Underwriting Agreement – SanDisk Corp.
SanDisk Corporation
$1,000,000,000
aggregate principal amount of
1.5% Convertible Senior Notes due 2017
UNDERWRITING AGREEMENT
August 19, 2010
August 19, 2010
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
|
c/o |
Morgan Stanley & Co. Incorporated Goldman, Sachs & Co. |
Ladies and Gentlemen:
SanDisk Corporation, a Delaware corporation (the
“Company“), proposes to issue and sell to the several
underwriters named in Schedule II hereto (the “Underwriters“),
$1,000,000,000 aggregate principal amount of its 1.5% Convertible Senior Notes
due 2017 (the “Firm Securities“), to be issued pursuant to the
provisions of an indenture to be dated as of August 25, 2010 (the
“Indenture“) between the Company and The Bank of New York
Mellon Trust Company, N.A., as Trustee (the “Trustee“). The
Company also proposes to issue and sell to the several Underwriters not more
than an additional $150,000,000 aggregate principal amount of its 1.5%
Convertible Senior Notes due 2017 (the “Additional
Securities“) if and to the extent that Morgan Stanley & Co.
Incorporated shall have determined to exercise, on behalf of the several
Underwriters, the right to purchase such Additional Securities (or any portion
thereof) granted in Section 2 hereof. The Firm Securities and the Additional
Securities are hereinafter collectively referred to as the
“Securities.” The Securities will be convertible into shares of
common stock of the Company, par value $0.001 per share (the “Common
Stock“). The Common Stock into which the Securities are convertible are
hereinafter collectively referred to as the “Underlying
Securities.”
The Company has filed with the Securities and Exchange Commission (the
“Commission“) a registration statement, including a prospectus,
on Form S 3 (File No. 333-157078) for registration under the Securities Act of
1933, as amended, (the “Securities Act“), of the Securities and
the Underlying Securities (the “Shelf Securities“), and the
offering thereof from time to time in accordance with Rule 415. The registration
statement including all documents incorporated by reference therein and as
amended to the date of this Agreement, including the information (if any) deemed
to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A or Rule 430B under the Securities Act, is hereinafter referred to
as the “Registration Statement,” and the related prospectus
covering the Shelf Securities dated February 2, 2009 in the form first used to
confirm sales of the Securities (or in the form first made available to the
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Underwriters by the Company to meet requests of purchasers pursuant to Rule
173 under the Securities Act) is hereinafter referred to as the “Basic
Prospectus.” The Basic Prospectus, as supplemented by the prospectus
supplement specifically relating to the Securities in the form first used to
confirm sales of the Securities (or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173
under the Securities Act) is hereinafter referred to as the
“Prospectus,” and the term “preliminary
prospectus” means any preliminary form of the Prospectus. For purposes
of this Agreement, “free writing prospectus” has the meaning
set forth in Rule 405 under the Securities Act, “Time of Sale
Prospectus” means the preliminary prospectus dated August 18, 2010
together with the free writing prospectuses, if any, each identified in Schedule
V hereto, and “broadly available road show” means a “bona fide
electronic road show” as defined in Rule 433(h)(5) under the Securities Act that
has been made available without restriction to any person. As used herein, the
terms “Registration Statement,” “preliminary prospectus,” “Time of Sale
Prospectus” and Prospectus shall include the documents, if any, incorporated by
reference therein. The terms “supplement,”
“amendment,” and “amend” as used herein with
respect to the Registration Statement, the Prospectus, the Time of Sale
Prospectus, any preliminary prospectus or free writing prospectus shall include
all documents subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the “Exchange
Act“), that are deemed to be incorporated by reference therein.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission. The Company is a well-known seasoned issuer (as
defined in Rule 405 under the Securities Act) eligible to use the Registration
Statement as an automatic shelf registration statement and the Company has not
received notice that the Commission objects to the use of the Registration
Statement as an automatic shelf registration statement;
(b) (i) Each document, if any, filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such part became
effective, did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement as of the
date
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hereof does not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iv) the Registration Statement and the
Prospectus comply, and as amended or supplemented, if applicable, will comply in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (v) the Time of Sale Prospectus does
not, and at the time of each sale of the Securities in connection with the
offering when the Prospectus is not yet available to prospective purchasers and
at the Closing Date (as defined in Section 4), the Time of Sale Prospectus will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, (vi) each broadly available road
show, if any, when considered together with the Time of Sale Prospectus, does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (vii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to (A) statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Underwriters expressly for use therein or (B) that
part of the Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act of 1939, as amended (the
“Trust Indenture Act“), of the Trustee;
(c) The Company is not an “ineligible issuer” in connection with the offering
of the Securities pursuant to Rules 164, 405 and 433 under the Securities Act.
