1
EXHIBIT 4.10
HMT TECHNOLOGY CORPORATION
$200,000,000
5-3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2004
PURCHASE AGREEMENT
January 15, 1997
SALOMON BROTHERS INC
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX & XXXXX LLC
XXXXXXXXX, XXXXXXXX & COMPANY LLC
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
HMT Technology Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the persons listed on Annex I hereto, as initial
purchasers (the "Initial Purchasers"), $200,000,000 principal amount of its
5-3/4% Convertible Subordinated Notes due 2004 (the "Firm Securities"). The
Company also proposes to grant to you an option to purchase up to $30,000,000
additional principal amount of such Notes to cover over-allotments, if any (the
"Option Securities" and, together with the Firm Securities, the "Securities").
The Securities will be convertible into shares of Common Stock, par value $0.001
per share (the "Common Stock"), of the Company at the conversion price set forth
herein. The Securities are to be issued under an indenture (the "Indenture") to
be dated as of January 15, 1997, between the Company and State Street Bank and
Trust Company of California, N.A., as trustee (the "Trustee").
The sale of the Securities to you will be made without registration of the
Securities or the Common Stock issuable upon conversion thereof under the
Securities Act of 1933, as amended (the "Act"), in reliance upon the exemption
from the registration requirements of the Act provided by Section 4(2) thereof.
You have advised the Company that you will make an offering of the Securities
purchased by you hereunder in accordance with Section 4 hereof on the terms set
forth in the Final Memorandum (as defined below), as soon as you deem advisable
after this Agreement has been executed and delivered.
In connection with the sale of the Securities, the Company has prepared a
preliminary offering memorandum, dated January 3, 1997 (the "Preliminary
Memorandum"), and a final offering memorandum, dated January 15, 1997 (the
"Final Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum
sets forth certain information concerning the Company, the Securities and the
Common Stock issuable upon conversion thereof. The Company hereby confirms that
it has authorized the use of the Preliminary Memorandum and the Final Memorandum
in connection
2
with the offering and resale by the Initial Purchasers of the Securities.
Any references herein to the Preliminary Memorandum or the Final Memorandum
shall be deemed to include all exhibits thereto and all documents incorporated
by reference therein that were filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), on or before the date and time that this
Agreement is executed and delivered by the parties hereto (the "Execution
Time"); and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Final Memorandum shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
Execution Time that is incorporated by reference therein.
The holders of the Securities or the Common Stock issuable upon conversion
thereof will be entitled to the benefits of the Registration Agreement (the
"Registration Agreement") to be dated as of January 15, 1997, between the
Company and the Initial Purchasers.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, the Initial Purchasers as set forth below in this Section 1.
(a) Each of the Preliminary Memorandum and the Final Memorandum as
of its respective date did not, and the Final Memorandum (as the same may have
been amended or supplemented) as of the Closing Date (as defined in Section 3
below) will not, contain 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; provided,
however, that the Company makes no representations or warranties as to the
information contained in or omitted from the Preliminary Memorandum or the Final
Memorandum in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of the Initial Purchasers specifically
for inclusion in the Preliminary Memorandum or the Final Memorandum (or any
amendment or supplement thereof or thereto). All documents incorporated by
reference in the Preliminary Memorandum or the Final Memorandum that were filed
under the Exchange Act on or before the Execution Time complied, and all such
documents that are filed under the Exchange Act after the Execution Time and on
or before the Closing Date will comply, in all material respects with the
applicable requirements of the Exchange Act and the rules thereunder. No stop
order or other similar order or decree preventing the use of the Preliminary
Memorandum or the Final Memorandum, or any order or decree asserting that the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act has been issued and remains in effect and, to the best
of the Company's knowledge, no proceedings for that purpose have been commenced
or are contemplated.
(b) The information provided by the Company pursuant to Section 5(h)
hereof will not, at the date thereof, contain 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.
(c) Each of the Company and its subsidiary, HMT FSC Ltd., a Barbados
West Indies Company (the "Subsidiary"), has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate power
and authority to own its properties and conduct its business as described in the
Final
-2-
3
Memorandum, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts material
business, except where failure to be so qualified or to be in good standing
would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and the Subsidiary, taken as a whole; to the best of the Company's knowledge, no
proceeding has been instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and authority or
qualification; each of the Company and the Subsidiary is in possession of and
operating in compliance with all authorizations, licenses, certificates,
consents, orders and permits from state, federal and other regulatory
authorities which are material to its business, all of which are valid and in
full force and effect; neither the Company nor the Subsidiary is in violation of
its respective charter or bylaws or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any material
bond, debenture, note or other evidence of indebtedness, or in any material
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which the Company or the Subsidiary
is a party or by which either of them or any of their properties may be bound;
and neither the Company nor the Subsidiary is in violation of any law, order,
rule, regulation, writ, injunction, judgment or decree of any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its properties. The Company does not own or control,
directly or indirectly, any corporation, association or other entities other
than the Subsidiary, which is not a "Significant Subsidiary" (as such term is
defined in Regulation S-X of the Act).
(d) All the outstanding shares of capital stock of the Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and all outstanding shares of capital stock of the Subsidiary are
owned of record by the Company directly free and clear of any security
interests, claims, liens or encumbrances.
(e) The Company's authorized equity capitalization is as set forth
in the Final Memorandum; the Securities and the Common Stock conform as to legal
matters in all material respects to the descriptions thereof contained in the
Final Memorandum; the holders of the outstanding shares of capital stock of the
Company are not entitled to any preemptive right, right of first refusal or
other similar rights to subscribe for the Securities or the shares of Common
Stock issuable upon conversion thereof; and the shares of Common Stock initially
issuable upon conversion of the Securities have been duly and validly authorized
and reserved for issuance upon such conversion and, when issued upon conversion,
will be validly issued, fully paid and nonassessable, and not subject to any
preemptive right, right of first refusal or other similar rights. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale or transfer of the
Securities except as may be required under the Act. Except as disclosed in the
Memorandum, the Company does not have outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted
-3-
4
and exercised thereunder, set forth in the Final Memorandum, accurately and
fairly presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(f) The Company has the corporate power and authority to enter into
this Agreement, the Indenture and the Registration Agreement and to issue, sell
and deliver the Securities. This Agreement has been duly authorized, executed
and delivered by the Company, and each of the Indenture and the Registration
Agreement has been duly authorized by the Company, and from and after the
Closing Date will be duly authorized and executed by the Company, and, assuming
due authorization, execution and delivery by the Initial Purchasers or the
Trustee, as the case may be, constitutes, or, in the case of the Indenture and
the Registration Agreement, from and after the Closing Date will constitute, a
legal, valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect and general
principles of equity, whether enforcement is considered in a proceeding in
equity or at law and the discretion of the court before which any proceeding
therefor may be brought); and the Securities have been duly authorized by the
Company and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial Purchasers
pursuant to this Agreement, will constitute legal, valid and binding obligations
of the Company, entitled to the benefits of the Indenture (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting creditors' rights generally from time
to time in effect and general principles of equity, whether enforcement is
considered in a proceeding in equity or at law and the discretion of the court
before which any proceeding therefor may be brought).
