$550,000,000
PLURALSIGHT, INC.
0.375% CONVERTIBLE SENIOR NOTES DUE 2024
PURCHASE AGREEMENT
March 6, 2019
March 6, 2019
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
As “Representatives” of the several
Initial Purchasers named
in Schedule I hereto
c/o Morgan Stanley & Co. LLC
1585 Broadway
New York, New York 10036
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Pluralsight, Inc., a Delaware corporation (the “
Company
”), proposes to issue and sell to the several purchasers named in Schedule I hereto (the “
Initial
Purchasers
”) $550,000,000 principal amount of its 0.375% Convertible Senior Notes due 2024 (the “
Firm Securities
”) to be issued pursuant to the provisions of an Indenture dated on or about March 11, 2019 (the “
Indenture
”) between the Company and U.S. Bank National Association, as Trustee (the “
Trustee
”). The Company also proposes to issue and sell to the Initial Purchasers not more than an additional $83,500,000 principal amount of its 0.375% Convertible Senior Notes due 2024 (the “
Additional Securities
”) if and to the extent that you, as the Representatives of the offering, shall have determined to exercise, on behalf of the Initial Purchasers, the right to purchase such 0.375% Convertible Senior Notes due 2024 granted to the Initial Purchasers in Section 2 hereof. The Firm Securities and the Additional Securities are hereinafter collectively referred to as the “
Securities
”. The Company’s Class A common stock, par value $0.0001 per share (the “
Class A Common Stock
”), is hereinafter referred to herein as the “
Class A Common Stock
”. The Securities will be convertible into cash, shares of Class A Common Stock (the “
Underlying Securities
”), or a combination of cash and Underlying Securities, at the Company’s election in accordance with the terms of the Indenture.
The Class A Common Stock, together with the Class B common stock, par value $0.0001 per share of the Company (the “
Class B Common Stock
”), and Class C common stock, par value $0.0001 per share (the “
Class C Common Stock
”), of the Company are hereinafter referred to as the “
Common Stock
.”
The Company is the sole managing member of Pluralsight Holdings, LLC, a Delaware limited liability company (“
Pluralsight LLC
”), and directly owns a 54.0% membership interest in Pluralsight LLC.
In connection with the offering of the Firm Securities, the Company separately intends to enter into privately-negotiated capped call transactions with certain of the Initial Purchasers or their respective affiliates and/or certain other financial institutions (the “
Option Counterparties
”) pursuant to capped call confirmations (the “
Base Capped Call Confirmations
”) to be dated the date hereof, and in connection with the issuance of any Additional Securities, the Company and the Option Counterparties may enter into additional capped call confirmations (the “
Additional Capped Call Confirmations
”) to be dated on or about the date on which the Initial Purchasers exercise their option to purchase such Additional Securities (such Additional Capped Call Confirmations, together with the Base Capped Call Confirmations, the “
Capped Call Confirmations
”).
The Securities and the Underlying Securities will be offered without being registered under the Securities Act of 1933, as amended (the “
Securities Act
”), to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act.
In connection with the sale of the Securities, the Company has prepared a preliminary offering memorandum (the “
Preliminary Memorandum
”) and will prepare a final offering memorandum (the “
Final Memorandum
”) including or incorporating by reference a description of the terms of the Securities and the Underlying Securities, the terms of the offering and a description of the Company. For purposes of this Agreement, “
Additional Written Offering Communication
” means any written communication (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or a solicitation of an offer to buy the Securities other than the Preliminary Memorandum or the Final Memorandum; “
Time of Sale Memorandum
” means the Preliminary Memorandum together with each Additional Written Offering Communication or other information, if any, each identified in Schedule II hereto under the caption Time of Sale Memorandum; and “
General Solicitation
” means any offer to sell or solicitation of an offer to buy the Securities by any form of general solicitation or advertising (as those terms are used in Regulation D under the Securities Act). As used herein, the terms Preliminary Memorandum, Time of Sale Memorandum and Final Memorandum shall include the documents, if any, incorporated by reference therein on the date hereof. The terms “
supplement
”, “
amendment
” and “
amend
” as used herein with respect to the Preliminary Memorandum, the Time of Sale Memorandum, the Final Memorandum or any Additional Written Offering Communication shall include all documents subsequently filed by the Company with the Securities and Exchange Commission (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 of the Company and Pluralsight LLC.
Each of the Company and Pluralsight LLC, jointly and severally, represents and warrants to, and agrees with, the Representatives that:
(a)
(i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in the Preliminary Memorandum, the Time of Sale Memorandum or the Final Memorandum complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder, (i) the Time of Sale Memorandum does not, and at the time of each sale of the Securities in connection with the offering when the Final Memorandum is not yet available to prospective purchasers and at the Closing Date (as defined in Section 4), the Time of Sale Memorandum, as then amended or supplemented by the Company, 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, (i) any Additional Written Offering Communication prepared, used or referred to by the Company, when considered together with the Time of Sale Memorandum, at the time of its use did 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, (i) any General Solicitation that is not an Additional Written Offering Communication, made by the Company or by an Initial Purchaser with the consent of the Company, when considered together with the Time of Sale Memorandum, at the time when made or used did 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 (i) the Preliminary Memorandum does not contain and the Final Memorandum, in the form used by the Initial Purchasers to confirm sales and on the Closing Date (as defined in Section 4), will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Preliminary Memorandum, the Time of Sale Memorandum, the Final Memorandum, Additional Written Offering Communication or General Solicitation based upon information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representatives expressly for use therein.
(b)
Except for the Additional Written Offering Communications, if any, identified in Schedule II hereto, including electronic road shows, if any, furnished to the Representatives before first use, the Company has not prepared, used or referred to, and will not, without the Representatives’ prior consent, prepare, use or refer to, any Additional Written Offering Communication.
(c)
Each of the Company and Pluralsight LLC has been duly incorporated or formed, as applicable, is validly existing as a corporation or limited liability company, as applicable, in good standing under the laws of the State of Delaware, has the corporate or limited liability company power and authority to own or lease its property and to conduct its business as described in the Time of Sale Memorandum and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a material adverse effect on (i) the Company, Pluralsight LLC and the subsidiaries of the Company or Pluralsight LLC, taken as a whole or (ii) the power or ability of the Company or Pluralsight LLC to perform their respective obligations under the Transaction Documents (as defined below) or to consummate the transactions contemplated by the Time of Sale Memorandum (a “
Material Adverse Effect
”).
(d)
Each significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X) of the Company and each significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X) of Pluralsight LLC has been duly organized or formed, as applicable, is validly existing as a corporation or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation, organization, or formation, has the corporate or limited liability company power and authority, as applicable, to own or lease its property and to conduct its business as described in the Time of Sale Memorandum and is duly qualified to transact business and is in good standing (to the extent such concept of good standing is applicable in such jurisdiction) in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification (to the extent such concepts are applicable under such laws), except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect; all of the issued equity interests of each Significant Subsidiary of the Company and Pluralsight LLC have been duly and validly authorized and issued, are fully paid and non-assessable (to the extent such concepts are applicable under such laws) and are owned directly or indirectly by the Company or Pluralsight LLC, as applicable, free and clear of all liens, encumbrances, equities or claims, except as described in the Time of Sale Memorandum.
(e)
This Agreement has been duly authorized, executed and delivered by the Company and Pluralsight LLC.
(f)
As of the Closing Date, the authorized capital stock of the Company and the authorized membership interests of Pluralsight LLC conform as to legal matters to the descriptions thereof contained in each of the Time of Sale Memorandum and the Final Memorandum.
(g)
The shares of Common Stock of the Company and the membership interests of Pluralsight LLC outstanding prior to the issuance of the Securities have been duly authorized and are validly issued, fully paid and non-assessable. Except as described in or expressly contemplated by the Time of Sale Memorandum and the Final Memorandum, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company, Pluralsight LLC or any subsidiaries of the Company or Pluralsight LLC, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company, Pluralsight LLC or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options.
(h)
With respect to the stock options granted pursuant to the stock-based compensation plans of the Company, Pluralsight LLC and their subsidiaries (the “
Stock Plans
”), each grant of a stock option was made in accordance with the terms of the Stock Plans and all applicable laws and regulatory rules or requirements, including all applicable federal securities laws.
(i)
The Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to (A) applicable bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or similar laws affecting creditors’ rights generally and (B) equitable principles of general applicability, and will be entitled to the benefits of the Indenture pursuant to which such Securities are to be issued (such exceptions in clauses (A) and (B), the “
Enforceability Exceptions
”).
(j)
The maximum number of Underlying Securities initially issuable upon conversion of the Securities (including the maximum number of additional Underlying Securities by which the Conversion Rate (as such term is defined in the Time of Sale Memorandum and the Final Memorandum) (the “
Conversion Rate
”) may be increased in connection with a Make-Whole Fundamental Change (as such term is defined in the Time of Sale Memorandum and the Final Memorandum) and assuming (x) the Company elects, upon each conversion of the Securities, to deliver solely shares of Class A Common Stock, other than cash in lieu of fractional shares, in settlement of each conversion and (y) the Initial Purchasers exercise their option to purchase the Additional Securities in full (the “
Maximum Number of Underlying Securities
”)) has been duly authorized and reserved for issuance and, when issued upon conversion of the Securities in accordance with the terms of the Securities and the Indenture, 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.
(k)
The Indenture has been duly authorized by the Company and, when executed and delivered by the Company and the Trustee, the Indenture will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
(l)
Each Capped Call Confirmation has been duly authorized by the Company, and when executed and delivered by the Company and each Option Counterparty, each Capped Call Confirmation will be a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.
(m)
The execution and delivery by the Company and Pluralsight LLC of, and the performance by the Company and Pluralsight LLC of their respective obligations under, this Agreement, and the execution and delivery by the Company of, and the performance by the Company of its obligations under, the Indenture, the Securities and the Capped Call Confirmations (collectively with this Agreement, the “
Transaction Documents
”) will not contravene (i) any provision of applicable law, (ii) the certificate of incorporation, certificate of formation, bylaws or limited liability company agreement of the Company or Pluralsight LLC, as applicable, (iii) any agreement or other instrument binding upon the Company, Pluralsight LLC or the subsidiaries of the Company or Pluralsight LLC that is material to the Company, Pluralsight LLC and the subsidiaries of the Company or Pluralsight LLC, taken as a whole, or (iv) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company, Pluralsight LLC or any subsidiary of the Company or Pluralsight LLC, except that in the case of clauses (i), (iii) and (iv) above, where such contravention would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the execution and delivery by the Company or Pluralsight LLC of, and the performance by the Company or Pluralsight LLC of their respective obligations under the Transaction Documents, except (i) such as has previously been obtained and (ii) such as may be required by the securities or Blue Sky laws of the various states or foreign jurisdictions or the rules and regulations of the Financial Industry Regulatory Authority, Inc. in connection with the purchase and distribution of the Securities by the Initial Purchasers.
(n)
There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business, management or operations of the Company, Pluralsight LLC and the subsidiaries of the Company or Pluralsight LLC, taken as a whole, from that set forth in the Time of Sale Memorandum.
(o)
Neither the Company nor Pluralsight LLC is (i) in violation of its certificate of incorporation, certificate of formation, bylaws or limited liability
company agreement, as applicable; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or Pluralsight LLC is a party or by which the Company, Pluralsight LLC or any of their respective subsidiaries is bound or to which any of the property or assets of the Company or Pluralsight LLC is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation or any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Eeffect .
(p)
There are no legal or governmental proceedings pending or, to the knowledge of the Company or Pluralsight LLC, threatened to which the Company, Pluralsight LLC or any of their respective subsidiaries is a party or to which any of the properties of the Company, Pluralsight LLC or any of their subsidiaries is subject (i) other than proceedings accurately described in all material respects in the Time of Sale Memorandum and proceedings that would not reasonably be likely to have a Material Adverse Effect or (i) that would be required to be described in the Time of Sale Memorandum and the Final Memorandum if either were a prospectus included in a registration statement on Form S-1 and are not so described in all material respects in the Time of Sale Memorandum and the Final Memorandum; and there are no statutes, regulations, contracts or other documents to which the Company, Pluralsight LLC or any subsidiary of the Company or Pluralsight LLC is subject to or by which the Company or Pluralsight LLC or any such subsidiary is bound, that would be required to be described in the Time of Sale Memorandum and the Final Memorandum if either were a prospectus included in a registration statement on Form S-1 that are not described in the Time of Sale Memorandum and the Final Memorandum in all material respects as would be required.
(q)
The Company is not, and after giving effect to the offering and sale of the Securities, the application of the proceeds therefrom and the transactions contemplated by the Capped Call Confirmations as described in the Final Memorandum, will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “
Investment Company Act
”).
(r)
The Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, (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 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, reasonably be expected to have a Material Adverse Effect.
(s)
There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean‑up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, reasonably be likely to have a Material Adverse Effect.
(t)
There are no contracts, agreements or understandings between the Company or Pluralsight LLC and any person granting such person the right to require the Company or Pluralsight LLC, as applicable to file a registration statement under the Securities Act with respect to any securities of the Company or Pluralsight LLC, except as have been validly waived in connection with the issuance of the Securities contemplated hereby and as have been described in the Time of Sale Memorandum.
(u)
Neither the Company or Pluralsight LLC nor any affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act, an “
Affiliate
”) of the Company or Pluralsight LLC has directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the sale of the Securities in a manner that would require the registration under the Securities Act of the Securities, (i) made any General Solicitation that is not an Additional Written Offering Communication other than General Solicitations listed on Schedule II hereto or those made with the prior written consent of the Representatives, or (i) offered, solicited offers to buy or sold the Securities in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.
(v)
It is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers in the manner contemplated by this Agreement to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended.
(w)
The Securities satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act.
(x)
The statements set forth in the Time of Sale Memorandum and the Final Memorandum under the caption “Description of Capital Stock”, insofar as they purport to constitute a summary of the terms of the Company’s capital stock, and under the caption “Description of Notes”, under the caption “Certain Material
U.S. Federal Income Tax Considerations”, and under the caption “Plan of Distribution”, insofar as they purport to describe the provisions of the laws and documents referred to therein, are fairly summarized in all material respects.
(y)
PricewaterhouseCoopers, who have certified certain financial statements of the Company and Pluralsight LLC and its subsidiaries, are independent public accountants as required by the Securities Act and the rules and regulations of the Commission thereunder and the Public Company Accounting Oversight Board (United States).
(z)
(i) None of the Company, Pluralsight LLC or any of their respective subsidiaries or controlled affiliates, nor any director or officer of the Company, Pluralsight LLC or any of their respective subsidiaries, or, to the knowledge of the Company or Pluralsight LLC, any employee, agent or representative of the Company, Pluralsight LLC or any of their respective subsidiaries or controlled affiliates, has taken any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt 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) (“
Government Official
”) in order to improperly influence official action, or to any person in violation of any applicable anti-corruption laws; (ii) the Company, Pluralsight LLC and their respective subsidiaries and controlled affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained policies and procedures reasonably designed to promote and achieve compliance with such laws and with the representations and warranties contained herein; and (iii) none of the Company, Pluralsight LLC or their respective subsidiaries will use, directly or indirectly, the proceeds of the offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any applicable anti-corruption laws.
(aa) The operations of the Company, Pluralsight LLC and their respective 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, Pluralsight LLC and their respective subsidiaries conduct business, the rules and regulations thereunder and any related or similar 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, Pluralsight LLC or their respective subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company or Pluralsight LLC, threatened.
(bb)
(i) None of the Company, Pluralsight LLC, any subsidiaries of the Company or Pluralsight LLC, or any director, officer, or employee of the Company, Pluralsight LLC or any subsidiaries of the Company or Pluralsight LLC, or, to the Company’s or Pluralsight LLC’s knowledge, any agent, affiliate or representative of the Company, Pluralsight LLC or any subsidiaries of the Company or Pluralsight LLC, is an individual or entity (“
Person
”) that is, or is owned or controlled by one or more Persons that are:
(A)
the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“
OFAC
”), the United Nations Security Council (“
UNSC
”), the European Union (“
EU
”), Her Majesty’s Treasury (“
HMT
”), or other relevant sanctions authority (collectively, “
Sanctions
”), or
(B)
located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, the Crimea region of the Ukraine, Cuba, Iran, North Korea and Syria).
(ii)
The Company and Pluralsight LLC 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)
to fund or facilitate 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)
in any other manner 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)
For the past five years, the Company, Pluralsight LLC and their respective subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and will not knowingly engage 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.
(cc)
Subsequent to the respective dates as of which information is given in each of the Time of Sale Memorandum and the Final Memorandum, (i) the
Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction; (i) the Company and Pluralsight LLC have not purchased any of their outstanding capital stock or membership interests other than from its employees or other service providers in connection with the termination of their service, as applicable, nor declared, paid or otherwise made any dividend or distribution of any kind on their capital stock or membership interests other than ordinary and customary dividends; and (i) there has not been any material change in the capital stock or membership interests, short-term debt or long-term debt of the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, except in each case as described in each of the Time of Sale Memorandum and the Final Memorandum, respectively.