Any free writing prospectus that the Company is required to file pursuant to
Rule 433(d) under the Securities Act has been, or will be, filed with the
Commission in accordance with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was prepared by or on behalf of or used
or referred to by the Company complies or will comply in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free writing
prospectuses, if any, identified in Schedule I hereto, and electronic road shows
each furnished to the Underwriters before first use, the Company has not
prepared, used or referred to, and will not, without your prior consent,
prepare, use or refer to, any free writing prospectus;
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(d) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Time of Sale Prospectus any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Time of Sale
Prospectus; and, since the respective dates as of which information is given in
the Time of Sale Prospectus, there has not been any change in the capital stock
(other than upon the issuance or exercise of shares, stock options or stock
purchase rights granted in the ordinary course of business pursuant to the
Company153s existing stock option and stock purchase plans) or long-term debt of
the Company or any of its subsidiaries or any material adverse change, or any
development specifically related to the Company or its industry that would be
reasonably likely to result in a material adverse change, in the general
affairs, management, financial position, stockholders153 equity or results of
operations of the Company and its subsidiaries, taken as a whole (a
“Material Adverse Effect“), otherwise than as set forth or
contemplated in the Prospectus;
(e) Except as described in the Time of Sale Prospectus, neither the Company
nor its subsidiaries owns any real property. The Company and its subsidiaries
have good and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Time of Sale Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(f) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has the
corporate power and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; each domestic subsidiary
of the Company has been duly incorporated or organized, as the case may be, and
is validly existing in good standing under the laws of its jurisdiction of
incorporation or organization; each foreign subsidiary of the Company has been
duly incorporated or organized, as the case may be, and is validly existing in
good standing under the laws of its jurisdiction of incorporation or
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organization; and, except for Flash Partners, Ltd., Flash Alliance, Ltd.,
SanDisk Manufacturing and SanDisk International Limited, none of the Company153s
subsidiaries are “significant subsidiaries” within the meaning of Section
1.02(w) of Regulation S-X under the rules and regulations of the Commission;
(g) The Company has an authorized capitalization as set forth in the Time of
Sale Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description of such capital stock contained in
the Time of Sale Prospectus; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are, except for Flash Partners, Ltd.,
Flash Alliance, Ltd. and Rising Silicon, Inc., owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or claims,
other than director qualifying shares;
(h) This Agreement has been duly authorized, executed and delivered by the
Company;
(i) The Indenture has been duly qualified under the Trust Indenture Act and
has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors153 rights
generally and equitable principles of general applicability;
(j) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, will conform to
the “Description of the Notes” section in the Time of Sale Prospectus, and in
each case, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors153 rights generally
and equitable principles of general applicability, and will be entitled to the
benefits of the Indenture;
(k) The Underlying Securities issuable upon conversion of the Securities have
been duly authorized and reserved and, when issued upon conversion of the
Securities in accordance with the terms of the Securities, will be validly
issued, fully paid and non-assessable, and the issuance of the Underlying
Securities will not be subject to any preemptive or similar rights;
(l) There are no contracts, agreements or understandings between the Company
and any person granting such person the right to
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require the Company to file a registration statement under the Securities Act
with respect to any of the securities of the Company or to require the Company
to include such securities with the Securities registered pursuant to the
Registration Statement;
(m) The issue and sale of the Securities by the Company and the compliance by
the Company with all of the provisions of this Agreement, the Indenture and the
Securities and the consummation of the transactions contemplated hereby or
thereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the certificate of incorporation or by-laws
of the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the Securities
or the consummation by the Company of the transactions contemplated by this
Agreement, the Indenture and the Securities, except the registration under the
Exchange Act and the Securities Act of the Securities, the qualification of the
Indenture under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by the Underwriters;
(n) Neither the Company nor any of its subsidiaries is (A) in violation of
its certificate of incorporation or by-laws (or similar such documents) or (B)
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except, with respect
to (B), for defaults that would not have a Material Adverse Effect;
(o) The statements set forth in the Prospectus under the caption “Description
of the Notes,” insofar as they purport to constitute a summary of the material
terms of the Securities, under the caption “Description of Capital Stock,”
insofar as they purport to constitute a summary of the terms of the Underlying
Securities, and under the caption “Underwriting,” insofar as it purports to
describe the provisions of the documents referred to therein, are accurate,
complete and fair;
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(p) Other than as set forth in the Time of Sale Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject that would be reasonably likely to have a Material
Adverse Effect; and, to the best of the Company153s knowledge, no such proceedings
are threatened by governmental authorities or others (other than counterclaims
related to existing litigation) that would be reasonably likely to result in a
Material Adverse Effect;
(q) The Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Prospectus will not be, required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended;
(r) The interests in Flash Partners, Ltd. and Flash Alliance, Ltd. held by
the Company have been validly authorized and issued and are owned by the
Company, free and clear of all liens, encumbrances, equities or claims (other
