EXHIBIT 4.6
▇▇▇▇▇▇▇▇▇▇ TECHNOLOGY INCORPORATED
$130,000,000
2.25% Convertible Subordinated Notes due 2010*
Purchase Agreement
New York, New York
February 18, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the Initial Purchasers
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇▇▇▇▇ Technology Incorporated, a corporation organized under the
laws of Minnesota (the "Company"), proposes to issue and sell to the several
parties named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, $130,000,000 principal amount
of its 2.25% Convertible Subordinated Notes due 2010 (the "Firm Securities").
The Company also proposes to grant to the Initial Purchasers an option to
purchase up to $20,000,000 additional principal amount of such 2.25% Convertible
Subordinated Notes due 2010 to cover over-allotments, if any (the "Option
Securities" and, together with the Firm Securities, the "Securities"). The
Securities will be convertible into shares of Common Stock, par value $.01
("Stock", which shall include the associated common share purchase right), of
the Company. The Securities are to be issued under an indenture (the
"Indenture"), to be dated as of February 24, 2003, between the Company and
LaSalle Bank National Association, as trustee (the "Trustee"). The Securities
have the benefit of a Registration Rights Agreement (the "Registration Rights
Agreement"), to be dated as of February 24, 2003, between the Company and the
Initial Purchasers, pursuant to which the Company has agreed to file with the
United States Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein a shelf registration statement (the "Shelf
Registration Statement") pursuant to Rule 415 of the Act (as defined) relating
to the resale of (i) such Securities and (ii) the shares of Stock initially
issuable upon conversion of the Securities by holders thereof, and to use its
best efforts to cause such Shelf Registration
----------------------
* Plus an option to purchase up to $20,000,000 additional principal
amount from the Company to cover over-allotments.
Statement to be declared effective. To the extent there are no additional
parties listed on Schedule I other than you, the term Representatives as used
herein shall mean you as the Initial Purchasers, and the terms Representatives
and Initial Purchasers shall mean either the singular or plural as the context
requires. The use of the neuter in this Agreement shall include the feminine and
masculine wherever appropriate. Certain terms used herein are defined in Section
17 hereof.
The sale of the Securities and the Stock issuable upon conversion of
the Securities to the Initial Purchasers will be made without registration of
the Securities or such Stock under the Act in reliance upon exemptions from the
registration requirements of the Act.
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum, dated February 18, 2003 (as amended or
supplemented immediately prior to the Execution Time, including any and all
exhibits thereto and any information incorporated by reference therein, the
"Preliminary Memorandum"), and a final offering memorandum, dated February 18,
2003 (as amended or supplemented at the Execution Time, including any and all
exhibits thereto and any information incorporated by reference therein, the
"Final Memorandum"). Each of the Preliminary Memorandum and the Final Memorandum
sets forth certain information concerning the Company and the Securities. The
Company hereby confirms that it has authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, references herein to the Final Memorandum at the
Execution Time are not meant to include any information incorporated by
reference therein subsequent to the Execution Time, and any references herein to
the terms "amend", "amendment" or "supplement" with respect to the Final
Memorandum shall be deemed to refer to and include any information filed under
the Exchange Act subsequent to the Execution Time which is incorporated by
reference therein.
1. Representations and Warranties. The Company represents and warrants
to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. At the Execution
Time, on the Closing Date (as defined in Section 3 hereof) and on any
settlement date (pursuant to Section 3 hereof), the Final Memorandum did
not, and will not (and any amendment or supplement thereto, at the date
thereof, at the Closing Date and on any settlement date (pursuant to
Section 3 hereof), will not), contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
warranty as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum, or any amendment or
supplement thereto, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Initial
Purchasers through the Representatives specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any
security, under circumstances that would require the registration of
the Securities
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under the Act (it being understood that no representation or warranty
is made with respect to the activities of the Initial Purchasers or any
of their Affiliates).
(c) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States (it being understood that no representation or warranty is made
with respect to the activities of the Initial Purchasers or any of
their Affiliates).
(d) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(e) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirements of Regulation S
(it being understood that no representation or warranty is made with
respect to the activities of the Initial Purchasers or any of their
Affiliates). Terms used in this paragraph have the meanings given to
them by Regulation S.
(f) On or prior to the Closing Date, the Company shall have
been advised by The Portal Market of the NASD that the Securities have
been designated Portal-eligible securities in accordance with the rules
and regulations of the NASD.
(g) The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Final Memorandum will not be, an
"investment company" within the meaning of the Investment Company Act,
without taking account of any exemption arising out of the number of
holders of the Company's securities.
(h) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(i) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any Securities or
the shares of Stock issuable upon conversion of the Securities (except
as contemplated by this Agreement).
(j) The Company has not taken, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(k) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(l) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or lease, as
the case may be, and to operate its properties and conduct its business
as described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification except to
the extent that failure to be so qualified or be in good standing could
not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business (a
"Material Adverse Effect").
(m) All the outstanding shares of capital stock of each
subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable, and, all outstanding shares of capital
stock of the subsidiaries of the Company are owned by the Company
either directly or through wholly owned subsidiaries free and clear of
any perfected security interest or any other security interests,
claims, liens or encumbrances.