(dd)
The Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, have good and marketable title in fee simple to all real property and good and marketable title to all personal property (other than intellectual property, which is covered by Section 1(ee) below) owned by them which is material to the business of the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances and defects except such as are described in the Time of Sale Memorandum and the Final Memorandum or such as do not materially diminish the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole; and any real property and buildings held under lease by the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, are held by them under valid, subsisting and to the Company’s or Pluralsight LLC’s knowledge, enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, in each case except as described in the Time of Sale Memorandum and the Final Memorandum.
(ee)
The Company, Pluralsight LLC and their respective subsidiaries own or possess, or can reasonably promptly acquire on commercially reasonable terms, all patents, patent rights, licenses, inventions, copyrights, know‑how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names, domain names and other intellectual property rights, moral rights and other rights throughout the world (collectively, “
Intellectual Property Rights
”) employed by them in connection with, the business now conducted by them or as proposed to be conducted by them in the Time of Sale Memorandum and the Final Memorandum (“
Company Intellectual Property
”), except where the failure to own, possess or acquire any of the foregoing would not result in a material adverse effect on the Company, Pluralsight LLC, and their respective subsidiaries, taken as a whole; and none of the Company, Pluralsight LLC or any their
respective subsidiaries has received any written notice of infringement of or conflict with the Intellectual Property Rights of others that would reasonably be expected to result in a material adverse effect on the Company, Pluralsight LLC, and their respective subsidiaries, taken as a whole. The Company, Pluralsight LLC and their respective subsidiaries have taken all reasonable steps consistent with normal industry practice to secure exclusive ownership rights in the Company Intellectual Property from their employees, consultants, agents and contractors. There are no outstanding options, licenses or agreements of any kind relating to the Company Intellectual Property owned by the Company, Pluralsight LLC or any of their respective subsidiaries that are required to be described in the Time of Sale Memorandum and the Final Memorandum are not described in all material respects. The Company, Pluralsight LLC and their respective subsidiaries are not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Time of Sale Memorandum and are not described in all material respects. No government funding, facilities or resources of a university, college, other educational institution or research center or funding from third parties was used in the development of any Company Intellectual Property that is owned or purported to be owned by the Company, Pluralsight LLC or any of their respective subsidiaries except as would not have a material adverse effect on the Company, Pluralsight LLC and their respective subsidiaries, and no government agency or body, university, college, other educational institution or research center has any claim or right in or to any Company Intellectual Property that is owned or purported to be owned by the Company, Pluralsight LLC or any of their respective subsidiaries. The Company, Pluralsight LLC and their respective subsidiaries have used all software and other materials distributed under a “free”, “open source”, or similar licensing model (including but not limited to the GNU General Public License, GNU Lesser General Public License and GNU Affero General Public License) (“
Open Source Materials
”) in compliance with all license terms applicable to such Open Source Materials, except where the failure to comply would not reasonably be expected to have a material adverse effect on the Company, Pluralsight LLC, and their respective subsidiaries, taken as a whole. None of the Company, Pluralsight LLC or any of their respective subsidiaries has used or distributed any Open Source Materials in a manner that requires or has required (i) the Company, Pluralsight LLC or any of their respective subsidiaries to permit reverse-engineering of any products or services of the Company, Pluralsight LLC or any of their respective subsidiaries, or any software code or other technology owned by the Company, Pluralsight LLC or any of their respective subsidiaries; or (ii) any products or services of the Company, Pluralsight LLC or any of their respective subsidiaries, or any software code or other technology owned by the Company, Pluralsight LLC or any of their respective subsidiaries, to be (A) disclosed or distributed in source code form, (B) licensed for the purpose of making derivative works, or (C) redistributable at no charge, except in the case of (i) and (ii) above, for the Open Source Materials
themselves and otherwise such as would not have a material adverse effect on the Company, Pluralsight LLC, and their respective subsidiaries, taken as a whole.
(ff)
No material labor dispute with the employees of the Company, Pluralsight LLC or any of their respective subsidiaries exists, except as described in the Time of Sale Memorandum and the Final Memorandum, or, to the knowledge of the Company or Pluralsight LLC, is imminent; and neither the Company nor Pluralsight LLC is aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could have a Material Adverse Effect.
(gg)
The Company, Pluralsight LLC and each of their respective subsidiaries, taken as a whole, are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as the Company reasonably believes are prudent and customary in the businesses in which they are engaged; none of the Company, Pluralsight LLC or any of their respective subsidiaries have been refused any insurance coverage sought or applied for; and none of the Company, Pluralsight LLC or any of their respective subsidiaries 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 as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except as described in the Time of Sale Memorandum.
(hh)
The Company, Pluralsight LLC and their respective subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except for such certificates, authorizations and permits, the failure of which to obtain, would not reasonably be expected to have a Material Adverse Effect, and none of the Company, Pluralsight LLC or any subsidiaries of the Company or Pluralsight LLC has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as described in the Time of Sale Memorandum and the Final Memorandum.
(ii)
The Company, Pluralsight LLC and each of their respective subsidiaries, taken as a whole, maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (i) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States (“
U.S. GAAP
”) and to maintain asset accountability; (i) access to assets is permitted only in accordance with management’s general or specific authorization; (i) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) the interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Time of Sale Memorandum or the Final Memorandum is accurate. Except as described in the Time of Sale Memorandum and the Final Memorandum, since
the end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in the Company’s and Pluralsight LLC’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s or Pluralsight LLC’s internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Company’s and Pluralsight LLC’s internal control over financial reporting.
(jj)
The Company, Pluralsight LLC and each of their respective subsidiaries have filed all federal, state, local and foreign tax returns required to be filed through the date of this Agreement or have requested extensions thereof (except where the failure to file would not, individually or in the aggregate, have a material adverse effect on the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole) and have paid all taxes required to be paid thereon (except for cases in which the failure to file or pay would not have a material adverse effect on the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, or, except as currently being contested in good faith and for which reserves required by U.S. GAAP have been created in the financial statements of the Company and Pluralsight LLC), and no unpaid tax deficiency has been determined adversely to the Company, Pluralsight LLC or any of their respective subsidiaries which has had (nor do the Company, Pluralsight LLC or any of their respective subsidiaries have any notice or knowledge of any unpaid tax deficiency which could reasonably be expected to be determined adversely to the Company, Pluralsight LLC or any of their respective subsidiaries and which would reasonably be expected to have) a material adverse effect on the Company, Pluralsight LLC and their subsidiaries, taken as a whole.
(kk)
As of the date of this Agreement and through and as of the Closing Date and each Option Closing Date, the Company, and to the Company’s knowledge, its directors and officers, in their capacities as such, are in compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended (the “
Sarbanes-Oxley Act
”), and all rules and regulations promulgated thereunder applicable to the Company and its officers and directors at such time, and is taking steps designed to ensure that it will be in compliance, at all times, with the other provisions of the Sarbanes-Oxley Act when they become applicable to the Company.
(ll)
The financial statements of the Company and Pluralsight LLC included in each of the Time of Sale Memorandum and the Final Memorandum present fairly in all material respects the consolidated financial position of the Company, Pluralsight LLC and the subsidiaries of the Company and Pluralsight
LLC as of the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis throughout the periods involved. The other financial information of the Company and Pluralsight LLC included in the Time of Sale Memorandum and the Final Memorandum have been derived from accounting or other records of the Company, Pluralsight LLC and their respective subsidiaries and presents fairly in all material respects the information shown thereby.
(mm)
The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Time of Sale Memorandum and the Final Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.
(nn)
The Company, Pluralsight LLC and each of their respective subsidiaries have complied, and are presently in compliance with, its privacy and data and information security policies in effect from time to time, with contractual privacy and data and information security obligations and with applicable law and regulations regarding the collection, use, transfer, storage, protection, disposal and disclosure of personally identifiable information by the Company, Pluralsight LLC and their respective subsidiaries, except to the extent that the failure to do so would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the Company, Pluralsight LLC and their respective subsidiaries, taken as a whole. The Company, Pluralsight LLC and their respective subsidiaries, taken as a whole, have (i) taken commercially reasonable steps to protect the information technology assets and personally identifiable information within their control and (ii) have established and maintained commercially reasonable disaster recovery and security plans, procedures and facilities for the business consistent with prevalent industry practices. The information technology systems, used by the Company, Pluralsight LLC and their respective subsidiaries in their respective businesses are adequate for, and operate and perform in a manner consistent with prevalent industry practices. To the Company’s knowledge, there has been no security breach or attack in which personally identifiable information held by the Company, Pluralsight LLC or any of their respective subsidiaries, has been accessed or acquired by an unauthorized third party.
(oo)
Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Time of Sale Memorandum or the Final Memorandum is not based on or derived from sources that are reliable and accurate in all material respects.
(pp)
Neither the Company nor any of its subsidiaries has any securities rated by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act.
(qq)
Neither the Company or Pluralsight LLC nor, to the Company’s knowledge or Pluralsight LLC’s knowledge, any controlled affiliate of the Company or Pluralsight LLC has taken, nor will the Company take, directly or indirectly, any action which is designed, or would reasonably be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or to result in a violation of Regulation M under the Exchange Act.
2.
Agreements to Sell and Purchase
. The Company hereby agrees to sell to the several Initial Purchasers, and each Initial Purchaser, 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 amount of Firm Securities set forth in Schedule I hereto opposite its name at a purchase price of 97.5% of the principal amount thereof (the “
Purchase Price
”) plus accrued interest, if any, from March 11, 2019 to the Closing Date (as defined below).
On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to sell to the Initial Purchasers the Additional Securities, and the Initial Purchasers shall have the right to purchase, severally and not jointly, up to $83,500,000 principal amount of Additional Securities at the Purchase Price. The Representatives may exercise this right on behalf of the Initial Purchasers in whole or from time to time in part by giving written notice to the Company;
provided
that the Option Closing Date (as defined below) shall occur within a period of 13 calendar days from, and including, the Closing Date. Any exercise notice shall specify the principal amount of Additional Securities to be purchased by the Initial Purchasers 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 4 solely for the purpose of covering sales of Securities in excess of the number of the Firm Securities. On each day, if any, that Additional Securities are to be purchased (an “
Option Closing Date
”), each Initial Purchaser agrees, severally and not jointly, to purchase the principal amount of Additional Securities (subject to such adjustments to eliminate fractional Securities as the Representatives may determine) that bears the same proportion to the total principal amount of Additional Securities to be purchased on such Option Closing Date as the principal amount of Firm Securities set forth in Schedule I opposite the name of such Initial Purchaser bears to the total principal amount of Firm Securities.
3.
Terms of Offering.
The Representatives have advised the Company that the Initial Purchasers will make an offering of the Securities purchased by the Initial
Purchasers hereunder as soon as practicable after this Agreement is entered into as in the Representatives’ judgment is advisable.
4.
Payment and Delivery.
Payment for the Firm Securities shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Firm Securities for the respective accounts of the several Initial Purchasers at 10:00 a.m., New York City time, on March 11, 2019, or at such other time on the same or such other date, not later than March 18, 2019, as shall be designated in writing by the Representatives. The time and date of such payment are hereinafter referred to as the “
Closing Date
.”
Payment for any Additional Securities shall be made to the Company in Federal or other funds immediately available in New York City against delivery of such Additional Securities for the respective accounts of the several Initial Purchasers 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 the last calendar day of the 13-calendar day period beginning on, and including, the Closing Date, as shall be designated in writing by the Representatives.
The Securities shall be in definitive form or global form, as specified by the Representatives, and registered in such names and in such denominations as the Representatives shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Securities shall be delivered to the Representatives on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the several Initial Purchasers, with any transfer taxes payable in connection with the transfer of the Securities to the Initial Purchasers duly paid, against payment of the Purchase Price therefor plus accrued interest, if any, to the date of payment and delivery.
5.
Conditions to the Initial Purchasers’ Obligations.
The several obligations of the Initial Purchasers to purchase and pay for the Firm Securities on the Closing Date are subject to the following conditions:
(a)
The respective representations and warranties of the Company and Pluralsight LLC contained herein shall be true and correct on the date hereof and on and as of the Closing Date or the Option Closing Date, as the case may be; and the statements of the Company, Pluralsight LLC and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Option Closing Date, as the case may be;
(b)
Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, and subsequent to the Closing Date and prior to the Option Closing Date, 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, management or operations of the
Company, Pluralsight LLC and the subsidiaries of the Company or Pluralsight LLC, taken as a whole, from that set forth in the Time of Sale Memorandum provided to the prospective purchasers of the Securities that, in the Representatives’ judgment, is material and adverse and that makes it, in the Representatives’ judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Time of Sale Memorandum.
(c)
The Representatives shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of each of the Company and Pluralsight LLC, to the effect set forth in Section 5(a) and Section 5(b) above and to the effect that the representations and warranties of the Company and Pluralsight LLC, respectively, contained in this Agreement are true and correct on the date hereof and as of the Closing Date and that the Company and Pluralsight LLC, as applicable, has complied with all of the agreements and satisfied all of the conditions on their respective parts to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering each such certificate may rely upon the best of his or her knowledge as to proceedings threatened.
(d)
The Representatives shall have received on the Closing Date an opinion and negative assurance letter of Wilson Sonsini Goodrich & Rosati , P.C. (“
WSGR
”), outside counsel for the Company and Pluralsight LLC, dated the Closing Date, in form and substance reasonably satisfactory to the Representatives.
(e)
The Initial Purchasers shall have received on the Closing Date an opinion and negative assurance letter of Goodwin Procter LLP (“
Goodwin
”), counsel for the Initial Purchasers, dated the Closing Date, in form and substance reasonably satisfactory to the Representatives.
With respect to Section 5(d) above and Section 5(e) above, WSGR and Goodwin may state that their opinions and beliefs are based upon their participation in the preparation of the Time of Sale Memorandum and the Final Memorandum and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification, except as specified.
The opinion of WSGR described in Section 5(d) above shall be rendered to the Initial Purchasers at the request of the Company and Pluralsight LLC and shall so state therein.
(f)
The Initial Purchasers shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Initial Purchasers, from PricewaterhouseCoopers, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Time of Sale Memorandum and the Final Memorandum;
provided
that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.
(g)
The “lock‑up” agreements, each substantially in the form of
Exhibit A
hereto, between the Representatives and certain holders of shares of Common Stock or membership interests of Pluralsight LLC or any other securities convertible into or exercisable or exchangeable for Common Stock or membership interests of Pluralsight LLC (such shares of Common Stock, membership interests of Pluralsight LLC or such other securities collectively, the “
Company and LLC Equity Securities
”) and certain officers and directors of the Company and Pluralsight LLC, relating to sales and certain other dispositions of the Company and LLC Equity Securities, delivered to the Representatives on or before the date hereof, shall be in full force and effect on the Closing Date.
(h)
The Initial Purchasers shall have received, on each of the date hereof and the Closing Date, a certificate signed by the Chief Financial Officer of the Company dated the date hereof and as of the Closing Date, in form and substance satisfactory to the Initial Purchasers, containing statements and information with respect to certain information contained in the Time of Sale Memorandum and the Final Memorandum.
(i)
The several obligations of the Initial Purchasers to purchase Additional Securities hereunder are subject to the following conditions, and/or delivery to the Representatives on the applicable Option Closing Date of the following:
(i)
certificates dated the Option Closing Date and signed by an executive officer of each of the Company and Pluralsight LLC, confirming that the respective certificates of the Company and Pluralsight LLC delivered on the Closing Date pursuant to Section 5(c) hereof remains true and correct as of such Option Closing Date;
(ii)
an opinion and negative assurance letter of WSGR, dated the Option Closing Date, relating to the Additional Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion and negative assurance letter required by Section 5(d) hereof;
(iii)
an opinion and negative assurance letter of Goodwin, counsel for the Initial Purchasers, dated the Option Closing Date, relating to the Additional Securities to be purchased on such Option Closing Date and otherwise to the same effect as the opinion and negative assurance letter required by Section 5(e) hereof;
(iv)
a letter dated the Option Closing Date, in form and substance satisfactory to the Initial Purchasers, from PricewaterhouseCoopers, independent public accountants, substantially in the same form and substance as the letter furnished to the Initial Purchasers pursuant to Section 5(f) hereof;
provided
that the letter delivered on the Option Closing Date shall use a “cut-off date” not earlier than three business days prior to such Option Closing Date;
(v)
a certificate of the Chief Financial Officer of the Company dated the Option Closing Date, substantially in the same form and substance as the letters furnished to the Initial Purchasers pursuant to Section 5(h) hereof, containing statements and information with respect to certain information contained in the Time of Sale Prospectus and the Prospectus; and
(vi)
such other documents as the Representatives may reasonably request with respect to the good standing of the Company and Pluralsight LLC, the due authorization, execution and authentication of the Additional Securities to be sold on such Option Closing Date and other matters related to the execution and authentication of such Additional Securities.