than transfer restrictions contained in the following agreements between the
Company and Toshiba Corporation: (i) the Flash Partners Master Agreement, dated
as of September 10, 2004 (the “Flash Partners Master
Agreement“), (ii) the Master Operative Documents as defined in the
Flash Partners Master Agreement), (iii) the Flash Alliance Master Agreement,
dated as of July 7, 2006 (the “Flash Alliance Master
Agreement“), and (iv) the Master Operative Documents as defined in the
Flash Alliance Master Agreement);
(s) Except as disclosed in the Time of Sale Prospectus, the Company and each
of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; neither the Company
nor any such subsidiary has been refused any insurance coverage sought or
applied for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
at a cost that would not, in the aggregate, have a Material Adverse Effect,
except as described in or contemplated by the Time of Sale Prospectus;
(t) The Company and its subsidiaries (other than Flash Partners, Ltd. and
Flash Alliance, Ltd.) and, to the Company153s knowledge, Flash Partners, Ltd. and
Flash Alliance, Ltd., (i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws“), (ii)
have received all permits, licenses or other
7
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect;
(u) The costs or liabilities of the Company and its subsidiaries (other than
Flash Partners, Ltd. and Flash Alliance, Ltd. and, to the Company153s knowledge,
Flash Partners, Ltd. and Flash Alliance, Ltd., if any, associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) are not
reasonably likely, singly or in the aggregate, to have a Material Adverse
Effect;
(v) Except as described in the Time of Sale Prospectus, to the best knowledge
of the Company, the Company and each of its subsidiaries owns or possesses or
can acquire on reasonable terms all material licenses or other rights to use all
patents, copyrights, trademarks, service marks, trade names, mask work rights,
technology and know-how necessary to conduct its business in the manner
described in the Time of Sale Prospectus and, neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with (and
neither the Company nor any of its subsidiaries knows of any infringement or
conflict with) asserted rights of others with respect to any patents,
copyrights, trademarks, service marks, trade names, mask work rights, technology
or know-how which are reasonably likely to individually or in the aggregate,
result in a Material Adverse Effect; and, except as disclosed in the Time of
Sale Prospectus, the discoveries, inventions, products or processes of the
Company and its subsidiaries referred to in the Time of Sale Prospectus do not,
to the best knowledge of the Company or any of its subsidiaries, infringe or
conflict with any right or patent of any third party, or any discovery,
invention, product or process which is the subject of a patent application filed
by any third party, known to the Company or any of its subsidiaries which are
reasonably likely to have a Material Adverse Effect;
(w) The Company and each of its subsidiaries maintain a system of internal
control over financial reporting (as such term is defined in Rule 13a-15(f)
under the Exchange Act) that complies with the requirements of the Exchange Act
and has been designed by the Company153s principal executive officer and principal
financial officer, or under their supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements
8
for external purposes in accordance with generally accepted accounting
principles;
(x) No material labor dispute with the employees (as a group) of the Company
or any of its subsidiaries, taken as a whole, exists, except as described in or
contemplated by the Time of Sale Prospectus, or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in a Material Adverse
Effect;
(y) The Rights Agreement, dated as of September 15, 2003 (the
“Rights Agreement“), between the Company and Computershare
Trust Company, Inc. has been duly authorized, executed and delivered by the
Company; the rights (the “Rights“) to purchase one
two-hundredth of a share of Series A Junior Participating Preferred Stock for
$225.00 pursuant to the terms of the Rights Agreement have been duly authorized
by the Company; and the Series A Junior Participating Preferred Stock has been
duly authorized by the Company and validly reserved for issuance and, upon
exercise of the Rights when issued in accordance with the terms of the Rights
Agreement, will be validly issued, fully paid and non-assessable;
(z) Except as described in the Time of Sale Prospectus, there are no material
off-balance sheet transactions, arrangements, obligations (including contingent
obligations) or any other relationships with unconsolidated entities or other
persons, that may have a material current or future effect on the Company153s
financial condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant components of
revenues or expenses;
(aa) To the best of the Company153s knowledge after due inquiry, Ernst &
Young LLP, who has certified certain financial statements of the Company, whose
report is incorporated by reference in the Time of Sale Prospectus and who will
deliver at each Time of Delivery the letter or letters referred to in Section
5(m) hereof, is an independent registered public accounting firm as required by
the Securities Act and the Rules and Regulations. Except as described in the
Prospectus and as preapproved in accordance with the requirements set forth in
Section 10A of the Exchange Act, Ernst & Young LLP has not engaged in any
“prohibited activities” (as defined in Section 10A of the Exchange Act) on
behalf of the Company;
(bb) No relationship, direct or indirect, exists between or among the Company
on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Time of Sale Prospectus which is not so
9
described. The Company has not, directly or indirectly, including through any
subsidiary, extended or maintained credit, or arranged for the extension of
credit, or renewed any extension of credit, in the form of a personal loan to or
for any of its directors or executive officers in violation of the
Sarbanes-Oxley Act of 2002;
(cc) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act),
that comply with the requirements of the Exchange Act; such disclosure controls
and procedures (i) have been designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company153s principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; (ii) have
been evaluated for effectiveness as of the end of the Company153s last completed
fiscal quarter; and (iii) are effective in all material respects to perform the
functions for which they were established;
(dd) Based on its most recent evaluation of its internal control over
financial reporting, the Company is not aware of (i) any significant deficiency
or material weakness in the design or operation of its internal control over
financial reporting which is reasonably likely to adversely affect the Company153s
ability to record, process, summarize and report financial data; or (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in the Company153s internal control over financial
