Exhibit 10-01 PurchaseAgreement


Exhibit 10.1


PROS Holdings, Inc.
2.00% Convertible Senior Notes Due 2019




Purchase Agreement
December 4, 2014
Goldman, Sachs & Co., 
Deutsche Bank Securities Inc.
As representatives of the several Purchasers
named in Schedule I hereto,


c/o Goldman, Sachs & Co.
200 West Street
New York, New York 10282


c/o Deutsche Bank Securities Inc.
60 Wall Street, 4th Floor
New York, New York 10005


Ladies and Gentlemen:
PROS Holdings, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell to the Purchasers named in Schedule I hereto (the “Purchasers”), for whom you are acting as representatives (the “Representatives”), an aggregate of $125,000,000 principal amount of its 2.00% Convertible Senior Notes due 2019 (the “Firm Securities”), convertible into cash, shares (the “Underlying Shares”) of common stock of the Company, par value $0.001 per share (“Stock”) or a combination of cash and Underlying Shares, at the Company’s election, and at the option of the Representatives on behalf of the Purchasers, up to an aggregate of $18,750,000 additional principal amount of 2.00% Convertible Senior Notes due 2019 (the “Optional Securities”). The Firm Securities and the Optional Securities are herein collectively called the “Securities”.
In connection with the offering of the Firm Securities, the Company is separately entering into convertible note hedge transactions and warrant transactions with one or more counterparties, which may include the Purchasers or affiliates thereof (each, a “Call Spread Counterparty”), in each case pursuant to a convertible note hedge confirmation (a “Base Bond Hedge Confirmation”) and a warrant confirmation (a “Base Warrant Confirmation”), respectively, each dated the date hereof (the Base Bond Hedge Confirmations and the Base Warrant Confirmations, collectively, the “Base Call Spread Confirmations”), and in connection with the issuance of any Optional Securities, the Company and each Call Spread Counterparty may enter into additional convertible note hedge transactions and additional warrant transactions, in each case pursuant to an additional convertible note hedge confirmation (an “Additional Bond Hedge Confirmation”) and an additional warrant confirmation (an “Additional Warrant Confirmation”), respectively, each to be dated the date on which the option granted to the Purchasers pursuant to Section 2 hereof to purchase such Optional Securities is exercised (the Additional Bond 



    




Hedge Confirmations and the Additional Warrant Confirmations, collectively, the “Additional Call Spread Confirmations” and, together with the Base Call Spread Confirmations, the “Call Spread Confirmations”).


		
	1.
	The Company represents and warrants to, and agrees with, each of the Purchasers that:


		
	(a)
	A preliminary offering memorandum, dated December 3, 2014 (the “Preliminary Offering Memorandum”), and an offering memorandum, dated December 4, 2014 (the “Offering Memorandum”), have been prepared in connection with the offering of the Securities and Underlying Shares, if any, issuable upon conversion thereof.  The Preliminary Offering Memorandum, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(b)), is hereinafter referred to as the “Pricing Memorandum”.  Any reference to the Preliminary Offering Memorandum, the Pricing Memorandum or the Offering Memorandum shall be deemed to refer to and include all documents filed with the United States Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or prior to the date of such memorandum and incorporated by reference therein and any reference to the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, as amended or supplemented, as of any specified date, shall be deemed to include (i) any documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, and prior to such specified date and (ii) any Additional Issuer Information (as defined in Section 5(f)) furnished by the Company prior to the completion of the distribution of the Securities; and all documents filed under the Exchange Act and so deemed to be included in the Preliminary Offering Memorandum, the Pricing Memorandum or the Offering Memorandum, as the case may be, or any amendment or supplement thereto are hereinafter called the “Exchange Act Reports” (provided that where only sections of such documents are specifically incorporated by reference, only such sections shall be considered to be part of the “Exchange Act Reports”).  The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder at the time of filing; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II(a) hereof. The Preliminary Offering Memorandum and the Offering Memorandum and any amendments or supplements thereto and the Exchange Act Reports did not and will not, as of their respective dates, 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; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser through the Representatives expressly for use therein; 


		
	(b)
	For the purposes of this Agreement, the “Applicable Time” is 4:47 p.m. (Eastern time) on the date of this Agreement; the Pricing Memorandum as supplemented by the information set forth in Schedule III hereto, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Company Supplemental Disclosure Document (as defined in Section 6(a)



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(i)) listed on Schedule II(b) hereto and each Permitted General Solicitation Material (as defined in Section 6(a)(i)) listed on Schedule II(d) hereto) does not conflict with the information contained in the Pricing Memorandum or the Offering Memorandum and each such Company Supplemental Disclosure Document and Permitted General Solicitation Material, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in a Company Supplemental Disclosure Document or Permitted General Solicitation Material in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser through the Representatives expressly for use therein;
		
	(c)
	Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included in the Pricing Memorandum any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Memorandum; and, since the respective dates as of which information is given in the Pricing Memorandum, there has not been any change in the capital stock (other than pursuant to the Company’s equity incentive plans and inducement awards described in the Pricing Memorandum) or long‐term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”), other than as set forth or contemplated in the Pricing Memorandum;


		
	(d)
	The Company and its subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title to all personal property owned by them that is material to the business of the Company and its subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Memorandum or such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and, to the Company’s knowledge, enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries;


		
	(e)
	The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Disclosure Package and the Offering Memorandum, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified or in good standing in any such other jurisdiction would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and each subsidiary of the Company has been duly organized and is validly existing as a corporation or other form of organization in good standing under the laws of its jurisdiction of formation to the extent that the concept of “good standing” (or its functional equivalent) is applicable under the laws of such jurisdiction;



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	(f)
	The Company has an authorized capitalization as set forth in the Pricing Disclosure Package under the heading “Capitalization”, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non‐assessable; the shares of Stock initially issuable upon conversion of the Securities (assuming physical settlement of all conversions and giving effect to the maximum conversion rate pursuant to any make-whole adjustment (such number of shares, the “Conversion Shares”)) have been duly and validly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Securities and the Indenture referred to below, will be duly and validly issued, fully paid and non‐assessable and will conform to the description of the Stock contained in the Pricing Disclosure Package and the Offering Memorandum; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non‐assessable and (except for directors’ qualifying shares and except as otherwise set forth in the Pricing Disclosure Package) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims;


		
	(g)
	The Securities have been duly authorized by the Company and, when issued and delivered pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and when duly authenticated by the trustee under the indenture referred to below. will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the indenture to be dated as of December 10, 2014 (the “Indenture”) between the Company and Wilmington Trust, N.A., as Trustee (the “Trustee”), under which they are to be issued, which will be substantially in the form previously delivered to you; the Indenture has been duly authorized by the Company and, when executed and delivered by the Company and the Trustee, the Indenture will constitute a valid and legally binding instrument, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization and other laws of general applicability relating to or affecting creditors' rights, and to general equity principles (regardless of whether enforcement is considered in a proceeding at equity or at law), public policy, applicable laws relating to fiduciary duties and indemnification and implied covenants of good faith and fair dealing, and entitled to the benefits provided by the Indenture; and the Securities and the Indenture will conform in all material respects to the descriptions thereof in the Pricing Disclosure Package and the Offering Memorandum and will be in substantially the form previously delivered to you;


		
	(h)
	The Company has all requisite corporate power to execute, deliver and perform its obligations under this Agreement.  This Agreement has been duly and validly authorized, executed and delivered by the Company;


		
	(i)
	None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Securities) will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System;


		
	(j)
	Prior to the date hereof, neither the Company nor any of its affiliates has taken any action that would violate Regulation M under the Exchange Act (“Regulation M”) in connection with the offering of the Securities;