(j)
A number of shares of Class A Common Stock equal to the sum of the Maximum Number of Underlying Securities shall have been approved for listing on The NASDAQ Global Select Market, subject to official notice of issuance.
6.
Covenants of the Company and Pluralsight LLC.
Each of the Company and Pluralsight LLC, jointly and severally, covenants with each Initial Purchaser as follows:
(a)
To furnish to the Representatives in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 6(d) or (e), as many copies of the Time of Sale Memorandum, the Final Memorandum, any documents incorporated by reference therein and any supplements and amendments thereto as the Representatives may reasonably request.
(b)
Before amending or supplementing the Preliminary Memorandum, the Time of Sale Memorandum or the Final Memorandum, to furnish to the Representatives a copy of each such proposed amendment or supplement and not to use any such proposed amendment or supplement to which the Representatives reasonably object.
(c)
To furnish to the Representatives a copy of each proposed Additional Written Offering Communication to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed Additional Written Offering Communication to which the Representatives reasonably object.
(d)
If the Time of Sale Memorandum is being used to solicit offers to buy the Securities at a time when the Final Memorandum 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 Memorandum in order to make the statements therein, in the light of the circumstances, not misleading, or if, in the opinion of counsel for the Initial Purchasers, it is necessary to amend or supplement the Time of Sale Memorandum to comply with applicable law, forthwith to prepare and furnish, at its own expense, to the Initial Purchasers and to any dealer upon request, either amendments or supplements to the Time of Sale Memorandum so that the statements in the Time of Sale Memorandum 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 Memorandum, as amended or supplemented, will comply with applicable law.
(e)
If, during such period after the date hereof and prior to the date on which all of the Securities shall have been sold by the Initial Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Final Memorandum in order to make the statements therein, in the light of the circumstances when the Final Memorandum is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Initial Purchasers, it is necessary to amend or supplement the Final Memorandum to comply with applicable law, forthwith to prepare and furnish, at its own expense, to the Initial Purchasers, either amendments or supplements to the Final Memorandum so that the statements in the Final Memorandum as so amended or supplemented will not, in the light of the circumstances when the Final Memorandum is delivered to a purchaser, be misleading or so that the Final Memorandum, as amended or supplemented, will comply with applicable law.
(f)
To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request.
(g)
Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s and Pluralsight LLC’s counsel and the Company’s accountants in connection with the issuance and sale of the Securities and all other fees or expenses in connection
with the preparation of the Preliminary Memorandum, the Time of Sale Memorandum, the Final Memorandum, any Additional Written Offering Communication prepared by or on behalf of, used by, or referred to by the Company and any amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the delivering of copies thereof to the Initial Purchasers, in the quantities herein above specified, (i) all costs and expenses related to the transfer and delivery of the Securities to the Initial Purchasers, including any transfer or other taxes payable thereon, (i) the cost of printing or producing any Blue Sky or legal investment memorandum, if any, 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(f) hereof, including filing fees and the reasonable and documented fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the Blue Sky or legal investment memorandum (such amount not to exceed $15,000), (i) any fees charged by rating agencies for the rating of the Securities, (i) the fees and expenses, if any, incurred in connection with the listing of the Underlying Securities on the Nasdaq Global Select Market, (i) the costs and charges of the Trustee and any transfer agent, registrar or depositary, (i) the cost of the preparation, issuance and delivery of the Securities, (i) 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 production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and 50% of ground transportation costs and 50% of the cost of any aircraft chartered in connection with the road show (the remaining 50% of the cost of such ground transportation and aircraft to be paid by the Initial Purchasers), (i) the document production charges and expenses associated with printing this Agreement and (i) 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, and the last paragraph of Section 10, the Initial Purchasers 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.
(h)
Neither the Company or Pluralsight LLC nor any Affiliate will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) which could be integrated with the sale of the Securities in a manner which would require the registration under the Securities Act of the Securities.
(i)
To furnish the Representatives with any proposed General Solicitation to be made by the Company or on its behalf before its use, and not to make or use any proposed General Solicitation without the prior written consent of the Representatives.
(j)
While any of the Securities or the Underlying Securities remain “restricted securities” within the meaning of the Securities Act, to make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act.
(k)
During the period of one year after the Closing Date or any Option Closing Date, if later, the Company will not be, nor will it become, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act.
(l)
During the period of one year after the Closing Date or any Option Closing Date, if later, the Company will not, and will use its commercially reasonable efforts to not permit any person that is an affiliate (as defined in Rule 144 under the Securities Act) at such time (or has been an affiliate within the three months preceding such time) to, resell any of the Securities or the Underlying Securities which will be “restricted securities” under Rule 144 following such resale.
(m)
Not to take any action prohibited by Regulation M under the Exchange Act in connection with the distribution of the Securities contemplated hereby.
(n)
To effect and maintain the listing of a number of shares of Class A Common Stock equal to the sum of the Maximum Number of Underlying Securities on The NASDAQ Global Select Market, subject to notice of official listing.
(o)
The Company will deliver to each Initial Purchaser (or its agent), on the date of execution of this Agreement, a properly completed and executed Certification Regarding Beneficial Owners of Legal Entity Customers, together with copies of identifying documentation, and the Company undertakes to provide such additional supporting documentation as each Initial Purchaser may reasonably request in connection with the verification of the foregoing Certification.
(p)
To reserve and keep available at all times, free of pre-emptive rights, a number of shares of Class A Common Stock equal to the Maximum Number of Underlying Securities for the purpose of enabling the Company to satisfy all obligations to issue the Underlying Securities upon conversion of the
Securities. Between the date hereof and the Closing Date, the Company will not do or authorize any act or thing that would result in an adjustment of the Conversion Rate of the Securities.
Each of the Company and Pluralsight LLC also agrees that, without the prior written consent of Morgan Stanley & Co. LLC on behalf of the Initial Purchasers, it will not, during the period ending 75 days after the date of the Final Memorandum (the “
Restricted Period
”), (1) 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 Company and LLC Equity Securities, (2) 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 Company and LLC Equity Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Company and LLC Equity Securities, in cash or otherwise, or (3) make any public announcement of its intention to do any of the foregoing. The foregoing sentence shall not apply to (a) the sale of the Securities under this Agreement and any Underlying Securities delivered upon conversion thereof in accordance with the terms of the Indenture, (b) the issuance of shares of Common Stock by the Company or membership interests in Pluralsight LLC upon the exercise of an option or warrant or the conversion or vesting of Company and LLC Equity Securities outstanding on the date hereof of which the Initial Purchasers have been advised in writing
1
, (c) the issuance by the Company of any Company and LLC Equity Securities pursuant to any incentive plan or stock ownership plan in effect on the date hereof and described in the Time of Sale Memorandum and the Final Memorandum, (d) the filing by the Company of a registration statement with the Commission on Form S-8 in respect of any Company and LLC Equity Securities issued under or the grant of any award pursuant to an employee benefit plan in effect on the date hereof and described in the Time of Sale Memorandum, (e) the establishment or amendment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock,
provided
that (i) such plan does not provide for the transfer of Common Stock during the Restricted Period and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by the Company regarding the establishment or amendment of such plan, such announcement or filing shall include a statement to the effect that no transfer of Common Stock may be made under such plan during the Restricted Period, (f) the offering or sale of Common Stock by certain stockholders of the Company as described in the Time of Sale Memorandum or (g) the sale or issuance of or entry into an agreement to sell or issue Company and LLC Equity Securities in connection with one or more acquisitions of businesses, products or technologies, joint ventures, commercial relationships or other strategic corporate transactions;
provided
that the aggregate amounts of Company and LLC Equity Securities (on an as-converted, as-exercised or as-exchanged basis) that the Company or Pluralsight LLC may sell or issue or agree to sell or issue pursuant to this paragraph shall not exceed 5% of the total number of shares of Class A Common Stock of the Company issued and
1
Company to confirm how many shares can be issued pursuant to this clause.
outstanding immediately following the completion of the transactions contemplated by this Agreement determined on a fully-diluted basis and assuming that all outstanding membership interests in Pluralsight LLC that are exchangeable for shares of Class A Common Stock are so exchanged, and provided further that each recipient of Company and LLC Equity Securities pursuant to this clause (g) shall execute a lock-up agreement substantially in the form of
Exhibit A
hereto with respect to the remaining portion of the Restricted Period.
7.
Offering of Securities; Restrictions on Transfer
. (a) Each Initial Purchaser, severally and not jointly, represents and warrants that such Initial Purchaser is a qualified institutional buyer as defined in Rule 144A under the Securities Act (a “
QIB
”). Each Initial Purchaser, severally and not jointly, agrees with the Company that (i) it will not solicit offers for, or offer or sell, such Securities by any General Solicitation, other than a permitted communication listed on Schedule II hereto, or those made with the prior written consent of the Company, or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act and (i) it will sell such Securities only to persons that it reasonably believes to be QIBs that, in purchasing such Securities, are deemed to have represented and agreed as provided in the Final Memorandum under the captions “Transfer Restrictions”.
(b)
The Company agrees that the Initial Purchasers may provide copies of the Preliminary Memorandum, the Time of Sale Memorandum, the Final Memorandum and any other agreements or documents relating thereto, including without limitation, the Indenture, to Xtract Research LLC (“Xtract”), following completion of the offering, for inclusion in an online research service sponsored by Xtract, access to which shall be restricted by Xtract to QIBs.
8.
Indemnity and Contribution
. (a) The Company and Pluralsight LLC, jointly and severally, agree to indemnify and hold harmless each Initial Purchaser, its directors and officers, each person, if any, who controls any Initial Purchaser within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any Initial Purchaser within the meaning of Rule 405 under the Securities Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Memorandum, the Time of Sale Memorandum, any Additional Written Offering Communication prepared by or on behalf of, used by, or referred to by the Company, any General Solicitation made by the Company, any “road show” as defined in Rule 433(h) under the Securities Act (a “road show”), the Final Memorandum or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Initial Purchaser furnished
to the Company in writing by such Initial Purchaser through the Representatives expressly for use therein.
(b)
Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, Pluralsight LLC, the directors of the Company and Pluralsight LLC, the officers of the Company and each person, if any, who controls the Company or Pluralsight LLC 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 and Pluralsight LLC to such Initial Purchaser, but only with reference to information relating to such Initial Purchaser furnished to the Company or Pluralsight LLC in writing by such Initial Purchaser through the Representatives expressly for use in the Preliminary Memorandum, the Time of Sale Memorandum, any Additional Written Offering Communication set forth in Schedule II hereto, road show, the Final Memorandum 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 reasonably incurred and documented 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 in writing to the retention of such counsel, (i) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party, (i) the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party, or (i) 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 Representatives, in the case of parties indemnified pursuant to Section 8(a), and by the Company and Pluralsight LLC, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party, in such form and substance reasonably satisfactory to such indemnified party, from all liability on claims that are the subject matter of such proceeding, and (y) does not include any statements to or any admission of fault, culpability or failure to act by or on behalf of any indemnified party.
(d)
To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and Pluralsight LLC on the one hand and the Initial Purchasers on the other hand from the offering of the Securities or (i) 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 and Pluralsight LLC on the one hand and of the Initial Purchasers 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 and Pluralsight LLC on the one hand and the Initial Purchasers 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 Pluralsight LLC and the total discounts and commissions received by the Initial Purchasers bear to the aggregate offering price of the Securities. The relative fault of the Company and Pluralsight LLC on the one hand and of the Initial Purchasers 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, Pluralsight LLC or by the Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Initial Purchasers’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amount of Securities they have purchased hereunder, and not joint.
(e)
The Company, Pluralsight LLC and the Initial Purchasers agree that it would not be just or equitable if contribution pursuant to this Section 8 were determined by
pro rata
allocation (even if the Initial Purchasers 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 Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities resold by it in the initial placement of such Securities were offered to investors exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.
(f)
The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (i) any investigation made by or on behalf of any Initial Purchaser, its directors and officers, any person controlling any Initial Purchaser or any affiliate of any Initial Purchaser or by or on behalf of the Company, Pluralsight LLC, their respective officers or directors or any person controlling the Company or Pluralsight LLC and (i) acceptance of and payment for any of the Securities.
9.
Termination.
The Initial Purchasers may terminate this Agreement by notice given by the Representatives to the Company and Pluralsight LLC, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange or The NASDAQ Global Select Market, (i) trading of any securities of the Company shall have been suspended on any exchange or in any
over‑the‑counter market, (i) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (i) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (i) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in the Representatives’ judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in the Representatives’ 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 Memorandum or the Final Memorandum.
10.
Effectiveness; Defaulting Initial Purchasers
. 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 Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase is not more than one‑tenth of the aggregate principal amount of Securities to be purchased on such date, the other Initial Purchasers shall be obligated severally in the proportions that the principal amount of Firm Securities set forth opposite their respective names in Schedule I bears to the aggregate principal amount of Firm Securities set forth opposite the names of all such non‑defaulting Initial Purchasers, or in such other proportions as the Representatives may specify, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on such date;
provided
that in no event shall the principal amount of Securities that any Initial Purchaser 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 Securities without the written consent of such Initial Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase Firm Securities which it or they have agreed to purchase hereunder on such date and the aggregate principal amount of 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 the Representatives and the Company and Pluralsight LLC 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 Initial Purchaser or of the Company and Pluralsight LLC. In any such case either the Representatives or the Company and Pluralsight LLC 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 Time of Sale Memorandum, the Final Memorandum or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase Additional Securities and the aggregate principal amount of Additional Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Additional Securities to be purchased on such Option Closing Date, the non-defaulting Initial Purchasers shall have the option to (a) terminate their obligation hereunder to
purchase the Additional Securities to be sold on such Option Closing Date or (b) purchase not less than the principal amount of Additional Securities that such non-defaulting Initial Purchasers would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement.
If this Agreement shall be terminated by the Initial Purchasers, or any of them, pursuant to Section 9 above or because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Initial Purchasers or such Initial Purchasers as have so 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 Initial Purchasers 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, Pluralsight LLC and the Initial Purchasers with respect to the preparation of the Preliminary Memorandum, the Time of Sale Memorandum, the Final Memorandum, the conduct of the offering, and the purchase and sale of the Securities.
(b)
The Company and Pluralsight LLC acknowledge that in connection with the offering of the Securities: (i) the Initial Purchasers have acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Company, Pluralsight LLC or any other person, (i) the Initial Purchasers owe the Company and Pluralsight LLC 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 (i) the Initial Purchasers may have interests that differ from those of the Company and Pluralsight LLC. Each of the Company and Pluralsight LLC waives to the full extent permitted by applicable law any claims it may have against the Initial Purchasers arising from an alleged breach of fiduciary duty in connection with the offering of the Securities.
12.
Recognition of the U.S. Special Resolution Regimes
. (a) In the event that any Initial Purchaser that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Initial Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b)
In the event that any Initial Purchaser that is a Covered Entity or a BHC Act Affiliate of such Initial Purchaser becomes subject to a proceeding
under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Initial Purchaser are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For purposes of this Section a “
BHC Act Affiliate
” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “
Covered Entity
” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “
Default Right
” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “
U.S. Special Resolution Regime
” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
13.
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.
14.
Applicable Law.
This Agreement, and any claim, controversy or dispute arising under or related thereto, shall be governed by and construed in accordance with the internal laws of the State of New York.
15.
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.
16.
Patriot Act
. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Company and Pluralsight LLC, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.
17.
Notices.
