) (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
-9-
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for shares of Common Stock or (ii) enter into any
swap or any 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 (A)(i) or (A)(ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise, (B)
publicly disclose the intention to effect any such transaction, or (C) make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock, in each case, for a period of 90 days after the date of the
Purchase Agreement without the prior written consent of CSFBC (the "Lockup
Agreement").
(m) The Company shall not invest, or otherwise use the proceeds received by
the Company from its sale of the Offered Securities in such a manner as would
require the Company or any of its subsidiaries to register as an investment
company under the 1940 Act.
6. Conditions of the Obligation of the Purchaser. The obligation of the
Purchaser to purchase and pay for the Firm Securities on the First Closing Date
and for the Optional Securities on each Optional Closing Date will be subject to
the accuracy of the representations and warranties on the part of the Company
herein, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) The Purchaser shall have received a letter, dated the date of this
Agreement, of Ernst & Young LLP confirming that they are independent public
accountants within the meaning of the Securities Act and the applicable
published Rules and Regulations and to the effect that:
(i) in their opinion the financial statements examined by them
and included or incorporated by reference in the Offering Document and
in the Exchange Act Reports comply as to form in all material respects
with the applicable accounting requirements of the Securities Act and
the related published Rules and Regulations;
(ii) on the basis of a reading of the latest available interim
financial statements of the Company, inquiries of officials of the
Company who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included or
incorporated by reference in the Offering Document and the
Exchange Act Reports; or
(B) for the period from the closing date of the latest
income statement included or incorporated by reference in the
Offering Document and the Exchange Act Reports to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and previous quarter,
in consolidated net sales, net operating income or in the total
or per share amounts of consolidated net income or in the ratio
of earnings to fixed charges;
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except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Offering Document discloses
have occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Offering Document and the Exchange Act Reports (in
each case to the extent that such dollar amounts, percentages and
other financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) a change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the judgment of CSFBC, be likely to prejudice
materially the success of the proposed issue, sale or distribution of the
Offered Securities, whether in the primary market or in respect of dealings
in the secondary market, or (ii) (A) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company or its
subsidiaries which, in the judgment of a majority in interest of the
Purchasers including CSFBC, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the offering or
the sale of and payment for the Offered Securities; (B) any downgrading in
the rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (C) any suspension or limitation of trading
in securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market; (D) any banking moratorium declared by U.S. Federal or New York
authorities; or (E) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of CSFBC, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the offering or sale of and payment for the
Offered Securities.
(c) The Purchaser shall have received an opinion, dated such Closing
Date, of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the Company ("TH&T"),
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Offering Document; and the Company is
duly qualified to do business as a foreign corporation in good
standing in Florida, Massachusetts, Utah, Washington, California,
Texas, North Carolina, and Illinois;
(ii) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Document; all of the issued and outstanding capital
stock of each subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable, and the capital
stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects;
-11-
(iii) The authorized capital stock of the Company conforms as to
the legal matters to the description thereof contained in the Offering
Document.
(iv) The Indenture has been duly authorized, executed and
delivered; the Offered Securities delivered on such Closing Date have
been duly authorized, executed, authenticated, issued and delivered
and conform to the description thereof contained in the Offering
Document; and the Indenture and the Offered Securities delivered on
such Closing Date constitute valid and legally binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(v) The Offered Securities delivered on such Closing Date are
convertible into the Underlying Shares in accordance with the terms of
the Indenture; the shares of such Underlying Shares initially issuable
upon conversion of the Offered Securities delivered on such Closing
Date have been duly authorized and reserved for issuance upon such
conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; the outstanding shares of such
Underlying Shares have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description thereof
contained in the Offering Document; and the stockholders of the
Company have no preemptive rights under the Company's Certificate of
Incorporation or, to such counsel's knowledge, under any contractual
obligations with respect to the Offered Securities or the Underlying
Shares issuable upon conversion of the Offered Securities;
(vi) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Offering Document, will not be an
"investment company" as defined in the Investment Company Act.
(vii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement and
the Registration Rights Agreement in connection with the issuance or
sale of the Offered Securities by the Company, except such as may be
required under state securities or Blue Sky laws and except for the
order of the Commission declaring the Shelf Registration Statement
effective;
(viii) To such counsel's knowledge, there are no pending
actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Indenture, this Agreement, or the
Registration Rights Agreement, or which are otherwise material in the
context of the sale of the Offered Securities; and, to such counsel's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(ix) The execution, delivery and performance of each of the
Indenture, this Agreement, and the Registration Rights Agreement, and
the issuance and sale of the Offered Securities and compliance with
the terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
or any agreement, indenture, mortgage, loan agreement, note or lease
or other instrument filed as an exhibit to the Company's Annual Report
on Form 10-K for the year ended December 31, 1998, or the charter or
by-laws of the Company or any such subsidiary, and the Company has
full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement;
-12-
(x) The statements in the Offering Document under the captions
"Description of Debentures," "Description of Capital Stock," Transfer
Restrictions" and "Plan of Distribution" insofar as such statements
constitute summaries of the legal matters, documents or proceedings
referred to therein, fairly summarize the matters referred to therein;
(xi) The Offered Securities are properly treated as indebtedness
for United States federal income tax purposes (subject to customary
qualifications, limitations, exceptions and assumptions as set forth
therein);
(xii) The information in the Offering Document under the caption
"Certain United States Federal Income Tax Considerations," while not
purporting to discuss all tax matters relating to the Offered
Securities, based upon the Offered Securities being treated as
indebtedness, sets forth the material federal income tax consequences
of the Offered Securities, subject to the qualifications set forth
therein.