(n) The Company's authorized equity capitalization is as set
forth in the Final Memorandum and the capital stock conforms in all
material respects to the description thereof contained in the Final
Memorandum; the shares of Stock initially issuable upon conversion of
the Securities have been duly and validly authorized and, when issued
upon conversion in accordance with the terms of the Securities and the
Indenture, will be validly issued, fully paid and nonassessable; the
Board of Directors of the Company or a duly constituted committee
thereof has duly and validly adopted resolutions reserving such shares
of Stock for issuance upon conversion; and except (i) as set forth in
the Final Memorandum and (ii) options in respect of 518,000 additional
shares of Stock granted in the Company's fiscal year 2003 and
approximately 4,500 shares of restricted Stock to be issued to members
of the Board of Directors on the date hereof, no options, warrants, or
other rights to purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any securities for
shares of capital stock or ownership interest in the Company are
outstanding.
(o) There are no persons with registration rights or other
similar rights to have any securities of the Company (other than the
Securities and the Stock issuable upon conversion of the Securities)
registered under the Shelf Registration Statement.
(p) None of the holders of outstanding shares of capital stock
of the Company and no other person has or will have any preemptive or
other rights to purchase, subscribe for or otherwise acquire (i) the
Securities or the shares of Stock to be issued upon conversion of the
Securities or any rights to such shares or (ii) any other capital stock
of the Company or rights thereto as a result of or in connection with
the transactions contemplated by the Indenture, this Agreement or the
Registration Rights Agreement.
(q) This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized and,
assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Company,
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will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (subject, as to the
enforcement of remedies, to applicable bankruptcy, fraudulent
conveyance, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law); the Securities have been duly
authorized, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Initial Purchasers, will have been duly executed and delivered by the
Company and will constitute the legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture (subject, as to
the enforcement of remedies, to applicable bankruptcy, fraudulent
conveyance, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and
to general principles of equity, regardless of whether considered in a
proceeding in equity or at law) and will be convertible into Stock in
accordance with their terms; and the Registration Rights Agreement has
been duly authorized and, when executed and delivered by the Company,
will constitute a legal, valid and binding instrument enforceable
against the Company in accordance with its terms (except as rights to
indemnification thereunder may be limited by applicable law and
subject, as to the enforcement of remedies, to applicable bankruptcy,
fraudulent conveyance, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally from time to time in effect
and to general principles of equity, regardless of whether considered
in a proceeding in equity or at law).
(r) Assuming compliance by the Initial Purchasers with the
representations, warranties and agreements set forth in Section 4
hereof, no consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein, in the Indenture or the
Registration Rights Agreement, except such as will be obtained under
the Act and the Trust Indenture Act in accordance with the Registration
Rights Agreement, the securities laws of any jurisdiction outside the
U.S. in which the Securities are offered and such as may be required
under the blue sky or securities laws of any jurisdiction and the
National Association of Securities Dealers Inc. in connection with the
purchase and distribution of the Securities by the Initial Purchasers
in the manner contemplated herein and in the Final Memorandum and the
Registration Rights Agreement.
(s) None of the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issue and sale of
the Securities, or the consummation of any other of the transactions
herein or therein contemplated, nor the fulfillment of the terms hereof
or thereof, will conflict with, result in a breach or violation of,
cause an early termination of any benefits under, or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, (i) the charter or by-laws of
the Company or any subsidiary, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a party
or bound or to which any of their respective properties is subject; or
(iii) assuming compliance by the Initial Purchasers with the
representations, warranties and agreements set forth in Section 4
hereof, any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of its subsidiaries of any court,
regulatory body,
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administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any of its subsidiaries or any of
their respective properties, except in the case of clause (ii) for such
conflicts, breaches, violations, early terminations, liens, charges or
encumbrances that could not reasonably be expected to have a Material
Adverse Effect.
(t) The consolidated historical financial statements and
schedules of the Company and its consolidated subsidiaries included in
or incorporated by reference in the Final Memorandum present fairly in
all material respects the financial condition, statements of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form in all material respects with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise
noted therein); the selected financial data set forth under the caption
"Selected Financial Data" in the Annual Report on Form 10-K for the
fiscal year ended September 29, 2002 and incorporated in the Final
Memorandum fairly present, on the basis stated in such Form 10-K, the
information included therein.
(u) 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 or its or their property is pending
or, to the knowledge of the Company, threatened that (i) could
reasonably be expected to have a material adverse effect on the
performance of this Agreement, the Indenture or the Registration Rights
Agreement, or the consummation of any of the transactions contemplated
hereby or thereby; or (ii) could reasonably be expected to have a
Material Adverse Effect, except as set forth in or contemplated in the
Final Memorandum (exclusive of any amendment or supplement thereto).
(v) The Company and each of its subsidiaries own or lease all
such properties as are necessary to the conduct of their respective
operations as presently conducted.
(w) Neither the Company nor any subsidiary is in violation or
default of (i) any provision of its charter or bylaws; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any subsidiary
of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or such subsidiary or any of their properties, as applicable,
except in the case of clauses (ii) and (iii) for such violations or
defaults that could not reasonably be expected to have a Material
Adverse Effect.