All communications hereunder shall be in writing and effective only upon receipt and if to the Initial Purchasers shall be delivered, mailed or sent to Morgan Stanley & Co. LLC, 1585 Broadway, New York, New York 10036, Attention: Convertible Debt Syndicate Desk, with a copy to the Legal Department; in care of J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179 (fax: (212) 622-8358); Attention: Equity Syndicate Desk; and if to the Company or Pluralsight LLC, shall be delivered, mailed or sent to 182 North Union Avenue, Farmington, Utah 84025, Attention: General Counsel.
|
|
|
|
Very truly yours,
|
|
PLURALSIGHT, INC.
|
|
|
By:
|
/s/ Aaron Skonnard
|
|
Name:
|
Aaron Skonnard
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
PLURALSIGHT HOLDINGS, LLC
|
|
|
By:
|
/s/ Aaron Skonnard
|
|
Name:
|
Aaron Skonnard
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
Accepted as of the date hereof
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
Acting severally on behalf of themselves and the several Initial Purchasers named in Schedule I hereto.
|
|
|
|
By:
|
Morgan Stanley & Co. LLC
|
|
|
|
By:
|
/s/ Melissa Knox
|
|
Name:
|
Melissa Knox
|
|
Title:
|
Managing Director
|
|
|
|
|
By:
|
J.P. Morgan Securities LLC
|
|
|
By:
|
/s/ Santosh Sreenivasan
|
|
Name:
|
Santosh Sreenivasan
|
|
Title:
|
Managing Director
|
SCHEDULE I
|
|
|
|
|
|
Initial Purchaser
|
|
Principal Amount of Firm Securities to be Purchased
|
|
|
|
Morgan Stanley & Co. LLC
|
|
255,750,000
|
|
J.P. Morgan Securities LLC
|
|
143,000,000
|
|
Barclays Capital Inc.
|
|
63,250,000
|
|
Merrill Lynch, Pierce, Fenner & Smith, Incorporated
|
|
52,250,000
|
|
Citigroup Global Markets Inc.
|
|
24,750,000
|
|
Raymond James & Associates, Inc.
|
|
5,500,000
|
|
SunTrust Robinson Humphrey, Inc.
|
|
5,500,000
|
|
|
|
|
Total:
|
|
$
|
550,000,000
|
|
SCHEDULE II
Permitted Communications
Time of Sale Memorandum
|
|
1.
|
Preliminary Memorandum, dated March 4, 2019
|
|
|
2.
|
Pricing term sheet, dated March 6, 2019, attached hereto as Exhibit B
|
Permitted Additional Written Offering Communications
|
|
1.
|
Each electronic “road show” as defined in Rule 433(h) furnished to the Initial Purchasers prior to use that the Initial Purchasers and Company have agreed may be used in connection with the offering of the Securities
|
|
|
2.
|
Pricing term sheet, dated March 6, 2019, attached hereto as Exhibit B
|
Permitted General Solicitations other than Permitted Additional Written Offering Communications set forth above
|
|
1.
|
Launch press release, dated March 4, 2019, in respect of the offering of Securities
|
|
|
2.
|
Pricing press release, to be dated March 6, 2019, in respect of the offering of Securities
|
EXHIBIT A
Form of Lock-up Agreement
____________, 2019
Morgan Stanley & Co. LLC
|
|
c/o
|
Morgan Stanley & Co. LLC
1585 Broadway
New York, NY 10036
|
Ladies and Gentlemen:
The undersigned understands that Morgan Stanley & Co. LLC (“
Morgan Stanley
”) proposes to enter into an Underwriting Agreement (the “
Underwriting Agreement
”) with Pluralsight, Inc., a Delaware corporation (the “
Company
”), Pluralsight Holdings, LLC (“
Pluralsight LLC
”), and the selling stockholders named in
Schedule I
to the Underwriting Agreement, providing for the offering (the “
Equity Offering
”) by the several Underwriters named in
Schedule II
to the Underwriting Agreement (the “
Underwriters
”), of shares of Class A common stock, par value $0.0001 per share (the “
Class A Common Stock
”), of the Company (the “
Shares
”) and/or a
Purchase Agreement (the “
Purchase Agreement
”, and together with the Underwriting Agreement, the “
Offering Agreements
”), with the Company and Pluralsight LLC providing for the offering (the “
Note Offering
”, and together with the Equity Offering, the “
Offerings
”) by the several Initial Purchasers named in
Schedule I
to the Purchase Agreement (the “
Initial Purchasers
”, and together with the Underwriters, the “
Purchasers
”), of convertible senior notes due 2024 of the Company (the “
Notes
”). The Notes will be convertible into cash, shares of Class A Common Stock, or a combination thereof, at the Company’s option.
To induce the Purchasers that may participate in the Offerings to continue their efforts in connection with the Offerings, the undersigned hereby agrees that, without the prior written consent of Morgan Stanley on behalf of the Purchasers, he/she or it will not, during the period commencing on the date hereof and ending (and including) 75 days after the date of the final offering memoranda (the “
Restricted Period
”)
relating to the Offerings (the “
Final Memoranda
”) (or if such final memoranda have different dates or if the Company chooses to pursue only one of the Offerings, then 75 days after the latest of the dates set forth on such final memoranda if different dates and 75 days after the date of the final offering memorandum for the single Offering the Company pursues), (1) 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 Class A Common Stock, the Company’s Class B common stock, par value $0.0001 per share (the “
Class B Common Stock
”), and the Company’s Class C common stock (the “
Class C Common Stock,”
and collectively with the Class A Common Stock and Class B Common Stock, the “
Common Stock
”) or units of Pluralsight LLC (the “
LLC Units
”) beneficially owned (as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”)), by the undersigned or any other securities so owned convertible into or exercisable or exchangeable for Common Stock or LLC Units (such shares of Common Stock, LLC Units or such other securities collectively, the “
Securities
,” and any such
Securities beneficially owned by the undersigned, the “
Undersigned’s Securities
”) or publicly disclose the intention to do any of the foregoing or (2) 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 Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of the Securities, in cash or otherwise.
The restrictions described in the foregoing sentence shall not apply to:
(a)
transactions relating to Securities acquired in open market transactions after the completion of the Offerings;
provided
that no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made during the Restricted Period in connection with subsequent sales of Securities acquired in such open market transactions;
(b)
the transfer of the Undersigned’s Securities (i) to the spouse, domestic partner, parent, child or grandchild of the undersigned or any other person with whom the undersigned has a relationship by blood, marriage or adoption not more remote than first cousin (each, an “
immediate family member
”) or to a trust or other entity formed for estate planning purposes for the direct or indirect benefit of the undersigned or an immediate family member, (ii) by bona fide gift, will or intestacy, [or] (iii) if the undersigned is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of such trust; [or (iv) by bona fide gift to a charitable organization, as such term is described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, by the undersigned so long as the aggregate amount of such gift taken altogether with all such other gifts by the undersigned does not exceed 30,000 shares or LLC Units (or any other of the Undersigned’s Securities convertible or exercisable or exchangeable for such shares or LLC Units (a “
Permitted Donation
”))];
provided
that no filing under Section 16(a) of the Exchange Act or other public filing, report or announcement reporting a reduction in beneficial ownership of shares of Common Stock or other Securities shall be required or shall be voluntarily made during the Restricted Period; [unless the undersigned is otherwise permitted to file a report under Section 16(a) of the Exchange Act during the Restricted Period in connection with other exceptions under this agreement in which case such filing shall include a statement to the effect that the charitable gift was made pursuant to such Permitted Donation];
2
(c)
if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, the transfer of the Undersigned’s Securities (i) to another corporation, partnership, limited liability company, trust or other business entity that controls, is controlled by, manages or is managed by or is under common control with the undersigned or affiliates of the undersigned (including, for the avoidance of doubt, where the undersigned is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), or (ii) as part of a disposition, transfer or distribution by the undersigned to its stockholders, partners, members or other equity holders;
(d)
the establishment, amendment or modification of a trading plan pursuant to Rule 10b5‑1 under the Exchange Act (a “
10b5-1 Plan
”) for the transfer of shares of Common Stock;
provided
that (i) such plan does not provide for the transfer of shares of Common Stock during the Restricted Period (except, in the case of an amendment or modification to such plan, with respect to Common Stock of the Company originally subject to such plan prior to the amendment or modification, and provided that the amendment or modification does not affect the terms or conditions
2
NTD: Bracketed language in this section to be included in the 1-2 directors with planned gifts
with respect to the transfer thereof) and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the establishment, amendment or modification of such plan, such announcement or filing shall include a statement to the effect that no transfer of shares of Common Stock may be made under such plan during the Restricted Period;
(e)
the sale or transfer of Common Stock pursuant to a 10b5-1 Plan in effect as of the date hereof (an “
Existing Plan
”), provided that (i) the expected timing and volume of any sale or transfer of shares of Common Stock pursuant to the Existing Plan are set forth on
Exhibit A
hereto and (ii) to the extent a public filing under the Exchange Act, if any, is required in connection with such sale or transfer, such filing shall include a statement to the effect that the sale or transfer was made pursuant to such Existing Plan;
(f)
the transfer of the Undersigned’s Securities to the Company or Pluralsight LLC in connection with the vesting or settlement of restricted stock units or incentive units or the exercise of options or other rights to purchase shares of Common Stock, in each case on a “net” or “cashless” basis or to cover tax withholding obligations of the undersigned in connection with such vesting or exercise, including any transfer to the Company or Pluralsight LLC for the payment of tax withholdings or remittance payments due as a result of the vesting, settlement or exercise of such restricted stock units, incentive units, options or rights;
provided
that if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Restricted Period, the undersigned shall include a statement in any such report to the effect that such transfer is in connection with the vesting or settlement of restricted stock units or incentive units, or the “net” or “cashless” exercise of options or other rights to purchase shares of Common Stock, as applicable or to cover tax obligations in connection with such vesting;
(g)
[the sale by the Company (on behalf of the undersigned) of up to such number of shares of Class A Common Stock solely necessary to raise funds to satisfy the Company’s income and payroll tax withholding obligations in connection with the settlement or vesting of restricted stock units held by the undersigned that are outstanding as of the date hereof;
provided
that if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Restricted Period, the undersigned shall include a statement in any such report to the effect that such transfer was solely pursuant to the circumstances described in this clause (g), no other shares of Common Stock were sold and that the Undersigned’s Securities are subject to a lock-up agreement with the Underwriters;
provided further
that no other public announcement shall be required or shall be voluntarily made in connection with such transfer;]
3
(h)
the transfer of the Undersigned’s Securities to the Company or Pluralsight LLC pursuant to agreements under which the Company, Pluralsight LLC or any of their respective equity holders has the option to repurchase such Securities upon termination of service of the undersigned;
(i)
the transfer of the Undersigned’s Securities pursuant to a bona fide third party tender offer, merger, consolidation or other similar transaction made to all holders of Securities of the Company or Pluralsight LLC involving a “change of control” (as defined below) of the Company or Pluralsight LLC occurring after the consummation of the Offerings, that has been approved by the board of directors of the Company or the board of managers of Pluralsight LLC, as the case may
3
NTD: To be included in Section 16 officer lock-ups that have RSUs vesting during the lock-up for which the Company will sell to cover the tax obligations.
be;
provided
that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Undersigned’s Securities shall remain subject to the terms of this letter;
(j)
the exchange, redemption, or repurchase of any LLC Units (or securities convertible into or exercisable or exchangeable LLC Units) and a corresponding number of shares of Class B Common Stock or Class C Common Stock, as applicable, into or for shares of Class A Common Stock (or securities convertible into or exercisable or exchangeable for Class A Common Stock), or at the Company’s option, for cash or Class A Common Stock, pursuant to either an exchange agreement between the Company and certain unit holders of Pluralsight LLC or the Pluralsight LLC Fourth Amended and Restated Limited Liability Agreement, which agreement, as applicable, is described in the Final Memoranda (the “
Transfer Agreement
”);
provided
that (i) such shares of Class A Common Stock and other securities remain subject to the terms of this letter and (ii) to the extent a public announcement or filing under the Exchange Act, if any, is required of or voluntarily made by or on behalf of the undersigned or the Company regarding the exchange, redemption, or repurchase, as applicable, such announcement or filing shall include a statement to the effect that such exchange, redemption, or repurchase, as applicable, occurred pursuant to the Transfer Agreement and no transfer of the shares of Class A Common Stock or other securities received upon exchange may be made during the Restricted Period, except sales or transfers of shares of Common Stock pursuant to an Existing Plan;
(k)
the transfer of the Undersigned’s Securities that occurs pursuant to a domestic order or in connection with a divorce settlement; and
(l)
the sale and transfer of Securities by the undersigned to the Purchaser in the Offerings pursuant to the terms of the Underwriting Agreement;
provided
, that (A) in the case of (b), (c) and [(j)/(k)] above, [other than in the case of a Permitted Donation]
4
, it shall be a condition to the transfer or distribution that the donee, transferee or distributee, as the case may be, agrees in writing to be bound by the restrictions set forth herein, (B) in the case of (c), [(g)/(h)] and [(j)/(k)] above, no filing under Section 16(a) of the Exchange Act or other public filing, report or announcement reporting a reduction in beneficial ownership of shares of Common Stock or other Securities shall be voluntarily made during the Restricted Period, and (C) in the case of [(g)/(h)] and [(j)/(k)] above, if the undersigned is required to file a report under Section 16(a) of the Exchange Act during the Restricted Period, the undersigned shall include a statement in such report to the effect that such transfer is to the Company in connection with the repurchase of the Undersigned’s Securities or pursuant to a qualified domestic order or in connection with a divorce settlement, as the case may be.
For purposes of clause [(h)/(i)] above, “
change of control
” means the consummation of any bona fide third party tender offer, merger, consolidation or other similar transaction the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of 50% of the total voting power of the voting stock of the Company or Pluralsight LLC.
In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley, it will not, during the Restricted Period, make any demand for or exercise any right with respect to,
4
NTD: Language to be included in the 1-2 directors with planned gifts
the registration of any of the Undersigned’s Securities, if such demand would require the Company during the Restricted Period to file, or make a public announcement of its intention to file, a registration statement. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Undersigned’s Securities during the Restricted Period except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Purchasers are relying upon this letter in proceeding toward consummation of the Offerings. The undersigned further understands that this letter is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this letter. This letter, and any claim, controversy or dispute arising under or related thereto, shall be governed by, and construed in accordance with, the internal laws of the state of New York. Notwithstanding anything to the contrary contained herein, this letter will automatically terminate and the undersigned will be released from all obligations hereunder upon the earliest to occur, if any, of (i) the date on which the Company advises Morgan Stanley in writing, prior to the execution of either of the Offering Agreements, that it has determined not to proceed with the Offerings, (ii) the date of termination of the Offering Agreements, or (iii) March 31, 2019, in the event that at least one of the Offering Agreements has not been executed by such date;
provided, however
, that the Company may, by written notice to the undersigned prior to such date, extend such date for a period of up to three additional months. This letter shall not be amended without the prior written consent of the undersigned.
The undersigned hereby consents to receipt of this letter in electronic form and understands and agrees that this letter may be signed electronically. In the event that any signature is delivered by facsimile transmission, electronic mail, or otherwise by electronic transmission evidencing an intent to sign this letter, such facsimile transmission, electronic mail or other electronic transmission shall create a valid and binding obligation of the undersigned with the same force and effect as if such signature were an original. Execution and delivery of this letter by facsimile transmission, electronic mail or other electronic transmission is legal, valid and binding for all purposes.
Whether or not the Offerings actually occur depends on a number of factors, including market conditions. Any Offering will only be made pursuant to a Purchase Agreement or an Underwriting Agreement, as applicable, the terms of which are subject to negotiation between the Company and the Initial Purchasers and Underwriters, respectively.
|
|
|
|
|
|
|
|
|
Very truly yours,
|
|
|
|
|
IF AN INDIVIDUAL:
|
|
IF AN ENTITY:
|
By:
|
|
|
|
|
(duly authorized signature)
|
|
(please print complete name of entity)
|
Name:
|
|
|
By:
|
|
|
(please print full name)
|
|
|
(duly authorized signature)
|
|
|
|
Name:
|
|
|
|
|
|
(please print full name)
|
|
|
|
Title:
|
|
|
|
|
|
(please print full title)
|
Address:
|
|
|
Address:
|
|
|
|
|
|
|
|
|
|
|
|
|
E-mail:
|
|
|
E-mail:
|
|
EXHIBIT B
[INSERT FINAL PRICING TERM SHEET]
[
Dealer’s name and address
]
|
|
|
To:
|
Pluralsight, Inc.
182 North Union Avenue
Farmington, Utah 84025
|
|
|
From:
|
[
Dealer’s name
]
|
|
|
Re:
|
[Base][Additional] Capped Call Transaction
|
|
|
Ref. No:
|
[__________]
1
|
|
|
Date:
|
[___________], 2019
|
Dear Ladies and Gentlemen:
The purpose of this communication (this “
Confirmation
”) is to set forth the terms and conditions of the above-referenced transaction entered into on the Trade Date specified below (the “
Transaction
”) between [__________]
(“
Dealer
”) and Pluralsight, Inc. a Delaware corporation (“
Counterparty
”). This communication constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below.