		
	(k)
	The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture, the Call Spread Confirmations and this Agreement and the consummation of the transactions herein and therein contemplated and the application of the proceeds from the sale of the Securities as described under “Use of Proceeds” in the Pricing Disclosure Package and the 



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Offering Memorandum will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, that certain Credit Agreement by and among Wells Fargo Bank, National Association, a national banking association, as administrative agent and PROS, Inc., a Delaware corporation, dated as of July 2, 2012, as amended (the “Credit Agreement”), including the Third Amendment dated as of December 3, 2014 (the “Credit Agreement Amendment”), (ii) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any other indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (iii) result in any violation of the provisions of the Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws of the Company or (iv) result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clauses (ii) and (iv), for any conflict, default, breach or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement, the Indenture or the Call Spread Confirmations, except such consents, approvals, authorizations, registrations or qualifications as have been obtained prior to the date of this Agreement or may be required (y) under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Purchasers or (z) for listing of the Conversion Shares on The New York Stock Exchange (the “Exchange”);
		
	(l)
	Neither the Company nor any of its subsidiaries is (i) in violation of its Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except in the case of clause (ii), for such defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;


		
	(m)
	The statements set forth in the Pricing Memorandum and the Offering Memorandum under the caption “Description of Notes” and “Description of Capital Stock”, insofar as they purport to constitute a summary of the terms of the Securities and the Stock, and under the caption, “Certain United States Federal Income Tax Considerations”, insofar as they purport to describe the provisions of the laws, legal conclusions and documents referred to therein, fairly and accurately summarize or describe, as applicable, the matters set forth therein;


		
	(n)
	Other than as set forth or described in the Pricing Disclosure Package and the Offering Memorandum, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;


		
	(o)
	When the Securities are issued and delivered pursuant to this Agreement, the Securities will not be of the same class (within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Act”)) as securities which are listed on a national securities exchange registered under 



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Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system, and will be eligible for resale under Rule 144A;
		
	(p)
	The Company is subject to Section 13 or 15(d) of the Exchange Act;


		
	(q)
	The Company is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof and the transactions contemplated by the Call Spread Confirmations as described in the Pricing Disclosure Package, will not be, an “investment company”, as such term is defined in the United States Investment Company Act of 1940, as amended (the “Investment Company Act”);


		
	(r)
	Neither the Company nor any person acting on its behalf (other than the Purchasers, as to which no representation is made) has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act (other than by means of a Permitted General Solicitation, as defined below);


		
	(s)
	Within the preceding six months, neither the Company nor any other person acting on behalf of the Company has offered or sold to any person any Securities, or any securities of the same or a similar class as the Securities, other than Securities offered or sold to the Purchasers hereunder.  The Company will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act) of any Securities or any substantially similar security issued by the Company, within six months subsequent to the date on which the distribution of the Securities has been completed (as notified to the Company by the Representatives), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Act;


		
	(t)
	The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) 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 generally accepted accounting principles in the United States (“GAAP”).  Except as disclosed in the Pricing Disclosure Package, since the date of the latest audited financial statements included or incorporated by reference in the Pricing Disclosure Package, the Company’s internal control over financial reporting is effective (excluding SignalDemand, Inc. and Cameleon Software SA) and the Company is not aware of any material weaknesses in its internal control over financial reporting;


		
	(u)
	Except as disclosed in the Pricing Disclosure Package, since the date of the latest audited financial statements included or incorporated by reference in the Pricing Memorandum, there has been 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;    


		
	(v)
	The financial statements, including the notes thereto, included or incorporated by reference in the Pricing Disclosure Package present fairly in all material respects the consolidated financial position at the dates indicated and the cash flows and results of operations for the periods indicated of the Company and its consolidated subsidiaries. Except as otherwise stated in the Pricing Disclosure Package, such financial statements have been prepared in conformity with GAAP applied on a consistent basis throughout the periods involved; and the supporting schedules, if any, included or incorporated by reference in the Pricing Disclosure Package present fairly the information required to be stated therein. The other financial information included or incorporated by reference in the Pricing 



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Disclosure Package presents fairly in all material respects the information included therein and has been prepared on a basis consistent with that of the financial statements that are included in the Pricing Disclosure Package and the books and records of the respective entities presented therein. The pro forma financial information incorporated by reference in the Pricing Disclosure Package reflects, in all material respects, subject to the limitations set forth in the incorporated documents as to such pro forma financial information, the results of operations of the Company, its consolidated subsidiaries and Cameleon Software SA and its subsidiaries purported to be shown thereby for the periods indicated and conforms in all material respects to the requirements of Regulation S-X of the rules and regulations of the Commission under the Act and the Company believes (i) the assumptions underlying the pro forma adjustments are reasonable, (ii) that such adjustments have been properly applied to the historical amounts in the compilation of such pro forma statements and notes thereto, and (iii) that, to the Company’s knowledge, such statements and notes thereto present fairly, in all material respects, with respect to the Company and its consolidated subsidiaries and Cameleon Software SA and its subsidiaries, the pro forma financial position and results of operations and the other information purported to be shown therein at the respective dates or for the respective periods therein specified;
		
	(w)
	The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the applicable requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information required to be disclosed by the Company in its reports that it submits or files or will submit or file under the Exchange Act is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective in all material respects; 


		
	(x)
	PricewaterhouseCoopers LLP, which has audited certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm with respect to the Company and its subsidiaries; 


		
	(y)
	Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; (iv) violated or is in violation of any provision of the Bribery Act 2010 of the United Kingdom; or (v) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment;


		
	(z)
	The operations of the Company and its subsidiaries are and, to the knowledge of the Company, the operations of the Company and its subsidiaries (excluding SignalDemand, Inc. and Cameleon Software SA) have been conducted at all times in compliance 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 agency having jurisdiction over the Company or any of its subsidiaries (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened;



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	(aa)
	 Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), or other relevant sanctions authority (collectively, “Sanctions”), and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) 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 or (ii) 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;


(bb) The Company and its subsidiaries own, or possess sufficient rights to use or can acquire on commercially reasonable terms, all trademarks, service marks, trade names, domain names (including all goodwill associated with the foregoing), patent rights, copyrights, mask works, software,  know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information) and other intellectual property rights, including, to the extent currently existing, registrations and applications thereof (collectively, "Intellectual Property Rights") material to the business as currently conducted and as described in the Pricing Memorandum.  Except as would not reasonably be expected to result in a Material Adverse Effect, (i) to the knowledge of the Company as of the date hereof, neither the Company nor any of its subsidiaries, nor the conduct of their respective businesses, has infringed, misappropriated or otherwise violated or currently infringes, misappropriates or otherwise violates the Intellectual Property Rights of any third party, (ii) except pursuant to the Credit Agreement and except for outbound licenses thereof, the Company and its subsidiaries hold all right, title and interest in and to Intellectual Property Rights owned by the Company free and clear of all liens, encumbrances and defects of title; and (iii) to the knowledge of the Company, all Intellectual Property Rights registered with an applicable governmental entity that are owned by or exclusively licensed to the Company or any of its subsidiaries are valid and enforceable. Except as would not, if determined adversely to the Company or any of its subsidiaries, individually or in the aggregate, have a Material Adverse Effect, there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by any third party to which the Company or any of its subsidiaries is a party (x) challenging the Company's or any of its subsidiaries' rights in or to, or alleging the violation of any of the terms of, any of their owned or licensed Intellectual Property Rights, (y) except for proceedings before the applicable governmental entity in connection with the ordinary course of prosecution thereof, challenging the validity, enforceability or scope of any Intellectual Property Rights owned by or exclusively licensed to the Company or any of its subsidiaries, or (z) alleging that the Company or any of its subsidiaries has infringed, misappropriated or otherwise violated or conflicted with any Intellectual Property Rights of any third party;
(cc) The Company and its subsidiaries have filed all federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof, taking into account any extensions thereof (except where the failure to file would not, individually or in the aggregate, have a Material Adverse Effect), and have paid all material taxes due and payable (except where the failure to pay would not, individually or in the aggregate, have a Material Adverse Effect or except as currently being contested in good faith and for which reserves required by U.S. GAAP have been created in the financial statements of the Company), and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company nor any of its subsidiaries have any notice 