reporting;
(ee) Since the date of the most recent evaluation of its internal controls
over financial reporting, there have been no significant changes in the
Company153s internal controls over financial reporting that are reasonably likely
to materially affect the Company153s internal controls, over financial reporting;
(ff) The Company153s Board of Directors has validly appointed an audit
committee whose composition satisfies the listing requirements of the NASDAQ
Global Select Market (“NASDAQ“) and the Board of Directors
and/or the audit committee has adopted a charter that satisfies the requirements
of NASDAQ. The audit committee has reviewed the adequacy of its charter within
the past twelve months;
(gg) Except as described in the Time of Sale Prospectus, each of the Company
and its subsidiaries (i) has made or filed all material foreign, federal, state,
local and provincial income and all other tax returns, reports and declarations
required to be made or filed by it by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, due (whether or not
10
shown as due) and payable by it on such returns, reports, and declarations,
except those being contested in good faith for which adequate reserves have been
accrued on the Company153s latest balance sheet and (iii) has set aside on its
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply
and which such taxes are not yet due and payable. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction. There are no material liens with respect to any taxes upon any of
the assets or properties of the Company or any of its subsidiaries other than
for taxes that are not yet due and payable;
(hh) Neither the Company nor any of its subsidiaries (other than, to the
Company153s knowledge, Flash Partners, Ltd. and Flash Alliance, Ltd.) nor any
director or officer of the Company, nor, to the Company153s knowledge, any
affiliate, employee or agent of the Company or of any of its subsidiaries or
affiliates (other than, to the Company153s knowledge, Flash Partners, Ltd. and
Flash Alliance, Ltd.), has taken any action in furtherance of an offer, payment,
promise to pay, or authorization or approval of the payment or giving of money,
property, gifts or anything else of value, directly or indirectly, to any
government official (including any officer or employee of a government or
government-owned or controlled entity or of a public international organization,
or any person acting in an official capacity for or on behalf of any of the
foregoing, or any political party or party official or candidate for political
office) to influence official action or secure an improper advantage; and the
Company and its subsidiaries and affiliates have conducted their businesses in
compliance with applicable anti-corruption laws and have instituted and
maintained policies and procedures designed to promote and achieve compliance
with such laws;
(ii) The operations of the Company and its subsidiaries are and have been
conducted at all times in material compliance with all applicable financial
recordkeeping and reporting requirements, including those of the Bank Secrecy
Act, as amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of
jurisdictions where the Company and its subsidiaries conduct business, the rules
and regulations thereunder and any related or similar applicable rules,
regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Anti-Money Laundering Laws“), and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to
the best knowledge of the Company, threatened; and
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(jj) (i) Neither the Company nor any of its subsidiaries, nor any director or
officer of the Company, nor, to the Company153s knowledge, any employee, agent or
affiliate of the Company or any of its subsidiaries, is an individual or entity
(“Person“) that is, or is owned or controlled by a Person that
is:
(A) the subject of any sanctions administered or enforced by the U.S.
Department of Treasury153s Office of Foreign Assets Control
(“OFAC“), the United Nations Security Council
(“UNSC“), the European Union (“EU“), Her
Majesty153s Treasury (“HMT“), or other relevant sanctions
authority (collectively, “Sanctions“), nor
(B) located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran,
North Korea, Sudan and Syria).
(ii) The Company represents and covenants that it will not, directly or
indirectly, use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
Person:
(A) for the purpose of funding or facilitating any activities or business of
or with any Person or in any country or territory that, at the time of such
funding or facilitation, is the subject of Sanctions; or
(B) for any other purpose that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).
(iii) The Company represents and covenants that for the past 5 years, it and
its subsidiaries have not knowingly engaged in, and are not now knowingly
engaged in any dealings or transactions with any Person, or in any country or
territory, that at the time of the dealing or transaction is or was the subject
of Sanctions.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Firm Securities set forth in
Schedule II hereto opposite its name at a price equal to 98.25% of the principal
amount thereof (the “Purchase Price“) plus accrued interest, if
any, from August 25, 2010 to the Closing Date.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
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and sell to the Underwriters the Additional Securities, and the Underwriters
shall have the right to purchase, severally and not jointly, up to $150,000,000
aggregate principal amount of Additional Securities at the Purchase Price plus
accrued interest, if any, to the date of payment and delivery. The Underwriters
may exercise these rights in whole or from time to time in part by giving
written notice of each election to exercise the foregoing option not later than
30 days after the date of this Agreement. Any exercise notice shall specify the
principal amount of Additional Securities to be purchased by the Underwriters
and the date on which such Additional Securities are to be purchased. Each
purchase date must be at least one business day after the written notice is
given and may not be earlier than the Closing Date for the Firm Securities nor
later than ten business days after the date of such notice. Additional
Securities may be purchased as provided in Section 2 hereof solely for the
purpose of covering over allotments made in connection with the offering of the
Firm Securities. On each day, if any, that Additional Securities are to be
purchased (each an “Option Closing Date“), each Underwriter
agrees, severally and not jointly, to purchase the principal amount of
Additional Securities (subject to such adjustments to eliminate fractional
securities as you may determine) that bears the same proportion to the total
number of Additional Securities to be purchased on such Option Closing Date as
the principal amount of Firm Securities set forth in Schedule II hereto opposite
the name of such Underwriter bears to the total principal amount of Firm
Securities.