(x) Deloitte & Touche LLP, who have reviewed certain financial
statements of the Company and its consolidated subsidiaries included in
the Final Memorandum, are independent public accountants with respect
to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who
has previously certified certain financial statements of the Company
and its consolidated subsidiaries and previously delivered their report
with respect to certain audited consolidated financial statements and
schedules included in the Final Memorandum, were at all times
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during their engagement by the Company independent public accountants
with respect to the Company within the meaning of the Act and the
applicable published rules and regulations thereunder.
(y) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
could not reasonably be expected to have a Material Adverse Effect and,
except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto)) and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as could not reasonably
be expected to have a Material Adverse Effect, except as set forth in
or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto).
(z) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or is threatened or imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or its subsidiaries'
principal suppliers, contractors or customers that could reasonably be
expected to have a Material Adverse Effect, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto).
(aa) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; all policies of insurance and
fidelity or surety bonds insuring the Company or any of its
subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect; the Company and
its subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; other than claims that could not
reasonably be expected to have a Material Adverse Effect, there are no
claims by the Company or any of its subsidiaries under any such policy
or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause; and neither the Company
nor any such subsidiary has been refused any insurance coverage sought
or applied for and neither the Company nor any such subsidiary has any
reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its business other than refusals, failures to renew and failures to
obtain that could not reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(bb) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or
8
contemplated by the Final Memorandum (exclusive of any amendment or
supplement thereto).
(cc) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct their respective businesses other than such licenses,
certificates, permits and authorizations the failure of which to
possess could not reasonably be expected to have a Material Adverse
Effect, and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto).
(dd) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ee) The Company and its subsidiaries (i) have been and 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
("Environmental Laws"); (ii) have received and are in compliance with
all permits, licenses or other approvals required under applicable
Environmental Laws to conduct their respective businesses; (iii) other
than notices excluded in (iv) below, have not received notice of any
actual or potential liability for the (x) investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes
at any of the Company's or its subsidiaries' currently or formerly
owned or leased sites, or at any off-site location where our wastes
were disposed; or (y) exposure to any such hazardous or toxic
substances or wastes, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
except as set forth in or contemplated in the Final Memorandum
(exclusive of any amendment or supplement thereto); and (iv) in the
past five years prior to the date hereof, have not been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(ff) Each of the Company and its subsidiaries has fulfilled
its obligations, if any, under the minimum funding standards of ▇▇▇▇▇▇▇
▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the
9
Company and its subsidiaries are eligible to participate and each such
plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations; the Company and its subsidiaries have not incurred any
unpaid liability to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(gg) The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent
applications, trade and service marks, trade and service ▇▇▇▇
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of the Company's business as now conducted or as proposed in the Final
Memorandum to be conducted, except where the failure to have such
Intellectual Property could not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its
subsidiaries has received any charge, complaint, claim, demand or
notice alleging any interference, infringement, misappropriation or
violation of a third party's right in Intellectual Property (including
any claim that the Company or any of its subsidiaries must license or
refrain from using such Intellectual Property), which, if the subject
of any unfavorable ruling, decision or finding could, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(hh) Each executive officer and director of the Company has
entered into a written agreement with the Company in the form of
Exhibit B hereto (each such agreement, a "Lock-up Agreement"), and
executed originals of each Lock-up Agreement have been delivered to
you.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97.250% of the principal amount thereof, plus accrued interest, if any, from
February 24, 2003 to the Closing Date, the principal amount of Firm Securities
set forth opposite such Initial Purchaser's name on Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several Initial Purchasers to purchase, severally and not jointly,
the Option Securities at the same purchase price as the Initial Purchasers paid
for the Firm Securities, plus accrued interest, if any, from February 24, 2003
to the settlement date for the Option Securities. The option may be exercised
only to cover over-allotments in the sale of the Firm Securities by the Initial
Purchasers. The option may be exercised in whole or in part at any time (but not
more than once) on or before the 30th day after the date of the Final Memorandum
upon written or telegraphic notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Initial Purchasers
are exercising the option
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and the settlement date. Delivery of the Option Securities, and payment
therefor, shall be made as provided in Section 3 hereof. The principal amount of
Option Securities to be purchased by each Initial Purchaser shall be the same
percentage of the total number of Option Securities to be purchased by the
Initial Purchasers as such Initial Purchaser is purchasing of the Firm
Securities, subject to such adjustments as the Representatives shall deem
advisable.
3. Delivery and Payment. Delivery of and payment for the Firm
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 A.M., New York City time, on February
24, 2003, or at such time on such later date (not later than five Business Days
after the foregoing date) as the Representatives shall designate, which date and
time may be postponed by agreement between the Representatives and the Company
or as provided in Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Initial Purchasers against payment by the several Initial Purchasers
through the Representatives of the purchase price thereof to or upon the order
of the Company by wire transfer payable in same-day funds to the account
specified by the Company. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option), for the respective accounts of the several Initial Purchasers,
against payment by the several Initial Purchasers through the Representatives of
the purchase price thereof to or upon the order of the Company by wire transfer
payable in same-day funds to the account specified by the Company. If settlement
for the Option Securities occurs after the Closing Date, the Company will
deliver to the Representatives on the settlement date for the Option Securities,
and the obligation of the Initial Purchasers to purchase the Option Securities
shall be conditioned upon receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and letters
delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Initial Purchasers. Each Initial Purchaser, severally
and not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those persons it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the Act) and,
to the extent applicable, in accordance with the restrictions set forth in
paragraph 2 of Exhibit A hereto, and that, in connection with each such
sale, it has taken or will take reasonable steps to ensure that the
purchaser of such Securities is aware that such sale is being made in
reliance on Rule 144A; or (ii) in accordance with the restrictions set
forth in Exhibit A hereto.
