Exhibit 10.2

HARMONIC INC.

(a Delaware corporation)

$125,000,000

4.00% Convertible Senior Notes due 2020

PURCHASE AGREEMENT

Dated: December 8, 2015

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HARMONIC INC.

(a Delaware corporation)

$125,000,000

4.00% Convertible Senior Notes due 2020

PURCHASE AGREEMENT

December 8, 2015

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

as Representative of the several Initial Purchasers

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

Harmonic Inc., a Delaware corporation (the “Company”), confirms its agreement
with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) and
each of the other Initial Purchasers named in Schedule A hereto (collectively,
the “Initial Purchasers,” which term shall also include any initial purchaser
substituted as hereinafter provided in Section 11 hereof), for whom Merrill
Lynch is acting as representative (in such capacity, the “Representative”), with
respect to (i) the sale by the Company and the purchase by the Initial
Purchasers, acting severally and not jointly, of the respective principal
amounts set forth in said Schedule A of $125,000,000 aggregate principal amount
of the Company’s 4.00% Convertible Senior Notes due 2020 (the “Initial
Securities”) and (ii) the grant by the Company to the Initial Purchasers, acting
severally and not jointly, of the option to purchase all or any part of an
additional $18,750,000 aggregate principal amount of its 4.00% Convertible
Senior Notes due 2020 (the “Option Securities” and, together with the Initial
Securities, the “Securities”) as provided in Section 2(b) hereof. The Securities
are to be issued pursuant to an indenture dated as of December 14, 2015 (the
“Indenture”) between the Company and U.S. Bank National Association, as trustee
(the “Trustee”). The Securities will be convertible into cash, shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”), or a
combination of cash and shares of Common Stock, at the Company’s election.

The Company understands that the Initial Purchasers propose to make an offering
of the Securities on the terms and in the manner set forth herein and agrees
that the Initial Purchasers may resell, subject to the conditions set forth
herein, all or a portion of the Securities to purchasers (“Subsequent
Purchasers”) at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the “1933 Act”),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A
(“Rule 144A”) of the rules and regulations promulgated under the 1933 Act (the
“1933 Act Regulations”) by the Securities and Exchange Commission (the
“Commission”)).

 

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The Company has prepared and delivered to each Initial Purchaser copies of a
preliminary offering memorandum dated December 7, 2015 prior to the Applicable
Time (as defined below) (the “Preliminary Offering Memorandum”) and has prepared
and will deliver to each Initial Purchaser, on the date hereof or the next
succeeding day or such later date specified by each Initial Purchaser, copies of
a final offering memorandum December 8, 2015 (the “Final Offering Memorandum”),
each for use by such Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Securities. “Offering Memorandum” means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including exhibits thereto and any documents incorporated therein by reference,
which has been prepared and delivered by the Company to the Initial Purchasers,
in the case of the Preliminary Offering Memorandum prior to the Applicable Time,
in connection with their solicitation of purchases of, or offering of, the
Securities. The Company will prepare a final term sheet reflecting the final
terms of the Securities, in the form set forth in Schedule B hereto (the “Final
Term Sheet”), and will deliver such Final Term Sheet to the Initial Purchasers
prior to the Applicable Time in connection with their solicitation of purchases
of, or offering of, the Securities. Each party agrees that, unless it obtains
the prior written consent of such other party, it will not make any offer
relating to the Securities by any written materials other than the Offering
Memorandum and the Issuer Written Information. “Issuer Written Information”
means (i) any writing intended for general distribution to investors as
evidenced by its being specified in Schedule C hereto, including the Final Term
Sheet, and (ii) any “road show” that is a “written communication” within the
meaning of the 1933 Act. “General Disclosure Package” means the Preliminary
Offering Memorandum and any Issuer Written Information specified on Schedule C
hereto and issued at or prior to 8:15 P.M. New York City time, on December 8,
2015 or such other time as agreed by the Company and Merrill Lynch (such date
and time, the “Applicable Time”).

All references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the “1934 Act”) which is incorporated by reference in the
Offering Memorandum.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company. The Company represents and
warrants to each Initial Purchaser as of the date hereof, the Applicable Time,
the Closing Time (as defined below) and any Date of Delivery (as defined below),
and agrees with each Initial Purchaser, as follows:

(i) General Disclosure Package; Rule 144A Eligibility. The Company hereby
confirms that it has authorized the use of the General Disclosure Package,
including the Preliminary Offering Memorandum and the Final Term Sheet, and the
Final Offering Memorandum in connection with the offer and sale of the
Securities by the Initial Purchasers. The Securities satisfy the requirements
set forth in Rule 144A(d)(3).

(ii) No Registration Required; No General Solicitation. Subject to compliance by
the Initial Purchasers with the representations and warranties of the Initial
Purchasers and the procedures set forth in Section 6 hereof, it is not necessary
in connection with the offer, sale and delivery of the offered Securities to the
Initial Purchasers and to each Subsequent Purchaser in the manner contemplated
by this Agreement, the General Disclosure Package and the Final Offering
Memorandum to register the Securities under the 1933 Act or to qualify the
Indenture under the

 

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Trust Indenture Act of 1939, as amended (the “1939 Act”). None of the Company,
its Affiliates or any person acting on its or any of their behalf (other than
the Initial Purchasers and persons acting on their behalf, as to whom the
Company makes no representation) has engaged, in connection with the offering of
the offered Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act Regulations.

(iii) Accurate Disclosure. As of the Applicable Time, neither (A) the General
Disclosure Package nor (B) any Issuer Written Information, when considered
together with the General Disclosure Package, included, includes or will include
an untrue statement of a material fact or omitted, omits or will omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The Final Offering
Memorandum, as of its date, at the Closing Time or at any Date of Delivery, did
not, does not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
The documents incorporated or deemed to be incorporated by reference in the
General Disclosure Package and the Final Offering Memorandum, when such
documents incorporated by reference were filed with the Commission, when read
together with the other information in the General Disclosure Package or the
Final Offering Memorandum, as the case may be, did not, does not and will not
contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

The representations and warranties in this subsection shall not apply to
statements in or omissions from the General Disclosure Package or the Final
Offering Memorandum made in reliance upon and in conformity with written
information furnished to the Company by any Initial Purchaser through Merrill
Lynch expressly for use therein. For purposes of this Agreement, the only
information so furnished shall be [the information in the second and third
sentences under the heading “Plan of Distribution–Notes are Not Being
Registered,” and the information in the first paragraph under the heading “Plan
of Distribution–Price Stabilization, Short Positions” in the Offering Memorandum
(collectively, the “Initial Purchaser Information”).

(iv) Incorporation of Documents by Reference. The documents incorporated or
deemed to be incorporated by reference in the Offering Memorandum, when they
became effective or at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
under the 1934 Act (the “1934 Act Regulations”).

(v) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included in the Offering Memorandum are
independent public accountants as required by the 1933 Act, the 1933 Act
Regulations, the 1934 Act, the 1934 Act Regulations and the Public Company
Accounting Oversight Board.