1. This Confirmation is subject to, and incorporates, the definitions and provisions of the 2006 ISDA Definitions (the “
2006 Definitions
”) and the definitions and provisions of the 2002 ISDA Equity Derivatives Definitions (the “
Equity Definitions
”, and together with the 2006 Definitions, the “
Definitions
”), in each case as published by the International Swaps and Derivatives Association, Inc. (“
ISDA
”). In the event of any inconsistency between the 2006 Definitions and the Equity Definitions, the Equity Definitions will govern and in the event of any inconsistency between terms defined in the Equity Definitions and this Confirmation, this Confirmation shall govern. Certain defined terms used herein have the meanings assigned to them in the Indenture [to be] dated as of March [__], 2019 between Counterparty and U.S. Bank National Association as trustee (the “
Indenture
”) relating to the USD[__________] principal amount of [__]% Convertible Senior Notes due 2024
(the “
Base Convertible Securities
”) together with any [__]% Convertible Senior Notes due 2024 [that may be]
2
issued pursuant to the Initial Purchasers’ option under the Purchase Agreement (as defined below) (the “
Optional Convertible Securities
” and, together with the Base Convertible Securities, the “
Convertible Securities
”). In the event of any inconsistency between the terms defined in the Indenture and this Confirmation, this Confirmation shall govern. [For the avoidance of doubt, references herein to sections of the Indenture are based on the draft of the Indenture most recently reviewed by the parties at the time of execution of this Confirmation. If any relevant sections of the Indenture are changed, added or renumbered following execution of this Confirmation but prior to the execution of the Indenture, the parties will amend this Confirmation in good faith to preserve the economic intent of the parties based on the draft of the Indenture so reviewed.]
3
The parties further acknowledge that references to the Indenture herein are references to the Indenture as in effect on the date of its execution and if the Indenture is, or the Convertible Securities are, amended, supplemented or modified following their execution, any such amendment, supplement or modification (other than any amendment or supplement (1) pursuant to Section 10.01(k) of the Indenture that, as reasonably determined by the Calculation Agent, conforms the Indenture to the description of the Convertible Securities in the Offering Memorandum dated March [__], 2019 relating to the Convertible Securities, and (2) a Merger Supplemental Indenture (as defined below)) will be disregarded for purposes of this Confirmation (other than as provided in Section 8(a) below) unless the parties agree otherwise in writing.
1
If applicable.
2
Include for confirmation relating to the base convert offering.
3
Include for confirmation relating to the base convert offering and confirmation relating to the greenshoe convert offering, if executed before the initial closing.
This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall be subject to an agreement (the “
Agreement
”) in the form of the 2002 ISDA Master Agreement as if Dealer and Counterparty had executed an agreement in such form on the Trade Date (but without any Schedule except for (i) the election of the laws of the State of New York as the governing law (without reference to choice of law doctrine) and the election of USD as the Termination Currency, [([ii) the election of an executed guarantee of [__________] (“
Guarantor
”) dated as of the Trade Date in substantially the form attached hereto as Schedule 1 as a Credit Support Document,] (iii) the election of Guarantor as Credit Support Provider in relation to Dealer and (iv)]
4
[and (ii)] the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Dealer, (a) [with a Threshold Amount” of 3% of the shareholders’ equity of [
Dealer
]/[[
Dealer Parent]
(“
Dealer Parent
”)]
5
on the Trade Date, (b) “Specified Indebtedness” having the meaning set forth in Section 14 of the Agreement, except that it shall not include any obligation in respect of deposits received in the ordinary course of Dealer's banking business, (c) the phrase “, or becoming capable at such time of being declared,” shall be deleted from clause (1) of such Section 5(a)(vi) of the Agreement, and (d) the following sentence shall be added to the end of Section 5(a)(vi) of the Agreement: “Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (i) the default was caused solely by error or omission of an administrative or operational nature; (ii) funds were available to enable the relevant party to make payment when due; and (iii) the payment is made within two Local Business Days of such party’s receipt of written notice of its failure to pay.”).
All provisions contained in, or incorporated by reference to, the Agreement will govern this Confirmation except as expressly modified herein. In the event of any inconsistency between this Confirmation and either the Definitions or the Agreement, this Confirmation shall govern.
The Transaction hereunder shall be the sole Transaction under the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Counterparty are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
2. The Transaction constitutes a Share Option Transaction for purposes of the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows:
General Terms:
|
|
|
Trade Date:
|
[_________], 2019
|
|
|
Effective Date:
|
The closing date of [the initial issuance of]
6
the Convertible Securities [issued pursuant to the Initial Purchasers’ option under the Purchase Agreement (as defined below) exercised on the date hereof]
7
.
|
|
|
Option Style:
|
“Modified American”, as described under “Procedures for Exercise” below.
|
|
|
Option Type:
|
Call
|
|
|
Seller:
|
Dealer
|
|
|
Buyer:
|
Counterparty
|
|
|
4
Guarantee to be provided if Dealer ordinarily provides a guarantee, typically from Parent, for similar capped call transactions.
5
Include as applicable
|
|
|
Shares:
|
Class A Common Stock of Counterparty, par value USD$0.0001 (Ticker Symbol: “PS”).
|
|
|
Number of Options:
|
[The number of Base Convertible Securities in denominations of USD1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Convertible Securities.]
8
[The number of Optional Convertible Securities in denominations of USD1,000 principal amount purchased by the Initial Purchasers (as defined in the Purchase Agreement), at their option pursuant to Section 2 of the Purchase Agreement (as defined below).]
9
For the avoidance of doubt, the Number of Options shall be reduced by each exercise of Options hereunder. In no event shall the Number of Options be less than zero.
10
|
|
|
Applicable Percentage:
|
[__]%
|
|
|
Option Entitlement:
|
A number equal to the product of the Applicable Percentage and [____]
11
.
|
|
|
Number of Shares:
|
As of any date, the product of (i) the Number of Options, and (ii) the Option Entitlement.
|
|
|
Conversion Rate:
|
As of any date, the “Conversion Rate” (as defined in the Indenture) as of such date.
|
|
|
Strike Price:
|
$[___]
12
|
|
|
Cap Price:
|
$[___].
|
|
|
Premium:
|
USD [_____]Dealer and Counterparty hereby agree that notwithstanding anything to the contrary herein or in the Agreement, following the payment of the Premium, in the event that (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement that is within the Counterparty’s control) occurs or is designated with respect to any Transaction and, as a result, Counterparty owes to Dealer the amount calculated under Section 6(d) and Section 6(e) or otherwise under the Agreement (calculated as if the Transactions terminated on such Early Termination Date were the sole Transactions under the Agreement) or (b) Counterparty owes to Dealer, pursuant to Sections 12.2, 12.3, 12.6, 12.7, 12.8 or 12.9 of the Equity Definitions or otherwise under the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.
|
|
|
Premium Payment Date:
|
The Effective Date
|
|
|
Exchange:
|
The NASDAQ Global Select Market
|
|
|
12
To be the initial Conversion Rate.
|
|
|
Related Exchange:
|
All Exchanges; provided that Section 1.26 of the Equity Definitions shall be amended to add the words “United States” before the word “exchange” in the tenth line of such Section.
|
|
|
Procedures for Exercise:
|
|
|
|
Exercise Dates:
|
Each Conversion Date
|
|
|
Conversion Date:
|
[Each “Conversion Date”, as defined in the Indenture, occurring during the period from and excluding the Trade Date to and including the Expiration Date, for Convertible Securities, each in denominations of USD1,000 principal amount, that are submitted for conversion on such Conversion Date in accordance with the terms of the Indenture, excluding Convertible Securities (i) that are Excluded Convertible Securities for which the provisions of Section 8(b) of this Confirmation shall apply or (ii)(A) with respect to which Counterparty has made an “Exchange Election” pursuant to Section 14.12 of the Indenture and (B) that have been accepted by the designated financial institution pursuant to Section 14.12 of the Indenture (such Convertible Securities, other than those excluded as set forth above, the “
Relevant Convertible Securities
” for such Conversion Date).]
13
[Each “Conversion Date”, as defined in the Indenture, occurring during the period from and excluding the Trade Date to and including the Expiration Date, for Convertible Securities, each in denominations of USD1,000 principal amount, that are submitted for conversion on such Conversion Date in accordance with the terms of the Indenture (excluding Convertible Securities (i) that are Excluded Convertible Securities for which the provisions of Section 8(b) of this Confirmation shall apply or (ii)(A) with respect to which Counterparty has made an “Exchange Election” pursuant to Section 14.12 of the Indenture and (B) that have been accepted by the designated financial institution pursuant to Section 14.12 of the Indenture) but are not “Relevant Convertible Securities” under, and as defined in, the confirmation between the parties hereto regarding the Base Convertible Capped Call Transaction dated [___], 2019 (Transaction Ref. No. [___]) (the “
Base
Convertible
Capped Call Transaction Confirmation
”) (such Convertible Securities, the “
Relevant Convertible Securities
” for such Conversion Date). For the purposes of determining whether any Convertible Securities will be Relevant Convertible Securities hereunder or under the Base Convertible Capped Call Transaction Confirmation, Convertible Securities that are converted pursuant to the Indenture shall be allocated first to the Base Convertible Capped Call Transaction Confirmation until all Options thereunder are exercised or terminated.]
14
|
|
|
Required Exercise on Conversion Dates:
|
On each Conversion Date, a number of Options equal to the number of Relevant Convertible Securities for such Conversion Date in denominations of USD1,000 principal amount shall be automatically exercised.
|
|
|
|
|
|
Excluded Convertible Securities:
|
[Convertible Securities surrendered for conversion (in accordance with the terms of the Indenture) on any date prior to the Free Convertibility Date.]
15
[Convertible Securities surrendered for conversion on any date prior to the Free Convertibility Date that are not “Excluded Convertible Securities” under, and as defined in, the Base Convertible Capped Call Transaction Confirmation. For purposes of determining whether any Convertible Securities will be Excluded Convertible Securities hereunder or under the Base Convertible Capped Call Transaction Confirmation, Convertible Securities that are converted prior to such date shall be allocated first to the Base Convertible Capped Call Transaction Confirmation until all Options thereunder are exercised or terminated.]
16
|
|
|
Free Convertibility Date:
|
December 1, 2023
|
|
|
Expiration Date:
|
The second “Scheduled Trading Day” immediately preceding the “Maturity Date” (each as defined in the Indenture).
|
|
|
Automatic Exercise:
|
As provided above under “Required Exercise on Conversion Dates”.
|
|
|
Exercise Notice Deadline:
|
The second Exchange Business Day immediately preceding the “Maturity Date” (as defined in the Indenture).
|
|
|
|
|
|
Notice of Exercise:
|
Notwithstanding anything to the contrary in the Equity Definitions, Dealer shall have no obligation to make any payment or delivery in respect of any exercise of Options hereunder unless Counterparty notifies Dealer in writing prior to 4:00 PM, New York City time, on the Exercise Notice Deadline in respect of the aggregate number of Options being exercised hereunder[;
provided
that any “Notice of Exercise” delivered to Dealer pursuant to the Base Convertible Capped Call Transaction Confirmation shall deemed to be a Notice of Exercise pursuant to this Confirmation and the terms of such Notice of Exercise shall apply,
mutatis mutandis
, to this Confirmation]
17
.Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible Securities. For the avoidance of doubt, if Counterparty fails to give such notice when due in respect of any exercise of Options hereunder, Dealer’s obligation to make any payment or delivery in respect of such exercise shall be permanently extinguished, and late notice shall not cure such failure;
provided
that notwithstanding the foregoing, such notice (and the related exercise of Options) in connection with any conversion of Relevant Convertible Securities during the period starting on and including the Free Convertibility Date and ending on and including the second “Scheduled Trading Day” immediately preceding the “Maturity Date” (each as defined in the Indenture) (the “
Final Conversion Period
”) shall be effective if given after the Exercise Notice Deadline, but prior to 4:00 PM New York City time, on the fifth Exchange Business Day following the Exercise Notice Deadline, in which event the Calculation Agent shall have the right to adjust in a commercially reasonable manner the Delivery Obligation as appropriate to reflect the additional commercially reasonable costs (including, but not limited to, hedging mismatches and market losses) and expenses reasonably incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of Dealer not having received such notice on or prior to the Exercise Notice Deadline.
|
|
|
|
|
|
Notice of Convertible Security Settlement Method:
|
Counterparty shall notify Dealer in writing before 4:00 P.M. (New York City time) on the Free Convertibility Date (the “
Final Settlement Method Election Date
”) of the irrevocable election by the Counterparty,
in accordance with Section 14.02(a)(iii) of the Indenture, of the settlement method and, if applicable, the “Specified Dollar Amount” (as defined in the Indenture) applicable to Relevant Convertible Securities with a Conversion Date occurring on or after the Final Settlement Method Election Date. If Counterparty fails timely to provide such notice, Counterparty shall be deemed to have notified Dealer of combination settlement with a “Specified Dollar Amount” (as defined in the Indenture) of USD1,000 for all conversions occurring on or after the Final Settlement Method Election Date. Counterparty agrees that, to the extent it provides such a notice, it shall settle any Relevant Convertible Securities with a Conversion Date on or after the Final Settlement Method Election Date in the same manner as provided in the Notice of Convertible Security Settlement Method it provides hereunder.
|
|
|
Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice:
|
To be provided by Dealer.
|
|
|
Settlement Terms:
|
|
|
|
Settlement Date:
|
In respect of an Exercise Date occurring on a Conversion Date on or after the Free Convertibility Date, the settlement date for the cash and/or Shares (if any) to be delivered in respect of the Relevant Convertible Securities converted on such Conversion Date pursuant to Section 14.01(a)(ii) of the Indenture;
provided
that the Settlement Date will not be prior to the Exchange Business Day immediately following the date Counterparty provides the Notice of Delivery Obligation prior to 4:00 PM, New York City time.
|
|
|
|
|
|
Delivery Obligation:
|
In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above, in respect of an Exercise Date occurring on a Conversion Date on or after the Free Convertibility Date, Dealer will deliver to Counterparty, on the related Settlement Date, a number of Shares and/or amount of cash in USD for the Relevant Convertible Securities equal to (a) the Applicable Percentage
multiplied by
(b) the aggregate number of Shares, if any, that Counterparty would be obligated to deliver to the holder(s) of the Relevant Convertible Securities converted on such Conversion Date pursuant to Section 14.02(a)(iv) of the Indenture and/or the aggregate amount of cash, if any, in excess of USD1,000 per Convertible Security (in denominations of USD1,000) that Counterparty would be obligated to deliver to holder(s) pursuant to Section 14.02(a)(iv) of the Indenture (except that such aggregate number of Shares shall be determined without taking into consideration any rounding pursuant to Section 14.02(j)of the Indenture and shall be rounded down to the nearest whole number) and cash in lieu of fractional Shares, if any, resulting from such rounding, if Counterparty had elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities by the Convertible Security Settlement Method in the manner specified below, as determined by the Calculation Agent in a commercially reasonable fashion by reference to such Sections of the Indenture (this clause (b), the “
Convertible Obligation
”);
provided
that (i) if the Convertible Obligation exceeds the Capped Convertible Obligation, then the Delivery Obligation shall be the Applicable Percentage
multiplied by
the Capped Convertible Obligation; (ii) if, in respect of any Exercise Date, (x)(I) the number of Shares included in the Delivery Obligation multiplied by the Share Obligation Value Price plus (II) the amount of cash included in the Delivery Obligation, would otherwise exceed (y) the product of the Applicable Percentage and the relevant Net Convertible Share Obligation Value, such number of Shares and such amount of cash shall be proportionately reduced to the extent necessary to eliminate such excess; (iii) the Convertible Obligation (and, for the avoidance of doubt, the Capped Convertible Obligation) shall be determined (A) excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a result of any “make-whole fundamental change” adjustments to the Conversion Rate pursuant to Section 14.03 or 14.04(h) of the Indenture and (B) without regard to the election, if any, by Counterparty to adjust the Conversion Rate (and, for the avoidance of doubt, the Delivery Obligation shall not include any interest payment on the Relevant Convertible Securities that the Counterparty is (or would have been) obligated to deliver to holder(s) of the Relevant Convertible Securities for such Conversion Date); and (iv) if such exercise relates to the conversion of Relevant Convertible Securities in connection with which holders thereof are entitled to receive additional Shares and/or cash pursuant to the “make-whole fundamental change” adjustment to the Conversion Rate set forth in Section 14.03 of the Indenture, then, notwithstanding the foregoing clause (iii), the Convertible Obligation shall include such additional Shares and/or cash (as determined by the Calculation Agent by reference to such Section of the Indenture), except that the Delivery Obligation shall be capped so that the value of the Delivery Obligation per Option (with the value of any Shares included in the Delivery Obligation determined by the Calculation Agent using the VWAP Price on the date the consideration is deliverable to the “Holder” of such Relevant Convertible Security pursuant to the Indenture) does not exceed the amount as determined by the Calculation Agent that would be payable by Dealer pursuant to Section 6 of the Agreement if such Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the Transaction (except that, for purposes of determining such amount (x) the Number of Options shall be deemed to be equal to the number of Options exercised on such Exercise Date and (y) such amount payable will be determined as if Section 14.03 of the Indenture were deleted) was the sole Affected Transaction and Counterparty was the sole Affected Party (determined without regard to Section 8(c) of this Confirmation), it being understood that the cap described in this clause (iv) is in addition to, and cumulative with, clauses (i), (ii) and (iii) of this proviso. Notwithstanding the foregoing, and in addition to the caps described in clauses (i), (ii), (iii) and (iv) of the proviso above, in all events the Delivery Obligation shall be capped so that the value of the Delivery Obligation does not exceed the value of the Convertible Obligation
multiplied by
the Applicable Percentage (with the Convertible Obligation determined based on the actual settlement method elected by Counterparty with respect to such Relevant Convertible Securities instead of the Convertible Security Settlement Method and with the value of any Shares included in either the Delivery Obligation or such Convertible Obligation determined by the Calculation Agent using the Share Obligation Value Price on the date the consideration is deliverable to the “Holder” of such Relevant Convertible Security pursuant to the Indenture).