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(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States.
5. Agreements. The Company agrees with each Initial
Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as you may
reasonably request.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without the prior written
consent of the Representatives; provided, however, that, prior to the
earlier of (i) the completion of the distribution of the Securities by
the Initial Purchasers (as determined by the Initial Purchasers) and
(ii) the date that is nine months after the Closing Date, the Company
will not file any document under the Exchange Act that is incorporated
by reference in the Final Memorandum unless, prior to such proposed
filing, the Company has furnished the Representatives with a copy of
such document for their review and the Representatives have not
reasonably objected to the filing of such document. The Company will
promptly advise the Representatives in writing when any document filed
under the Exchange Act that is incorporated by reference in the Final
Memorandum shall have been filed with the Commission and the Initial
Purchasers will promptly advise the Company in writing of the
completion of the distribution of the Securities.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
shall be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company promptly (i) will notify the
Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 5, will prepare an amendment or
supplement that will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final
Memorandum to the several Initial Purchasers and counsel for the
Initial Purchasers without charge in such quantities as you may
reasonably request.
(d) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers
under the laws of such jurisdictions as the Representatives may
designate and will maintain such qualifications in effect so long as
required for the sale of the Securities; provided that in no event
shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any
jurisdiction where it is not now so subject. The Company will promptly
advise the Representatives of the receipt by the Company of any
notification with respect to
12
the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(e) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its Affiliates to, resell
any Securities or Stock issuable upon conversion of the Securities that
have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities or the Stock issuable upon conversion of the Securities
under the Act (it being understood that no agreement is being made with
respect to the activities of the Initial Purchasers or any of their
Affiliates).
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States (it being understood that no agreement is being made with
respect to the activities of the Initial Purchasers or any of their
Affiliates).
(h) So long as any of the Securities or shares of Stock issued
or issuable upon conversion of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act, the
Company will, during any period in which it is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act or it is not
exempt from such reporting requirements pursuant to and in compliance
with Rule 12g3-2(b) under the Exchange Act, provide to each holder of
such restricted securities and to each prospective purchaser (as
designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This covenant
is intended to be for the benefit of the holders, and the prospective
purchasers designated by such holders, from time to time of such
restricted securities.
(i) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirements of Regulation S (it
being understood that no agreement is being made with respect to the
activities of the Initial Purchasers or any of their Affiliates). Terms
used in this paragraph have the meanings given to them by Regulation S.
(j) The Company will cooperate with the Representatives and
use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company and to be
eligible for The Portal Market of the NASD.
(k) The Company will not for a period of 90 days following the
Execution Time, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., offer, sell, contract to sell, or otherwise dispose of (or
enter into any transaction which is designed to, or could be
13
expected to, result in the disposition by any person of), directly or
indirectly, or file (or participate in the filing of) a registration
statement with the Commission in respect of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder with
respect to, (i) any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such
capital stock or, (ii) any debt securities issued or guaranteed by the
Company or any of its direct or indirect subsidiaries; provided,
however, that the Company may issue (1) shares of Stock pursuant to
existing employee benefit plans and (2) shares of Stock as
consideration for acquisitions so long as the parties receiving Stock
in any such acquisition agree to be bound by the foregoing
restrictions.
(l) The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(m) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation of the Indenture and the
Registration Rights Agreement, the issuance of the Securities and the
fees of the Trustee; (ii) the preparation, printing or reproduction of
the Preliminary Memorandum and Final Memorandum and each amendment or
supplement to either of them; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of such copies of the Preliminary Memorandum
and Final Memorandum, and all amendments or supplements to either of
them, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the
preparation, printing, authentication, issuance and delivery of
certificates for the Securities, including any stamp or transfer taxes
in connection with the original issuance and sale of the Securities and
the shares of Stock issuable upon conversion of the Securities; (v) the
printing (or reproduction) and delivery of this Agreement, any blue sky
memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the
Securities; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states (including filing fees and the reasonable fees and expenses of
counsel for the Initial Purchasers relating to such registration and
qualification); (vii) admitting the Securities for trading in The
Portal Market of the NASD and the listing of the shares of Stock
issuable upon conversion of the Securities; (viii) the transportation
and other expenses incurred by or on behalf of Company representatives
in connection with presentations to prospective purchasers of the
Securities; (ix) the fees and expenses of the Company's accountants and
the fees and expenses of counsel (including local and special counsel)
for the Company; and (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder and under the
Indenture and the Registration Rights Agreement.
(n) The Company will reserve and keep available at all times,
free of preemptive rights, shares of Stock for the purpose of enabling
the Company to satisfy its obligations to issue shares of Stock upon
conversion of the Securities.