(g) Neither the issue and sale of the Securities, the execution and
delivery of this Agreement, the Indenture or the Registration Agreement, the
performance by the Company of its obligations under this Agreement, the
Indenture, the Registration Agreement or the Securities, nor the fulfillment of
the terms hereof will (i) conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws of the Company or
the Subsidiary, (ii) result in a breach or violation of any of the terms of any
material agreement, mortgage, deed of trust, lease, franchise, license,
indenture or other agreement or instrument to which either the Company or the
Subsidiary is a party or by which either of them is bound (including without
limitation the Revolving Credit Agreement (as defined below)), or (iii) result
in a breach or violation of any applicable statute, rule or regulation
applicable to the Company or the Subsidiary or any judgment, order or decree
applicable to the Company or the Subsidiary of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
the Company or the Subsidiary, as the case may be.
(h) No consent, approval, authorization or order of or qualification
with any court, government or governmental agency or body having jurisdiction
over the Company, or over any of its properties or operations, is necessary in
connection with the consummation by the Company of the transactions herein
contemplated and the performance by the Company of its obligations under this
Agreement, the Indenture, the Registration Agreement or the Securities.
-4-
5
(i) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is quoted on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of Securities
Dealers, Inc. is contemplating terminating such registration or listing.
(j) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
without taking account of any exemption arising out of the number of holders of
the Company's securities.
(k) The Firm Securities and the Option Securities, as the case may
be, satisfy the requirements set forth in Rule 144A(d)(3) under the Act for
securities to be eligible for trading pursuant to Rule 144A.
(l) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Initial Purchasers under this Agreement or in
connection with the initial resale of such Securities by the Initial Purchasers
in accordance with this Agreement to register the Securities under the Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
(m) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D under the Act ("Regulation D")) of the Company has directly, or
through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Act) that is
currently or will be integrated with the sale of the Securities in a manner that
would require the registration of the Securities or the Common Stock issuable
upon conversion thereof under the Act or (ii) engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offering of the Securities.
(n) None of the Company, its affiliates or any person acting on
behalf of the Company or its affiliates has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Act ("Regulation S"))
with respect to the Securities, and the Company and its affiliates and any
person acting on its or their behalf have complied with the offering
restrictions requirement of Regulation S.
(o) The Company is subject to the reporting requirements of Section
13 or Section 15(d) of the Exchange Act.
(p) The Company has agreed to permit the Securities to be designated
PORTAL eligible securities, will pay the requisite fees related thereto and has
provided all necessary information to the National Association of Securities
Dealers, Inc. in order to ensure that the Securities are designated PORTAL
eligible securities.
-5-
6
(q) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the Company
(except as contemplated by this Agreement).
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Initial Purchasers, and each of the Initial Purchasers
agrees, severally and not jointly, to purchase from the Company, the Firm
Securities at a purchase price of 97.0% of the principal amount thereof, plus
accrued interest, if any, from January 21, 1997, to the Closing Date. Each
Security will be convertible at the option of the holder into shares of Common
Stock of the Company at a conversion price of $23.75 per share, subject to
adjustment as specified in the Final Memorandum. Delivery of the certificates
for the Securities, and payment therefor, shall be made as provided in Section 3
hereof.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option (the "Option") to the Initial Purchasers to purchase the Option
Securities at a purchase price of 97.0% of the principal amount thereof, plus
accrued interest, if any, from January 21, 1997, to the settlement date for the
Option Securities. The Option may be exercised only to cover over-allotments in
the sale of the Firm Securities by the Initial Purchasers. The Option may be
exercised in whole or in part at any time (but not more than once) on or before
the 30th day after the date of the Final Memorandum upon written or telegraphic
notice to the Company setting forth the principal amount of Option Securities as
to which the Initial Purchasers are exercising the Option and the settlement
date therefor. Delivery of certificates for the Option Securities, and payment
therefor, shall be made as provided in Section 3 hereof.
(c) The Initial Purchasers shall notify the Company of the
completion of the sale of the Securities by the Initial Purchasers.
3. Delivery and Payment. Delivery of and payment for the Firm Securities
and Option Securities (if the Option provided for in Section 2(b) hereof shall
have been exercised on or before the second business day prior to the Closing
Date) shall be made at 7:00 A.M., San Francisco time, on January 21, 1997, or
such later date as the Initial Purchasers and the Company shall agree (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Initial
Purchasers against payment by the Initial Purchasers of the purchase price
thereof to or upon the order of the Company by certified or official bank check
or wire transfer and payable in same day funds. Delivery of the Securities shall
be made at such location as the Initial Purchasers shall reasonably designate at
least one business day in advance of the Closing Date and payment for the
Securities shall be made at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx 00000. Certificates for
the Securities shall be registered in such names and in such denominations as
the Initial Purchasers may request not less than two full business days in
advance of the Closing Date.
-6-
7
The Company agrees to have the Securities available for inspection,
checking and packaging by the Initial Purchasers in New York, New York, not
later than 1:00 P.M., San Francisco time, on the business day prior to the
Closing Date.
If the Option is exercised after the second business day prior to
the Closing Date, the Company will deliver (at the expense of the Company) to
the Initial Purchasers, at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation, 650 Page Mill Road, Palo Alto 94304, on the date
specified by the Initial Purchasers (which shall be within two business days
after exercise of the Option), certificates for the Option Securities in such
names and denominations as the Initial Purchasers shall have requested against
payment of the purchase price thereof to or upon the order of the Company by
certified or official bank check or wire transfer and payable in same day funds.
If settlement for the Option Securities occurs after the Closing Date, the
Company will deliver to the Initial Purchasers on the settlement date for the
Option Securities, and the obligation of the Initial Purchasers to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering of Securities; Restrictions on Transfer. (a) Each Initial
Purchaser severally represents and warrants to and agrees with the Company that
(i) such Initial Purchaser has not solicited and will not solicit any offer to
buy or offer to sell the Securities by means of any form of general solicitation
or general advertising (within the meaning of Regulation D) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act or,
with respect to Securities sold in reliance on Regulation S, by means of any
directed selling efforts and (ii) it has solicited and will solicit offers to
buy the Securities only from, and has offered and will offer, sell or deliver
the Securities only to, (A) persons who it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to it that
each such account is a qualified institutional buyer, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A, (B) persons who it reasonably
believes to be institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D), and who provide to it a letter
substantially in the form of Exhibit A hereto or (C) persons to whom, and under
circumstances which, it reasonably believes offers and sales of Securities may
be made without registration of the Securities under the Act in reliance upon
Regulation S thereunder. Each Initial Purchaser also severally represents and
warrants and agrees that such Initial Purchaser has offered and will offer to
sell the Securities only to, and has solicited and will solicit offers to buy
the Securities only from, persons that in purchasing such Securities will be
deemed to have represented and agreed as provided under "Investor
Representations and Restrictions on Resale" in Exhibit B hereto.