|
|
|
|
|
|
Capped Convertible Obligation:
|
In respect of an Exercise Date occurring on a Conversion Date, the Convertible Obligation that would apply if the “Daily VWAP” for each “Trading Day” in the “Observation Period” (each as defined in the Indenture) or, if applicable, the assumed “Observation Period” specified in clause (ii) of “Convertible Security Settlement Method” below, were the lesser of (x) the Cap Price and (y) the actual “Daily VWAP” for such “Trading Day” (each as defined in the Indenture).
|
|
|
Net Convertible Share Obligation Value:
|
With respect to Relevant Convertible Securities as to a Conversion Date, (i) the Total Convertible Share Obligation Value of such Relevant Convertible Securities for such Conversion Date
minus
(ii) the aggregate principal amount of such Relevant Convertible Securities for such Conversion Date.
|
|
|
Total Convertible Share Obligation Value:
|
With respect to Relevant Convertible Securities with respect to a Conversion Date, (i) (A)the number of Shares equal to the aggregate number of Shares that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture multiplied by (B) the Share Obligation Value Price plus (ii) an amount of cash equal to the aggregate amount of cash that Counterparty is obligated to deliver to the holder(s) of Relevant Convertible Securities for such Conversion Date pursuant to the Indenture (including, for the avoidance of doubt, any cash payable by Counterparty in lieu of fractional Shares); provided that the Total Convertible Share Obligation Value shall be determined excluding any Shares and/or cash that Counterparty is obligated to deliver to holder(s) of the Relevant Convertible Securities as a direct or indirect result of any adjustments to the Conversion Rate pursuant to an adjustment pursuant to Section 14.04(h) of the Indenture.
|
|
|
Share Obligation Value Price:
|
The opening price as displayed under the heading “Op” on Bloomberg page “PS.N <Equity>” (or its equivalent successor if such page is not available) on the applicable Settlement Date or other date of delivery.
|
|
|
Convertible Security Settlement Method:
|
For any Relevant Convertible Securities, if Counterparty has notified Dealer in the related Notice of Exercise (or in the Notice of Convertible Security Settlement Method, as the case may be) that it has elected to satisfy its conversion obligation in respect of such Relevant Convertible Securities in cash or in a combination of cash and Shares in accordance with Section 14.02(a)(iii) of the Indenture (a “
Cash Election
”) with a “Specified Dollar Amount” (as defined in the Indenture) of at least USD1,000, the Convertible Security Settlement Method shall be the settlement method actually so specified in such notice as being elected by Counterparty in respect of such Relevant Convertible Securities; provided that, if no such notice is sent with respect to such settlement method, the Convertible Security Settlement Method shall assume Counterparty made a Cash Election with respect to such Relevant Convertible Securities with a “Specified Dollar Amount” (as defined in the Indenture) of USD1,000 per Relevant Convertible Security.
|
|
|
|
|
|
Notice of Delivery Obligation:
|
No later than the Exchange Business Day immediately following the last day of the relevant “Observation Period,” as defined in the Indenture, Counterparty shall give Dealer notice of the aggregate number of Shares and/or cash comprising the Convertible Obligations for all Relevant Convertible Securities (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise or Notice of Convertible Security Settlement Method or Dealer’s obligations with respect to Delivery Obligation, each as set forth above, in any way).
|
|
|
Other Applicable Provisions:
|
To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 (except that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws arising as a result of the fact that Counterparty is the Issuer of the Shares) of the Equity Definitions will be applicable as if “Physical Settlement” applied to the Transaction.
|
|
|
Restricted Certificated Shares:
|
Notwithstanding anything to the contrary in the Equity Definitions, Dealer may, in whole or in part, deliver Shares required to be delivered to Counterparty hereunder in certificated form in lieu of delivery through the Clearance System. With respect to such certificated Shares, the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by deleting the remainder of the provision after the word “encumbrance” in the fourth line thereof.
|
|
|
Adjustments:
|
|
|
|
|
|
|
Method of Adjustment:
|
Calculation Agent Adjustment. Notwithstanding Section 11.2 of the Equity Definitions, upon the occurrence of any event or condition set forth in Sections 14.04(a), (b), (c), (d) or (e) or Section 14.05 of the Indenture that the Calculation Agent determines would result in an adjustment under the Indenture by reference to such Sections thereof (any such event or condition, an “
Adjustment Event
”), the Calculation Agent shall make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and any other terms relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments” below. Immediately upon the occurrence of any Adjustment Event, Counterparty shall notify the Calculation Agent of such Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Convertible Securities in respect of such Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the results and details of such adjustments.
In addition, Dealer may make a corresponding adjustment to the terms relevant to the exercise, settlement or payments of the Transaction (but without duplication of any adjustment pursuant to the foregoing paragraph) upon the occurrence of any event or condition that Dealer determines would result in an adjustment under Section 14.05 of the Indenture in respect of the Convertible Security Settlement Method.
For the avoidance of doubt, Dealer shall not have any payment or delivery obligation hereunder in respect of, and no adjustment shall be made to the terms of the Transaction on account of, (x) any distribution of cash, property or securities by Counterparty to the holders of Convertible Securities (upon conversion or otherwise) or (y) any other transaction in which holders of Convertible Securities are entitled to participate, in each case, in lieu of an adjustment under the Indenture in respect of an Adjustment Event (including, without limitation, under the fourth sentence of Section 14.04(c) of the Indenture or the fourth sentence of Section 14.04(d) of the Indenture).
|
|
|
Discretionary Adjustments:
|
Notwithstanding anything to the contrary herein or in the Equity Definitions, if the Calculation Agent in good faith disagrees with any adjustment under the Indenture that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 14.05 of the Indenture or pursuant to Section 14.07 of the Indenture or any supplemental indenture entered into thereunder (a “
Merger Supplemental Indenture
”) or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then the Calculation Agent will determine the adjustment to be made to any one or more of the Strike Price, Number of Options, and any other variable relevant to the exercise, settlement or payment of or under the Transaction in a commercially reasonable manner.
|
|
|
Extraordinary Events:
|
|
|
|
Merger Events:
|
Notwithstanding Section 12.1(b) of the Equity Definitions, except for purposes of “Announcement Event” and “Adjustments to Cap Price” below, a “Merger Event” means the occurrence of any event or condition set forth in Section 14.07 of the Indenture.
|
|
|
|
|
|
Tender Offer:
|
Section 12.1(d) of the Equity Definitions is hereby amended by replacing the phrase “greater than 10% and less than 100% of the outstanding voting shares of the Issuer” in the third and fourth line thereof with “(a) greater than 15% and less than 100% of the outstanding Shares of the Issuer in the event that such offer, solicitation, proposal or other event is being made by any entity or person other than the Issuer or any subsidiary thereof or (b) greater than 20% and less than 100% of the outstanding Shares of the Issuer in the event that such offer, solicitation, proposal or other event is being made by the Issuer or any subsidiary thereof”.
|
|
|
Consequences of Merger Events and Tender Offer:
|
Notwithstanding Sections 12.2 and 12.3 of the Equity Definitions, upon the occurrence of a Merger Event that the Calculation Agent determines by reference to Section 14.07 of the Indenture would result in an adjustment under the Indenture, the Calculation Agent shall make a corresponding adjustment to the terms relevant to the exercise, settlement or payment of the Transaction, subject to “Discretionary Adjustments” above;
provided
that such adjustment shall be made without regard to any “make-whole fundamental change” adjustment to the Conversion Rate pursuant to Section 14.03 or 14.04(h) of the Indenture and the election, if any, by Counterparty to adjust the Conversion Rate; and
provided further
that if, with respect to a Merger Event, (A) the consideration for the Shares includes (or, at the option of a holder of Shares, may include) shares of an entity or person that is not a corporation organized under the laws of the United States, any State thereof or the District of Columbia, or (B) the Counterparty to the Transaction following such Merger Event will not be a corporation or will not be the Issuer following such Merger Event, in either case, Dealer may elect in its sole discretion that Cancellation and Payment (Calculation Agent Determination) shall apply.
|
|
|
|
|
|
Consequences of Announcement Events:
|
Modified Calculation Agent Adjustment as set forth in Section 12.3(d) of the Equity Definitions;
provided
that, in respect of an Announcement Event, (x) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall be replaced by references to “date of such Announcement Event”, (y) the phrase “exercise, settlement, payment or any other terms of the Transaction (including, without limitation, the spread)” shall be replaced with the phrase “Cap Price (
provided
that in no event shall the Cap Price be less than the Strike Price)” and the words “whether within a commercially reasonable period of time prior to or after the Announcement Event (as determined by the Calculation Agent)” shall be inserted prior to the word “which” in the seventh line, and (z) for the avoidance of doubt, the Calculation Agent shall, in good faith and a commercially reasonable manner, determine whether the relevant Announcement Event has had a material economic effect on the Transaction and, if so, shall adjust the Cap Price accordingly to take into account such economic effect on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early Termination Date and/or any other date of cancellation, it being understood that any adjustment in respect of an Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event and shall not be duplicative with any other adjustment or cancellation valuation made pursuant to this Confirmation, the Equity Definitions or the Agreement;
provided
that in no event shall the Cap Price be adjusted to be less than the Strike Price. An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable; provided further that upon the Calculation Agent making an adjustment, determined in a commercially reasonable manner, to the Cap Price upon any Announcement Event, then the Calculation Agent shall make an adjustment to the Cap Price upon any announcement regarding the same event that gave rise to the original Announcement Event, including without limitation, regarding the abandonment of any such event, to the extent necessary to reflect the economic effect of such subsequent announcement on the Transaction (provided that in no event shall the Cap Price be less than the Strike Price).
|
|
|
|
|
|
Announcement Event:
|
(i) The public announcement (whether by Counterparty or a Valid Third Party Entity) of any Merger Event or Tender Offer, or the announcement by Counterparty of any intention to enter into a Merger Event or Tender Offer, (ii) the public announcement by Counterparty of an intention by Counterparty to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer, (iii) there occurs a public announcement (whether by Counterparty or a Valid Third Party Entity) of any potential acquisition by Counterparty and/or its subsidiaries where the consideration exceeds 33% of the market capitalization of the Counterparty as of the date of such announcement, or (iv) any subsequent public announcement (whether by Counterparty or a Valid Third Party Entity) of a change to a transaction or intention that is the subject of an announcement of the type described in clause (i), (ii) or (iii) of this sentence (including, without limitation, a new announcement relating to such a transaction or intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention); provided that, for the avoidance of doubt, the occurrence of an Announcement Event with respect to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention.
|
|
|
Valid Third Party Entity
|
In respect of any transaction, any third party whose announcement is reasonably determined by the Calculation Agent to have had a material economic effect on the Shares and/or options on the Shares.
|
|
|
Notice of Merger Consideration and Consequences:
|
Upon the occurrence of a Merger Event that causes the Shares to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), Counterparty shall reasonably promptly (but in any event prior to the relevant merger date) notify the Calculation Agent of (i) the type and amount of consideration that a holder of Shares would have been entitled to in the case of reclassifications, consolidations, mergers, sales or transfers of assets or other transactions that cause Shares to be converted into the right to receive more than a single type of consideration and (ii) the weighted average of the types and amounts of consideration to be received by the holders of Shares that affirmatively make such an election.
|
|
|
Nationalization, Insolvency or Delisting:
|
Cancellation and Payment (Calculation Agent Determination);
provided
that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall thereafter be deemed to be the Exchange.
|
|
|
Additional Disruption Events:
|
|
|
|
|
|
|
(a) Change in Law:
|
Applicable;
provided
that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) by adding the phrase “and/or Hedge Position” after the word “Shares” in clause (X) thereof and (iii) by immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”.
|
|
|
(b) Failure to Deliver:
|
Applicable
|
|
|
(c) Insolvency Filing:
|
Applicable
|
|
|
(d) Hedging Disruption:
|
Applicable
|
|
|
(e) Increased Cost of Hedging:
|
Not Applicable
|
|
|
Hedging Party:
|
Dealer
|
|
|
Determining Party:
|
For all applicable Extraordinary Events, Dealer; all calculations and determinations made by the Determining Party shall be made in good faith and in a commercially reasonable manner;
provided
that, upon receipt of written request from Counterparty, the Determining Party shall promptly provide Counterparty with a written explanation describing in reasonable detail any calculation, adjustment or determination made by it (including any quotations, market data or information from internal or external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing Determining Party’s proprietary models or other information that may be proprietary or subject to contractual, legal or regulatory obligations to not disclose such information), and shall use commercially reasonable efforts to provide such written explanation within five (5) Exchange Business Days from the receipt of such request.
|
|
|
Non-Reliance:
|
Applicable
|
|
|
Agreements and Acknowledgments Regarding Hedging Activities:
|
Applicable
|
|
|
Hedging Adjustment:
|
For the avoidance of doubt, whenever the Dealer, Determining Party or Calculation Agent is permitted to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the effect of an event, the Calculation Agent or Determining Party or Dealer, as the case may be, shall make such adjustment by reference to the effect of such event on Dealer assuming that Dealer maintains a commercially reasonable hedge position.
|
|
|
Additional Acknowledgments:
|
Applicable
|
3.
Calculation Agent
: Dealer;
provided
that following the occurrence of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, if the Calculation Agent fails to timely make any calculation, adjustment or determination required to be made by the Calculation Agent hereunder or to perform any obligation of the Calculation Agent hereunder and such failure continues for five (5) Exchange Business Days following notice to the Calculation Agent by Counterparty of such failure, Counterparty shall have the right to designate a nationally recognized third-party dealer in over-the-counter
corporate equity derivatives to act, during the period commencing on the date such Event of Default occurred and ending on the Early Termination Date with respect to such Event of Default, as the Calculation Agent.
All calculations and determinations made by the Calculation Agent shall be made in good faith and in a commercially reasonable manner;
provided
that, upon receipt of written request from Counterparty, the Calculation Agent shall promptly provide Counterparty with a written explanation describing in reasonable detail any calculation, adjustment or determination made by it (including any quotations, market data or information from internal or external sources used in making such calculation, adjustment or determination, as the case may be, but without disclosing Dealer's proprietary models or other information that may be proprietary or subject to contractual, legal or regulatory obligations to not disclose such information), and shall use commercially reasonable efforts to provide such written explanation within five (5) Exchange Business Days from the receipt of such request.
4.
Account Details
:
Dealer Payment Instructions:
|
|
|
[Bank:
|
[_____________]
|
ABA#:
|
[_____________]
|
Acct No.:
|
[_____________]
|
Beneficiary:
|
[_____________]
|
Ref:
|
[_____________]]
|
Counterparty Payment Instructions: To be provided.
5.
Offices
:
The Office of Dealer for the Transaction is:
[__________]
The Office of Counterparty for the Transaction is: [Inapplicable, Company is not a Multibranch Party.]
6.
Notices
: For purposes of this Confirmation:
(a) Address for notices or communications to Counterparty:
Pluralsight, Inc.
182 North Union Avenue
Farmington, Utah 84025
Attn: [__________]
(b) Address for notices or communications to Dealer:
[__________]
7.
Representations, Warranties and Agreements:
(a) In addition to the representations and warranties in the Agreement and those contained elsewhere herein, Counterparty represents and warrants to and for the benefit of, and agrees with, Dealer as follows:
(i) On the Trade Date (A) none of Counterparty and its officers and directors is aware of any material non-public information regarding Counterparty or the Shares, and (B) all reports and other documents filed by Counterparty with the Securities and Exchange Commission pursuant to the Exchange Act when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), do not contain any untrue statement of a material fact or any omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading .
(ii) On the Trade Date, Counterparty is not engaged in any “distribution,” as such term is defined in Regulation M under the Exchange Act (“
Regulation M
”), other than (1) a distribution meeting the requirements of the exceptions set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M and (2)
the distribution of Shares being made concurrently with the distribution of the Convertible Notes
. During (x) the “Observation Period” and any deemed “Observation Period” as set forth herein applicable to the Relevant Convertible Securities and (y) in the event an Early Termination Date is designated due to an Additional Termination Event as a result of an Excluded Conversion Event, a period starting on or about such Early Termination Date as reasonably determined by Dealer and notified to Counterparty (an “
Early Termination Period
”), the Shares or securities that are convertible into, or exchangeable or exercisable for, Shares will not be subject to a “restricted period,” as such term is defined in Regulation M.