(vi) Financial Statements. The financial statements included or incorporated by
reference in the General Disclosure Package and the Final Offering Memorandum,
together with the related schedules and notes, present fairly in all material
respects the financial position of the Company and its consolidated subsidiaries
at the dates indicated and the statement of operations, stockholders’ equity and
cash flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with U.S.
generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, present
fairly in all material respects in accordance with GAAP the information required
to be stated therein. The selected financial data and the

 

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summary financial information included in the Offering Memorandum present fairly
in all material respects the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements included
therein. The interactive data in eXtensible Business Reporting Language
incorporated by reference in the General Disclosure Package and the Final
Offering 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.

(vii) No Material Adverse Change in Business. Except as otherwise stated
therein, since the respective dates as of which information is given in the
General Disclosure Package or the Final Offering Memorandum, (A) there has been
no material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a “Material Adverse Effect”) and (B) there have
been no transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise.

(viii) Good Standing of the Company. The Company has been duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Delaware and has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the General Disclosure
Package and the Final Offering Memorandum and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a Material
Adverse Effect.

(ix) Good Standing of Subsidiaries. Each “significant subsidiary” of the Company
(as such term is defined in Rule 1-02 of Regulation S-X) (each, a “Subsidiary”
and, collectively, the “Subsidiaries”) has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
incorporation or organization, has corporate or similar power and authority to
own, lease and operate its properties and to conduct its business as described
in the General Disclosure Package and the Final Offering Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or to be in good standing would not result in a Material Adverse Effect.
Except as otherwise disclosed in the General Disclosure Package and the Final
Offering Memorandum, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity. None of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The Company does not own or control, directly
or indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 to the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2014.

(x) Capitalization. The authorized, issued and outstanding shares of capital
stock of the Company are as set forth in the General Disclosure Package and the
Final Offering Memorandum in the column entitled “Actual” under the caption
“Capitalization” (except for subsequent issuances, if any, pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit plans
referred to in the General Disclosure Package and the Final Offering Memorandum
or pursuant to the exercise of convertible securities or options referred to in
the General Disclosure Package and the Final Offering Memorandum).

 

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(xi) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.

(xii) Authorization of the Indenture. The Indenture has been duly authorized by
the Company and, when duly executed and delivered by the Company and the
Trustee, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally
and except as enforcement thereof is subject to general principles of equity,
including the principles of good faith, commercial reasonableness and fair
dealing (regardless of whether enforcement is considered in a proceeding in
equity or at law).

(xiii) Authorization of the Securities and the Conversion Shares. The Securities
have been duly authorized and, at the Closing Time, will have been duly executed
by the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment of the purchase
price therefor as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity, including the principles of good faith, commercial
reasonableness and fair dealing (regardless of whether enforcement is considered
in a proceeding in equity or at law), and will be in the form contemplated by,
and entitled to the benefits of, the Indenture. The maximum number of shares of
Common Stock initially issuable upon conversion of the Securities (taking into
account any make-whole adjustment and assuming physical settlement (as defined
in the Final Offering Memorandum) of the Securities (the “Conversion Shares”))
(which for the avoidance of doubt will not take into effect any changes in the
conversion ratio) have been duly authorized and reserved for issuance upon such
conversion by all necessary corporate action and such shares, when issued upon
such conversion in accordance with the terms of the Indenture, will be validly
issued and will be fully paid and non-assessable; and the issuance of such
shares upon such conversion will not be subject to the preemptive or other
similar rights of any securityholder of the Company.

(xiv) Description of the Securities, the Common Stock and the Indenture. The
Securities and the Indenture will conform in all material respects to the
respective statements relating thereto contained in the General Disclosure
Package and the Final Offering Memorandum. The Common Stock conforms to all
statements relating thereto contained or incorporated by reference in the
General Disclosure Package and the Final Offering Memorandum and such
description conforms to the rights set forth in the instruments defining the
same.

(xv) Reserved.

(xvi) Absence of Violations, Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is (A) in violation of its charter, by-laws or similar
organizational document, (B) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease

 

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or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound or to which any of the
properties or assets of the Company or any subsidiary is subject (collectively,
“Agreements and Instruments”), except for such defaults that would not, singly
or in the aggregate, result in a Material Adverse Effect, or (C) in violation of
any law, statute, rule, regulation, judgment, order, writ or decree of any
arbitrator, court, governmental body, regulatory body, administrative agency or
other authority, body or agency having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties, assets or operations
(each, a “Governmental Entity”), except for such violations that would not,
singly or in the aggregate, result in a Material Adverse Effect. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein and therein in the General Disclosure Package
and the Final Offering Memorandum (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described therein under the caption “Use of Proceeds”) and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any subsidiary pursuant to, the
Agreements and Instruments or any law, statute, rule, regulation, judgment,
order, writ or decree of any Governmental Entity (except for such conflicts,
breaches, defaults or Repayment Events or liens, charges or encumbrances that
would not, singly or in the aggregate, result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the charter,
by-laws or similar organizational document of the Company or any of its
subsidiaries. As used herein, a “Repayment Event” means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.

(xvii) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary’s principal
suppliers, manufacturers, customers or contractors, which, in either case, would
result in a Material Adverse Effect.

(xviii) Absence of Proceedings. Except as disclosed in the General Disclosure
Package and the Final Offering Memorandum, there is no action, suit, proceeding,
inquiry or investigation before or brought by any Governmental Entity now
pending or, to the knowledge of the Company, threatened in writing, against or
affecting the Company or any of its subsidiaries, which might result in a
Material Adverse Effect, or which might materially and adversely affect their
respective properties or assets or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder.

(xix) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
Governmental Entity is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale
of the Securities hereunder or the consummation of the transactions contemplated
by this Agreement or for the due execution, delivery and performance of the
Indenture, except such as have been already obtained or such as may be required
under the Blue Sky or similar laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Initial Purchaser in the
manner contemplated by this Agreement and in the Offering Memorandum and the
rules and regulations of The NASDAQ Global Select Market.

 

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(xx) Possession of Licenses and Permits. The Company and its subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental
Entities necessary to conduct the business now operated by them, except where
the failure so to possess would not, singly or in the aggregate, result in a
Material Adverse Effect. The Company and its subsidiaries are in compliance with
the terms and conditions of all Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, result in a Material Adverse
Effect. All of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not, singly or in the
aggregate, result in a Material Adverse Effect. Neither the Company nor any of
its subsidiaries has received any notice of proceedings relating to the
revocation or modification of any Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.

(xxi) Title to Property. Neither the Company nor its subsidiaries own real
property; and all of the leases and subleases under which the Company or any of
its subsidiaries holds properties described in the General Disclosure Package
and the Final Offering Memorandum, are in full force and effect, and neither the
Company nor any such subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or sublease.