(b) Each Initial Purchaser severally represents and warrants to and
agrees with the Company that (i) it has not offered or sold, and will not offer
or sell any Securities to persons in the United Kingdom, except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or as agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an
offer to the public in the
-7-
8
United Kingdom, within the meaning of the Public Offers of Securities
Regulations 1995 (the "Regulations"), (ii) it has complied and will comply with
all applicable provisions of the Financial Services Xxx 0000 and the Regulations
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on and will only issue or pass on to any person in the United Kingdom any
document received by it in connection with the issue of the Securities if that
person is of a kind described in Article 11(3) of the Financial Services Xxx
0000 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
such document may otherwise lawfully be issued or passed on.
5. Agreements. The Company agrees with the Initial Purchasers that:
(a) The Company will furnish to the Initial Purchasers, without
charge, during the period mentioned in paragraph (c) below, as many copies of
the Final Memorandum and any supplements and amendments thereof or thereto as
the Initial Purchasers may reasonably request. The Company will pay the expenses
of printing or other production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum,
other than by filing documents under the Exchange Act that are incorporated by
reference therein, without prior consent of the Initial Purchasers. Prior to the
completion of the sale of the Securities by the Initial Purchasers, the Company
will not file any document under the Exchange Act that is incorporated by
reference in the Final Memorandum unless the Company has furnished you a copy
for your review prior to filing and will not file any such document to which you
reasonably and timely object.
(c) The Company will promptly advise the Initial Purchasers when,
prior to the completion of the sale of the Securities by the Initial Purchasers,
any document filed under the Exchange Act which is incorporated by reference in
the Final Memorandum shall have been filed with the Securities and Exchange
Commission (the "Commission").
(d) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers, any event occurs as a result of which the
Final Memorandum as then amended or supplemented would 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, or if it shall be necessary to amend or supplement the
Final Memorandum (including any document incorporated by reference therein which
was filed under the Exchange Act) to comply with the Exchange Act or the rules
thereunder or other applicable law, the Company promptly will notify the Initial
Purchasers of the same and, subject to paragraph (b) of this Section 5, will
prepare and provide to the Initial Purchasers pursuant to paragraph (a) of this
Section 5 an amendment or supplement which will correct such statement or
omission or effect such compliance and, in the case of such an amendment or
supplement which is to be filed under the Exchange Act and which is incorporated
by reference in the Final Memorandum, will file such amendment or supplement
with the Commission.
-8-
9
(e) The Company will cooperate with you and your counsel in
endeavoring to obtain the qualification of the Securities for sale under the
laws of such jurisdictions as the Initial Purchasers may reasonably designate,
will maintain such qualifications in effect so long as reasonably required for
the sale of the Securities and will arrange for the determination of the
legality of the Securities for purchase by institutional investors; provided,
however, that the Company shall not be required to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. The Company will promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect to (i)
the suspension of the qualification of the Securities for sale in any
jurisdiction or (ii) the initiation or threatening of any proceeding for such
purpose.
(f) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D) of the Company will solicit any offer to buy or offer or sell
the Securities by means of any form of general solicitation or general
advertising (within the meaning of Regulation D).
(g) None of the Company, its affiliates nor any person acting on
behalf of the Company or its affiliates will engage in any directed selling
efforts with respect to the Securities within the meaning of Regulation S, and
the Company, its affiliates and each such person acting on its or their behalf
will comply with the offering restrictions requirement of' Regulation S.
(h) The Company shall, during any period in the three years after
the Closing Date in which the Company is not subject to Section 13 or 15(d) of
the Exchange Act, make available, upon request, to any holder of the Securities
or Common Stock issued upon conversion thereof in connection with any sale
thereof and any prospective purchaser of Securities or Common Stock issued upon
conversion thereof from such holder the information specified in Rule 144A(d)(4)
under the Act.
(i) The Company will not, and will not permit any of its affiliates
(as defined in Rule 501(b) of Regulation D) to, resell any Securities or Common
Stock issued upon conversion thereof which constitute "restricted securities"
under Rule 144 that have been reacquired by any of them.
(j) Neither the Company nor any affiliate (as defined in Rule 501(b)
of Regulation D) will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) the offering of
which security will be integrated with the sale of the Securities in a manner
that would require the registration of the Securities or Common Stock issuable
upon conversion thereof under the Act.
(k) The Company shall include information substantially in the form
set forth in Exhibit B in each Final Memorandum.
-9-
10
(l) The Company shall use its best efforts in cooperation with the
Initial Purchasers to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(m) The Company will not, for a period of 90 days following the
Execution Time without prior written consent of Salomon Brothers, Inc (which
consent shall not be unreasonably withheld), offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the offering of, any
debt securities issued or guaranteed by the Company, any preferred stock or
Common Stock of the Company or any security convertible into or exchangeable for
preferred stock or Common Stock (other than the Securities); provided, however,
that the Company may issue securities upon the exercise of outstanding warrants
and may grant options and performance shares and issue and sell Common Stock
pursuant to any employee stock option, stock incentive or purchase plan, stock
ownership plan or dividend reinvestment plan of the Company in effect at the
Execution Time.