(iii) On the Trade Date and on each day during the “Observation Period” applicable to the Relevant Convertible Securities and any Early Termination Period, neither Counterparty nor any “affiliate” or “affiliated purchaser” (each as defined in Rule 10b-18 under the Exchange Act (“
Rule 10b-18
”)) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares, except through Dealer.
(iv) Without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty acknowledges that neither Dealer nor any of its affiliates is making any representations or warranties or taking any position or expressing any view with respect to the treatment of the Transaction under any accounting standards including ASC Topic 260,
Earnings Per Share
, ASC Topic 815,
Derivatives and Hedging
, or
ASC Topic 480,
Distinguishing Liabilities from Equity
and ASC
815-40,
Derivatives and Hedging
–
Contracts in Entity's Own Equity
(or any successor issue statements).
(v) Without limiting the generality of Section 3(a)(iii) of the Agreement, the Transaction will not violate Rule 13e-1 or Rule 13e-4 under the Exchange Act.
(vi) Prior to the Trade Date, Counterparty shall deliver to Dealer a resolution of Counterparty's board of directors authorizing the Transaction.
(vii) Counterparty is not entering into this Confirmation to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for Shares) or to manipulate the price of the Shares (or any security convertible into or exchangeable for Shares) or otherwise in violation of the Exchange Act.
(viii) Counterparty is not, and after giving effect to the transactions contemplated hereby will not be, required to register as, an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
(ix) On each of the Trade Date and the Premium Payment Date, Counterparty is not “insolvent” (as such term is defined under Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the “
Bankruptcy Code
”)) and Counterparty would be able to purchase the Number of Shares in compliance with the laws of the jurisdiction of Counterparty's incorporation.
(x) To Counterparty’s knowledge, no U.S. state or local law, rule, regulation or regulatory order applicable to the Shares would give rise to any reporting, consent, registration or other requirement (including without limitation a requirement to obtain prior approval from any person or entity) as a result of Dealer or its affiliates owning or holding (however defined) Shares;
provided
that no such representation shall be made by Counterparty with respect to any rules and regulations applicable to Dealer (including FINRA) arising from Dealer’s status as a regulated entity under applicable law.
(xi) The representations and warranties of Counterparty set forth in Section 3 of the Agreement and Section 1 of the Purchase Agreement dated as of [_______], 2019, between the Counterparty and Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC as representatives of the Initial Purchasers party thereto (the “
Purchase Agreement
”) are true and correct and are hereby deemed to be repeated to Dealer as if set forth herein.
(xii) Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing, (C) has total assets of at least $50 million.
(b) Each of Dealer and Counterparty agrees and represents that it is an “eligible contract participant” as defined in Section 1a(18) of the U.S. Commodity Exchange Act, as amended, and is entering into the Transaction as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not for the benefit of any third party.
(c) Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly, Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.
(d) Each of Dealer and Counterparty agrees and acknowledges that Dealer is a “financial institution,” “swap participant” and “financial participant” within the meaning of Sections 101(22), 101(53C) and 101(22A) of the Bankruptcy Code. The parties hereto further agree and acknowledge (A) that this Confirmation is (i) a “securities contract,” as such term is defined in Section 741(7) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “settlement payment” within the meaning of Section 546 of the Bankruptcy Code, and (ii) a “swap agreement,” as such term is defined in Section 101(53B) of the Bankruptcy Code, with respect to which each payment and delivery hereunder or in connection herewith is a “termination value,” “payment amount” or “other transfer obligation” within the meaning of Section 362 of the Bankruptcy Code and a “transfer” within the meaning of Section 546 of the Bankruptcy Code, and (B) that Dealer is entitled to the protections afforded by, among other sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 546(j), 548(d)(2), 555, 560 and 561 of the Bankruptcy Code.
(e) As a condition to the effectiveness of the Transaction, Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Effective Date, in substantially the form attached hereto as Annex A.
(f) Counterparty understands that notwithstanding any other relationship between Counterparty and Dealer and its affiliates, in connection with the Transaction and any other over-the-counter derivative transactions between Counterparty and Dealer or its affiliates, Dealer or its affiliates is acting as principal and is not a fiduciary or advisor in respect of any such transaction, including any entry, exercise, amendment, unwind or termination thereof.
(g) Each party acknowledges and agrees to be bound by the Conduct Rules of the Financial Industry Regulatory Authority, Inc. applicable to transactions in options, and further agrees not to violate the position and exercise limits set forth therein.
(h) Counterparty represents and warrants that it has received, read and understands the OTC Options Risk Disclosure Statement and a copy of the most recent disclosure pamphlet prepared by The Options Clearing Corporation entitled “Characteristics and Risks of Standardized Options”.
8.
Other Provisions
:
(a)
Right to Extend
. Dealer may divide any Number of Options into additional Options and designate the Expiration Date and the Number of Options for each such Conversion Date (as defined in the Indenture) if Dealer determines, in good faith and a commercially reasonable manner, that such further division is necessary or advisable to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions or to enable Dealer to effect purchases of Shares in connection with its hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be compliant and consistent with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures, generally applicable to transactions of the type of the Transactions.
(b)
Additional Termination Events
. The occurrence of (i) an “Event of Default” with respect to Counterparty under the terms of the Convertible Securities as set forth in Section 6.01 of the Indenture, (ii) an Amendment Event, (iii) an Excluded Conversion Event or (iv) Repayment Event shall be an Additional Termination Event with respect to which the Transaction is the sole Affected Transaction and Counterparty is the sole Affected Party, and Dealer, in the case of clauses (i) or (ii) above, shall be the party entitled to, or, in the case of clauses (iii) or (iv), shall designate an Early Termination Date pursuant to Section 6(b) of the Agreement;
provided
that in the case of an Excluded Conversion Event the Transaction shall be subject to termination only in respect of a number of Options equal to the number of Convertible Securities that cease to be outstanding in connection with or as a result of such Excluded Conversion Event. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with an Excluded Conversion Event, the Calculation Agent shall assume that (x) the relevant Excluded Convertible Securities shall not have been converted and remain outstanding, and (y) in the case of an Induced Conversion, any adjustments, agreements, additional payments, deliveries or acquisitions by or on behalf of Counterparty or any affiliate of Counterparty in connection therewith had not occurred. Notwithstanding the foregoing, the amount payable in respect of such Affected Transaction pursuant to Section 6 of the Agreement in connection with an Excluded Conversion Event shall not exceed the value of the Convertible Obligation
multiplied by
the Applicable Percentage (with the Convertible Obligation determined (a) as set forth opposite the caption “Delivery Obligation” in Section 2 above as if the converted Convertible Securities were not Excluded Convertible Securities and (b) based on the actual settlement method elected by Counterparty with respect to such Convertible Securities and with the value of any Shares included in such Convertible Obligation determined by the Calculation Agent using the Share Obligation Value Price on the date of such payment).
“
Amendment Event
” means that Counterparty amends, modifies, supplements, waives or obtains a waiver in respect of any term of the Indenture or the Convertible Securities governing the principal amount, coupon, maturity, repurchase obligation of Counterparty, any term relating to conversion of the Convertible Securities (including changes to the conversion rate, conversion rate adjustment provisions, conversion settlement dates or conversion conditions), or any term that would require consent of the holders of not less than 100% of the principal amount of the Convertible Securities to amend, in each case without the consent of Dealer.
“
Excluded Conversion Event
” means any conversion of any Excluded Convertible Securities.
“
Induced Conversion
” means a conversion of any Excluded Convertible Securities (A) in connection with (x) an adjustment to the Conversion Rate effected by Counterparty (whether pursuant to Section 14.04(h) of the Indenture or otherwise) that is not required under the terms of the Indenture or (y) an agreement by Counterparty with the holder(s) of such Convertible Securities whereby, in the case of either (x) or (y), the holder(s) of such Convertible Securities receive upon conversion or pursuant to such agreement, as the case may be, a payment of cash or delivery of Shares or any other property or item of value that was not required under the terms of the Indenture or (B) after having been acquired from a holder of Convertible Securities by or on behalf of Counterparty or any of its affiliates other than pursuant to a conversion by such Holder and thereafter converted by or on behalf of Counterparty or any affiliate of Counterparty.
“
Repayment Event
” means that (i) any Convertible Securities are repurchased (whether pursuant to Section 2.10 or 15.02 of the Indenture or for any other reason) by Counterparty or any of its Affiliates or subsidiaries, (ii) any Convertible Securities are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty or any of its Affiliates or subsidiaries (howsoever described), (iii) any principal of any of the Convertible Securities is repaid prior to the final Maturity Date (as defined in the Indenture) of the Convertible Securities, or (iv) any Convertible Securities are exchanged by or for the benefit of any holders of Convertible Securities thereof for any other securities of Counterparty or any of its Affiliates (as defined in the Indenture) (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction;
provided
that, no conversion of Convertible Securities pursuant to the terms of the Indenture shall constitute a Repayment Event. Promptly following any Repayment Event (but, in any event, within five Scheduled Trading Days following settlement thereof), Counterparty shall notify Dealer of such Repayment Event and the aggregate principal amount of Convertible Securities subject to such Repayment Event (the “
Repayment Convertible Securities
”) (any such notice, a “
Repayment Notice
”)[;
provided
that, any “Repayment Notice” delivered to Dealer pursuant to the Base Capped Call Transaction Confirmation shall be deemed to be a Repayment Notice pursuant to this Confirmation and the terms of such Repayment Notice shall apply,
mutatis mutandis
, to this Confirmation]. The receipt by Dealer from Counterparty of any Repayment Notice shall constitute an Additional Termination Event as provided herein. Counterparty acknowledges its responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act and the rules and regulations thereunder, in respect of any action taken by Counterparty in respect of a Repayment Event, including, without limitation, the delivery of a Repayment Notice. Upon receipt of any such Repayment Notice, Dealer shall designate an Exchange Business Day following receipt of such Repayment Notice (which Exchange Business Day shall be on or as promptly as reasonably practicable after the related settlement date for the relevant Repayment Event) as an Early Termination Date with respect to a portion (the “
Repayment Terminated Portion
”) of the Transaction consisting of a number of Options (the “
Repayment Options
”) equal to the lesser of (x) the number of Repayment Convertible Securities in denominations of USD1,000 that are subject to the relevant Repayment Event [(and for the purposes of determining whether any Convertible Securities will be Repayment Securities hereunder or under, and as defined in, the Base Capped Call Transaction Confirmation, Convertible Securities that are subject to a Repayment Event shall be allocated first to the Base Capped Call Transaction Confirmation until all Options thereunder are exercised or terminated)] and (y) the Number of Options as of the date Dealer designates such Early Termination Date, and as of such date, the Number of Options shall be reduced by the number of Repayment Options. Any payment or delivery in respect of such termination of the Repayment Terminated Portion of the Transaction shall be made pursuant to Section 6 of the Agreement and, if applicable, this Section 8(b) of the Confirmation. Counterparty shall cause any Convertible Securities subject to a Repayment Event to be promptly cancelled and acknowledges and agrees that, except to the extent provided above in this Section 8(b), all such Convertible Securities subject to a Repayment Event will be deemed for all purposes under the Transaction to be permanently extinguished and no longer outstanding. Counterparty shall be the sole Affected Party with respect to such Additional Termination Event and the Repayment Terminated Portion of the Transaction shall be the sole Affected Transaction.
(c)
Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events
. If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Counterparty's control, or (iii) an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from an event or events outside Counterparty's control), and if Dealer would owe any amount to Counterparty pursuant to Section 6(d)(ii) and 6(e) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a
“Payment Obligation”),
then Dealer shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below) unless (a) Counterparty gives irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) as of the date of such election, Counterparty represents that is not in possession of any material non-public information regarding Counterparty or the Shares, and that such election is being made in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (c) Dealer agrees, in its sole discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) and 6(e) of the Agreement, as the case may be, shall apply.
|
|
|
Share Termination Alternative:
|
If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant to Section 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of payment.
|
|
|
Share Termination Delivery Property:
|
A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price.
|
|
|
Share Termination Unit Price:
|
The value of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Delivery Unit Price the Calculation Agent may consider a variety of factors, including the market price of the Share Termination Delivery Units and/or the purchase price paid in connection with the commercially reasonable purchase of Share Termination Delivery Property.
|
|
|
Share Termination Delivery Unit:
|
One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the “Exchange Property”), a unit consisting of the type and amount of such Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any securities) in such Nationalization, Insolvency or Merger Event, as determined by the Calculation Agent.
|
|
|
Failure to Deliver:
|
Applicable
|
|
|
Other Applicable Provisions:
|
If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that the Share Termination Alternative is applicable to the Transaction.
|
(d)
Disposition of Hedge Shares
. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer, based on the advice of legal counsel, the Shares acquired by Dealer for the purpose of hedging its obligations pursuant to the Transaction (the “
Hedge
Shares
”) cannot be sold in the U.S. public market by Dealer without registration under the Securities Act, Counterparty shall, at its election: (i) in order to allow Dealer to sell the Hedge Shares in a registered offering, use its commercially reasonable efforts to make available to Dealer an
effective registration statement under the Securities Act to cover the resale of such Hedge Shares and (A) enter into an agreement, in form and substance reasonably satisfactory to Dealer, substantially in the form of an underwriting agreement for a registered offering for companies of a similar size in a similar industry, (B) provide accountant's “comfort” letters in customary form for registered offerings of equity securities for companies of a similar size in a similar industry, (C) provide disclosure opinions of nationally recognized outside counsel to Counterparty in customary form for registered offerings of equity securities for companies of a similar size in a similar industry, (D) provide other customary opinions, certificates and closing documents customary in form for registered offerings of equity securities for companies of a similar size in a similar industry and (E) afford Dealer a reasonable opportunity to conduct a “due diligence” investigation with respect to Counterparty customary in scope for underwritten offerings of equity securities for companies of a similar size in a similar industry;
provided, however
, that if Counterparty elects clause (i) above but Dealer, in its commercially reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause (iii) of this Section 8(d) shall apply at the election of Counterparty; (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, enter into a private placement agreement substantially similar to private placement purchase agreements customary for private placements of equity securities of companies of a similar size in a similar industry, in form and substance commercially reasonably satisfactory to Dealer using best efforts to include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for Dealer or any designated buyer of the Hedge Shares from Dealer), opinions and certificates and such other documentation as is customary for private placements agreements of equity securities of companies of a similar size in a similar industry, as is reasonably acceptable to Dealer (in which case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its good faith and commercially reasonable judgment, to compensate Dealer for any customary liquidity discount from the public market price of the Shares incurred on the sale of Hedge Shares in a private placement); or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer.
(e)
Repurchase Notices
. Counterparty shall, at least one Scheduled Valid Day prior to any day on which Counterparty intends to effect any repurchase of Shares, give Dealer written notice of such repurchase (a “
Repurchase Notice
”) on such day if, following such repurchase, the Notice Percentage would reasonably be expected to be (i) greater than 8.0% and (ii) greater by 0.5% than the Notice Percentage included in the immediately preceding Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice Percentage as of the date hereof). The “
Notice Percentage
” as of any day is the fraction, expressed as a percentage, the numerator of which is the Number of Shares and the denominator of which is the number of Shares outstanding on such day. In the event that Counterparty fails to provide Dealer with a Repurchase Notice on the day and in the manner specified in this Section 8(e) then Counterparty agrees to indemnify and hold harmless Dealer, its affiliates and their respective directors, officers, employees, agents and controlling persons (Dealer and each such person being an “
Indemnified Party
”) from and against any and all losses (including losses relating to the Dealer's hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages and liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may become subject under applicable securities laws, including without limitation, Section 16 of the Exchange Act or under any U.S. state or federal law, regulation or regulatory order, in each case, relating to or arising out of such failure. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty will reimburse any Indemnified Party for all reasonable expenses (including reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in connection with the investigation of, preparation for or defense or settlement of any pending or threatened claim or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by or on behalf of Counterparty, in each case relating out of such failure. This indemnity shall survive the completion of the Transaction contemplated by this Confirmation and any assignment and delegation of the Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit of any permitted assignee of Dealer. Counterparty will not be liable under this
indemnity provision to the extent any loss, claim, damage, liability or expense is found in a final judgment by a court to have resulted from Dealer’s gross negligence or willful misconduct.
(f)
Transfer and Assignment
.