(xxii) Possession of Intellectual Property. To the Company’s knowledge, the
Company and its subsidiaries own or possess adequate rights to use or can
acquire on commercially reasonable terms all inventions, patents, trademarks,
service marks, trade names, domain names, copyrights, licenses, technology,
know-how, trade secrets and other intellectual property and proprietary or
confidential information, systems or procedures (including all goodwill
associated with, and all registrations and applications for registration of, the
foregoing) (collectively, “Intellectual Property”) material to the conduct of
its businesses as currently conducted. To the Company’s knowledge, the conduct
of the business of the Company and its subsidiaries as currently conducted does
not infringe, misappropriate or otherwise violate any Intellectual Property of
others. Except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, there is no currently pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim
(i) challenging the Company’s or any of its subsidiary’s rights in or to, any of
the Intellectual Property owned by the Company or any subsidiary of the Company;
(ii) alleging that the Company or any of its subsidiaries has infringed,
misappropriated or otherwise violated or conflicted with any Intellectual
Property of any third party; or (iii) challenging the validity, scope or
enforceability of any Intellectual Property registered by the Company or any of
its subsidiaries, other than office actions received in the ordinary course of
prosecuting and maintaining such Intellectual Property, and in the case of each
of (i), (ii) and (iii), the Company is unaware of any facts which would form a
reasonable basis for any such action, suit, proceeding or claim which would,
individually or in the aggregate, result in a Material Adverse Effect. To the
Company’s knowledge and except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (x) all finally issued
registered Intellectual Property that is owned by the Company or any of its
subsidiaries is not invalid or unenforceable, and (y) all registered
Intellectual Property owned by the Company or a subsidiary of the Company, is
owned free and clear of all third-party liens.

 

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(xxiii) Environmental Laws. Except as described in the General Disclosure
Package and the Final Offering Memorandum or would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor any
of its subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products,
asbestos-containing materials or mold (collectively, “Hazardous Materials”) or
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, “Environmental
Laws”), (B) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or, to the
Company’s knowledge, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries and (D) there are no events or
circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or Governmental Entity, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.

(xxiv) Accounting Controls and Disclosure Controls. The Company and each of its
subsidiaries maintain effective internal control over financial reporting (as
defined under Rule 13-a15 and 15d-15 under the 1934 Act Regulations) that
complies with the requirements of the Exchange Act and has been designed by the
Company’s principal executive officer and principal financial officer, or under
their supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management’s general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; (D) 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
(E) that the interactive data in eXtensible Business Reporting Language
incorporated by reference in the General Disclosure Package and the Final
Offering Memorandum fairly presents the information called for in all material
respects and is prepared in accordance in all material respects with the
Commission’s rules and guidelines applicable thereto. Except as described in the
General Disclosure Package and the Final Offering Memorandum, since the end of
the Company’s most recent audited fiscal year, there has been (1) no material
weakness in the Company’s internal control over financial reporting (whether or
not remediated) and (2) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting. The
Company and each of its subsidiaries maintain an effective system of disclosure
controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the
1934 Act Regulations) that are designed to ensure that information required to
be disclosed by the Company in the reports that it files or submits under the
1934 Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms, and is accumulated and
communicated to the Company’s management, including its principal executive
officer or officers and principal financial officer or officers, as appropriate,
to allow timely decisions regarding disclosure.

 

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(xxv) Compliance with the Sarbanes-Oxley Act. There is and, in the past five
years, has been no failure on the part of the Company or any of the Company’s
directors or officers, in their capacities as such, to comply in all material
respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith, including Section 402 related
to loans and Sections 302 and 906 related to certifications.

(xxvi) Payment of Taxes. All U.S. federal income tax returns of the Company and
its subsidiaries required by law to be filed have been filed and all taxes shown
by such returns or otherwise assessed, which are due and payable, have been
paid, except assessments against which appeals have been or will be promptly
taken and as to which adequate reserves have been provided. No assessment in
connection with the U.S. federal income tax returns of the Company through the
fiscal year ended December 31, 2014 has been made against the Company. The
Company and its subsidiaries have filed all other tax returns that are required
to have been filed by them pursuant to applicable foreign, state, local or other
law and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Company and its subsidiaries, except for such taxes,
if any, as are being contested in good faith and as to which adequate reserves
have been established by the Company, except, in each case, insofar as the
failure to file such returns or pay such taxes was described in the General
Disclosure Package and the Final Offering Memorandum or would not result in a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Company in respect of any income and corporation tax liability for any years not
finally determined are adequate to meet any assessments or re-assessments for
additional income tax for any years not finally determined, except to the extent
of any inadequacy that was described in the General Disclosure Package and the
Final Offering Memorandum or would not result in a Material Adverse Effect.

(xxvii) Insurance. The Company and its subsidiaries carry or are entitled to the
benefits of insurance, with financially sound and reputable insurers, in such
amounts and covering such risks as is generally maintained by companies of
established repute engaged in the same or similar business, and all such
insurance is in full force and effect. The Company has no reason to believe that
it or any of its subsidiaries will not be able (A) to renew its existing
insurance coverage as and when such policies expire or (B) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material
Adverse Effect. Neither of the Company nor any of its subsidiaries has been
denied any insurance coverage which it has sought or for which it has applied.

(xxviii) Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the General Disclosure Package and
the Final Offering Memorandum will not be required, to register as an
“investment company” under the Investment Company Act of 1940, as amended (the
“1940 Act”).

(xxix) Absence of Manipulation. Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take, directly or
indirectly, any action which is designed, or would be expected, to cause or
result in, or which constitutes, a violation of Regulation M under the 1934 Act.

 

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(xxx) Foreign Corrupt Practices Act. None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director, officer, agent,
employee, controlled affiliate or other person acting on behalf of the Company
or any of its subsidiaries has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company has conducted its
businesses in compliance with the FCPA and has instituted and maintains policies
and procedures reasonably designed to ensure, and which are reasonably expected
to continue to ensure, continued compliance therewith.

(xxxi) Money Laundering Laws. The operations of the Company and its subsidiaries
are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Entity (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any
Governmental Entity involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.

(xxxii) OFAC. None of the Company, any of its subsidiaries or, to the knowledge
of the Company, any director, officer, agent, employee, affiliate or
representative of the Company or any of its subsidiaries is an individual or
entity (“Person”) currently the subject of any sanctions administered or
enforced by the United States Government, including, without limitation, the
U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the
United Nations Security Council (“UNSC”), the European Union, Her Majesty’s
Treasury (“HMT”), or other relevant sanctions authority (collectively,
“Sanctions”), nor is the Company located, organized or resident in a country or
territory that is the subject of Sanctions; and the Company will not directly or
indirectly use the proceeds of the sale of the Securities, or lend, contribute
or otherwise make available such proceeds to any subsidiaries, joint venture
partners or other Person, to fund any activities of or business with any Person,
or in any country or territory, that, at the time of such funding, is the
subject of Sanctions, to extent that it would be in violations of the Sanctions,
or in any other manner that will result in a violation by any Person (including
any Person participating in the transaction, whether as underwriter, advisor,
investor or otherwise) of Sanctions.

(xxxiii) Statistical and Market-Related Data. Any statistical and market-related
data included in the General Disclosure Package or the Final Offering Memorandum
are based on or derived from sources that the Company believes, after reasonable
inquiry, to be reliable and accurate and, to the extent required, the Company
has obtained the written consent to the use of such data from such sources.

(xxxiv) No Rating of Securities. Neither the Company nor its subsidiaries have
any debt securities or preferred stock that are rated by any “nationally
recognized statistical rating agency” (as defined in Section 3(a)(62) of the
1934 Act).