(n) The Company will apply the net proceeds from the issuance of
Notes substantially as set forth in the Final Memorandum.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Firm Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time and the Closing Date, to the accuracy of the statements of
the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The Company shall have furnished to the Initial Purchasers the
opinion of Xxxxxx Godward LLP, counsel for the Company, dated the Closing Date,
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 its properties
and conduct its business as described in the Final Memorandum, and, to the
best of such counsel's knowledge, is duly qualified as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material
properties or conducts material business, except where failure to be so
qualified or to be in good standing would not have a material adverse
effect on the financial condition, earnings, operations or business of the
Company. To the best of such counsel's knowledge, the Company does not own
or control, directly or indirectly, any corporation, association or other
entity other than the HMT FSC Ltd.;
(ii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum; the holders of the outstanding shares of
capital stock of the Company are not entitled to any preemptive right or,
to the best of such counsel's knowledge, any right of first refusal or
other similar rights to subscribe for the Securities or the shares of
Common Stock issuable upon conversion thereof; and the shares of Common
Stock initially issuable upon conversion of the Securities have been duly
and validly authorized and reserved for
-10-
11
issuance upon such conversion and, when issued upon conversion, would be
validly issued, fully paid and nonassessable, and not subject to any
preemptive right, or, to the best of such counsel's knowledge any
registration right, right of first refusal or other similar rights;
(iii) the Company has the corporate power and authority to
enter into this Agreement, the Indenture and the Registration Agreement
and to issue, sell and deliver the Securities;
(iv) each of this Agreement, the Indenture and the
Registration Agreement has been duly authorized, executed and delivered by
the Company, and, assuming due authorization, execution and delivery by
the Initial Purchasers or the Trustee, as the case may be, constitutes a
legal, valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally from time to time in
effect and general principles of equity, whether enforcement is considered
in a proceeding in equity or at law and the discretion of the court before
which any proceeding therefor may be brought); and the Securities have
been duly authorized by the Company and, when executed and authenticated
in accordance with the provisions of the Indenture and delivered to and
paid for by the Initial Purchasers pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company, entitled
to the benefits of the Indenture (subject, as to enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting creditors' rights generally from time to time in
effect and general principles of equity, whether enforcement is considered
in a proceeding in equity or at law and the discretion of the court before
which any proceeding therefor may be brought);
(v) no consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body
having jurisdiction over the Company, or over any of its properties or
operations, is necessary in connection with the issuance of the Securities
by the Company and the performance by the Company at the Closing of its
obligations under the Indenture, the Registration Agreement or the
Securities, except such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the Initial Purchasers (as to which such counsel need
express no opinion);
(vi) neither the issue and sale of the Securities by the
Company, the execution and delivery by the Company of the Indenture or the
Registration Agreement, the performance by the Company of its obligations
under this Agreement, the Indenture, the Registration Agreement or the
Securities, nor the fulfillment of the terms hereof (a) conflict with,
result in a breach or violation of, or constitute a default under the
certificate of incorporation or bylaws of the Company, (b) constitute a
default or breach of any agreement, mortgage, deed of trust, lease,
franchise, license, indenture or other agreement or instrument that would
be required to be filed with the Commission in connection with a
registration statement of the Company on Form S-1 if filed as of the date
of such opinion, or (c) result in a
-11-
12
breach or violation of any (i) applicable statute, rule or regulation, or
(ii) any judgment, order or decree known to such counsel to be applicable
to the Company of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company;
(vii) it is not necessary in connection with the offer, sale
and delivery of the Securities in the manner contemplated by this
Agreement to register the Securities under the Act or to qualify the
Indenture under the Trust Indenture Act;
(viii) to the best of such counsel's knowledge, except as set
forth in the Final Memorandum, there are no legal or governmental
proceedings pending or threatened against the Company or the Subsidiary
which are of a type that would be required to be described in the Final
Memorandum if the Final Memorandum were a prospectus included in a
registration statement of the Company on Form S-1 under the Act;
(ix) the Firm Securities and the Option Securities, as the
case may be, satisfy the requirements set forth in Rule 144A(d)(3) under
the Act for securities to be eligible for trading pursuant to Rule 144A;
(x) each document incorporated by reference into the Final
Memorandum (except for financial statements, supporting schedules and
other financial and statistical data derived therefrom as to which such
counsel need not express any opinion), complied as to form when filed with
the Commission in all material respects with the Exchange Act and the
rules and regulations of the Commission thereunder;
(xi) the terms and provisions of the capital stock of the
Company and the terms and provisions of the Securities and Indenture are
accurate and consistent in all material respects when compared with the
description thereof contained in the Final Memorandum;
(xii) the statements in the Final Memorandum under the
captions "Description of Convertible Notes," "Description of Capital
Stock" and "Certain Federal Income Tax Considerations" insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, have been reviewed by such counsel and
fairly present the information that would be called for with respect to,
and are fair summaries of, such legal matters, documents and proceedings
if the Final Memorandum were a prospectus included in a registration
statement of the Company on Form S-1 under the Act; and
(xiii)to such counsel's knowledge, except as set forth in the
Final Memorandum, no holders of Common Stock or other securities of the
Company have registration rights with respect to securities of the Company
and all such rights, because of the filing of the registration statement
required to be filed pursuant to the Registration Agreement have, with
respect thereto, been waived.
-12-
13
Such counsel shall also state that, in the course of
preparation by the Company of the Final Memorandum, such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Initial Purchasers and representatives of
counsel for the Initial Purchasers, at which conferences the contents of the
Final Memorandum and related matters were reviewed and discussed and, although
such counsel has not independently verified, the accuracy, completeness or
fairness of the statements contained in the Final Memorandum (other than as set
forth in clauses (xi) and (xii) above), no facts have come to the attention of
such counsel that would lead such counsel to believe that the Final Memorandum
(other than the financial statements including supporting schedules and other
financial and statistical information contained therein, as to which such
counsel need not express any comment), as of its date or on the Closing Date,
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
State of California or the United States or the Delaware General Corporation Law
to the extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials.
(b) The Initial Purchasers shall have received from Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, counsel for the Initial Purchasers,
such opinion or opinions, dated the Closing Date, with respect to the issuance
and sale of the Securities, the Indenture, the Final Memorandum (together with
any amendment or supplement thereof or thereto) and other related matters as the
Initial Purchasers may reasonably 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.
(c) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Final Memorandum, any amendment or supplement to the Final
Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied pursuant to this agreement at or prior to the
Closing Date; and
(ii) since the date of the most recent financial
statements incorporated by reference in the Final Memorandum (exclusive of
any amendment or supplement thereof or thereto), there has been no
material adverse change in the condition
-13-
14
(financial or other), earnings, business or properties of the Company,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereof or thereto).