(xiii) The descriptions in the Offering Circular and the
Exchange Act Reports (incorporated by reference into the Offering
Circular) of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present in all
material respects the information;
(xiv) This Agreement has been duly authorized, executed and
delivered by the Company;
(xv) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company, conforms to the description
contained in the Offering Document and constitutes a valid and legally
binding obligation of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors rights and to general equity
principles;
(xvi) It is not necessary in connection with (i) the offer, sale
and delivery of the Offered Securities by the Company to the Purchaser
pursuant to this Agreement or (ii) the resales of the Offered
Securities by the Purchaser in the manner contemplated by this
Agreement, to register the Offered Securities under the Securities Act
or to qualify an indenture in respect thereof under the Trust
Indenture Act;
To the extent that such opinion relates to the laws of the State of New
York, TH&T may rely on the opinion of New York legal counsel reasonably
acceptable to CSFBC.
In addition, such counsel shall state that they have no reason to
believe that the Offering Circular, or any amendment or supplement thereto,
or any Exchange Act Report (incorporated by reference into the Offering
Circular) as of the date hereof and as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; it being understood that such counsel need express no
opinion as to the financial statements or other financial data contained in
the Offering Circular and the Exchange Act Reports.
(d) The Purchaser shall have received from Wilson, Sonsini, Xxxxxxxx
& Xxxxxx, Professional Corporation, counsel for the Purchaser, such opinion
or opinions, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Offered Securities, the Offering Circular,
the exemption from registration for the offer and sale of the Offered
Securities by the Company to the Purchaser and the resales by the Purchaser
as contemplated hereby and other related matters as CSFBC may require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
-13-
(e) The Purchaser shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date, and that, subsequent to the date of the
most recent financial statements in the Offering Document there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Offering Document or as described in such certificate.
(f) The Purchaser shall have received a letter, dated such Closing
Date, of Ernst & Young LLP which meets the requirements of subsection (a)
of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
The Company will furnish the Purchaser with such conformed copies of such
opinions, certificates, letters and documents as the Purchaser reasonably
requests. CSFBC may in its sole discretion waive on behalf of the Purchaser
compliance with any conditions to the obligations of the Purchaser hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless Purchaser, its partners, directors and officers and each person,
if any, who controls such Purchaser within the meaning of Section 15 of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular or the Exchange Act Reports, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, including any losses,
claims, damages or liabilities arising out of or based upon the Company's
failure to perform its obligations under Section 5(a) of this Agreement, and
will reimburse the Purchaser for any legal or other expenses reasonably incurred
by the Purchaser in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by the Purchaser specifically for use
therein, it being understood and agreed that the only such information consists
of the information described as such in subsection (b) below.
(b) The Purchaser will indemnify and hold harmless the Company, its directors
and officers and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, against any losses, claims, damages
or liabilities to which the Company may become subject, under the Securities Act
or the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by the Purchaser specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by the Purchaser consists of the
following information in the Offering Document: the last paragraph at the bottom
of the cover page
-14-
concerning the terms of the offering by the Purchaser, the legend concerning
over-allotments and stabilizing on the inside front cover page, and under the
caption "Plan of Distribution," the second, third, fifth, sixth, and ninth
paragraphs; provided, however, that the Purchaser shall not be liable for any
losses, claims, damages or liabilities arising out of or based upon the
Company's failure to perform its obligations under Section 5(a) of this
Agreement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party except to the
extent that such omission materially prejudices the indemnifying party's ability
to defend such claim; provided, however, that such omission will not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (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 will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written consent
(which consent shall not be unreasonably withheld), 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 and the indemnified party would be entitled thereto pursuant to this
section, 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 45 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.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Purchaser on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Purchaser on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Purchaser on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company bear to the total discounts and commissions received by the
Purchaser from the Company under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Purchaser
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection
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(d), the Purchaser shall not be required to contribute any amount in excess of
the amount by which the total price at which the Offered Securities purchased by
it were resold exceeds the amount of any damages which the Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(e) The obligations of the Company under this Section shall be in addition to
any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls the Purchaser
within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchaser under this Section shall be in addition to any
liability which the Purchaser may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Purchaser set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Purchaser, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If for any reason the purchase of the Offered
Securities by the Purchaser is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Company and the Purchaser pursuant to
Section 7 shall remain in effect, and if any Offered Securities have been
purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Purchaser is not consummated for any reason other than
solely because of the occurrence of any event specified in clause (C), (D) or
(E) of Section 6(b)(ii), the Company will reimburse the Purchaser for all out-
of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if sent to
the Purchaser will be mailed, delivered or telegraphed and confirmed to the
Purchaser at Eleven Madison Avenue, New York, New York 10010-3629, Attention:
Investment Banking Department Transactions Advisory Group, or, if sent to the
Company, will be mailed, delivered or telegraphed and confirmed to it at 0000 XX
0xx Xxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, Attention: President.
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder, except that holders of Offered Securities shall be
entitled to enforce the agreements for their benefit contained in the second and
third sentences of Section 5(b) hereof against the Company as if such holders
were parties thereto.
11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
12. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
-16-
If the foregoing is in accordance with the Purchaser's understanding of our
agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
Purchaser in accordance with its terms.
Very truly yours,
Citrix Systems, Inc.
By: /s/ Xxxxx X. Xxxxxx, Xx.
----------------------------
Title: Chief Financial Officer
-------------------------
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Credit Suisse First Boston Corporation
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Title: Director
-------------------------
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SCHEDULE A
None
-18-