 

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(b) Officer’s Certificates. Any certificate signed by any officer of the Company
or any of its subsidiaries delivered to the Representative or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Company
to each Initial Purchaser as to the matters covered thereby.

SECTION 2. Sale and Delivery to Initial Purchasers; Closing.

(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Initial Purchaser, severally and not jointly, and
each Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, at the price set forth in Schedule A, the aggregate principal amount of
Initial Securities set forth in Schedule A, plus any additional principal amount
of Initial Securities which such Initial Purchaser may become obligated to
purchase pursuant to the provisions of Section 11 hereof, subject to such
adjustments as Merrill Lynch in its discretion shall make to ensure that any
sales or purchases are in authorized denominations.

(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an overallotment option to the Initial
Purchasers, severally and not jointly, to purchase the Option Securities, at the
price set forth in Schedule A. The option hereby granted may be exercised for
30 days after the date hereof and may be exercised in whole or in part from time
to time only for the purpose of covering overallotments of the Initial
Securities, if any, upon notice by the Representative to the Company setting
forth the amount of Option Securities as to which the several Initial Purchasers
made in connection with the offering and distribution of the Initial Securities
are then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a “Date of
Delivery”) shall be determined by the Representative, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time. If the option is exercised as to all or any
portion of the Option Securities, each of the Initial Purchasers, acting
severally and not jointly, will purchase that proportion of the total principal
amount of Option Securities then being purchased which the number of Initial
Securities set forth in Schedule A opposite the name of such Initial Purchaser
bears to the total principal amount of Initial Securities, subject in each case
to such adjustments as Merrill Lynch in its discretion shall make to ensure that
any sales or purchases are in authorized denominations.

(c) Payment. Payment of the purchase price for, and delivery of certificates or
security entitlements for, the Initial Securities shall be made at the offices
of Davis Polk & Wardwell LLP, 1600 El Camino Real, Menlo Park, California 94025,
or at such other place as shall be agreed upon by the Representative and the
Company, at 9:00 A.M. (New York City time) on the fourth business day after the
date hereof (unless postponed in accordance with the provisions of Section 11),
or such other time not later than ten business days after such date as shall be
agreed upon by the Representative and the Company (such time and date of payment
and delivery being herein called “Closing Time”).

In addition, in the event that any or all of the Option Securities are purchased
by the Initial Purchasers, payment of the purchase price for, and delivery of
certificates or security entitlements for, such Option Securities shall be made
at the above-mentioned offices, or at such other place as shall be agreed upon
by the Representative and the Company, on each Date of Delivery as specified in
the notice from Merrill Lynch to the Company.

Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company, against delivery to the
Representative for the respective accounts of the Initial Purchasers of
certificates or security entitlements for the Securities to be purchased by
them. It is understood that each Initial Purchaser has authorized the
Representative, for its account, to accept

 

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delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the Initial
Purchasers, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Initial Purchaser whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Initial Purchaser from its obligations hereunder.

SECTION 3. Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:

(a) Delivery of Offering Memorandum. The Company has delivered to each Initial
Purchaser, without charge, as many copies of the Preliminary Offering Memorandum
(as amended or supplemented) thereto and documents incorporated by reference
therein as such Initial Purchaser reasonably requested, and the Company hereby
consents to the use of such copies. The Company will furnish to each Initial
Purchaser, without charge, such number of copies of the Final Offering
Memorandum thereto and documents incorporated by reference therein as such
Initial Purchaser may reasonably request.

(b) Notice and Effect of Material Events. If at any time prior to the completion
of resales of the Securities by the Initial Purchasers, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Initial Purchasers or for the Company, to amend or supplement
the General Disclosure Package or the Final Offering Memorandum in order that
the General Disclosure Package or the Final Offering Memorandum, as the case may
be, will not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
Subsequent Purchaser, the Company will promptly (A) give the Representative
notice of such event and (B) prepare any amendment or supplement as may be
necessary to correct such statement or omission and, a reasonable amount of time
prior to any proposed use or distribution, furnish the Representative with
copies of any such amendment or supplement; provided that the Company shall not
use or distribute any such amendment or supplement to which the Representative
or counsel for the Initial Purchasers shall object. The Company will furnish to
the Initial Purchasers such number of copies of such amendment or supplement as
the Initial Purchasers may reasonably request.

(c) Reporting Requirements. Until the completion of resales of the Securities by
the Initial Purchasers, the Company will file all documents required to be filed
with the Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations. The Company has given the
Representative notice of any filings made pursuant to the 1934 Act or 1934 Act
Regulations within 48 hours prior to the Applicable Time; the Company will give
the Representative notice of its intention to make any such filing from the
Applicable Time to the Closing Time and will furnish the Representative with
copies of any such documents a reasonable amount of time prior to such proposed
filing, as the case may be, and will not file or use any such document to which
the Representative or counsel for the Initial Purchasers shall reasonably
object, except as required by applicable law.

(d) Blue Sky Qualifications. The Company will use its commercially reasonable
efforts, in cooperation with the Initial Purchasers, to qualify the Securities
for offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representative may designate
and to maintain such qualifications in effect so long as required to complete
the distribution of the Securities; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.

 

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(e) Use of Proceeds. The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the General Disclosure
Package and the Final Offering Memorandum under “Use of Proceeds.”

(f) DTCC. The Company will cooperate with the Initial Purchasers and use its
commercially reasonable efforts to permit the offered Securities to be eligible
for clearance and settlement through the facilities of The Depository Trust &
Clearing Corporation (“DTCC”).

(g) Listing. The Company will use its commercially reasonable efforts to effect
and maintain the listing of the Conversion Shares on The Nasdaq Global Select
Market.

(h) Restriction on Sale of Securities. During a period of 90 days from the date
of the Final Offering Memorandum, the Company will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, 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 or
otherwise transfer or dispose of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder or any Conversion Shares, (B) any
shares of Common Stock issued by the Company upon the exercise of an option or
warrant, the vesting and settlement of any restricted stock unit or the
conversion of a security outstanding on the date hereof and referred to in the
General Disclosure Package and the Final Offering Memorandum, (C) any shares of
Common Stock issued or options to purchase Common Stock or restricted stock
units granted pursuant to existing employee benefit plans of the Company
referred to in the General Disclosure Package and the Final Offering Memorandum,
(D) any shares of Common Stock issued pursuant to any non-employee director
stock plan or dividend reinvestment plan referred to in the General Disclosure
Package and the Final Offering Memorandum or (E) any registration statement on
Form S-8 covering securities referred to in clauses (C) and (D) above.

SECTION 4. Payment of Expenses.