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or knowledge of any tax deficiency which remains unpaid and would reasonably be expected to be determined adversely to the Company or its subsidiaries and which could reasonably be expected to have) a Material Adverse Effect;
(dd) Nothing has come to the attention of the Company that has caused the Company to believe that the statistical, industry-related and market-related data included or incorporated by reference in the Pricing Disclosure Package are not based on or derived from sources that are reliable and accurate in all material respects;
(ee) No material labor or employment dispute with the employees of the Company or any of its subsidiaries exists, except as described in the Pricing Disclosure Package, or, to the knowledge of the Company, is imminent;
(ff) Since the date as of which information is given in the Pricing Disclosure Package, and except as may otherwise be disclosed in the Pricing Disclosure Package, the Company has not (i) issued or granted any securities, other than pursuant to the Company’s equity incentive plans, inducement awards or pursuant to outstanding options, rights or warrants, in each case disclosed in the Pricing Disclosure Package, (ii) incurred any material liability or obligation, direct or contingent, other than liabilities and obligations which were incurred in the ordinary course of business, (iii) entered into any material transaction not in the ordinary course of business (other than the transactions contemplated hereby and the Credit Agreement Amendment) or (iv) declared or paid any dividends on its capital stock;
(gg) The Company and each subsidiary are insured against such losses and risks and in such amounts as, in the Company’s reasonable judgment, are prudent and customary in the businesses in which they are engaged; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business;
(hh) Except as described in the Pricing Disclosure Package, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person, except as have been validly waived or complied with;
(ii) There is and has been no failure on the part of the Company or, to the Company’s knowledge, any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications;
(jj) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect;

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(kk) The Company, to its knowledge, has operated its business in a manner compliant in all material respects with all privacy and data protection laws and regulations applicable to the Company’s collection, handling, and storage of personal identifiable information; and
(ll) The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Pricing Memorandum or the 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.
		
	2.
	Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 96.75% of the principal amount thereof (the “Purchase Price”), plus accrued interest, if any, from December 10, 2014 to the first Time of Delivery (as defined in Section 4 hereof), the principal amount of Securities set forth opposite the name of such Purchaser in Schedule I hereto, and (b) in the event and to the extent that you on behalf of the Purchasers exercise the election to purchase Optional Securities as provided below, the Company agrees to issue and sell to each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at the Purchase Price set forth in clause (a) of this Section 2, that portion of the aggregate principal amount of the Optional Securities as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractions of $1,000), determined by multiplying such aggregate principal amount of Optional Securities by a fraction, the numerator of which is the maximum aggregate principal amount of Optional Securities that such Purchaser is entitled to purchase as set forth opposite the name of such Purchaser in Schedule I hereto and the denominator of which is the maximum aggregate principal amount of Optional Securities that all of the Purchasers are entitled to purchase hereunder.


The Company hereby grants to the Purchasers the right to purchase at their option up to $18,750,000 aggregate principal amount of Optional Securities, at the purchase price set forth in clause (a) of the first paragraph of this Section 2 plus accrued interest, if any, from December 10, 2014 to such Subsequent Time of Delivery (as defined in Section 4 hereof), to cover sales in excess of the aggregate principal amount of Firm Securities.  Any such election to purchase Optional Securities may be exercised by written notice from the Representatives on behalf of the Purchasers to the Company, given within a period of 30 calendar days from the date of this Agreement, setting forth the aggregate principal amount of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by the Representatives but in no event earlier than the First Time of Delivery or, unless you and the Company otherwise agree in writing, earlier than three or later than ten New York Business Days (as defined below) after the date of such notice.
		
	3.
	Upon the authorization by you of the release of the Securities, the several Purchasers propose to offer the Securities for sale upon the terms and conditions set forth in this Agreement and the Offering Memorandum and each Purchaser, acting severally and not jointly, hereby represents and warrants to, and agrees with the Company that:


		
	(a)
	It will sell the Securities only to persons whom it reasonably believes are “qualified institutional buyers” (“QIBs”) within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A; 


		
	(b)
	It is an Institutional Accredited Investor, within the meaning of Rule 501(a) under the Act; and


		
	(c)
	Neither it nor any of its affiliates or any other person acting on its or their behalf will solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising 



10
    




within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act (other than by means of a Permitted General Solicitation, as defined below).
4.
		
	(a)
	The Securities to be purchased by each Purchaser hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”) or its designated custodian.  The Company will deliver the Securities to the Representatives, for the account of each Purchaser, against payment by or on behalf of such Purchaser of the purchase price therefor by wire transfer of Federal (same day) funds, by causing DTC to credit the Securities to the account of Goldman, Sachs & Co. at DTC.  The Company will cause the certificates representing the Securities to be made available to the Representatives for checking at least twenty-four hours prior to each Time of Delivery (as defined below) at the office of Davis Polk & Wardwell LLP, 1600 El Camino Real, Menlo Park, California 94025 (the “Closing Location”)  The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on December 10, 2014 or such other time and date as the Representatives and the Company may agree upon in writing, and with respect to the Optional Securities, 9:30 a.m. New York City time, on the date specified by you in the written notice given by the Representatives of the Purchasers’ election to purchase such Optional Securities, or such other time and date as the Representatives and the Company may agree upon in writing; provided, however, that such delivery date must be at least three New York Business Days (as defined below) after such written notice is given and may not be earlier than the First Time of Delivery (as defined below) nor later than ten New York Business Days (as defined below) after the date of such notice; provided further, that solely with respect to an Optional Securities written notice that is delivered prior to the First Time of Delivery, the related Time of Delivery (as defined below) must be at least one New York Business Day after the written notice is given. Such time and date for delivery of the Firm Securities are herein called the “First Time of Delivery”, any such time and date for delivery of the Optional Securities, if not the First Time of Delivery, are herein called a “Subsequent Time of Delivery”, and each such time and date for delivery are herein called a “Time of Delivery”.


		
	(b)
	The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross-receipt for the Securities and any additional documents requested by the Purchasers pursuant to Section 8(k) hereof, will be delivered at such time and date at the Closing Location, and the Securities will be delivered at the office of DTC (or its designated custodian), all at such Time of Delivery.  A meeting will be held at the Closing Location at 5:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto.  For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.