14
(o) The Company will refuse, and will cause all applicable
trustees and transfer agents to refuse, to register any transfer of
Securities or shares of Stock issued upon conversion of Securities if
such transfer is not made pursuant to an effective registration
statement under the Act or pursuant to an available exemption from the
registration requirements of the Act; provided that the provisions of
this paragraph shall not be applicable to any Security or share of
Stock which has been transferred pursuant to an effective registration
statement or Rule 144 under the Act, and, as a result of which, or
otherwise, are no longer subject to restrictions on transfer under the
Act.
(p) All of the Securities and shares of Stock issuable upon
conversion of the Securities will contain a legend to the effect that
the transfer thereof is prohibited except pursuant to an effective
registration statement under the Act or pursuant to an available
exemption from registration under the Act and that hedging transactions
involving those Securities or shares may not be conducted unless in
compliance with the Act; provided that such legend may be removed if
such Securities or shares have been transferred pursuant to an
effective registration statement or when eligible for resale under Rule
144 under the Act, and, as a result of which, or otherwise, are no
longer subject to restrictions on transfer under the Act.
(q) Between the date hereof and the Closing Date, the Company
will not do or authorize any act or thing that would result in an
adjustment of the conversion price.
(r) The Company shall duly list the shares of Stock issuable
upon conversion of the Securities on the Nasdaq National Market,
subject to official notice of issuance.
(s) The Company shall (i) deliver to the trustee (the "2005
Notes Trustee") for its 6% Convertible Subordinated Notes due 2005 (the
"2005 Notes") an irrevocable notice instructing the 2005 Notes Trustee,
upon telephonic authorization from the Company contemporaneous with the
receipt of the purchase price for the Firm Securities as specified in
Section 3 of this Agreement, to deliver to The Depository Trust Company
("DTC") as holder of the 2005 Notes, a notice of redemption (the
"Redemption Notice") for all the outstanding 2005 Notes pursuant to
Section 3.02 of the Indenture (the "2005 Notes Indenture") dated as of
March 18, 1998 between the Company and the 2005 Notes Trustee, (ii) not
do or authorize any act or thing that would result in the rescission of
the Redemption Notice and (iii) redeem the 2005 Notes in the manner
provided for in the 2005 Notes Indenture and the Redemption Notice.
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Firm Securities and
the Option Securities, as the case may be, shall be subject to the accuracy of
the representations and warranties on the part of the Company contained herein
at the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
15
(a) The Company shall have requested and caused Faegre &
▇▇▇▇▇▇ LLP, counsel for the Company, to furnish to the Representatives its
opinion, dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of Minnesota, with full corporate power and authority to
own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each of
Wisconsin and South Dakota and that the Company has no
material subsidiaries;
(ii) all the outstanding shares of capital stock of
the Company and each Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all outstanding shares of capital stock of the Subsidiaries
are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, any other
security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum; the shares of Stock
issuable upon conversion of the Securities conform, as to
legal matters, in all material respects to the description
thereof incorporated in the Final Memorandum; the shares of
Stock initially issuable upon conversion of the Securities
have been duly authorized and, when issued upon conversion in
accordance with the Securities and the Indenture, will be
validly issued, fully paid and nonassessable; no holder of
outstanding Securities of the Company has any statutory or, to
such Counsel's knowledge, other preemptive rights to subscribe
for the Securities or the shares of Stock issuable upon
conversion of the Securities; and to such counsel's knowledge,
except (i) as set forth in the Final Memorandum and (ii)
options in respect of 518,000 additional shares of Stock
granted in the Company's fiscal year 2003 and approximately
4,500 shares of restricted Stock to be issued to members of
the Board of Directors on the date hereof, no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock
or ownership interests in the Company are outstanding;
(iv) the Indenture has been duly authorized, executed
and delivered, and assuming due authorization, execution and
delivery by the Trustee, constitutes a legal, valid and
binding instrument enforceable against the Company in
accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing,
regardless of whether considered in a proceeding in equity or
at law); the Securities have been duly and validly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchasers
16
under this Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law); the
Registration Rights Agreement has been duly authorized,
executed and delivered and constitutes a legal, valid and
binding instrument enforceable against the Company in
accordance with its terms (except as rights to indemnification
thereunder may be limited by applicable laws and subject, as
to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in
equity or at law); and the statements set forth under the
heading "Description of Notes" and the description of capital
stock incorporated in the Final Memorandum constitute a fair
and accurate summary of the provisions of the Securities, the
Indenture and the Registration Rights Agreement in all
material respects;
(v) there is no pending or to the knowledge of such
counsel threatened 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 or
its or their property that would be required to be disclosed
in a registration statement on Form S-1 under the Act and that
is not adequately disclosed in the Final Memorandum, except in
each case for such proceedings that could not reasonably be
expected to, singly or in the aggregate, result in a Material
Adverse Effect; and the statements in the Final Memorandum
under the headings "Material United States Income Tax
Considerations", and "Legal Matters" insofar as such
statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries
of such legal matters, agreements, documents or proceedings;
(vi) such counsel has no reason to believe that at
the Execution Time or on the Closing Date, the Final
Memorandum contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in
each case, other than the financial statements and other
financial information contained therein, as to which such
counsel need express no opinion);
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization, filing