(a) Expenses. The Company will pay or cause to be paid all expenses incident to
the performance of their obligations under this Agreement, including
(i) preparation, issuance and delivery of the Securities to the Initial
Purchasers and the Common Stock issuable upon conversion thereof and any charges
of DTCC in connection therewith, (ii) the fees and disbursements of the
Company’s counsel, accountants and other advisors, (iii) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(d) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Initial Purchasers in connection therewith and
in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (iv) the preparation, printing and delivery to the Initial Purchasers
of copies of each Preliminary Offering Memorandum, any Issuer Written
Information, the Final Term Sheet and the Final Offering Memorandum and any
amendments or supplements thereto and any costs associated with electronic
delivery of any of the foregoing by the Initial Purchasers to investors, (v) all
fees and expenses of the Trustee and any expenses of any transfer agent or
registrar for the Securities or the Conversion Shares, (vi) the costs and
expenses of the Company relating to investor presentations on any “road show”
undertaken in connection with the marketing of the Securities, including without
limitation, and expenses associated with the production of road show slides and
graphics, (vii) the fees and expenses incurred in connection with the listing of
the Conversion Shares on The Nasdaq Global Select Market and (viii) the costs
and expenses (including, without limitation, any damages or other amounts
payable in connection with legal or contractual liability) associated with the
reforming of any contracts for sale of the Securities made by the Initial
Purchasers caused by a breach of the representation contained in the first
sentence of Section 1(a)(iii).

 

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(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5, Section 10(a)(i)
or (iii) or Section 11 hereof, the Company shall reimburse the Initial
Purchasers for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Initial Purchasers.

SECTION 5. Conditions of Initial Purchasers’ Obligations. The obligations of the
several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained herein or in
certificates of any officer of the Company or any of its subsidiaries, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:

(a) Opinion of Counsel for Company. At the Closing Time, the Representative
shall have received the favorable opinion, dated the Closing Time, of Wilson
Sonsini Goodrich & Rosati Professional Corporation, counsel for the Company, in
form and substance satisfactory to counsel for the Initial Purchasers, together
with signed or reproduced copies of such letter for each of the other Initial
Purchasers to the effect set forth in Exhibit A hereto.

(b) Opinion of Counsel for Initial Purchasers. At the Closing Time, the
Representative shall have received the favorable opinion, dated the Closing
Time, of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers, together
with signed or reproduced copies of such letter for each of the other Initial
Purchasers in form and substance satisfactory to the Representative.

(c) Officer’s Certificate. At the Closing Time, there shall not have been, since
the date hereof or since the respective dates as of which information is given
in the General Disclosure Package or the Final Offering Memorandum, any Material
Adverse Effect, and the Representative shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of the Company, dated the
Closing Time, to the effect that (i) there has been no such Material Adverse
Effect, (ii) the representations and warranties of the Company in this Agreement
are true and correct with the same force and effect as though expressly made at
and as of the Closing Time and (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time.

(d) Accountant’s Comfort Letter. At the time of the execution of this Agreement,
the Representative shall have received from PricewaterhouseCoopers LLC a letter,
dated such date, in form and substance satisfactory to the Representative,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers 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 the Offering
Memorandum.

(e) Bring-down Comfort Letter. At the Closing Time, the Representative shall
have received from PricewaterhouseCoopers LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.

(f) Approval of Listing. At the Closing Time, the Conversion Shares shall have
been approved for listing on The Nasdaq Global Select Market, subject only to
official notice of issuance.

 

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(g) Lock-up Agreements. At the date of this Agreement, the Representative shall
have received an agreement substantially in the form of Exhibit B hereto signed
by the persons listed on Schedule D hereto.

(h) Conditions to Purchase of Option Securities. In the event that the Initial
Purchasers exercise their option provided in Section 2(b) hereof to purchase all
or any portion of the Option Securities and such Option Securities will be
delivered at a Date of Delivery other than the Closing Time, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company and any of its subsidiaries hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representative shall have received such documents, not
inconsistent with those to be delivered at the Closing Time, as the
Representative may require, including:

(i) Officer’s Certificate. A certificate, dated such Date of Delivery, of the
Chief Executive Officer or the Chief Financial Officer of the Company confirming
that the certificate delivered at the Closing Time pursuant to Section 5(c)
hereof remains true and correct in all material respects as of such Date of
Delivery.

(ii) Opinion of Counsel for Company. The favorable opinion of Wilson Sonsini
Goodrich & Rosati Professional Corporation, counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchasers, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(a) hereof.

(iii) Opinion of Counsel for Initial Purchasers. The favorable opinion of Davis
Polk & Wardwell LLP, counsel for the Initial Purchasers, dated such Date of
Delivery, relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(b) hereof.

(iv) Bring-down Comfort Letter. A letter from PricewaterhouseCoopers LLC, in
form and substance satisfactory to the Representative and dated such Date of
Delivery, substantially in the same form and substance as the letter furnished
to the Representative pursuant to Section 5(d) hereof, except that the
“specified date” in the letter furnished pursuant to this paragraph shall be a
date not more than three business days prior to such Date of Delivery.

(i) Additional Documents. At the Closing Time and at each Date of Delivery (if
any), counsel for the Initial Purchasers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representative and counsel for the Initial Purchasers.

(j) Termination of Agreement. If any condition specified in this Section shall
not have been fulfilled when and as required to be fulfilled, this Agreement,
or, in the case of any condition to the purchase of Option Securities on a Date
of Delivery which is after the Closing Time, the obligations of the several
Initial Purchasers to purchase the relevant Option Securities, may be terminated
by the Representative by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 7, 8, 9, 14, 15, 16 and 17 shall survive
any such termination and remain in full force and effect.

 

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SECTION 6. Subsequent Offers and Resales of the Securities.

(a) Offer and Sale Procedures. Each of the Initial Purchasers and the Company
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:

(i) Offers and Sales. Offers and sales of the Securities shall be made to such
persons and in such manner as is contemplated by the Offering Memorandum. Each
Initial Purchaser severally agrees that it will not offer, sell or deliver any
of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. The Company has
not entered into any contractual arrangement, other than this Agreement, with
respect to the distribution of the Securities or the Common Stock issuable upon
conversion of the Securities and the Company will not enter into any such
arrangement except as contemplated thereby.

(ii) No General Solicitation. No general solicitation or general advertising
(within the meaning of Rule 502(c) under the 1933 Act Regulations) will be used
in the United States in connection with the offering or sale of the Securities.

(iii) Legends. Each of the Securities will bear, to the extent applicable, the
legend contained in “Notice to Investors” in the General Disclosure Package and
the Final Offering Memorandum for the time period and upon the other terms
stated therein.

(iv) Minimum Principal Amount. No sale of the Securities to any one Subsequent
Purchaser will be for less than U.S. $1,000 principal amount and no Security
will be issued in a smaller principal amount.

(b) Covenants of the Company. The Company covenants with each Initial Purchaser
as follows:

(i) Integration. The Company agrees that it will not and will cause its
Affiliates not to, directly or indirectly, solicit any offer to buy, sell or
make any offer or sale of, or otherwise negotiate in respect of, securities of
the Company of any class if, as a result of the doctrine of “integration”
referred to in Rule 502 under the 1933 Act Regulations, such offer or sale would
render invalid (for the purpose of (i) the sale of the offered Securities by the
Company to the Initial Purchasers, (ii) the resale of the offered Securities by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the
offered Securities by such Subsequent Purchasers to others) the exemption from
the registration requirements of the 1933 Act provided by Section 4(a)(2)
thereof or by Rule 144A thereunder or otherwise.

(ii) Rule 144A Information. The Company agrees that so long as any of the
Securities or the Conversion Shares constitute “restricted securities” within
the meaning of Rule 144A(a)(3), in order to render the offered Securities
eligible for resale pursuant to Rule 144A, it will make available, upon request,
to any holder of offered Securities or prospective purchasers of Securities the
information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the 1934 Act.