(d) At the Closing Date, Coopers & Xxxxxxx L.L.P. shall have
furnished to the Initial Purchasers a letter or letters, dated as of the Closing
Date, in form and substance satisfactory to the Initial Purchasers, confirming
that they are independent accountants within the meaning of the Exchange Act and
the applicable published rules and regulations thereunder and stating in effect
that: Coopers & Xxxxxxx L.L.P. addressed to the Initial Purchasers, dated the
Closing Date, confirming that they are independent certified public accountants
with respect to the Company, within the meaning of the Act and the Rules and
Regulations and based upon the procedures described in their letter delivered to
you concurrently with the execution of this Agreement (herein called the
"Original Letter"), but carried out to a date not more than five business days
prior to the Closing Date, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date; and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of such letter, or to reflect the availability of more recent financial
statements, data or information. The letter shall not disclose any change or any
development involving a prospective change, in or affecting the business or
properties of the Company which, in your sole judgment, makes it impracticable
or inadvisable to proceed with the sale of the Securities as contemplated by the
Final Memorandum. The Original Letter from Coopers & Xxxxxxx L.L.P. shall be
addressed to or for the use of the Initial Purchasers in form and substance
satisfactory to the Initial Purchasers and shall (i) represent, to the extent
true, that they are independent certified public accountants with respect to
the Company within the meaning of the Act and the applicable published Rules and
Regulations, (ii) set forth their opinion with respect to their examination of
the consolidated balance sheet of the Company as of March 31, 1996 and related
consolidated statements of operations, shareholders' equity, and cash flows for
the twelve (12) months ended Xxxxx 00, 0000, (xxx) state that Coopers & Xxxxxxx
L.L.P. has performed the procedures set out in the Statement on Auditing
Standards No. 71 ("SAS 71") for a review of interim financial information and
providing the report of Coopers & Xxxxxxx L.L.P. as described in SAS 71 on the
financial statements for each of the quarters in the two quarter period ended
September 30, 1996 (the "Quarterly Financial Statements"), (iv) state that in
the course of such review, nothing came to their attention that leads them to
believe that any material modifications need to be made to any of the Quarterly
Financial Statements in order for them to be in compliance with generally
accepted accounting principles consistently applied across the periods
presented, (v) state that nothing came to their attention that caused them to
believe that the pro forma financial statements contained in the Final
Memorandum do not comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X, or that the pro forma
adjustments thereto have not been properly applied to the historical amounts in
the completion of such statements, and (vi) address other matters agreed upon by
Coopers & Xxxxxxx L.L.P. and you. In addition, you shall have received from
Coopers & Xxxxxxx L.L.P. a letter addressed to the Company and made available to
you for the use of the Initial Purchasers stating that their review of the
Company's system of internal accounting controls to the extent they deemed
necessary in establishing the scope of their examination
-14-
15
of the Company's consolidated financial statements as of March 31, 1996, did not
disclose any weaknesses in internal controls that they considered to be material
weaknesses.
(e) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum (exclusive of any amendment
or supplement thereof or thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (d) of this
Section 6 or (ii) any change, or any development involving a prospective change,
in or affecting the business or properties of the Company the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the reasonable
judgment of the Initial Purchasers, to make it impractical or inadvisable to
market the Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(f) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(g) The Company shall have furnished to the Initial Purchasers a
certificate of the Company, signed on behalf of the Company by the Chairman of
the Board and Chief Financial Officer of the Company, to the effect that the
signers of such certificate have carefully examined the Final Memorandum, any
amendment or supplement to the Final Memorandum and this Agreement and that, and
the Initial Purchasers shall be satisfied that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of the Execution Time
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the Execution
Time;
(ii) As of the date of this Agreement and at all times
subsequent thereto up to the delivery of such certificate, the Final Memorandum
did not and does not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances in which made, not misleading, and, since the date of this
Agreement, there has occurred no event necessary to be set forth in an amended
or supplemented Final Memorandum in order to make any statements in such Final
Memorandum, in light of the circumstances under which made, not misleading,
which has not been so set forth; and
(iii) Subsequent to the respective dates as of which
information is given in each Memorandum, there has not been (A) any material
adverse change in the business, properties or assets described or referred to in
the Final Memorandum or in the condition (financial or otherwise), earnings,
operations or business of the Company or any change which would adversely affect
the power or ability of the Company to perform its obligations under this
Agreement, the Indenture, the Registration Agreement or the Securities, (B) any
change in the capital stock or outstanding indebtedness of the Company which is
material to the Company, except for the issuance
-15-
16
of the Securities pursuant hereto, or (C) any loss or damage (whether or not
insured) to the property of the Company which has been sustained or will have
been sustained which has a material adverse effect on the condition (financial
or otherwise), earnings, operations, business or business prospects of the
Company.
(h) The Company shall have furnished to the Initial Purchasers
satisfactory evidence that the execution, delivery and performance by the
Company of this Agreement, the Indenture and the Registration Agreement, and the
issuance of the Securities, will not result in breach of or default under that
certain Amended and Restated Revolving Credit Agreement dated as of August 28,
1996 among the Company, the lenders party thereto and The First National Bank of
Boston, as administrative agent, as amended through the Closing Date (the
"Revolving Credit Agreement").
(i) At the Execution Time, the Company shall have furnished to the
Initial Purchasers letters substantially in the form of Exhibit C hereto from
the executive officers and directors of the Company, and from Summit Partners,
L.P. and Hitachi Metals, Ltd., in which each such person agrees, for a period of
ninety (90) days after the last date of original issuance of the Securities to
the Initial Purchasers, not to offer to sell, contract to sell or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to any shares of
Common Stock, any options or warrants to purchase any shares of Common Stock or
any securities convertible into or exchangeable for shares of Common Stock, now
owned or hereafter acquired directly by such person or with respect to which
such person has or hereafter acquires the power of disposition, otherwise than
(i) as to any individual, during his or her lifetime or upon death, by gift,
will or intestacy, to his or her immediate family or to a trust the
beneficiaries of which are exclusively such person and/or a member or members
of such person's immediate family; provided any donee or transferee thereof
agrees in writing to be bound by such agreement, (ii) as a distribution to
partners or stockholders of such person, provided that the distributees thereof
agree in writing to be bound by the terms of such agreement or (iii) with the
prior written consent of Salomon Brothers Inc.
(j) Prior to the Closing Date, the Company shall have furnished to
the Initial Purchasers such further information, certificates and documents as
the Initial Purchasers may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchasers and counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Initial Purchasers. Notice of such cancellation shall be given to the Company in
writing or by telephone or telefax confirmed in writing.
-16-
17
The documents required to be delivered by this Section 6 shall
be delivered at the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional
Corporation, counsel for the Initial Purchasers, at 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000 on the Closing Date.
7. Reimbursement of Initial Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 6 hereof (other than
paragraph (b) of Section 6) is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by the
Initial Purchasers, the Company will reimburse the Initial Purchasers upon
demand for all reasonable and duly documented out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
it in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each of the Initial Purchasers, the directors, officers,
employees and agents of each of the Initial Purchasers and each person who
controls any of the Initial Purchasers within the meaning of either the Act or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the Act,
the Exchange Act or other Federal or state statutory law or regulation, at
common law 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 a material fact contained in or
incorporated by reference into the Preliminary Memorandum, the Final Memorandum
or any information provided by the Company to any holder or prospective
purchaser of Securities pursuant to Section 5(h), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any reasonable legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; 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 any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial Purchasers
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company, its directors, its officers, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
such Initial Purchaser, but only with reference to written information furnished
to the Company by or on behalf of such Initial Purchaser specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum, or in any
amendment thereof or supplement thereto. This indemnity agreement will be in
addition to any liability which each Initial Purchaser may otherwise have. The
Company acknowledges that the statements set forth in the last paragraph of the
cover page and under the heading "Plan of Distribution" in the Preliminary
Memorandum and the Final Memorandum constitute the only information furnished in
writing by or on behalf of the Initial Purchasers for inclusion in the
Preliminary Memorandum or the Final Memorandum.