The Company hereby agrees that, without the written consent of Morgan Stanley
& Co. Incorporated and Goldman, Sachs & Co., on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, (ii) file any registration
statement with the Commission relating to the offering of any shares of Common
Stock or (iii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i), (ii) or
(iii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise.
The foregoing paragraph shall not apply to (i) the Securities to be sold
hereunder or the Underlying Securities, (ii) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and as described in the
Prospectus (or filing a registration statement with the Commission related to
the issuance or resale of such Common Stock), (iii) the issuance by the Company
of any shares of Common Stock, options or other securities to or for the benefit
of employees, consultants or directors of the Company on or after the date
hereof pursuant to the Company153s employee stock ownership plan or equity
incentive
13
plans as described in the Time of Sale Prospectus or the Registration
Statement and the issuance by the Company of shares of Common Stock upon the
exercise of any such options or other securities (or filing a registration
statement with the Commission related to the issuance or resale of such Common
Stock); (iv) pursuant to the convertible note hedge and warrant transactions as
described in the Prospectus or (v) any issuances in connection with bona
fide acquisitions in an aggregate amount that does not exceed 7% of the
Company153s capital stock on a fully diluted basis as of the date hereof.
If:
(1) during the last 17 days of the 90-day restricted period described in the
third paragraph of this Section 2, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or
(2) prior to the expiration of the 90-day restricted period described in the
third paragraph of this Section 2, the Company announces that it will release
earnings results during the 16 day period beginning on the last day of the
restricted period; and in each case
(3) at the end of the 90-day restricted period described in the third
paragraph of this Section 2, (i) the Company153s shares are not “actively traded
securities” as such term is defined in Regulation M under the Securities Act or
(ii) the Underwriters are not able to publish or distribute research reports
concerning the Company or its industry pursuant to Rule 139 of the Securities
Act,
then the restrictions imposed by this Agreement shall continue to apply until
the expiration of the 18 day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
3. Public Offering. The Company is advised by the Underwriters that
they propose to make a public offering of their respective portions of the
Securities as soon after this Agreement has been executed as in the
Underwriters153 judgment is advisable. The Company is further advised by the
Underwriters that the Securities are to be offered to the public upon the terms
set forth in the Prospectus.
4. Payment and Delivery. Payment for the Firm Securities shall be
made to the Company in Federal (same-day) funds to the account specified by the
Company to Morgan Stanley & Co. Incorporated at least forty-eight hours in
advance. The time and date of the delivery of the Securities and such payment
shall be the closing date and time set forth in Schedule I hereto, or at such
other time on the same or such other date, not later than the fifth business day
thereafter, as may be agreed by you and the Company in writing. The time and
date of such payment are hereinafter referred to as the “Closing
Date.”
Payment for the Firm Securities shall be made against delivery to Morgan
Stanley & Co. Incorporated on the Closing Date for the respective accounts
of the
14
several Underwriters of the Firm Securities registered in such names and in
such denominations as Morgan Stanley & Co. Incorporated shall request in
writing not less than one full business day prior to the Closing Date, with any
transfer taxes payable in connection with the transfer of the Firm Securities to
the Underwriters duly paid.
Payment for any Additional Securities shall be made to the Company in Federal
(same-day) funds to the account specified by the Company to Morgan Stanley &
Co. Incorporated at least forty-eight hours in advance of each Option Closing
Date. Such payment shall be against delivery of such Additional Securities for
the respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on the date specified in the corresponding notice described in Section 2
or at such other time on the same or on such other date, in any event not later
than October 1, 2010, as shall be designated in writing by you.
Payment for the Additional Securities shall be made against delivery to
Morgan Stanley & Co. Incorporated on each Option Closing Date for the
respective accounts of the several Underwriters of the Additional Securities
registered in such names and in such denominations as you shall request in
writing not less than one full business day prior to the relevant Option Closing
Date, with any transfer taxes payable in connection with the transfer of the
Additional Securities to the Underwriters duly paid.
The Firm Securities and Additional Securities shall be in definitive form or
global form, as specified by Morgan Stanley & Co. Incorporated, and in such
denominations as Morgan Stanley & Co. Incorporated shall request in writing
not later than one full business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be. The Firm Securities and Additional
Securities shall be delivered to Morgan Stanley & Co. Incorporated on the
Closing Date or an Option Closing Date, as the case may be, for the respective
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Securities to the Underwriters duly paid,
against payment of the Purchase Price therefor plus accrued interest, if any, to
the date of payment and delivery.