(iii) Restriction on Repurchases. Until one year following the last original
issuance of the Securities, the Company will not, and will cause its Affiliates
not to, resell any offered Securities which are “restricted securities” (as such
term is defined under Rule 144(a)(3)), whether as beneficial owner or otherwise
(except as agent acting as a securities broker on behalf of and for the account
of customers in the ordinary course of business in unsolicited broker’s
transactions).

 

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(c) Representations, Warranties and Agreements of the Initial Purchasers. Each
Initial Purchaser severally and not jointly represents and warrants to, and
agrees with, the Company that it is a Qualified Institutional Buyer and an
“accredited investor” within the meaning of Rule 501(a) under the 1933 Act
Regulations. Each Initial Purchaser understands that the offered Securities have
not been and will not be registered under the 1933 Act and may not be offered or
sold except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the 1933 Act. Each Initial Purchaser severally
represents and agrees that it has not offered or sold, and will not offer or
sell, any offered Securities constituting part of its allotment except in
accordance with Rule 144A or another applicable exemption from the registration
requirements of the 1933 Act. Accordingly, neither it nor any person acting on
its behalf has made or will make offers or sales of the Securities by means of
any form of general solicitation or general advertising (within the meaning of
Regulation D). Each Initial Purchaser will take reasonable steps to inform, and
cause each of its affiliates (as such term is defined in Rule 501(b) under the
1933 Act Regulations (each, an “Affiliate”)) to take reasonable steps to inform,
persons acquiring Securities from such Initial Purchaser or Affiliate, as the
case may be, that the Securities (A) have not been and will not be registered
under the 1933 Act, (B) are being sold to them without registration under the
1933 Act in reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be offered,
sold or otherwise transferred except (1) to the Company or (2) (x) in accordance
with Rule 144A to a person whom the seller reasonably believes is a Qualified
Institutional Buyer that is purchasing such Securities for its own account or
for the account of a Qualified Institutional Buyer to whom notice is given that
the offer, sale or transfer is being made in reliance on Rule 144A or
(y) pursuant to another available exemption from registration under the
1933 Act.

SECTION 7. Indemnification.

(a) Indemnification of Initial Purchasers. The Company agrees to indemnify and
hold harmless each Initial Purchaser, its Affiliates, its selling agents and
each person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, arising out of any untrue statement or alleged untrue statement of
a material fact included in any Preliminary Offering Memorandum, the Final
Offering Memorandum, the information contained in the Final Term Sheet, any
Issuer Written Information or any other information used by or on behalf of the
Company in connection with the offer or sale of the Securities (or any amendment
or supplement to the foregoing) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 7(d) below) any such settlement is effected
with the written consent of the Company;

 

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(iii) against any and all expense whatsoever, as incurred (including the fees
and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in any
Preliminary Offering Memorandum, the Final Offering Memorandum or the
information contained in the Final Term Sheet (or any amendment or supplement to
the foregoing) in reliance upon and in conformity with the Initial Purchaser
Information.

(b) Indemnification of Company, Directors and Officers. Each Initial Purchaser
severally agrees to indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in any
Preliminary Offering Memorandum, the Final Offering Memorandum or the
information contained in the Final Term Sheet (or any amendment or supplement to
the foregoing) in reliance upon and in conformity with the Initial Purchaser
Information.

(c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or
Section 8 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

 

18

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SECTION 8. Contribution. If the indemnification provided for in Section 7 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Initial Purchasers, on the other hand, from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, on the one hand, and of
the Initial Purchasers, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company,
on the one hand, and the total underwriting discount received by the Initial
Purchasers, on the other hand, bear to the aggregate initial offering price of
the Securities as set forth on the cover of the Final Offering Memorandum.

The relative fault of the Company, on the one hand, and the Initial Purchasers,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company 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 Company and the Initial Purchasers agree that it would not be just and
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 which does not take account of the
equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

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 purchased by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 8, each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act and each Initial Purchaser’s Affiliates and selling agents shall have
the same rights to contribution as such Initial Purchaser, and each director of
the Company, each officer of the Company, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Company. The
Initial Purchasers’ respective obligations to contribute pursuant to this
Section 8 are several in proportion to the aggregate principal amount of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.

 

19

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SECTION 9. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Initial Purchaser or its
Affiliates or selling agents, any person controlling any Initial Purchaser, its
officers or directors or any person controlling the Company and (ii) delivery of
and payment for the Securities.

SECTION 10. Termination of Agreement.

(a) Termination. The Representative may terminate this Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
in the judgment of the Representative, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
General Disclosure Package or the Final Offering Memorandum, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representative,
impracticable or inadvisable to proceed with the completion of the offering or
to enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the Nasdaq Global Select Market, or (iv) if trading generally on
the NYSE MKT or the New York Stock Exchange or in the Nasdaq Global Select
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by order of the Commission or any other governmental
authority, or (v) a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (vi) if a
banking moratorium has been declared by either Federal or New York authorities.

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 1, 7, 8, 9, 14,
15, 16 and 17 shall survive such termination and remain in full force and
effect.

SECTION 11. Default by One or More of the Initial Purchasers. If one or more of
the Initial Purchasers shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the “Defaulted Securities”), the Representative shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Initial Purchasers, or any other initial purchasers, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then:

(i) if the principal amount of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased on such date, each
of the non-defaulting Initial Purchasers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Initial Purchasers, or

 

20

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(ii) if the principal amount of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the Initial Purchasers to purchase, and the
Company to sell, the Option Securities to be purchased and sold on such Date of
Delivery, shall terminate without liability on the part of any non-defaulting
Initial Purchaser.

No action taken pursuant to this Section shall relieve any defaulting Initial
Purchaser from liability in respect of its default.

In the event of any such default which does not result in a termination of this
Agreement or, in the case of a Date of Delivery which is after the Closing Time,
which does not result in a termination of the obligation of the Initial
Purchasers to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the (i) Representative or (ii) the Company shall have
the right to postpone Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the General Disclosure Package or the Final Offering Memorandum or in
any other documents or arrangements. As used herein, the term “Initial
Purchaser” includes any person substituted for an Initial Purchaser under this
Section 11.

SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Initial Purchasers shall
be directed to Merrill Lynch at One Bryant Park, New York, New York 10036,
attention of Syndicate Department (facsimile: (646) 855-3073), with a copy to
ECM Legal (facsimile: (212) 230-8730); notices to the Company shall be directed
to it at 4300 North First Street, San Jose, California 95134, attention of
General Counsel (fax (408) 490-6524) (harmoniclegal@harmonicinc.com).

SECTION 13. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the initial offering price of the
Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several
Initial Purchasers, on the other hand, (b) in connection with the offering of
the Securities and the process leading thereto, each Initial Purchaser is and
has been acting solely as a principal and is not the agent or fiduciary of the
Company, any of its subsidiaries or their respective stockholders, creditors,
employees or any other party, (c) no Initial Purchaser has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company with
respect to the offering of the Securities or the process leading thereto
(irrespective of whether such Initial Purchaser has advised or is currently
advising the Company or any of its subsidiaries on other matters) and no Initial
Purchaser has any obligation to the Company with respect to the offering of the
Securities except the obligations expressly set forth in this Agreement, (d) the
Initial Purchasers and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company and (e) the Initial Purchasers have not provided any legal, accounting,
regulatory or tax advice with respect to the offering of the Securities and the
Company has consulted its own respective legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.