with or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein or in the Indenture and the Registration Rights
Agreement, except such as will be obtained under the Act and
the Trust Indenture Act in
17
connection with the transactions contemplated by the
Registration Rights Agreement and such as may be required
under the blue sky or securities laws of any jurisdiction and
the National Association of Securities Dealers Inc. in
connection with the transactions contemplated by this
Agreement and the Registration Rights Agreement and such other
approvals (specified in such opinion) as have been obtained;
(ix) none of the execution and delivery of the
Indenture, this Agreement or the Registration Rights
Agreement, the issue and sale of the Securities, or the
consummation of any other of the transactions herein or
therein contemplated, or the fulfillment of the terms hereof
or thereof, will conflict with, require any mandatory
repurchase or early termination of benefits under, result in a
breach or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to, (i) the charter or by-laws of
the Company or any of its subsidiaries; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any
of its subsidiaries is a party or bound or to which any of
their respective properties is subject; or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to
the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company, any of its subsidiaries or any of their respective
properties, except in the case of clauses (ii) and (iii) for
such conflicts, breaches, violations, mandatory repurchases,
early terminations, liens, charges or encumbrances that could
not reasonably be expected to have a Material Adverse Effect.;
(x) assuming the accuracy of the representations and
warranties and compliance with the agreements contained
herein, no registration of the Securities under the Act, and
no qualification of an indenture under the Trust Indenture
Act, is required for the offer and sale by the Initial
Purchasers of the Securities in the manner contemplated by
this Agreement;
(xi) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Memorandum,
will not be an "investment company" as defined in the
Investment Company Act without taking account of any exemption
arising out of the number of holders of the Company's
securities;
(xii) the Redemption Notice satisfies the
requirements of Section 3.02 of the 2005 Notes Indenture and,
assuming such Redemption Notice is given by the 2005 Notes
Trustee on behalf of the Company to the holders of the 2005
Notes in the manner specified by the 2005 Notes Indenture, no
further notice or action (other than the payment of the
redemption price in accordance with Section 3.03 of the 2005
Notes Indenture) on the part of the Company is required to
redeem the 2005 Notes;
18
(xiii) to such counsel's knowledge, as of September
29, 2002, the Company owned 110 issued U.S. Patents (the "U.S.
Patents") and 52 pending U.S. Applications (the "U.S.
Applications"); and such counsel knows of no claims of third
parties or liens with respect to the Company's ownership
interest in any of the U.S. Patents or U.S. Applications;
(xiv) to such counsel's knowledge, as of September
29, 2002, the Company owned 15 issued foreign patents (the
"Non-U.S. Patents") and 48 pending foreign patent applications
(the "Non-U.S. Applications"); and such counsel knows of no
claims of third parties or liens with respect to the Company's
ownership interest in any of the Non-U.S. Patents or Non-U.S.
Applications;
(xv) to such counsel's knowledge, the statements set
forth or incorporated in the Final Memorandum under the
captions "Risk Factors--We may be unable to adequately protect
our intellectual property," "Business--Research and
Development" and "Business--Intellectual Properties" and any
amendment or supplement thereto, insofar as such statements
constitute a summary of the Company's U.S. Patents, Non-U.S.
Patents, U.S. Applications, Non-U.S. Applications and other
intellectual property, fairly and accurately summarize in all
material respects the legal matters, documents and proceedings
relating to such U.S. Patents, Non-U.S. Patents, U.S.
Applications, Non-U.S. Applications and other intellectual
property described therein;
(xvi) to such counsel's knowledge, the Company or the
Company's customers own or possess sufficient rights to
patents, patent applications, copyrights, trade secrets and
other intellectual property rights necessary to the conduct of
its disk drive suspension business as now or proposed to be
conducted by the Company as described in the Final Memorandum;
(xvii) such counsel knows of no pending or threatened
action, suit, proceeding or claim by governmental authorities
or others that the Company is infringing or otherwise
violating any patents or trade secrets;
(xviii) such counsel is not aware of any material
defects of form in the preparation or filing of the U.S.
Applications and Non-U.S. Applications on behalf of the
Company; the U.S. Applications and Non-U.S. Applications are
being diligently pursued by the Company; and such counsel is
not aware of any pending or threatened actions, suits,
proceedings or claims by governmental authorities or others
challenging the validity of the U.S. Patents or Non-U.S.
Patents;
(xix) such counsel is not aware of any infringement
on the part of any third party of the U.S. Patents or Non-U.S.
Patents, trade secrets, know-how or other proprietary rights
of the Company; and
(xx) to such counsel's knowledge, there are no
contracts or other documents relating to the Company's
intellectual property of a character required to
19
be filed as an exhibit to the Company's filings with the Commission or
required to be described in the Company's filings with the Commission
that are not filed or described as required.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Minnesota or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom they believe to be reliable and who are satisfactory to counsel
for the Initial Purchasers; and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and public
officials. References to the Final Memorandum in this Section 6(a) include any
amendment or supplement thereto at the Closing Date.
(b) The Representatives shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with
respect to the issuance and sale of the Securities, the Indenture, the
Registration Rights Agreement, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(c) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the Chief Financial Officer or the Treasurer, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Final Memorandum, any amendment or supplement to
the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any
amendment or supplement thereto), there has been no material
adverse change in the condition (financial or otherwise),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated by the Final Memorandum (exclusive of
any amendment or supplement thereto).