5.  The Company agrees with each of the Purchasers:
		
	(a)
	To prepare the Offering Memorandum in a form approved by you; to make no amendment or any supplement to the Offering Memorandum which shall be disapproved by you promptly after reasonable notice thereof; and to furnish you with copies thereof;



11
    




		
	(b)
	Promptly from time to time to take such action as you may reasonably request to qualify the Securities and the Underlying Securities for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation;


		
	(c)
	To furnish the Purchasers with written and electronic copies of the Offering Memorandum and any amendment or supplement thereto in such quantities as you may from time to time reasonably request, and if, at any time prior to the expiration of nine months after the date of the Offering Memorandum, any event shall have occurred as a result of which the Offering Memorandum as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Offering Memorandum is delivered, not misleading, or, if for any other reason it shall be necessary or desirable during such same period to amend or supplement the Offering Memorandum, to notify you and upon your request to prepare and furnish without charge to each Purchaser and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Offering Memorandum or a supplement to the Offering Memorandum which will correct such statement or omission or effect such compliance;


		
	(d)
	During the period beginning from the date hereof and continuing until the date that is 60 days after the date of the Offering Memorandum, not to (i) offer, issue, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Act relating to any securities of the Company that are substantially similar to the Securities or the Stock, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities (other than registration statements on Form S-8 relating to securities granted or to be granted by the Company pursuant to any equity incentive plan or inducement awards), or publicly disclose the intention to make any offer, sale, pledge, disposition or filing or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction is to be settled by delivery of Stock or such other securities, in cash or otherwise other than (v) pursuant to the Company’s equity incentive plans and inducement awards existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement and disclosed in the Pricing Memorandum, (w) the entry into, or the issuance by the Company of any Stock upon settlement or termination of, the warrant transactions evidenced by the Base Warrant Confirmations and any Additional Warrant Confirmations, (x) the issuance of the Securities or any Underlying Securities upon conversion thereof or (y) the sale or issuance of or entry into an agreement to sell or issue shares of Stock in connection with the Company’s or any of its subsidiaries’ acquisition of one or more businesses, products or technologies (whether by means of merger, stock purchase, asset purchase or otherwise) or in connection with joint ventures, commercial relationships or other strategic transactions or pursuant to an employee benefit plan assumed by the Company in connection with any such strategic transaction; provided that (A) the aggregate number of shares of Stock that the Company 



12
    




may sell or issue or agree to sell or issue pursuant to this clause (y) shall not exceed 7.5% of the total number of shares of Stock issued and outstanding immediately following the completion of the transactions contemplated by this Agreement and (B) the Company shall (a) cause each recipient of such securities to execute and deliver to the Representatives, on or prior to issuance of such securities a lock-up agreement in the form of attached hereto as Exhibit A covering the remainder of such 60-day period and (b) enter stop transfer instructions with the Company’s transfer agent and registrar on such securities, which the Company agrees it will not waive or amend without the prior written consent of the Goldman, Sachs & Co. or (z) with the prior written consent of Goldman, Sachs & Co.
		
	(e)
	Not to be or become, at any time prior to the expiration of one year after the First Time of Delivery, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act;


		
	(f)
	At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective purchasers of Securities information (the “Additional Issuer Information”) satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act;


		
	(g)
	Except for such documents that are publicly available on EDGAR, to furnish to the holders of the Securities as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders' equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the date of the Offering Memorandum), to make available to its stockholders consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail;


		
	(h)
	The Company will not, and will not permit any of its controlled “affiliates” (as defined in Rule 144 under the Act) to, resell any of the Securities which constitute “restricted securities” under Rule 144 that have been reacquired by any of them (other than pursuant to a registration statement that has been declared effective under the Act) for a period of one year after the last date of issuance of such Securities (or, if later, the date on which the restrictive legend is removed from the Securities); 


		
	(i)
	To use the net proceeds received by the Company from the sale of the Securities pursuant to this Agreement in the manner specified in the Pricing Memorandum under the caption “Use of Proceeds”;


		
	(j)
	To reserve and keep available at all times, free of preemptive rights, shares of Stock for the purpose of enabling the Company to satisfy any obligations to issue shares of its Stock upon conversion of the Securities or to issue shares of Stock upon settlement or termination of the warrant transactions evidenced by the Base Warrant Confirmations and any Additional Warrant Confirmations; 


		
	(k)
	To use its reasonable best efforts to list, subject to notice of issuance, the Conversion Shares on the Exchange; and



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	(l)
	The Company and its affiliates will not take, directly or indirectly, any action prohibited by Regulation M in connection with the offering of the Securities; provided that the Company is not undertaking any responsibility regarding any actions taken by the Purchasers in this regard.


6.
		
	(a)
	



		
	i.
	The Company represents and agrees that, without the prior consent of the Representatives, it and its affiliates and any other person acting on its or their behalf (other than the Purchasers, as to which no statement is given) (x) have not made and will not make any offer relating to the Securities that, if the offering of the Securities contemplated by this Agreement were conducted as a public offering pursuant to a registration statement filed under the Act with the Commission, would constitute an “issuer free writing prospectus”, as defined in Rule 433 under the Act (any such offer is hereinafter referred to as a “Company Supplemental Disclosure Document”) and (y) have not solicited and will not solicit offers for, and have not offered or sold and will not offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D other than any such solicitation listed on Schedule II(d) (each such solicitation, a “Permitted General Solicitation”; each written general solicitation document listed on Schedule II(d), a “Permitted General Solicitation Material”);


		
	ii.
	  each Purchaser, severally and not jointly, represents and agrees that, without the prior consent of the Company and the Representatives, other than one or more term sheets relating to the Securities containing customary information and conveyed to purchasers of securities or any Permitted General Solicitation Material, it has not made and will not make any offer relating to the Securities that, if the offering of the Securities contemplated by this Agreement were conducted as a public offering pursuant to a registration statement filed under the Act with the Commission, would constitute a “free writing prospectus”, as defined in Rule 405 under the Act (any such offer (other than any such term sheets and any Permitted General Solicitation Material), is hereinafter referred to as a “Purchaser Supplemental Disclosure Document”); and


		
	iii.
	any Company Supplemental Disclosure Document, Purchaser Supplemental Disclosure Document or Permitted General Solicitation Material, the use of which has been consented to by the Company and the Representatives, is listed as applicable on Schedule II(b), Schedule II(c) or Schedule II(d) hereto, respectively.


		
	7. 
	The Company covenants and agrees with the several Purchasers that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the issue of the Securities and the Underlying Securities and all other expenses in connection with the preparation, printing, reproduction and filing of the Preliminary Offering Memorandum and the Offering Memorandum and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the cost of printing or producing any Agreement among Purchasers, this Agreement, the Indenture, the Securities, the Blue Sky Memorandum, closing documents (including any compilations thereof), Permitted General Solicitation Materials and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities and the Underlying Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements 



14
    




of one counsel for the Purchasers in each jurisdiction in connection with such qualification and in connection with the Blue Sky and legal investment surveys (such fees not to exceed $10,000); (iv) any fees charged by securities rating services for rating the Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (vii) all costs and expenses incurred in connection with any “road show” presentation to potential purchasers of the Securities; (viii) any cost incurred in connection with the listing of the Conversion Shares; (ix) any other costs and expenses related to the transfer and delivery of the Securities to the Purchasers, including any transfer taxes or other taxes payable thereon, and (x) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Purchasers will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.
		
	8. 
	The obligations of the Purchasers hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of each Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:


		
	(a)
	Davis Polk & Wardwell LLP, counsel for the Purchasers, shall have furnished to you such opinion or opinions, dated such Time of Delivery, with respect to such matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;


		
	(b)
	DLA Piper LLP (US), counsel for the Company, shall have furnished to you their written opinion and negative assurance letters, each dated such Time of Delivery, in form and substance agreed to by the parties prior to the date hereof;


		
	(c)
	On the date of the Offering Memorandum prior to the execution of this Agreement and also at each Time of Delivery, as the case may be, PricewaterhouseCoopers LLP shall have furnished to the Representatives, and on the date of the Offering Memorandum prior to the execution of this Agreement, KPMG SA shall have furnished to the Representatives at the request of the Company and Cameleon Software SA, respectively, letters, dated the respective dates of delivery thereof and addressed to the Purchasers, in form and substance reasonably satisfactory to the Representatives, containing, in the case of PricewaterhouseCoopers LLP, statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained or incorporated by reference in the Pricing Memorandum and the Offering Memorandum; provided, that the letter to be delivered by PricewaterhouseCoopers LLP at each Time of Delivery shall use a “cut-off” date no more than three business days prior to such Time of Delivery;