5. Conditions to the Underwriters153 Obligations. The several
obligations of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded the Company or any of the securities of the Company or any
of its subsidiaries or in the rating outlook
15
for the Company by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any development involving a
prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Time of Sale Prospectus that, in your
judgment, is material and adverse and that makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 5(a)(i) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date. The officer
signing and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Prospectus shall have been filed with the Commission pursuant to Rule
424(b) under the Securities Act within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; the final
term sheet substantially in the form of Schedule I hereto, and any material
required to be filed by the Company pursuant to Rule 433(d) under the Securities
Act, shall have been filed with the Commission within the applicable time
periods prescribed for such filings by Rule 433; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission and no notice of objection of the Commission to the
use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Securities Act shall have been received; no
stop order suspending or preventing the use of the Prospectus or any Issuer Free
Writing Prospectus shall have been initiated or threatened by the Commission;
and all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction.
(d) The Underwriters shall have received on the Closing Date an opinion of
Jones Day, outside counsel for the Company, dated the Closing Date, in the form
attached hereto as Exhibit I;
16
(e) The Underwriters shall have received on the Closing Date an opinion of
Jones Day, special Japanese counsel for the Company, dated the Closing Date, in
the form attached hereto as Exhibit II;
(f) The Underwriters shall have received on the Closing Date an opinion of
A&L Goodbody, special Irish counsel for the Company, dated the Closing Date,
in the form attached hereto as Exhibit III;
(g) The Underwriters shall have received on the Closing Date an opinion of
James F. Brelsford, Chief Legal Officer of the Company, dated the Closing Date,
in the form attached hereto as Exhibit IV;
(h) The Underwriters shall have received on the Closing Date an opinion of
Simpson Thacher & Bartlett LLP, counsel for the Underwriters, dated the
Closing Date, with respect to such matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(i) The Underwriters shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to the Underwriters, from Ernst &
Young LLP, an independent registered public accounting firm, containing
statements and information of the type ordinarily included in accountants153
“comfort letters” to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement, the Time
of Sale Prospectus and the Prospectus; provided that the letter
delivered on the Closing Date shall use a “cut off date” not earlier than the
date hereof.
(j) The “lock-up” agreements, each substantially in the form of Exhibit A
hereto, between you and all of the executive officers and directors of the
Company listed on Schedule IV hereto relating to sales and certain other
dispositions of shares of Common Stock or certain other securities, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date.
(k) The Underlying Securities issuable upon conversion of the Securities
shall have been approved for supplemental listing on NASDAQ, subject to notice
of issuance.
(l) The Securities shall be eligible for clearance and settlement through
DTC.
(m) The Underwriters shall have received on the Closing Date such documents
as you may reasonably request with respect to the good standing of the Company,
the due authorization and issuance of the Securities and other matters related
to the issuance of the Securities.
17
The several obligations of the Underwriters to purchase Additional Securities
hereunder are subject to delivery to you on the applicable Option Closing Date
of each of the documents referred to above dated as of such Option Closing Date
(except that insofar as any documents relate to Securities, they may be limited
to covering only Additional Securities).
6. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, a signed copy of the Registration
Statement (including exhibits thereto and documents incorporated by reference)
and to deliver to each of the Underwriters during the period mentioned in
Section 6(e) or 6(f) below, as many copies of the Time of Sale Prospectus, the
Prospectus, any documents incorporated by reference therein and any supplements
and amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration Statement, the Time of
Sale Prospectus or the Prospectus, in each case as it applies to the offering of
the Securities and the Underlying Securities pursuant to this Agreement, to
furnish to you a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which you reasonably object,
and to file with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed pursuant to
such Rule.
(c) To furnish to you a copy of each proposed free writing prospectus to be
prepared by or on behalf of, used by, or referred to by the Company, in each
case as it applies to the offering of the Securities and the Underlying
Securities pursuant to this Agreement, and not to use or refer to any proposed
free writing prospectus to which you reasonably object.
(d) Not to take any action relating to the offering of the Securities and the
Underlying Securities pursuant to this Agreement that would result in an
Underwriter or the Company being required to file with the Commission pursuant
to Rule 433(d) under the Securities Act a free writing prospectus prepared by or
on behalf of the Underwriter that the Underwriter otherwise would not have been
required to file thereunder.
(e) If the Time of Sale Prospectus is being used to solicit offers to buy the
Securities at a time when the Prospectus is not yet available to prospective
purchasers and any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Time of Sale Prospectus in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if any
18
event shall occur or condition shall exist as a result of which the Time of
Sale Prospectus conflicts with the information contained in the Registration
Statement then on file, or if, in the opinion of counsel for the Underwriters,
it is necessary to amend or supplement the Time of Sale Prospectus to comply
with applicable law, forthwith to prepare, file with the Commission and furnish,
at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements
in the Time of Sale Prospectus as so amended or supplemented will not, in the
light of the circumstances when delivered to a prospective purchaser, be
misleading or so that the Time of Sale Prospectus, as amended or supplemented,
will no longer conflict with the Registration Statement, or so that the Time of
Sale Prospectus, as amended or supplemented, will comply with applicable law.