-17-
18
(c) Promptly after receipt by an indemnified party under this
Section 8 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 this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there are legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after notice
of the institution of such action or (iv) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and each Initial Purchaser,
severally and not jointly, agrees to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the Company and such Initial Purchaser may be subject in such proportion
as is appropriate to reflect the relative benefits received by the Company and
by such Initial Purchaser from the offering of the Securities; provided,
however, that in no case shall such Initial Purchaser be responsible for any
amount in excess of the purchase discount or commission applicable to the
Securities purchased by such Initial
-18-
19
Purchaser hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Initial
Purchasers, severally and not jointly, shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and of each of the Initial Purchasers in connection with
the statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses), and benefits received by each such Initial Purchaser shall be deemed
to be equal to the total purchase discounts and commissions, in each case as set
forth on the cover page of the Final Memorandum. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or such Initial Purchaser. The
Company and each Initial Purchaser, severally and not jointly, agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation that does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of such Initial Purchasers shall have the same rights to contribution as
such Initial Purchaser, and each person who controls the Company within the
meaning of either the Act or the Exchange Act and each officer and director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
9. Substitution of Initial Purchasers. If any Initial Purchaser or Initial
Purchasers shall fail to take up and pay for the number of Firm Securities
agreed by such Initial Purchaser or Initial Purchasers to be purchased hereunder
upon tender of such Firm Securities in accordance with the terms hereof, and if
the aggregate number of Firm Securities that such defaulting Initial Purchaser
or Initial Purchasers so agreed but failed to purchase does not exceed 5% of the
aggregate principal amount of the Firm Securities, the remaining Initial
Purchasers shall be obligated, severally in proportion to their respective
commitments hereunder, to take up and pay for the Firm Securities that such
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase.
If any Initial Purchaser or Initial Purchasers so defaults and the
aggregate number of Firm Securities that such defaulting Initial Purchaser or
Initial Purchasers agreed but failed to take up and pay for exceeds 5% of the
aggregate principal amount of the Firm Securities, the remaining Initial
Purchasers shall have the right, but shall not be obligated, to take up and pay
for (in such proportions as may be agreed upon among them) the Firm Securities
which the defaulting Initial Purchaser or Initial Purchasers so agreed but
failed to purchase. If such remaining Initial Purchasers do not, at the Closing
Date, take up and pay for the Firm Securities which the defaulting Initial
Purchaser or Initial Purchasers so agreed but failed to purchase, the Closing
Date shall be postponed for twenty-four hours (including nonbusiness hours) to
allow the remaining Initial Purchasers the privilege of substituting within such
twenty-four hour period (including non-business hours) another purchaser or
purchasers (which may include any nondefaulting Initial Purchaser) reasonably
satisfactory to the Company. If no such purchaser or purchasers shall have been
substituted as aforesaid by such postponed Closing Date, the Closing Date may,
at the option of the Company, be postponed for a
-19-
20
further twenty-four hours, if necessary, to allow the Company the privilege of
finding another purchaser or purchasers, reasonably satisfactory to you, to
purchase the Firm Securities which the defaulting Initial Purchaser or Initial
Purchasers so agreed but failed to purchase. If it shall be arranged for the
remaining Initial Purchasers or substituted purchasers to take up the Firm
Securities of the defaulting Initial Purchaser or Initial Purchasers as provided
in this Section , (i) the Company shall have the right to postpone the time of
delivery for a period of not more than seven full business days, in order to
effect whatever changes may thereby be made necessary in the Memorandum, or in
any other documents or arrangements, and the Company agrees promptly to prepare
and deliver any amendments or supplements to the Memorandum or other such
documents which may thereby be made necessary, and (ii) the respective number of
Firm Securities to be purchased by the remaining Initial Purchasers and
substituted purchasers shall be taken as the basis of their obligation to
purchase hereunder. If the remaining Initial Purchasers shall not take up and
pay for all such Firm Securities so agreed to be purchased by the defaulting
Initial Purchaser or Initial Purchasers or substitute another purchaser or
purchasers as aforesaid, and the Company shall not find or shall not elect to
seek another purchaser or purchasers for such Firm Securities as aforesaid, then
this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section , the Company shall not be liable to any
Initial Purchaser (except as provided in Sections 4(j), 5 and 8 hereof) and no
Initial Purchaser (other than an Initial Purchaser who shall have failed,
otherwise than for some reason permitted under this Agreement, to purchase the
principal amount of Firm Securities agreed by such Initial Purchaser to be
purchased hereunder, which Initial Purchaser shall remain liable to the Company
and the other Initial Purchasers for damages, if any, resulting from such
default) shall be liable to the Company (except to the extent provided in
Sections 5 and 8 hereof).
The term "Initial Purchaser" in this Agreement shall include any person
substituted for a Initial Purchaser under this Section .
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchasers, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or the National Association of Securities Dealers Automated Quotation
National Market, (ii) trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market shall have been suspended or limited or
minimum prices shall have been established on either of such Exchange or Market,
(iii) a banking moratorium shall have been declared either by Federal,
California or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the reasonable judgment of the
Initial Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereof or thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of
-20-
21
the Initial Purchasers set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Initial Purchasers or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Initial Purchaser, will be mailed,
delivered or telefaxed and confirmed to Salomon Brothers Inc in writing, at
Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, telefax no.: (212)
783-2274, Attention of Legal Department, with a copy to Xxxxxx Xxxxxxx Xxxxxxxx
& Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, telefax no.:
(000) 000-0000, Attention of Xxxx X. Xxxx; or, if sent to the Company, will be
mailed, delivered or telefaxed and confirmed to it in writing at 0000 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, telefax no.: (000) 000-0000, Attention of
Xxxxx X. Xxxxxx, Chief Financial Officer, with a copy to Xxxxxx Godward LLP,
Five Palo Alto Square, 0000 Xx Xxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, telefax
no.: (000) 000-0000, Attention of Xxxxx X. Xxxxx.
13. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and no other
person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
-21-
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the Initial Purchasers.