		
	(d)
	(i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Memorandum any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Memorandum, and (ii) since the respective dates as of which information is given in the Pricing Memorandum there shall not have been any change in the capital stock (other than pursuant to the Company’s equity incentive plans and inducement awards) or long-term debt of the Company or any of its subsidiaries or any change, 



15
    




or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Pricing Memorandum, the effect of which, in any such case described in clause (i) or (ii), is in your judgment so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities being offered at such Time of Delivery on the terms and in the manner contemplated in this Agreement and in each of the Pricing Disclosure Package and the Offering Memorandum;
		
	(e)
	On or after the Applicable Time (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization”, as such term is defined in Section 3(a)(62) of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities;


		
	(f)
	On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Exchange or on The NASDAQ Global Market; (ii) a suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal, New York State or California State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities being issued at each such Time of Delivery on the terms and in the manner contemplated in the Pricing Disclosure Package and the Offering Memorandum;


		
	(g)
	The Conversion Shares shall have been duly listed, subject to notice of issuance, on The New York Stock Exchange;


		
	(h)
	The Company shall have obtained and delivered to the Purchasers executed copies of a lock-up agreement in the form attached hereto as Exhibit A from each of the parties listed on Schedule I thereto; 


		
	(i)
	The Purchasers shall have received an executed original copy of the Indenture;


		
	(j)
	The Securities shall be eligible for clearance and settlement through the facilities of DTC; and


		
	(k)
	The Company shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company satisfactory to you as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsection (e) of this Section and as to such other matters as you may reasonably request. The officer(s) signing and furnishing such certificate(s) may rely on his or her knowledge as to proceedings threatened.


		
	(l)
	The Purchasers shall have received, on the date hereof, a certificate dated the date hereof from the Chief Financial Officer of the Company in form and substance agreed to by the parties prior to the date hereof.



16
    




9.
		
	(a)
	The Company will indemnify and hold harmless each Purchaser against any losses, claims, damages or liabilities, joint or several, to which such Purchaser may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package, the Offering Memorandum, or any amendment or supplement thereto, any Company Supplemental Disclosure Document, any Permitted General Solicitation Material or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package, the Offering Memorandum or any such amendment or supplement, any Company Supplemental Disclosure Document or any Permitted General Solicitation Material, in reliance upon and in conformity with written information furnished to the Company by any Purchaser through the Representatives expressly for use therein.


		
	(b)
	Each Purchaser, severally and not jointly, will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package, the Offering Memorandum, or any amendment or supplement thereto, or any Company Supplemental Disclosure Document, any Permitted General Solicitation Material or arise out of or are based upon the omission or alleged omission to state therein a material fact or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Offering Memorandum, the Pricing Memorandum, the Pricing Disclosure Package, the Offering Memorandum or any such amendment or supplement, any Company Supplemental Disclosure Document or any Permitted General Solicitation Material, in reliance upon and in conformity with written information furnished to the Company by such Purchaser through the Representatives expressly for use therein; and each Purchaser will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.


		
	(c)
	Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; provided that the failure so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party under subsection (a) or (b) above except to the extent that the indemnifying party has been materially prejudiced through the forfeiture of substantive rights or defenses by such failure; and provided, further, that the failure so to notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party otherwise than under subsection (a) or (b) above.  In case any such 



17
    




action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action 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)
	If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Securities.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company  on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers, in each case as set forth in the Offering Memorandum.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Purchasers on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the 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 subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding 



18
    




the provisions of this subsection (d), no 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 pursuant to this Agreement and distributed to investors were offered to investors exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers’ obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint.
		
	(e)
	The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to any affiliate of each Purchaser and each person, if any, who controls any Purchaser within the meaning of the Act; and the obligations of the Purchasers under this Section 9 shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.


10.
		
	(a)
	If any Purchaser shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder, the Representatives may in their discretion arrange for either or both of them or another party or other parties to purchase such Securities on the terms contained herein at the applicable Time of Delivery. If within thirty‐six hours after such default by any Purchaser the Representatives do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty‐six hours within which to procure another party or other parties reasonably satisfactory to the Representatives to purchase such Securities on such terms.  In the event that, within the respective prescribed periods, the Representatives notify the Company that they have so arranged for the purchase of such Securities, or the Company notifies the Representatives that it has so arranged for the purchase of such Securities, the Representatives or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Offering Memorandum, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments or supplements to the Offering Memorandum which in the opinion of the Representatives may thereby be made necessary.  The term “Purchaser” as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Securities.


		
	(b)
	If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser or Purchasers by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one‐eleventh of the aggregate principal amount of all the Securities to be purchased at such Time of Delivery, then the Company shall have the right to require each non‐defaulting Purchaser to purchase the principal amount of Securities which such Purchaser agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Purchaser to purchase its pro rata share (based on the principal amount of Securities  which such Purchaser agreed to purchase hereunder) of the Securities of such defaulting Purchaser or Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Purchaser from liability for its default.



19
    




		
	(c)
	If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser or Purchasers by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require non‐defaulting Purchasers to purchase Securities of a defaulting Purchaser or Purchasers, then this Agreement (or, with respect to a Subsequent Time of Delivery, the obligation of the Purchasers to purchase and the Company to sell the Option Securities) shall thereupon terminate, without liability on the part of any non‐defaulting Purchaser or the Company, except for the expenses to be borne by the Company and the Purchasers as provided in Section 6 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Purchaser from liability for its default.


		
	11.
	The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Purchasers, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Purchaser or any controlling person of any Purchaser, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. 


		
	12.
	If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any Purchaser except as provided in Sections 7 and 9 hereof; but, if for any other reason, the Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Purchasers through you for all expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Purchasers in making preparations for the purchase, sale and delivery of the Securities, but the Company shall then be under no further liability to any Purchaser except as provided in Sections 7 and 9 hereof.


		
	13.
	In all dealings hereunder, the Representatives shall act on behalf of each of the Purchasers, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Purchaser made or given by the Representatives.


All statements, requests, notices and agreements hereunder shall be in writing, and if to the Purchasers shall be delivered or sent by mail or facsimile transmission to you as the Representatives at Goldman, Sachs & Co., 200 West Street, New York, New York 10282-2198, Attention: Registration Department; and Deutsche Bank Securities Inc., 60 Wall Street, 4th Floor, New York, New York 10005, Attention: Equity Capital Markets – Syndicate Desk, fax: (212) 797-9344 , with a copy to Deutsche Bank Securities Inc., 60 Wall Street, 36th Floor, New York, New York 10005, Attention: General Counsel, fax: (212) 797-4564; and if to the Company shall be delivered or sent by mail or facsimile transmission to the address of the Company set forth in the Offering Memorandum, Attention: Damian Olthoff; provided, however, that any notice to a Purchaser pursuant to Section 9 hereof shall be delivered or sent by mail or facsimile transmission to such Purchaser at its address set forth in its Purchasers’ Questionnaire, which address will be supplied to the Company by you upon request.  Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of 

20
    




their respective clients, as well as other information that will allow the Purchasers to properly identify their respective clients.
		
	14.
	This Agreement shall be binding upon, and inure solely to the benefit of, the Purchasers, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Purchaser, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from any Purchaser shall be deemed a successor or assign by reason merely of such purchase.


		
	15.
	Time shall be of the essence of this Agreement.


		
	16.
	The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the several Purchasers, on the other, (ii) in connection therewith and with the process leading to such transaction each Purchaser is acting solely as a principal and not the agent or fiduciary of the Company, (iii) no Purchaser has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Purchaser has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate.  The Company agrees that it will not claim that the Purchasers, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.