(d) The Company shall have furnished to the Representatives
such further certificates and documents as the Representatives may
reasonably request evidencing the derivation from the Company's
accounting books and records of financial statements or other financial
data included in the Final Memorandum and any amendment or supplement
to the Final Memorandum for periods during which the Company's
financial statements were audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
20
(e) At the Execution Time and at the Closing Date, the Company
shall have requested and caused Deloitte & Touche LLP to furnish to the
Representatives letters, dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants
within the meaning of the Act and the rules of the American Institute
of Certified Public Accountants, that they have performed a review of
the unaudited interim financial information of the Company for the
thirteen weeks ended December 29, 2002 and as at December 29, 2002, and
stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated in
the Final Memorandum and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Exchange Act and the related rules and
regulations adopted by the Commission thereunder that would
apply to the Final Memorandum if the Final Memorandum were a
prospectus included in a registration statement on Form S-1
under the Act;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review, in accordance with
the standards established under Statement on Auditing
Standards No. 71, of the unaudited interim financial
information for the thirteen weeks ended December 29, 2002 and
as at December 29, 2002; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, Board of Directors and the
Executive, Audit and Finance Committees of the Company and the
Subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions
and events subsequent to September 29, 2002, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Final Memorandum do
not comply in form in all material respects with
applicable accounting requirements and with the
related rules and regulations adopted by the
Commission with respect to financial statements
included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; or said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or incorporated
in the Final Memorandum; and
(2) with respect to the period subsequent to
December 29, 2002, there were any increases, at a
specified date not more than five days prior to the
date of the letter, in the long-term debt of the
Company and its subsidiaries or decreases in capital
stock of the Company or decreases in shareholders'
21
investment of the Company as compared with the
amounts shown on the December 29, 2002 unaudited
condensed consolidated balance sheet included or
incorporated in the Final Memorandum, or for the
period from December 30, 2002 to such specified date,
there were any decreases, as compared with the period
subsequent to December 30, 2001, in consolidated net
sales, gross profit, income from operations, or
income before income taxes or in total or per share
amounts of net income of the Company and its
subsidiaries, except in all instances for changes or
decreases set forth in such letter, in which case the
letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said
explanation is not deemed necessary by the
Representatives.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum agrees with the accounting records of the Company
and its subsidiaries excluding any questions of legal
interpretation.
References to the Final Memorandum in this Section 6(e)
include any amendment or supplement thereto at the date of the applicable
letter.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum (exclusive of
any amendment or supplement thereto), there shall not have been (i) any
increases in the long-term debt of the Company and its subsidiaries,
decreases in capital stock of the Company or decreases in shareholders'
investment of the Company as compared with the amounts shown on the
December 29, 2002 unaudited condensed consolidated balance sheet
included or incorporated in the Final Memorandum, or for the period
from December 30, 2002, any decreases, as compared with the period
subsequent to December 30, 2001, in consolidated net sales, gross
profit, income from operations, or income before income taxes or in
total or per share amounts of net income of the Company; or (ii) any
change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto) the
effect of which, in any case referred to in clause (i) or (ii) above,
is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(g) The Securities shall have been designated as
Portal-eligible securities in accordance with the rules and regulations
of the NASD, and the Securities shall be eligible for clearance and
settlement through DTC.
(h) The 2005 Notes Trustee shall have delivered the Redemption
Notice to DTC.
22
(i) Each Lock-up Agreement shall have been duly executed and
delivered to the Company and you and there shall have occurred no
breach of any Lock-up Agreement.
(j) The shares of Stock issuable upon conversion of the
Securities shall have been duly listed, subject to notice of issuance,
on the Nasdaq National Market.
(k) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
canceled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancelation shall be given to the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. on demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum, the Final
Memorandum (or in any supplement or amendment thereto) or any information
provided by the Company to any holder or prospective purchaser of Securities
pursuant to Section 5(h) hereof, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses
23
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial Purchasers
through the Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page regarding the delivery of the Securities and, under the heading "Plan of
Distribution", (i) the list of Initial Purchasers and their respective
participation in the sale of the Securities; and (ii) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in the
Preliminary Memorandum and the Final Memorandum, constitute the only information
furnished in writing by or on behalf of the Initial Purchasers for inclusion in
the Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be
24
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party; (iii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. An indemnifying
party shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent is consented to
by such indemnifying party, which consent shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Initial Purchasers severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Initial Purchasers may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the
Initial Purchasers on the other from the offering of the Securities; provided,
however, that in no case shall any Initial Purchaser (except as may be provided
in any agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchasers severally
shall contribute 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
of the Initial Purchasers on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Initial Purchasers shall be deemed to be equal
to the total purchase discounts and commissions. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the Initial Purchasers on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent
25
misrepresentation. For purposes of this Section 8, each person who controls an
Initial Purchaser within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Initial Purchaser shall have
the same rights to contribution as such Initial Purchaser, and each person who
controls the Company within the meaning of either the Act or the Exchange Act
and each officer and director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names on Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth on Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such nondefaulting Initial Purchasers do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser or the Company. In the event of a default by any
Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the Final
Memorandum or in any other documents or arrangements may be effected. Nothing
contained in this Agreement shall relieve any defaulting Initial Purchaser of
its liability, if any, to the Company or any nondefaulting Initial Purchaser for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission, the New York Stock Exchange or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on either of such Exchange or the Nasdaq National Market; (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities; or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or supplement
thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
26
or any of the officers, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc. at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
the Company's Chief Financial Officer ((fax no. (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to
▇▇▇▇▇▇▇▇▇▇ Technology Incorporated, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, attention of the Investor Relations.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and, except as expressly set forth in Section 5(h) hereof, no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York or The City of
Chicago.