Very truly yours,
HMT TECHNOLOGY CORPORATION
/s/ Xxxxx X. Xxxxxx
By:_________________________________________
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX & XXXXX LLC
XXXXXXXXX, XXXXXXXX & COMPANY LLC
c/o Salomon Brothers Inc
By: SALOMON BROTHERS INC
Xxxxxx Xxxxxx
By:___________________________________
Name: Xxxxxx Xxxxxx
Title: Director
-22-
23
ANNEX I
INITIAL PURCHASERS
Initial Purchaser Principal Amount
----------------- ----------------
SALOMON BROTHERS INC $100,000,000
ALEX. XXXXX & SONS INCORPORATED 30,000,000
XXXXXXXXX & XXXXX LLC 30,000,000
XXXXXXXXX, XXXXXXXX & COMPANY LLC 40,000,000
------------
Total $200,000,000
24
EXHIBIT A
Form of Investment Letter for
Accredited Investors
SALOMON BROTHERS INC
ALEX. XXXXX & SONS INCORPORATED
XXXXXXXXX & XXXXX LLC
XXXXXXXXX, XXXXXXXX & COMPANY LLC
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
In connection with our proposed purchase of $__________ aggregate
principal amount of the 5-3/4% Convertible Subordinated Notes due 2004 (the
"Securities") of HMT Technology Corporation, a Delaware corporation (the
"Company"), we confirm that:
1. We understand that the Securities and the Common Stock issuable upon
conversion thereof have not been registered under the Securities Act of 1933
(the "Securities Act"), and may not be sold except as permitted in the following
sentence. We understand and agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, (x) that such Securities
are being offered only in a transaction not involving any public offering within
the meaning of the Securities Act, (y) that if we should resell, pledge or
otherwise transfer such Securities or the Common Stock issuable upon conversion
thereof within three years after the date of the original issuance of the
Securities (or such shorter period as may then be applicable under the
Securities Act) or within three months after we cease to be an Affiliate (within
the meaning of Rule 144A under the Securities Act) of the Company, such
Securities or the Common Stock issuable upon conversion thereof may be resold,
pledged or transferred only (i) to the Company, (ii) so long as such Securities
or the Common Stock issuable upon conversion thereof are eligible for resale
pursuant to Rule 144A under the Securities Act ("Rule 144A"), to a person whom
we reasonably believe is a "qualified institutional buyer" (as defined in Rule
144A) ("QIB") that purchases for its own account or for the account of a QIB to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the certificate for the Security),
(iii) in an offshore transaction in accordance with Regulation S under the
Securities Act (as indicated by the box checked by the transferor on the
Certificate of Transfer on the reverse of the certificate for the Security),
(iv) to an institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (as indicated by the box
checked by the transferor on the Certificate of Transfer on the reverse of the
certificate for the Security) that has certified to the Company and the Trustee
(or, in the case of Common Stock, the Transfer Agent) that it is such an
accredited investor and is acquiring the
25
Securities or the Common Stock issuable upon conversion thereof for investment
purposes and not for distribution, (v) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable) under
the Securities Act, or (vi) pursuant to an effective registration statement
under the Securities Act, in each case in accordance with any applicable
securities laws of any state of the United States, and we will notify any
purchaser of the Securities or Common Stock issuable upon conversion thereof
from us of the above resale restrictions, if then applicable. We further
understand that in connection with any transfer of the Securities or Common
Stock issuable upon conversion thereof by us, the Company and the Trustee (or,
in the case of Common Stock, the Transfer Agent) may request, and if so
requested we will furnish, such certificates, legal opinions and other
information as they may reasonably require to confirm that any such transfer
complies with the foregoing restrictions.
2. We are able to fend for ourselves in the transactions contemplated by
this Offering Memorandum, we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are acting
are each able to bear the economic risk of our or its investment and can afford
the complete loss of such investment.
3. We understand that the minimum principal amount of Securities that may
be purchased by an institutional accredited investor is $250,000.
4. We understand that the Company and Salomon Brothers Inc, Alex. Xxxxx &
Sons Incorporated, Xxxxxxxxx & Xxxxx LLC and Xxxxxxxxx, Xxxxxxxx & Company LLC,
as the initial purchasers of the Securities ("Initial Purchasers"), and others
will rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements and we agree that if any of the acknowledgments,
representations and warranties deemed to have been made by us by our purchase of
Securities, for our own account or for one or more accounts as to each of which
we exercise sole investment discretion, are no longer accurate, we shall
promptly notify the Company and the Initial Purchasers.
5. We are acquiring the Securities purchased by us for investment
purposes, and not for distribution, for our own account or for one or more
accounts as to each of which we exercise sole investment discretion and we are
or such account is an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act).
6. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
-2-
26
EXHIBIT B
NOTICE TO INVESTORS
Offers and Sales by the Initial Purchasers
The Convertible Notes and the Common Stock issuable upon conversion
thereof have not been registered under the Securities Act and may not be offered
or sold in the United States or to, or for the account or benefit of, U.S.
persons except in accordance with an applicable exemption from the registration
requirements thereof. Accordingly, the Convertible Notes are being offered and
sold only (1) in the United States to qualified institutional buyers ("Qualified
Institutional Buyers") under Rule 144A under the Securities Act and to a limited
number of other institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) ("Institutional Accredited
Investors") in a private sale exempt from the registration requirements of the
Securities Act, and (2) outside the United States to non-U.S. persons ("foreign
purchasers") in reliance upon Regulation S under the Securities Act. Each
Institutional Accredited Investor that is a purchaser of Convertible Notes from
the Initial Purchasers will be required to sign a certificate in the form of
Exhibit A to the Purchase Agreement. Each foreign purchaser that is a purchaser
of Convertible Notes from an Initial Purchaser (an "Initial Foreign Purchaser")
will be required to sign a certificate in the form provided by the Initial
Purchasers.
Investor Representations and Restrictions on Resale
Each purchaser of the Convertible Notes will be deemed to have represented
and agreed as follows:
(1) it is acquiring the Convertible Notes for its own account or for
an account with respect to which it exercises sole investment discretion,
and that it or such account is a Qualified Institutional Buyer, an
Institutional Accredited Investor acquiring the Convertible Notes for
investment purposes and not for distribution or a foreign purchaser
outside the United States;
(2) it acknowledges that the Convertible Notes and the Common Stock
issuable upon conversion thereof have not been registered under the
Securities Act and may not be sold except as permitted below;
(3) it understands and agrees (x) that such Convertible Notes are
being offered only in a transaction not involving any public offering
within the meaning of the Securities Act, and (y) that (A) if within three
years (or such shorter period as may then be applicable under the
Securities Act regarding the holding period for securities under Rule
144(k) of the Securities Act or any successor rule) after the date of
original issuance of the Convertible Notes or if within three months after
it ceases to be an affiliate (within the meaning of Rule 144 under the
Securities Act) of the Company, it decides to resell, pledge or otherwise
transfer such Convertible Notes or the Common Stock issuable upon
conversion thereof on which the applicable legend set forth below appears,
such Convertible Notes or Common
27
Stock issuable upon conversion thereof may be resold, pledged or
transferred only (i) to the Company, (ii) so long as such Convertible
Notes if such Convertible Notes are not in book-entry form or Common Stock
issuable upon conversion thereof are eligible for resale pursuant to Rule
144A, to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that purchases for its own account or for the account
of Qualified Institutional Buyer to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A (as indicated by
the box checked by the transferor on the Certificate of Transfer on the
reverse of the Convertible Notes if such Convertible Notes are not in
book-entry form) and a certificate which may be obtained from the Company
or the Trustee is delivered by the Transferee to the Company and the
Trustee, (iii) in an offshore transaction in accordance with Regulation S
(as indicated by the box checked by the transferor on the Certificate of
Transfer on the reverse of the Convertible Notes if such Convertible Notes
are not in book-entry form), but, if such transfer is being effected by an
Initial Foreign Purchaser or any foreign purchaser who has purchased
Convertible Notes from an Initial Foreign Purchaser or from any person
other than a Qualified Institutional Buyer or an Institutional Accredited
Investor pursuant to this clause (iii) prior to the expiration of the "40
day restricted period" (within the meaning of Rule 903(c)(3) of Regulation
S under the Securities Act), the transferee shall have certified to the
Company and the Trustee for the Convertible Notes (or, in the case of
Common Stock, the Transfer Agent) that such transferee is a non-U.S.