		
	17.
	This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Purchasers, or any of them, with respect to the subject matter hereof.


		
	18.
	THIS AGREEMENT AND ANY MATTERS RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK.  The Company agrees that any suit or proceeding arising in respect of this agreement or our engagement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts.


		
	19.
	The Company and each Purchaser 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.


		
	20.
	This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.


		
	21.
	Notwithstanding anything herein to the contrary, the Company (and the Company’s employees, representatives, and other agents) are authorized to disclose to any and all persons, the tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Purchasers’ imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any 



21
    




person to comply with securities laws. For this purpose, “tax treatment” means US federal and state income tax treatment, and “tax structure” is limited to any facts that may be relevant to that treatment.
If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, and upon the acceptance hereof by the Representatives, on behalf of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement among each of the Purchasers and the Company.  It is understood that your acceptance of this letter on behalf of each of the Purchasers is pursuant to the authority set forth in a form of Agreement among Purchasers, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.
[Signature Page Follows]

22
    








Very truly yours,
PROS Holdings, Inc. 
By:    /s/ Andres Reiner    
Name:    Andres Reiner
Title:       President and Chief Executive Officer 




Accepted as of the date hereof:
Goldman, Sachs & Co.


By:    /s/ Daniel M. Young    
                 Name:  Daniel M. Young 
                 Title:    Managing Director 


Deutsche Bank Securities Inc.


By:    /s/ Andrew Yaeger    
                 Name:  Andrew Yaeger 
                 Title:    Managing Director 


By:    /s/ Paul Stowell    
                 Name:  Paul Stowell 
                 Title:    Managing Director 




                Acting severally on behalf of themselves and the several Purchasers




 [Signature Page to Purchase Agreement]



    










	
					
	SCHEDULE I

	 
	Principal
	 

	 
	Amount of
	 

	 
	Securities
	 

	 
	to be
	 

	Purchaser
	Purchased
	 

	Goldman, Sachs & Co.   
	$75,000,000
	 

	Deutsche Bank Securities Inc.    
	37,500,000
	 

	Stifel, Nicolaus & Company, Incorporated   
	7,500,000
	 

	Northland Securities, Inc.    
	5,000,000
	 

	Total   
	$125,000,000
	 







    
    




SCHEDULE II
(a)Additional Documents Incorporated by Reference: None.
(b)    Company Supplemental Disclosure Documents:  Term Sheet setting forth the final terms of the             Securities, substantially in the form attached hereto as Schedule III.
(c)    Purchaser Supplemental Disclosure Documents: None.
(d)    Permitted General Solicitation Materials: None.



    
    






SCHEDULE III


PRICING TERM SHEET    STRICTLY CONFIDENTIAL
DATED December 4, 2014

PROS Holdings, Inc.
$125,000,000 2.00% CONVERTIBLE SENIOR NOTES DUE 2019
The information in this pricing term sheet supplements PROS Holdings, Inc.’s preliminary offering memorandum, dated December 3, 2014 (the “Preliminary Offering Memorandum”), and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects, this term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum, including all other documents incorporated by reference therein. References to “we,” “our” and “us” refer only to PROS Holdings, Inc. and not to its subsidiaries. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum. All references to dollar amounts are references to U.S. dollars.
	
			
	Issuer:
	PROS Holdings, Inc.
	 

	Ticker/Exchange for Common Stock:
	“PRO”/The New York Stock Exchange.
	 

	Securities:
	2.00% Convertible Senior Notes due 2019 (the “notes”).
	 

	Principal Amount:
	$125,000,000.
	 

	Option to Purchase Additional Notes:
	$18,750,000.
	 

	Denominations:
	$1,000 and multiples of $1,000 in excess thereof.
	 

	Ranking:
	Senior unsecured.
	 

	Maturity:
	December 1, 2019, unless earlier converted or repurchased.
	 

	No Redemption at Our Option:
	We may not redeem the notes prior to the maturity date, and no “sinking fund” is provided for the notes.


	 

	Fundamental Change:
	If a “fundamental change” (as defined in the Preliminary Offering Memorandum under the caption “Description of Notes—Fundamental Change Permits Holders to Require Us to Repurchase Notes”) occurs at any time prior to the maturity date, subject to certain conditions, holders will have the right, at their option, to require us to repurchase for cash all of their notes, or any portion of the principal amounts thereof that is equal to $1,000 or a multiple of $1,000. The fundamental change repurchase price we are required to pay will be equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. 
	 













	
			
	Interest and Interest Payment Dates:
	2.00% per year. 


Interest will accrue from December 10, 2014 and will be payable semiannually in arrears on June 1 and December 1 of each year, beginning on June 1, 2015. 


	 

	Regular Record Dates:
	May 15 and November 15 of each year, as the case may be, immediately preceding the relevant interest payment date.
	 

	Issue Price:
	100% of principal, plus accrued interest, if any, from December 10, 2014 if settlement occurs after that date.
	 

	Last Reported Sale Price of Our Common Stock on December 4, 2014:
	

$25.99 per share.
	 

	Initial Conversion Rate:
	29.5972 shares of common stock per $1,000 principal amount of notes, subject to adjustment.
	 

	Initial Conversion Price:
	Approximately $33.79 per share of common stock, subject to adjustment.
	 

	Conversion Premium:
	Approximately 30.0% above the last reported sale price of our common stock on December 4, 2014.
	 

	Settlement Method:
	Cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, as described in the Preliminary Offering Memorandum.
	 

	Joint Book-Running Managers:
	Goldman, Sachs & Co.
Deutsche Bank Securities Inc.
	 

	Co-Managers
	Stifel, Nicolaus & Company, Incorporated
Northland Securities, Inc.


	 

	Pricing Date:
	December 4, 2014
	 

	Trade Date:
	December 5, 2014
	 

	Expected Settlement Date:
	December 10, 2014
	 

	CUSIP Number (144A):
	74346Y AA1
	 

	ISIN (144A):
	US74346YAA10
	 

	Listing:
	None.
	 

	Convertible Note Hedge and Warrant Transactions:


	In connection with the pricing of the notes, we entered into convertible note hedge transactions with one or more of the initial purchasers or their affiliates or other financial institutions, whom we refer to as the option counterparties. The convertible note hedge transactions are generally expected to reduce the potential dilution to our common stock upon conversion of the notes and/or offset any cash payments we are required to make in excess of the principal amount of converted notes, as the case may be. We also entered into warrant transactions with the option counterparties. However, the warrant transactions could have a dilutive effect on our common stock to the extent that the market value per share of our common stock exceeds the applicable strike price of the warrants. If the initial purchasers exercise their option to purchase additional notes, we may decide to enter into additional convertible note hedge and additional warrant transactions. See “Description of Convertible Note Hedge and Warrant Transactions” in the Preliminary Offering Memorandum.
	 













	
			
	Net Proceeds:
	We estimate that the net proceeds from this offering will be approximately $109.5 million (or approximately $126.0 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discount and our estimated offering expenses.
	 

	Use of Proceeds:
	We entered into convertible note hedge transactions with the option counterparties as described above. We also entered into warrant transactions with the option counterparties. We intend to use $10.7 million of the net proceeds from this offering to pay the cost of the convertible note hedge transactions (after such cost is partially offset by the proceeds to us from the sale of warrants pursuant to the warrant transactions). 


We expect to use the remainder of the net proceeds for general corporate purposes, including, but not limited to acquisitions or other strategic transactions, working capital and capital expenditures. However, we have not designated any specific uses for the remainder of the net proceeds and have no current agreements or commitments with respect to any material acquisition or strategic transaction. 
If the initial purchasers exercise their option to purchase additional notes, we may sell additional warrants and use a portion of the net proceeds from the sale of the additional notes, together with the proceeds from the sale of the additional warrants, to enter into additional convertible note hedge transactions. Any remaining net proceeds from the sale of additional notes will be used for general corporate purposes as described above. See “Use of Proceeds” in the Preliminary Offering Memorandum.
	 