"Commission" shall mean the Securities and Exchange Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
27
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement and your acceptance shall represent a binding agreement between
the Company and the several Initial Purchasers.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇ Technology Incorporated
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
For themselves and the other several Initial
Purchasers named in Schedule I to the foregoing Agreement.
SCHEDULE I
Principal Amount
of Firm Securities
Initial Purchasers to be purchased
------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc......................................................... $ 113,750,000
▇▇▇▇▇▇▇ & Company, Inc........................................................... 16,250,000
Total ........................................................... $ 130,000,000
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities and the Stock issuable upon conversion of the
Securities have not been registered under the Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from the registration requirements of the Act,
unless registered under the Act. Each Initial Purchaser represents and agrees
that, except as otherwise permitted by Section 4(a)(i) of the Agreement to which
this is an exhibit, it has offered and sold the Securities, and will offer and
sell the Securities, (i) as part of their distribution at any time; and (ii)
otherwise until one year after the latest of the commencement of the offering,
the Closing Date and any subsequent closing date under the Initial Purchasers'
over-allotment option (the "Restricted Period"), only in accordance with Rule
903 of Regulation S under the Act. Accordingly, each Initial Purchaser
represents and agrees that neither it, nor any of its Affiliates nor any person
acting on its or their behalf has engaged or will engage in any directed selling
efforts with respect to the Securities, and that it and they have complied and
will comply with the offering restrictions requirement of Regulation S. Each
Initial Purchaser agrees that it will not engage, directly or indirectly, in
hedging transactions with regard to the Securities or the Stock issuable upon
conversion of the Securities prior to the expiration of the Restricted Period
unless in compliance with the Act. Each Initial Purchaser agrees that, at or
immediately prior to the confirmation of sale of Securities (other than a sale
of Securities pursuant to Section 4(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the Restricted Period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Act") and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until one year after the last date on which Securities were initially
issued by the Company, except in either case in accordance with
Regulation S or Rule 144A under the Act. Hedging transactions with
regard to the Securities or the shares of Stock issuable upon
conversion of the Securities may not be conducted, directly or
indirectly, prior to the expiration of one year after the last date on
which Securities were initially issued by the Company, unless in
compliance with the Act. Terms used above have the meanings given to
them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the
Securities, except with its Affiliates or with the prior written
consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents and agrees that (i) it has not
offered or sold, and, prior to the expiry of six months from the closing of the
offering of the Securities will not offer or sell, any Securities to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments, whether as principal
or agent, for purposes of their businesses or otherwise in circumstances which
have not resulted in and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995,
(ii) it has complied and will comply with all applicable provisions of the
Financial Services and Markets Act 2000 (the "FSMA") with respect to anything
done by them in relation to the Securities in, from or otherwise involving the
United Kingdom and (iii) it has communicated, or caused to be communicated, and
will only communicate, or cause to be communicated, any invitation or inducement
to engage in investment activity (within the meaning of Section 21 of the FSMA)
received by it in connection with the issue or sale of any Securities in
circumstances in which Section 21(1) of the FSMA does not apply.
EXHIBIT B
[Form of Lock-Up Agreement]
[Letterhead of officer or director]
▇▇▇▇▇▇▇▇▇▇ TECHNOLOGY INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the Initial Purchasers
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Purchase Agreement (the "
Purchase Agreement"), between
Hutchinson Technology
Incorporated, a Minnesota corporation (the "Company"), and you as
Representatives of the several Initial Purchasers named therein, relating to a
placement of $130,000,000 aggregate principal amount of Convertible Subordinated
Notes due 2010 ($150,000,000 if the over-allotment option is exercised by the
Initial Purchasers).
In order to induce the Initial Purchasers to enter into the
Purchase
Agreement, the undersigned will not, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., offer, sell, contract to sell, pledge or otherwise
dispose of (or enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition of (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise), directly or indirectly, including the filing of (or participation in
the filing of) a registration statement with the Securities and Exchange
Commission in respect of), or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of common stock ("Common Stock") of the Company or
any securities convertible into, or exercisable or exchangeable for such Common
Stock, or publicly announce an intention to effect any such transaction, for a
period of 90 days after the date of the
Purchase Agreement, other than (i)
shares of Common Stock disposed of as bona fide gifts approved by ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc.; or (ii) with respect to stock options that expire prior to November
30, 2003, shares of Common Stock to generate net proceeds sufficient to pay the
strike price and the income taxes associated with the option exercise; provided,
however, that, without such
consent, the undersigned may participate in the filing of any registration
statement which the Company is permitted to file pursuant to the
Purchase
Agreement.
If for any reason the
Purchase Agreement shall be terminated prior to
the Closing Date (as defined in the
Purchase Agreement), the agreement set forth
above shall likewise be terminated.
Very truly yours,
-----------------------------------
Signature
-----------------------------------
Print Name