Person (within the meaning of Regulation S) and that such transferee is
acquiring the Convertible Notes or Common Stock in an offshore
transaction, (iv) to an Institutional Accredited Investor (as indicated by
the box checked by the transferor on the Certificate of Transfer on the
reverse of the Convertible Notes if such Convertible Notes are not in
book-entry form) who has certified to the Company and the Trustee for the
Convertible Notes (or, in the case of Common Stock, the Transfer Agent)
that such transferee is an Institutional Accredited Investor and is
acquiring the Convertible Notes or the Common Stock for investment
purposes and not for distribution, (provided that no Initial Foreign
Purchaser or any foreign purchaser who has purchased Convertible Notes
from an Initial Foreign Purchaser or from any person other than a
Qualified Institutional Buyer or an Institutional Accredited Investor
pursuant to clause (iii) shall be permitted to transfer any Convertible
Notes (or the Common Stock issuable upon conversion thereof) so purchased
by it to an Institutional Accredited Investor pursuant to this clause (iv)
prior to the expiration of the "40 day restricted period" and a
certificate which may be obtained from the Company or the Trustee is
delivered by the transferee to the Company and the Trustee), (v) pursuant
to an exemption from registration under the Securities Act provided by
Rule 144 (if applicable) under the Securities Act, or (vi) pursuant to an
effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States or other jurisdictions, (B) the purchaser will, and each subsequent
holder is required to, notify any purchaser of Convertible Notes or the
Common Stock issuable upon conversion thereof from it of the resale
restrictions referred to in (A) above, if then applicable, and (C) with
respect to any transfer of Convertible Notes or the Common Stock issuable
upon conversion thereof by an Institutional Accredited Investor, such
holder will deliver to the Company and the Trustee (or, in the case of
Common Stock, the Transfer Agent) such certificates and other information
as they may reasonably require to
-2-
28
confirm that the transfer by it complies with the foregoing restrictions
including, without limitation, the certificate in the form of Exhibit A to
the Purchase Agreement; and
(4) with respect to the Convertible Notes, it understands that the
notification requirement referred to in (3) above will be satisfied in the
case only of transfers by physical delivery of Certificated Convertible
Notes other than a Global Note, by virtue of the fact that the following
legend will be placed on the Convertible Notes unless otherwise agreed by
the Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
(X) PRIOR TO THE THIRD ANNIVERSARY (OR SUCH SHORTER PERIOD AS MAY
THEN BE APPLICABLE UNDER THE SECURITIES ACT) OF THE ISSUANCE HEREOF
(OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS
AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1)
TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY) AND A CERTIFICATE WHICH MAY BE OBTAINED
FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO
THE COMPANY AND THE TRUSTEE, (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY), AND, IF SUCH TRANSFER IS BEING
EFFECTED BY CERTAIN TRANSFERORS SPECIFIED IN THE INDENTURE (AS
DEFINED BELOW) PRIOR TO THE EXPIRATION OF THE "40 DAY RESTRICTED
PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF REGULATION S UNDER
THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE OBTAINED FROM THE
COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY
AND THE TRUSTEE, (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
-3-
29
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM ATTACHED TO
THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE (PROVIDED THAT CERTAIN HOLDERS SPECIFIED IN THE INDENTURE
MAY NOT TRANSFER THIS SECURITY PURSUANT TO THIS CLAUSE (4) PRIOR TO
EXPIRATION OF THE "40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF
RULE 903(c)(3) OF REGULATION S UNDER THE SECURITIES ACT), (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT AND A
CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTIONS. AN
INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES THAT
IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND
OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY
TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1)
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR
(2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT
IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT";
(5) with respect to the Common Stock issuable upon conversion of the
Convertible Notes, it understands that the notification requirement
referred to in (3) above will be satisfied by virtue of the fact that the
following legend will be placed on the Common Stock unless otherwise
agreed by the Company:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT
-4-
30
OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE THIRD ANNIVERSARY (OR SUCH
SHORTER PERIOD AS MAY THEN BE APPLICABLE UNDER THE SECURITIES ACT)
OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y)
BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN
EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), AND A
CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS
DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (3) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), AND
IF SUCH TRANSFER IS BEING EFFECTED BY CERTAIN TRANSFERORS SPECIFIED
IN THE INDENTURE (AS DEFINED BELOW) PRIOR TO THE EXPIRATION OF THE
"40 DAY RESTRICTED PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF
REGULATION S UNDER THE SECURITIES ACT), A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE IN THE FORM
ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE
COMPANY AND THE TRANSFER AGENT, (5) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT AND A CERTIFICATE WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND A
CERTIFICATE WHICH
-5-
31
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR OTHER JURISDICTIONS. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE
COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY
TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (1)
A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR
(2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (o)(2) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT."
(6) it (i) is able to fend for itself in the transactions
contemplated by the Offering Memorandum; (ii) has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of its prospective investment in the
Convertible Notes; and (iii) has the ability to bear the economic risks of
its prospective investment and can afford the complete loss of such
investment; and
(7) it understands that the Company, the Initial Purchasers and
others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements and agrees that if any of
the acknowledgments, representations and warranties deemed to have been
made by it by its purchase of the Convertible Notes are no longer
accurate, it shall promptly notify the Company and the Initial Purchasers.
If it is acquiring the Convertible Notes as a fiduciary or agent for one
or more investor accounts, it represents that it has sole investment
discretion with respect to each such account and it has full power to make
the foregoing acknowledgements, representations and agreements on behalf
of such account.
-6-