SECTION 14. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive

 

21

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benefit of the Initial Purchasers and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.

SECTION 15. Trial by Jury. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates) and
each of the Initial Purchasers hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.

SECTION 16. GOVERNING LAW. THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE
ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS
CHOICE OF LAW PROVISIONS.

SECTION 17. Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby (“Related Proceedings”) shall be instituted in (i) the federal courts of
the United States of America located in the City and County of New York, Borough
of Manhattan or (ii) the courts of the State of New York located in the City and
County of New York, Borough of Manhattan (collectively, the “Specified Courts”),
and each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court, as to which such jurisdiction is non-exclusive) of such courts in any
such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.

SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.

SECTION 20. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.

SECTION 21. Xtract Research LLC. The Company hereby agrees that the Initial
Purchasers may provide copies of the Preliminary Offering Memorandum and the
Final Offering Memorandum relating to the offering of the Securities and any
other agreements or documents relating thereto, including, without limitation,
any trust indentures, to Xtract Research LLC (“Xtract”) following the completion
of the offering for inclusion in an online research service sponsored by Xtract,
access to which is restricted to “qualified institutional buyers” as defined in
Rule 144A under the 1933 Act.

 

22

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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Initial Purchasers and the Company in accordance with its terms.

 

Very truly yours, HARMONIC INC. By  

/s/ Harold Covert

  Title: Chief Financial Officer

 

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

By

 

/s/ Stephen R. Miller, Jr.

 

Authorized Signatory

For itself and as Representative of the other Initial Purchasers named in
Schedule A hereto.

 

23

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SCHEDULE A

 

Sch A-1

--------------------------------------------------------------------------------

SCHEDULE B

Final Term Sheet

 

Sch B - 1

--------------------------------------------------------------------------------

SCHEDULE C

Issuer Written Information

 

Sch C - 1

--------------------------------------------------------------------------------

SCHEDULE D

List of Persons and Entities Subject to Lock-up

 

Sch D-1

--------------------------------------------------------------------------------

Exhibit A

FORM OF OPINION OF COMPANY’S COUNSEL

TO BE DELIVERED PURSUANT TO SECTION 5(b)

 

  1. The Company is a corporation duly incorporated and validly existing under
the laws of the State of Delaware and is in good standing under such laws. The
Company has requisite corporate power to own or lease its properties and carry
on its business, as described in the Final Offering Memorandum. The Company is
qualified to do business and is in good standing as a foreign corporation in the
State of California.

 

  2. The execution and delivery of the Operative Documents have been duly
authorized by all necessary corporate action on the part of the Company, and the
Company has the corporate power to execute and deliver the Operative Documents
and to perform its obligations under the terms of the Operative Documents.

 

  3. The Purchase Agreement has been duly executed and delivered by the Company.

 

  4. The authorized capital stock of the Company is as set forth in the Final
Offering Memorandum under the caption “Description of Capital Stock.”

 

  5. The Securities being issued on the date hereof are in the form contemplated
in the Indenture and have been duly authorized by all necessary corporate action
of the Company and have been duly executed by the Company and when authenticated
by the Trustee in accordance with the terms of the Indenture (which
authentication we have not determined by inspection of the Securities) and
issued and delivered to the Initial Purchasers against payment of the purchase
price therefor specified in the Purchase Agreement, the Securities will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms.

 

  6. The Indenture has been duly authorized by all necessary corporate action on
the part of the Company and the Indenture has been duly executed and delivered
by the Company and the Indenture constitutes a valid and binding instrument,
enforceable against the Company in accordance with its terms.

 

  7. The shares of Common Stock initially issuable upon conversion of the
Securities (assuming full physical settlement of the Securities and including
shares of Common Stock issuable with respect to any [Make-Whole Fundamental
Change] (as defined in the Indenture)) (the “Shares”) have been duly authorized
and reserved by all necessary corporate action on the part of the Company and
the Shares, if any, when issued upon due conversion of the Securities in
accordance with the terms of such Securities and the Indenture would, if issued
today, be validly issued, fully paid and nonassessable and free of preemptive
rights arising under the Certificate of Incorporation or Bylaws or the DGCL.

 

  8. The statements set forth in the General Disclosure Package and the Final
Offering Memorandum under the caption “Description of Notes” insofar as such
statements purport to constitute a summary of the terms of the Indenture and the
Securities, fairly summarize such terms in all material respects.

 

A-1

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  9. The statements set forth in the General Disclosure Package and the Final
Offering Memorandum under the caption “Certain U.S. Federal Income Tax
Considerations,” insofar as they purport to summarize the United States federal
tax laws referred to therein or legal conclusions with respect thereto, are fair
summaries in all material respects.

 

  10. The statements set forth in the General Disclosure Package and Final
Offering Memorandum under the caption “Description of Capital Stock,” insofar as
such statements constitute summaries of legal matters or documents, fairly
summarize the matters and documents referred to therein in all material
respects.

 

  11. The Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
General Disclosure Package, will not be required to be registered as, an
“investment company,” as such term is defined in the Investment Company Act.

 

  12. None of the issuance and sale of the Securities being delivered on the
date hereof, the execution, delivery and performance by the Company of its
obligations under the Purchase Agreement, the Indenture and the Securities or
the consummation of the transactions contemplated thereby will (i) violate the
Certificate of Incorporation or Bylaws, (ii) conflict with, result in a breach
or violation by the Company of any of the terms or provisions of, or constitute
a default by the Company under any Reviewed Agreement, (iii) result in a
violation of any Reviewed Judgment, or (iv) contravene any applicable law.

 

  13. No consent, approval, authorization, order, registration or qualification
of or with any U.S. federal, New York, California or Delaware (solely with
respect to the DGCL) governmental agency or body or court is required for the
execution and delivery of the Purchase Agreement, the offer, sale or issuance by
the Company of the Securities or the consummation by the Company of the
transactions contemplated by the Purchase Agreement or the Indenture, except
(i) such as have been obtained under the Securities Act, (ii) such as may be
required under state securities or Blue Sky laws, and (iii) as contemplated by
the Operative Documents.

 

  14. Assuming the accuracy of the Initial Purchasers’ representations contained
in the Purchase Agreement and the accuracy of the Company’s representations
contained in the Purchase Agreement, no registration of the Securities or the
Shares is required under the Securities Act for the sale of the Securities by
the Company to the Initial Purchasers pursuant to the Purchase Agreement and the
Indenture or for the initial resale of the Securities by the Initial Purchasers
in the manner contemplated by the Purchase Agreement, the General Disclosure
Package and the Final Offering Memorandum, and it is not necessary to qualify
the Indenture under the Trust Indenture Act (it being understood that, in each
case, no opinion is expressed as to any subsequent resale of the Securities or
the consequences thereof).