	Indebtedness:
	As of September 30, 2014, we had no outstanding indebtedness for borrowed money and our subsidiaries had an aggregate of $17.1 million in unsecured debt, trade payables and future minimum operating lease commitments to which the notes would have been structurally subordinated. After giving effect to the issuance of the notes (assuming no exercise of the initial purchasers’ option to purchase additional notes), our total consolidated debt as of September 30, 2014 would have been
$125.9 million.
	 








Description of Notes—Conversion Rights—Increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change
Holders who convert their notes in connection with a make-whole fundamental change occurring prior to the maturity date of the notes may be entitled to an increase in the conversion rate for the notes so surrendered for conversion.
The following table sets forth the number of additional shares by which the conversion rate for the notes will be increased per $1,000 principal amount of notes for each stock price and effective date set forth below:











	
														
	 
	Stock Price

	Effective Date
	$25.99
	$27.50
	$30.00
	$33.79
	$35.00
	$40.00
	$50.00
	$60.00
	$70.00
	$80.00
	$90.00
	$100.00
	$125.00

	December 10, 2014
	8.8791
	8.6444
	7.0375
	5.2156
	4.7509
	3.2700
	1.6249
	0.8785
	0.5239
	0.3076
	0.1732
	0.0917
	0.0058

	December 1, 2015   
	8.8791
	8.2936
	6.6638
	4.8355
	4.3738
	2.9204
	1.3637
	0.7084
	0.4185
	0.2428
	0.1349
	0.0702
	0.0014

	December 1, 2016   
	8.8791
	7.9958
	6.3101
	4.4442
	3.9794
	2.5404
	1.0787
	0.5314
	0.3101
	0.1764
	0.0952
	0.0469
	0.0000

	December  1, 2017   
	8.8791
	7.7310
	5.9386
	3.9925
	3.5169
	2.0860
	0.7529
	0.3558
	0.2037
	0.1133
	0.0589
	0.0262
	0.0000

	December  1, 2018   
	8.8791
	7.3240
	5.3329
	3.2491
	2.7611
	1.3810
	0.3477
	0.1748
	0.0973
	0.0528
	0.0258
	0.0080
	0.0000

	December  1, 2019   
	8.8791
	6.7664
	3.7361
	0.0000
	0.0000
	0.0000
	0.0000
	0.0000
	0.0000
	0.0000
	0.0000
	0.0000
	0.0000






The exact stock prices and effective dates may not be set forth in the table above, in which case:
		
	•
	If the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares by which the conversion rate for the notes will be increased will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year.


		
	•
	If the stock price is greater than $125.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to such conversion rate.


		
	•
	If the stock price is less than $25.99 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to such conversion rate.


Notwithstanding the foregoing, in no event will the conversion rate per $1,000 principal amount of notes exceed 38.4763 shares of common stock, subject to adjustment in the same manner as such conversion rate as set forth in the Preliminary Offering Memorandum under the caption “Description of Notes—Conversion Rights—Conversion Rate Adjustments.”
Our obligation to increase the conversion rate for notes converted in connection with a make-whole fundamental change could be considered a penalty, in which case the enforceability thereof would be subject to general principles of reasonableness and equitable remedies.


[Remainder of Page Intentionally Blank]











CAPITALIZATION
The following table sets forth our cash and cash equivalents, short-term investments and capitalization as of September 30, 2014:
		
	•
	on an actual basis; and


•on an as adjusted basis to give effect to the issuance of $125.0 million aggregate principal amount of notes in this offering (assuming no exercise of the initial purchasers’ option to purchase additional notes), after deducting the initial purchasers’ discount and our estimated offering expenses, and paying the cost of the convertible note hedge transactions (after such cost is partially offset by the proceeds to us from the sale of the warrants pursuant to the warrant transactions).


	
							
	(In thousands, except share and per share amounts)
	As of September 30, 2014

	ACTUAL   
	AS ADJUSTED

	(unaudited)

	Cash, cash equivalents and short-term investments    
	$
	40,413
	

	$
	149,882
	


	Debt, including current portion    
	$
	903
	

	$
	903
	


	Notes offered hereby(1)
	—
	

	



	


	Total debt    
	$
	903
	

	$
	125,903
	


	Stockholders’ equity
	 
	 

	Preferred stock, $0.001 par value, 5,000,000 shares authorized none issued, actual and as adjusted   
	$   —
	

	$   —
	


	Common stock, $0.001 par value; 75,000,000 shares authorized; 33,434,825 shares issued; 29,017,240 shares outstanding, actual and as adjusted(2)   
	$
	34
	

	$
	34
	


	Additional paid-in capital(3)   
	112,332
	

	101,632
	


	Treasury stock, 4,417,585 common shares, at cost    
	(13,938)
	

	(13,938)
	


	Retained earnings (accumulated deficit)    
	(1,076)
	

	(1,076)
	


	Accumulated other comprehensive loss   
	(1,421)
	

	(1,421)
	


	Non-controlling interest   
	1,924
	

	1,924
	


	Total stockholders’ equity(1)(3)    
	$
	97,855
	

	$
	87,155
	


	Total capitalization(1)(3)    
	

	$98,758
	

	

	$213,058
	





__________
		
	(1)
	In accordance with ASC 470-20, convertible debt that may be wholly or partially settled in cash is required to be separated into a liability and an equity component, such that interest expense reflects the issuer’s nonconvertible debt interest rate. Upon issuance, a debt discount is recognized as a decrease in debt and an increase in equity. The debt component accretes up to the principal amount over the expected term of the debt. ASC 470-20 does not affect the actual amount that we are required to repay, and the amounts shown in the table above for the notes offered hereby is the aggregate principal amount of the notes without reflecting the debt discount or fees and expenses that we are required to recognize or the increase in additional paid-in capital on our consolidated balance sheet.


		
	(2)
	The number of shares of common stock is based on 29.0 million shares outstanding as of September 30, 2014 and excludes:


		
	•
	1.7 million shares of common stock issuable upon the exercise of options outstanding at September 30, 2014 at a weighted average exercise price of $11.20 per share;


		
	•
	1.9 million shares of common stock issuable upon the vesting of restricted stock;


		
	•
	0.4 million shares of common stock issuable pursuant to outstanding market stock units;











		
	•
	1.3 million shares of common stock reserved for future issuance under our stock-based compensation plans, consisting of 0.8 million shares of common stock reserved for issuance under our 2007 Equity Incentive Plan, 0.5 million shares of common stock reserved for issuance under our 2013 Employee Stock Purchase Plan and shares that become available under the 2007 Equity Incentive Plan and 2013 Employee Stock Purchase Plan pursuant to provisions thereof that may automatically increase the share reserves under the plans each year; and


		
	•
	shares of common stock that may be issued upon conversion of the notes being offered hereby and pursuant to the warrant transactions being entered into in connection with this offering.


		
	(3)
	Issuance of the notes (giving effect to the application of ASC 470-20 as described in note (1) above) and the entry into the convertible note hedge and warrant transactions will result in a net increase in additional paid-in capital and, therefore, a net increase in total stockholders’ equity and total capitalization. Amounts shown in the table above do not reflect application of ASC 470- 20 to the notes.


.