(i) Either party may transfer or assign any of its rights or obligations under the Transaction with the prior written consent of the non-transferring party, such consent not to be unreasonably withheld or delayed;
provided
that Dealer may transfer or assign without any consent of Counterparty its rights and obligations hereunder, in whole or in part, to (A) any affiliate of Dealer whose obligations would be guaranteed by Dealer [or Dealer Parent]
18
or (B) any person (including any affiliate of Dealer whose obligations are not guaranteed in the manner described in clause (A)) or any person whose obligations would be guaranteed by a person (a “
Designated Transferee
”), in either case under this clause (B), with a rating for its long-term, unsecured and unsubordinated indebtedness at least equivalent to Dealer's (or its guarantor's),
provided however
that, in the case of this clause (B), in no event shall the credit rating of the Designated Transferee or of its guarantor (whichever is higher) be lower than A3 from Moody's Investor Service, Inc. or its successor or A- from Standard and Poor's Rating Group, Inc. or its successor;
provided further
that (i) Dealer will notify Counterparty in writing prior to any proposed transfer or assignment to a Designated Transferee, (ii) either (x) the transferee in any such transfer is a “dealer in securities” within the meaning of Section 475(c)(1) of the Code or (y) such transfer does not result in a deemed exchange by Counterparty within the meaning of Section 1001 of the Code, (iii) as a result of any such transfer or assignment, Counterparty will not be required to pay the transferee or assignee of such rights or obligations on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than the amount, if any, that Counterparty would have been required to pay Dealer in the absence of such transfer or assignment and (iv) the transferee or assignee shall provide Counterparty with a complete and accurate U.S. Internal Revenue Service Form W-9 or W-8 (as applicable) prior to becoming a party to the Transaction. If at any time at which (1) the Equity Percentage exceeds 8.0% or (2) Dealer, Dealer Group (as defined below) or any person whose ownership position would be aggregated with that of Dealer or Dealer Group (Dealer, Dealer Group or any such person, a “
Dealer Person
”) under the Business Combinations Statute or other federal, state or local law, rule, regulation or regulatory order or organizational documents or contracts of Counterparty applicable to ownership of Shares (“
Applicable Restrictions
”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership in excess of a number of Shares equal to (x) the number of Shares that would give rise to reporting, registration, filing or notification obligations or other requirements (including obtaining prior approval by a state or federal regulator) of a Dealer Person under Applicable Restrictions and with respect to which such requirements have not been met or the relevant approval has not been received
minus
(y) 1% of the number of Shares outstanding on the date of determination (either such condition described in clause (1) or (2), an “
Excess Ownership Position
”), Dealer, in its reasonable discretion, is unable to effect a transfer or assignment to a third party in accordance with the requirements set forth above after its commercially reasonable efforts on pricing and terms and within a time period reasonably acceptable to Dealer such that an Excess Ownership Position no longer exists, Dealer may designate any Scheduled Valid Day as an Early Termination Date with respect to a portion (the “
Terminated Portion
”) of the Transaction, such that an Excess Ownership Position no longer exists following such partial termination. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment or delivery shall be made pursuant to Section 6 of the Agreement and Section 8(c) of this Confirmation as if (i) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Terminated Portion of the Transaction, (ii) Counterparty were the sole Affected Party with respect to such partial termination, (iii) such portion of the Transaction were the only Terminated Transaction and (iv) Dealer were the party entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement and to determine the amount payable pursuant to Section 6(e) of the Agreement. The “
Equity Percentage
” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates subject to aggregation with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act and all persons who may form a “group” (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) with Dealer (collectively, “
Dealer Group
”) “beneficially own” (within the meaning of Section 13 of the Exchange Act) without duplication on such day and (B) the denominator of which is the number of Shares outstanding on such day.
(ii) In the case of a transfer or assignment by Counterparty of its rights and obligations hereunder and under the Agreement, in whole or in part (any such Options so transferred or assigned, the “
Transfer Options
”), to any party, withholding of such consent by Dealer shall not be considered unreasonable if such transfer or assignment does not meet the reasonable conditions that Dealer may impose including, but not limited, to the following conditions:
(A) With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 8(e) or any obligations under Section 2 (regarding Extraordinary Events) or 8(d) of this Confirmation;
(B) Any Transfer Options shall only be transferred or assigned to a third party that is a U.S. person (as defined in the Internal Revenue Code of 1986, as amended);
(C) Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, undertakings with respect to compliance with applicable securities laws in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of customary legal opinions with respect to securities laws and other matters by such third party and Counterparty as are reasonably requested and reasonably satisfactory to Dealer;
(D) Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have been required to pay to Counterparty in the absence of such transfer and assignment;
(E) An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment;
(F) Without limiting the generality of clause (B), Counterparty shall have caused the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and
(G) Counterparty shall be responsible for all reasonable costs and expenses, including reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment.
(iii) Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or make or receive any payment in cash, to or from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty solely to the extent of any such performance.
(g)
Staggered Settlement
. If Dealer determines reasonably and in good faith that the number of Shares required to be delivered to Counterparty hereunder on any Settlement Date would have resulted in the Equity Percentage on such date to exceed an Excess Ownership Position, then Dealer may, by notice to Counterparty prior to such Settlement Date (a “
Nominal Settlement Date
”), elect to deliver any Shares due to be delivered on one or more dates (each, a “
Staggered Settlement Date
”) or at two or more times on the Nominal Settlement Date as follows:
(i) in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to the 20
th
Exchange Business Day after such Nominal Settlement Date) or delivery times and how it will allocate the Shares it is required to deliver under “Delivery Obligation” (above) among the Staggered Settlement Dates or delivery times; and
(ii) the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates and delivery times will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal Settlement Date.
(h)
Disclosure
. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax structure.
(i)
No Netting and Set-off.
The provisions of Section 2(c) of the Agreement shall not apply to the Transaction. Each party waives any and all rights it may have to set-off delivery or payment obligations it owes to the other party under the Transaction against any delivery or payment obligations owed to it by the other party, whether arising under the Agreement, under any other agreement between parties hereto, by operation of law or otherwise.
(j)
Equity Rights
. Dealer acknowledges and agrees that this Confirmation is not intended to convey to it rights with respect to the Transaction that are senior to the claims of common stockholders in the event of Counterparty's bankruptcy. For the avoidance of doubt, the parties agree that the preceding sentence shall not apply at any time other than during Counterparty's bankruptcy to any claim arising as a result of a breach by Counterparty of any of its obligations under this Confirmation or the Agreement. For the avoidance of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to any other agreement.
(k)
Early Unwind
. In the event the sale by Counterparty of the [Base Convertible Securities]
19
[Optional Convertible Securities]
20
is not consummated with the Initial Purchasers pursuant to the Purchase Agreement for any reason by the close of business in New York on [
Date
] (or such later date as agreed upon by the parties) ([
Date
] or such later date being the “
Early Unwind Date
”), the Transaction shall automatically terminate (the “
Early Unwind
”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Counterparty thereunder shall be cancelled and terminated and (ii) each party shall be released and discharged by the other party from, and agrees not to make any claim against the other party with respect to, any obligations or liabilities of either party arising out of and to be performed in connection with the Transaction either prior to or after the Early Unwind Date. Dealer and Counterparty represent and acknowledge to the other that upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged.
(l)
Illegality
. The parties agree that, for the avoidance of doubt, for purposes of Section 5(b)(i) of the Agreement, “any applicable law” shall include the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any rules and regulations promulgated thereunder and any similar law or regulation, without regard to Section 739 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any similar legal certainty provision in any legislation enacted, or rule or regulation promulgated, on or after the Trade Date, and the consequences specified in the Agreement, including without limitation, the consequences specified in Section 6 of the Agreement, shall apply to any Illegality arising from any such act, rule or regulation.
(m)
Amendments to Equity Definitions and the Agreement
. Subject to the terms set forth above under Method of Adjustment, and solely with respect to the Cap Price, the following amendments shall be made to the Equity Definitions:
(i) solely for purposes of applying the Equity Definitions and for purposes of this Confirmation, any reference in the Equity Definitions to a Strike Price shall be deemed to be a reference to either of the Strike Price or the Cap Price, or both, as appropriate;
19
Include for base capped call confirmation only.
20
Include for additional capped call confirmation only.
(ii) for the purpose of any adjustment under Section 11.2(c) of the Equity Definitions, the first sentence of Section 11.2(c) of the Equity Definitions, prior to clause (A) thereof, is hereby amended to read as follows: (c) If “Calculation Agent Adjustment” is specified as the Method of Adjustment in the related Confirmation of a Share Option Transaction, then following the announcement or occurrence of any Potential Adjustment Event, the Calculation Agent will determine whether such Potential Adjustment Event has, in the commercially reasonable judgment of the Calculation Agent, a material economic effect on the theoretical value of the relevant Shares or options on the Shares (
provided
that such event is not based on (x) an observable market, other than the market for Counterparty’s own stock or (y) an observable index, other than an index calculated measured solely by reference to Counterparty’s own operations) and, if so, will (i) make appropriate adjustment(s), if any, determined in a commercially reasonable manner, to any one or more of: and, the portion of such sentence immediately preceding clause (ii) thereof is hereby amended by deleting the words “diluting or concentrative” and the words “(
provided
that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and replacing such latter phrase with the words “(
provided
that, solely in the case of Sections 11.2(e)(i), (ii)(A), (iv) and (v), no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares but, for the avoidance of doubt, solely in the case of Sections 11.2(e)(ii)(B) through (D), (iii) (vi) and (vii) adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)”;
(iii) Section 11.2(a) of the Equity Definitions is hereby amended by (1) deleting the words “in the determination of the Calculation Agent, a diluting or concentrative effect” and replacing these words with “in the commercially reasonable judgment of the Calculation Agent, a material economic effect”; and (2) adding at the end thereof “;
provided
that such event is not based on (i) an observable market, other than the market for Counterparty’s own stock or (ii) an observable index, other than an index calculated measured solely by reference to Counterparty’s own operations”;
(iv) Section 11.2(e)(vii) of the Equity Definitions is hereby amended and restated as follows: “any other corporate event involving the Counterparty that in the commercially reasonable judgment of the Calculation Agent has a material economic effect on the theoretical value of the Shares or options of the Shares;
provided
that such corporate event involving the Counterparty is not based on (a) an observable market, other than the market for Counterparty’s own stock or (b) an observable index, other than an index calculated measured solely by reference to Counterparty’s own operations.”; and
(v) Section 12.7(b) of the Equity Definitions is hereby amended by deleting the words “(and in any event within five Exchange Business Days) by the parties after” appearing after the words “agreed promptly” and replacing with the words “by the parties on or prior to”.
(n)
Delivery or Receipt of Cash
. For the avoidance of doubt, other than payment of the Premium by Counterparty, nothing in this Confirmation shall be interpreted as requiring Counterparty to cash settle the Transaction, except in circumstances where cash settlement is within Counterparty’s control (including, without limitation, where Counterparty elects to deliver or receive cash) or in those circumstances in which holders of Shares would also receive cash.
(o)
Waiver of Jury Trial
.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE AGREEMENT, THIS CONFIRMATION OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
(p)
Governing Law
.
THE AGREEMENT, THIS CONFIRMATION AND ALL MATTERS ARISING IN CONNECTION WITH THE AGREEMENT AND THIS CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO ITS CHOICE OF LAW DOCTRINE, OTHER THAN TITLE 14 OF THE NEW YORK GENERAL OBLIGATIONS LAW). THE PARTIES HERETO IRREVOCABLY SUBMIT
TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THE AGREEMENT, THIS CONFIRMATION OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
(q)
Amendment.
This Confirmation and the Agreement may not be modified, amended or supplemented, except in a written instrument signed by Counterparty and Dealer.
(r)
Counterparts
. This Confirmation may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
(s) Tax Matters.
(i)
Payee Representations
:
For the purpose of Section 3(f) of the Agreement, Counterparty makes the following representation to Dealer:
Counterparty is a corporation and a U.S. person (as that term is defined in Section 7701(a)(30) of the Code and used in Section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) for U.S. federal income tax purposes.
For the purpose of Section 3(f) of the Agreement, Dealer makes the following representations to Counterparty:
[Dealer is a U.S. person (as that term is used in Section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations) for U.S. federal income tax purposes.]
(ii)
Tax Documentation.
For the purpose of Sections 4(a)(i) and (ii) of the Agreement, Counterparty agrees to deliver to Dealer one duly executed and completed United States Internal Revenue Service Form W-9 (or successor thereto) and Dealer agrees to deliver to Counterparty, as applicable, a U.S. Internal Revenue Service Form W-8 or Form W-9 (or successor thereto). Such forms or documents shall be delivered (i) on or before the date of execution of this Confirmation, (ii) upon Counterparty or Dealer, as applicable, learning that any such tax form previously provided by it has become obsolete or incorrect and (iii) upon reasonable request of the other party.
(iii)
Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act
. “Indemnifiable Tax”, as defined in Section 14 of the Agreement, shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a "
FATCA Withholding Tax
"). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.
(iv) HIRE Act.
“Indemnifiable Tax”, as defined in Section 14 of the Agreement, shall not include any tax imposed on payments treated as dividends from sources within the United States under Section 871(m) of the Code or any regulations issued thereunder. For the avoidance of doubt, any such tax imposed under Section 871(m) of the Code is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement
.
(t)
U.S. QFC Stay Rules
. The parties agree that (i) to the extent that prior to the date hereof both parties have adhered to the 2018 ISDA U.S. Resolution Stay Protocol (the “
Protocol
”), the terms of the Protocol are
incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a Protocol Covered Agreement and each party shall be deemed to have the same status as Regulated Entity and/or Adhering Party as applicable to it under the Protocol; (ii) to the extent that prior to the date hereof the parties have executed a separate agreement the effect of which is to amend the qualified financial contracts between them to conform with the requirements of the QFC Stay Rules (the “
Bilateral Agreement
”), the terms of the Bilateral Agreement are incorporated into and form a part of this Agreement and each party shall be deemed to have the status of “Covered Entity” or “Counterparty Entity” (or other similar term) as applicable to it under the Bilateral Agreement; or (iii) if clause (i) and clause (ii) do not apply, the terms of Section 1 and Section 2 and the related defined terms (together, the “
Bilateral Terms
”) of the form of bilateral template entitled “Full-Length Omnibus (for use between U.S. G-SIBs and Corporate Groups)” published by ISDA on November 2, 2018 (currently available on the 2018 ISDA U.S. Resolution Stay Protocol page at www.isda.org and, a copy of which is available upon request), the effect of which is to amend the qualified financial contracts between the parties thereto to conform with the requirements of the QFC Stay Rules, are hereby incorporated into and form a part of this Agreement, and for such purposes this Agreement shall be deemed a “Covered Agreement,” Dealer shall be deemed a “Covered Entity” and Dealer shall be deemed a “Counterparty Entity.” In the event that, after the date of this Agreement, both parties hereto become adhering parties to the Protocol, the terms of the Protocol will replace the terms of this Section 8(u) of the Confirmation. In the event of any inconsistencies between this Agreement and the terms of the Protocol, the Bilateral Agreement or the Bilateral Terms (each, the “
QFC Stay Terms
”), as applicable, the QFC Stay Terms will govern. Terms used in this paragraph without definition shall have the meanings assigned to them under the QFC Stay Rules. For purposes of this paragraph, references to “this Agreement” include any related credit enhancements entered into between the parties or provided by one to the other. In addition, the parties agree that the terms of this paragraph shall be incorporated into any related covered affiliate credit enhancements, with all references to Dealer Parent replaced by references to the covered affiliate support provider.
“
QFC Stay Rules
” means the regulations codified at 12 C.F.R. 252.2, 252.81–8, 12 C.F.R. 382.1-7 and 12 C.F.R. 47.1-8, which, subject to limited exceptions, require an express recognition of the stay-and-transfer powers of the FDIC under the Federal Deposit Insurance Act and the Orderly Liquidation Authority under Title II of the Dodd Frank Wall Street Reform and Consumer Protection Act and the override of default rights related directly or indirectly to the entry of an affiliate into certain insolvency proceedings and any restrictions on the transfer of any covered affiliate credit enhancements.
(u) [
Reserved
]. Insert Dealer specific provisions, if any.
Please confirm that the foregoing correctly sets forth the terms of our agreement by sending to us a letter or telex substantially similar to this facsimile, which letter or telex sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms.
|
|
|
Yours faithfully,
|
|
|
[DEALER]
|
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
|
|
|
|
Agreed and Accepted By:
|
|
|
|
PLURALSIGHT, INC.
|
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
Schedule 1
[Form of Guarantee]
Annex A
Form of Opinion
|
|
1.
|
The Counterparty has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware.
|
|
|
2.
|
The Confirmation has been duly authorized, executed and delivered by the Counterparty.
|
|
|
3.
|
The execution and delivery by the Counterparty of the Confirmation, and the undertaking by the Counterparty of its obligations under the Confirmation and the consummation of the transactions therein contemplated do not violate, will not result in any violation by the Counterparty of its Certificate of Incorporation or its Bylaws.
|
|
|
4.
|
The execution and delivery by the Counterparty of the Confirmation, and the undertaking by the Counterparty of its obligations under the Confirmation and the consummation of the transactions therein contemplated, will not constitutes a violation of, or a default under, any material agreement of the Counterparty.
|