 

A-2

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Exhibit B

FORM OF LOCK-UP TO BE DELIVERED PURSUANT TO SECTION 5(g)

December     , 2015

Merrill Lynch, Pierce, Fenner & Smith

Incorporated,

as Representative of the several

Initial Purchasers to be named in Schedule A to the Purchase Agreement

One Bryant Park

New York, New York 10036

Re: Proposed Private Placement by Harmonic Inc.

Dear Sirs:

The undersigned, a stockholder and an officer and/or director of Harmonic Inc.,
a Delaware corporation (the “Company”), understands that Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“Merrill Lynch”) proposes to enter into a Purchase
Agreement (the “Purchase Agreement”), as representative of the several Initial
Purchasers to be named in Schedule A to such agreement (collectively, the
“Initial Purchasers”), with the Company providing for the placement of
$125,000,000 aggregate principal amount of the Company’s Convertible Senior
Notes due 2020 (the “Securities”). In recognition of the benefit that such a
placement will confer upon the undersigned as a stockholder and an officer
and/or director of the Company, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees with each Initial Purchaser that, during the period beginning on the date
hereof and ending on the date that is 90 days from the date of the Purchase
Agreement (the “Lock-up Period”), the undersigned will not, without the prior
written consent of Merrill Lynch, (i) directly or indirectly, 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 or
otherwise transfer or dispose of any shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), or any securities convertible into
or exercisable or exchangeable for Common Stock, whether now owned or hereafter
acquired by the undersigned or with respect to which the undersigned has or
hereafter acquires the power of disposition (collectively, the “Lock-Up
Securities”), or exercise any right with respect to the registration of any of
the Lock-up Securities, or file or cause to be filed any registration statement
in connection therewith, under the Securities Act of 1933, as amended, or
(ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Lock-Up Securities, whether any such swap or transaction is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise.

Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may:

 

  (a) transfer the undersigned’s Lock-Up Securities without the prior written
consent of Merrill Lynch:

 

  (i) as a bona fide gift or gifts;

 

B-1

--------------------------------------------------------------------------------

  (ii) to any member of the undersigned’s immediate family or to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the
undersigned, or if the undersigned is a trust, to a trustor or beneficiary of
the trust or to the estate of a beneficiary of such trust, provided that any
such transfer shall not involve a disposition for value (for purposes of this
lock-up agreement, “immediate family” shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin);

 

  (iii) by will or intestate succession upon the death of the undersigned;

 

  (iv) as a distribution to limited partners or stockholders of the undersigned
or affiliates of the undersigned;

 

  (v) to the undersigned’s affiliates or to any investment fund or other entity
controlled or managed by the undersigned;

 

  (vi) in connection with the exercise of options, warrants or rights to acquire
shares of Common Stock or any security convertible or exercisable into shares of
Common Stock issued pursuant to the Company’s employee benefit plans in effect
on the date hereof or agreements made available to Merrill Lynch in accordance
with their terms that expire during the Lock-up Period, provided that any such
shares issued upon exercise of such option or warrant or other right to acquire
shares of Common Stock shall continue to be subject to the provisions of this
agreement;

 

  (vii) to the Company in connection with the receipt of shares of Common Stock
in connection with the vesting or settlement of restricted stock units that vest
during the Lock-up Period or the “net” or “cashless” exercise of options that
expire during the Lock-up Period to purchase shares of Common Stock for purposes
of exercising such options, including the payment of taxes due as a result of
the vesting, settlement or exercise of such securities, provided that any such
shares of Common Stock received upon such vesting, settlement or exercise shall
continue to be subject to the provisions of this agreement, and, in addition, to
the extent the Company or the undersigned elects to settle income tax
withholding and remittance obligations of the undersigned in connection with the
vesting of such restricted stock units held by the undersigned by withholding
shares of Common Stock pursuant to this subclause, then the undersigned may
transfer up to a number of shares of Common Stock underlying the vested and
settled restricted stock units held by the undersigned equal to the maximum tax
rate applicable to such undersigned;

 

  (viii)  if the undersigned is not eligible to settle income tax withholding
and remittance obligations of the undersigned in connection with the vesting of
restricted stock units held by the undersigned that vest during the Lock-up
Period by withholding shares of Common Stock pursuant to subclause (vii) above,
then the undersigned may transfer up to a number of shares of the Common Stock
underlying the vested and settled restricted stock units held by the undersigned
equal to the maximum tax rate applicable to such undersigned;

 

  (ix) to the Company, in connection with the repurchase of shares of Common
Stock issued pursuant to an employee benefit plan in effect on the date hereof
in accordance with the terms of such plan;

 

B-2

--------------------------------------------------------------------------------

  (x) pursuant to a written plan meeting the requirements of Rule 10b5-1 (a
“10b5-1 Plan”) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), in existence as of the date hereof, provided that any public
announcement or filing under Section 16(a) of the Exchange Act regarding such
sale or transfer state that such transfers are made pursuant to a 10b5-1 Plan;

 

  (xi) pursuant to a bona fide third-party tender offer, merger, consolidation
or other similar transaction made to all holders of the Common Stock involving a
change of control of the Company, provided that in the event that such tender
offer, merger, consolidation or other such transaction is not completed, the
undersigned’s Lock-Up Securities shall continue to be subject to the provisions
of this agreement; or

 

  (xii) by operation of law, pursuant to a qualified domestic order or in
connection with a divorce settlement;

provided, however, that in the case of subclauses (i), (ii), (iii), (iv) and
(v) above, it shall be a condition to the transfer or distribution that each
donee, trustee, distributee, or transferee shall execute an agreement stating
that such donee, trustee, distributee, or transferee is receiving and holding
such capital stock subject to the provisions of this agreement and there shall
be no further transfer of such capital stock except in accordance with this
agreement; and

provided further, that in the case of subclauses (i), (ii), (iii), (iv), (v),
(vi), (vii) and (viii) above, it shall be a condition to such transfer that no
filing under Section 16(a) of the Exchange Act nor any other public filing or
disclosure of such transfer by or on behalf of the undersigned shall be required
or voluntarily made during the Lock-Up Period; provided, however, that solely
with respect to subclause (iii), this provision shall not apply with respect to
mandatory Form 5 filings under Section 16(a) of the Exchange Act;

 

  (b) enter into, amend or modify a 10b5-1 Plan after the date of this agreement
relating to the sale of the undersigned’s Lock-Up Securities, provided that the
securities subject to such 10b5-1 Plan may not be sold until after the
expiration of the Lock-Up Period, and no public announcement or filing under the
Exchange Act regarding the establishment of such plan shall be required or
voluntarily made during the Lock-Up Period.

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 Lock-Up Securities except in compliance with the foregoing
restrictions.

Notwithstanding anything to the contrary contained herein, this agreement shall
automatically terminate upon the termination of the Purchase Agreement (other
than the provisions thereof which survive termination) prior to payment for and
delivery of the Securities.

The undersigned hereby consents to receipt of this agreement in electronic form
and understands and agrees that this agreement 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
agreement, 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 agreement by facsimile transmission, electronic mail or other
electronic transmission is legal, valid and binding for all purposes.

 

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Very truly yours, Signature:  

 

Print Name:  

 

 

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