__________________
This communication is intended for the sole use of the person to whom it is provided by the sender. This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of the notes or the offering. This communication does not constitute an offer to sell or the solicitation of an offer to buy any notes in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
The notes and any shares of common stock issuable upon conversion of the notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws, and may not be offered or sold within the United States or any other jurisdiction, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. The initial purchasers are initially offering the notes only to qualified institutional buyers as defined in, and in reliance on, Rule 144A under the Securities Act. 
The notes and any shares of common stock issuable upon conversion of the notes are not transferable except in accordance with the restrictions described under “Notice to Investors” and “Transfer Restrictions” in the Preliminary Offering Memorandum.
A copy of the Preliminary Offering Memorandum for the offering of the notes may be obtained by contacting (i) Goldman, Sachs & Co., Attention: Prospectus Department, 200 West Street, New York, NY 10282, by telephone at (212) 902-1171, or by emailing prospectus-ny@ny.email.gs.com or (ii) Deutsche Bank Securities Inc., Attention: Prospectus Group, 60 Wall Street, New York, NY 10005-2836, by telephone at (800) 503-4611 or by emailing prospectus.CPDG@db.com.


Any legends, disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded. Such legends, disclaimers or other notices have been automatically generated as a result of this communication having been sent via Bloomberg or another system.

















EXHIBIT A
                 , 2014
Goldman, Sachs & Co.
Deutsche Bank Securities Inc.,
As representatives of the several Purchasers
named in Schedule I of the Purchase Agreement,


c/o Goldman, Sachs & Co.
200 West Street
New York, New York 10282


c/o Deutsche Bank Securities Inc
60 Wall Street, 4th Floor
New York, New York 10005
Re: PROS Holdings, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the “Representatives”), propose to enter into a Purchase Agreement (the “Purchase Agreement”) on behalf of the several purchasers named in Schedule I to such agreement (collectively, the “Purchasers”), with PROS Holdings, Inc., a Delaware corporation (the “Company”), providing for the placement of the Company’s Convertible Senior Notes due 2019 (the “Securities”) in a transaction not requiring registration under the Securities Act of 1933, as amended (the “Offering”).  The Securities will be convertible into cash, shares of common stock of the Company, par value $0.001 per share (the “Common Stock”), or a combination of cash and shares of Common Stock at the Company’s election. 
In consideration of the agreement by the Purchasers to offer and sell the Securities, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 60 days after the date of the Purchase Agreement (the “Lock-Up Period”), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock, or any options or warrants to purchase any shares of Common Stock, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership, as such term is used in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (collectively the “Undersigned’s Shares”).
The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Shares even if such shares would be disposed of by someone other than the undersigned.  Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned’s Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such shares.

A-1




    






     Notwithstanding the foregoing, the undersigned may (A) transfer the Undersigned’s Shares (i) as a charitable contribution or other bona fide gift or gifts, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that any such transfer shall not involve a disposition for value, (iii) upon death by will or intestacy, or (iv) in connection with the sale of the Undersigned’s Shares acquired in open market transactions after the date of the Purchase Agreement; provided any such sale occurs after the date the distribution of the Securities is complete, (B) sell the Undersigned’s Shares to cover tax withholding obligations of the undersigned in connection with (x) the vesting of restricted stock units of the Company awarded prior to the date of the Purchase Agreement or (y) the exercise of options during the Lock-Up Period, provided that any filing under Section 16(a) of the Exchange Act made in connection with such sales shall note that they are made to cover such tax withholding obligations, (C) transfer a portion of the Undersigned’s Shares to the Company upon a vesting event of the Company’s equity securities that occurs during the Lock-Up Period or upon the exercise of options to purchase the Company’s equity securities that occurs during the Lock-Up Period, including on a “cashless” or “net exercise” basis, which equity securities or options were issued pursuant to the Company’s equity incentive plans, (D) transfer or sell the Undersigned’s Shares pursuant to any contract, instruction or plan complying with Rule 10b5-1 (a “10b5-1 Plan”) of the Regulations of the Exchange Act that has been approved by the Company, is in existence on the date hereof, and of which the Representative has been made aware, (E) enter into a 10b5-1 Plan after the date of this agreement (this “Lock-Up Agreement”), (F) transfer the Undersigned’s Shares in connection with the transfer by operation of law or by order of a court of competent jurisdiction, provided that the transferee agrees to be bound in writing by the restrictions set forth herein, (G) transfer or sell the Undersigned’ Shares in connection with the repurchase of shares of Common Stock issued pursuant to an employee benefit plan in effect as of the date hereof or pursuant to the agreements pursuant to which such Shares were issued, (H) transfer or sell the Undersigned’s Shares pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital 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 Shares shall remain subject to the provisions of this Lock-Up Agreement, and (I) transfer or sell the Undersigned’s Shares with the prior written consent of Goldman, Sachs & Co. on behalf of the Purchasers; provided, however, that with respect to transfers pursuant to clauses (A)(i), (A)(ii) and (A)(iii) above, (a) any donee, trustee, or transferee agrees to be bound in writing by the restrictions set forth herein; (b) as a result of any such transfer, no filing under Section 16 of the Exchange Act reporting a reduction in beneficial ownership of shares of Common Stock shall be required or voluntarily made during the Lock-Up Period in connection with such transfer or distribution; and (c) the undersigned does not otherwise voluntarily effect any public announcement of such transfer during the Lock-Up Period, provided further that with respect to any entry into a 10b5-1 Plan pursuant to clause (E) above, (a) no transfer or sale pursuant to such 10b5-1 Plan occurs during the Lock-Up Period; (b) as a result of such entry, no filing under the Exchange Act regarding the establishment of such plan shall be required or voluntarily made by or on behalf of the undersigned; and (c) the undersigned does not otherwise voluntarily effect any public announcement of such entry during the Lock-Up Period.  
For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.  In addition, notwithstanding the foregoing, if the undersigned is a (A) corporation, partnership, limited liability company or other business entity, such entity may transfer the Undersigned’s Shares (i) to  another corporation, partnership, limited liability company or other business entity that controls, is controlled by or is under common control with the undersigned, or (ii) as part of a disposition, transfer, contribution or distribution by the undersigned to its equity holders, managers, partners or other principals (or the estates of such persons) or (B) trust, such trust may transfer the Undersigned’s Shares to a trustor or beneficiary of the trust; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute 

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an agreement stating that the transferee is receiving and holding such shares subject to the provisions of this Lock-Up Agreement and there shall be no further transfer of such shares except in accordance with this Lock-Up Agreement, and provided further that any such transfer shall not involve a disposition for value.
In addition, the undersigned agrees that, without the prior written consent of Goldman, Sachs & Co. on behalf of the Purchasers, the undersigned will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Undersigned’s Shares except in compliance with the foregoing restrictions.
This Lock-Up Agreement shall automatically terminate upon the earliest to occur, if any, of (a) the date the Company notifies the Representatives that the Company does not intend to proceed with the Offering, (b) the termination date of the Purchase Agreement (other than the provisions thereof which survive termination); provided no Securities have been delivered and paid for pursuant to the Purchase Agreement prior to such date and (c) December 20, 2014, if the Purchase Agreement has not been executed by that date. The undersigned understands that the Company and the Purchasers are relying upon this Lock-Up Agreement in proceeding toward consummation of the Offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.   
[Signature Page Follows]

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Very truly yours,
________________________________________
Exact Name of Shareholder
________________________________________
Authorized Signature
________________________________________
Title




























 [Signature Page to Lock-Up Agreement]

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Schedule I to EXHIBIT A






Signatories to Lock-up Agreement


Andres Reiner
Charles H. Murphy
D. Blair Crump
Damian Olthoff
Ellen Keszler
Greg Petersen
Mariette Woestemeyer
Ron Woestemeyer
Timothy C. Girgenti
Tim Williams
William Russell





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