(f) If, during such period after the first date of the public offering of the
Securities as in the reasonable opinion of counsel for the Underwriters the
Prospectus (or in lieu thereof the notice referred to in Rule 173(a) under the
Securities Act) is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a result
of which it is necessary to amend or supplement the Prospectus in order to make
the statements therein, in the light of the circumstances when the Prospectus
(or in lieu thereof the notice referred to in Rule 173(a) under the Securities
Act) is delivered to a purchaser, not misleading, or if, in the reasonable
opinion of counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses you will furnish to the Company) to which
Securities may have been sold by you on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the Prospectus
so that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus (or in lieu thereof the
notice referred to in Rule 173(a) under the Securities Act) is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with applicable law.
(g) To endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, provided that in connection therewith the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(h) To make generally available to the Company153s security holders and to you
as soon as practicable an earning statement (which need not be audited) covering
a period of at least twelve months beginning
19
with the first fiscal quarter of the Company occurring after the date of this
Agreement which shall satisfy the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company153s counsel and
the Company153s accountants in connection with the registration and delivery of
the Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free
writing prospectus prepared by or on behalf of, used by, or referred to by the
Company and amendments and supplements to any of the foregoing, including the
filing fees payable to the Commission relating to the Securities (within the
time required by Rule 456 (b)(1), if applicable), all printing costs associated
therewith, and the mailing and delivering of copies thereof to the Underwriters
and dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) the
cost of printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Securities under state securities laws
and all expenses in connection with the qualification of the Securities for
offer and sale under state securities laws as provided in Section 6(g) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
the Blue Sky or legal investment memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Securities
by the Financial Industry Regulatory Authority, Inc., (v) any fees charged by
the rating agencies for the rating of the Securities, (vi) all fees and expenses
in connection with the preparation and filing of the registration statement on
Form 8-A relating to the Securities and all costs and expenses incident to
listing the Securities and the Underlying Securities on NASDAQ, (vii) the cost
of the preparation, issuance and delivery of the Securities, (viii) the costs
and charges of any trustee, transfer agent, registrar or depositary, (ix) the
costs and expenses of the Company relating to investor presentations on any
“road show” undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
preparation or dissemination of any electronic road show, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such
20
consultants, and the cost of any aircraft chartered in connection with the
road show, (x) the document production charges and expenses associated with
printing this Agreement and (xi) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled “Indemnity and Contribution,” and
the last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, transfer
taxes payable on resale of any of the Securities by them and any advertising
expenses connected with any offers they may make.
(j) If the third anniversary of the initial effective date of the
Registration Statement occurs before all the Securities have been sold by the
Underwriters, prior to the third anniversary to file a new shelf registration
statement and to take any other action necessary to permit the public offering
of the Securities to continue without interruption; references herein to the
Registration Statement shall include the new registration statement declared
effective by the Commission;
(k) During the period beginning on the date hereof and continuing to and
including the Closing Date, not to offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company or warrants to purchase or
otherwise acquire debt securities of the Company substantially similar to the
Securities (other than (i) the Securities, (ii) commercial paper issued in the
ordinary course of business, (iii) pursuant to employee stock option or stock
purchase plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement, (iv)
pursuant to the convertible note hedge and warrant transactions as described in
the Prospectus or (v) securities or warrants permitted with the prior written
consent of Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.
(l) During a period of five years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders, and to deliver to you as soon as
they are available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange or NASDAQ on
which any class of securities of the Company is listed (other than any such
reports or financial statements that are filed with the Commission
electronically via EDGAR, IDEA or any successor system).
(m) To prepare a final term sheet relating to the offering of the Securities,
containing only information that describes the final terms of the Securities or
the offering in a form consented to by the Underwriters,
21
substantially in the form at Schedule I hereto, and to file such final term
sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act
following the date the final terms have been established for the offering of the
Securities.
(n) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Time of Sale
Prospectus under the caption “Use of Proceeds.”
(o) To use its best efforts to maintain the listing of the Underlying
Securities issuable upon conversion of the Securities on NASDAQ, the New York
Stock Exchange or another U.S. national securities exchange or established
automated over-the-counter trading market in the United States of America.
(p) To reserve and keep available at all times, free of preemptive rights,
shares of Underlying Securities for the purpose of enabling the Company to
satisfy any obligation to issue shares of its Underlying Securities upon
conversion of the Securities.
7. Covenants of the Underwriters. Each Underwriter severally
covenants with the Company not to take any action that would result in the
Company being required to file with the Commission under Rule 433(d) a free
writing prospectus prepared by or on behalf of such Underwriter that otherwise
would not be required to be filed by the Company thereunder, but for the action
of the Underwriter.
8. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act and each affiliate of any Underwriter within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under
the Securities Act, any Company information that the Company has filed, or is
required to file, pursuant to Rule 433(d) under the Securities Act, any
electronic roadshow or the Prospectus or any amendment or supplement thereto, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly
22
for use therein. The foregoing indemnity shall not apply to any issuer free
writing prospectus used by the Underwriters in violation of Section 7 hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus,
any issuer free writing prospectus or the Prospectus or any amendment or
supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the “indemnified
party“) shall promptly notify the person against whom such indemnity
may be sought (the “indemnifying party“) in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Underwriters authorized to appoint counsel under
this Section set forth in Schedule III hereto, in the case of parties
indemnified pursuant to Section 8(a), and by the Company, in the case of parties
indemnified pursuant to Section 8(b). The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent (which
consent shall not be unreasonably withheld, conditioned or delayed), but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified
23
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld, conditioned
or delayed), effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or Section
8(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein (other than with
respect to Section 8(a) in cases in which Section 8(b) is applicable), then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters bear to the
aggregate initial public offering price of the Securities as set forth in the
Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties153 relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters153 respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective principal
amounts of Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were
24
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in Section 8(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 8(d) shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Securities underwritten by
it and distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
(f) The indemnity and contribution provisions contained in this Section 8 and
the representations, warranties and other statements of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter, any person controlling any Underwriter or any
affiliate of any Underwriter or by or on behalf of the Company, its officers or
directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.
9. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on the New York Stock Exchange or NASDAQ, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over the counter market, (iii) a material disruption in
securities settlement, payment or clearance services in the United States shall
have occurred, (iv) any moratorium on commercial banking activities shall have
been declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities, or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and which, singly or together with any other event specified in this
clause (v), makes it, in your judgment, impracticable or inadvisable to proceed
with the offer, sale or delivery of the Securities on the terms and in the
manner contemplated in the Time of Sale Prospectus or the Prospectus.
25
10. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Firm Securities
that it has or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Firm Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not more than one
tenth of the aggregate principal amount of the Firm Securities to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Firm Securities set forth opposite
their respective names in Schedule II bears to the aggregate principal amount of
Firm Securities set forth opposite the names of all such non defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Firm Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
principal amount of Firm Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 10 by an amount
in excess of one ninth of such principal amount of Firm Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Securities and the aggregate
principal amount of Firm Securities with respect to which such default occurs is
more than one tenth of the aggregate principal amount of Firm Securities to be
purchased on such date, and arrangements satisfactory to you and the Company for
the purchase of such Firm Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any non
defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Securities and the aggregate number of Additional Securities with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Securities to be purchased on such Option Closing Date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase the Additional Securities to be sold on such
Option Closing Date or (ii) purchase not less than the number of Additional
Securities that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement the Company will reimburse the Underwriters or such Underwriters as
have so
26
terminated this Agreement with respect to themselves, severally, for all out
of pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Entire Agreement. (a) This Agreement, together with any
contemporaneous written agreements and any prior written agreements (to the
extent not superseded by this Agreement) that relate to the offering of the
Securities, represents the entire agreement between the Company and the
Underwriters with respect to the preparation of any preliminary prospectus, the
Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the
purchase and sale of the Securities.
(b) The Company acknowledges that in connection with the offering of the
Securities: (i) the Underwriters have acted at arms length, are not agents of,
and owe no fiduciary duties to, the Company or any other person, (ii) the
Underwriters owe the Company only those duties and obligations set forth in this
Agreement and prior written agreements (to the extent not superseded by this
Agreement), if any, and (iii) the Underwriters may have interests that differ
from those of the Company. The Company waives to the full extent permitted by
applicable law any claims it may have against the Underwriters arising from an
alleged breach of fiduciary duty in connection with the offering of the
Securities.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
15. Notices. All communications hereunder shall be in writing and
effective only upon receipt and if to the Underwriters shall be delivered,
mailed or sent to you at the address set forth in Schedule III hereto; and if to
the Company shall be delivered, mailed or sent to the address set forth in
Schedule III hereto.
27
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Very truly yours, SANDISK CORPORATION |
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By: |
/s/ Judy Bruner |
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Name: |
Judy Bruner |
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Title: |
EVP, Administration and CFO |
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Accepted as of the date hereof |
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MORGAN STANLEY & CO. INCORPORATED |
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GOLDMAN, SACHS & CO. |
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Acting severally on behalf of themselves and the several Underwriters named |
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By: |
MORGAN STANLEY & CO. INCORPORATED |
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By: |
/s/ Robert Brass Name: Robert Brass |
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Title: Executive Director |
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|
By: |
GOLDMAN, SACHS & CO. |
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|
By: |
/s/ Goldman, Sachs & Co. (Goldman, Sachs & Co.) |
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[Signature Page to Underwriting Agreement]
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