EXHIBIT 10.2
EXECUTION COPY
Arris Group, Inc.
$105,000,000
4 1/2% Convertible Subordinated Notes due 2008
PURCHASE AGREEMENT
March 12, 2003
CIBC WORLD MARKETS CORP.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Arris Group, Inc., a Delaware corporation (the "Company")
hereby confirms its agreement with you (the "Initial Purchaser"), as set forth
below.
1. The Notes. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$105,000,000 aggregate principal amount of its 4 1/2% Convertible Subordinated
Notes due 2008 (the "Firm Notes") and also proposes to grant to the Initial
Purchaser an option, exercisable by the Initial Purchaser at any time (but not
more than once) on or before the forty-fifth (45th) day following the date of
this agreement (the "Agreement"), to purchase up to an additional $20,000,000
aggregate principal amount of 4 1/2% Subordinated Convertible Notes due 2008
(the "Optional Notes"). The Firm Notes and the Optional Notes are herein
collectively referred to as the "Notes." The Notes are to be issued pursuant to
an indenture (the "Indenture"), to be dated as of March 18, 2003, between the
Company and The Bank of New York, as trustee (the "Trustee"). The Notes will be
convertible into shares (the "Underlying Securities") of common stock, par value
$0.01 per share, of the Company (the "Common Stock").
The Notes will be offered and sold to the Initial Purchaser
without such offers and sales being registered under the Securities Act of 1933,
as amended (together with the rules and regulations of the Securities and
Exchange Commission (the "Commission") promulgated thereunder, the "Securities
Act"), in reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has
prepared a preliminary offering circular dated March 11, 2003 (the "Preliminary
Circular") and a final offering circular dated March 12, 2003 (the "Final
Circular"; the Preliminary Circular and the Final Circular each herein being
referred to as a "Circular"), each setting forth or including a description of
the terms of the Notes, the terms of the offering of the Notes, a description of
the Company and its Subsidiaries (as set forth in Schedule I) and any material
developments
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relating to the Company and its Subsidiaries occurring after the date of the
most recent historical financial statements included therein. All references in
this Agreement to financial statements and schedules and other information which
is "contained," "included" or "stated" in any Circular (or other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in any
Circular.
The Company understands that the Initial Purchaser proposes to
make an offering of the Notes only on the terms and in the manner set forth in
the Circular and Section 9 hereof as soon as the Initial Purchaser deems
advisable after this Agreement has been executed and delivered, (i) to persons
in the United States whom the Initial Purchaser reasonably believes to be
qualified institutional buyers ("QIBs") as defined in Rule 144A under the
Securities Act, as such rule may be amended from time to time ("Rule 144A"), in
transactions under Rule 144A and (ii) outside the United States to certain
persons in reliance on Regulation S under the Securities Act.
The Initial Purchaser and its direct and indirect transferees
of the Notes will be entitled to the benefits of a Registration Rights Agreement
to be dated as of March 18, 2003 among the parties hereto (the "Registration
Rights Agreement") pursuant to which the Company has agreed, among other things,
to file a shelf registration statement pursuant to Rule 415 under the Securities
Act relating to the resale of the Notes by holders thereof.
The Notes, the Underlying Securities, the Indenture, the
Registration Rights Agreement and this Agreement are herein collectively
referred to as the "Transaction Documents."
2. Representations and Warranties of the Company. The
Company represents and warrants to and agrees with the Initial Purchaser that:
(a) Neither the Preliminary Circular as of the date
thereof nor the Final Circular nor any amendment or supplement thereto
as of the date thereof and at all times subsequent thereto up to the
Closing Date (as defined in Section 3 below), or up to the Additional
Closing Date (as defined in Section 3 below), if any, contained or
contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
Section 2 do not apply to statements or omissions made in reliance upon
and in conformity with information relating to the Initial Purchaser
furnished to the Company in writing by the Initial Purchaser expressly
for use in the Preliminary Circular or the Final Circular. The
Preliminary Circular or the Final Circular complied or will comply in
all material respects with the Securities Act. The documents
incorporated or deemed to be incorporated by reference in any Circular,
at the time they were or hereafter are filed with the Commission
complied and will
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comply in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (together with the rules
and regulations of the Commission promulgated thereunder, the
"Exchange Act").
(b) The documents incorporated by reference in the
Preliminary Circular and the Final Circular, when filed with the
Commission, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and none of such
documents contained any untrue statement of a material fact or omitted
to state 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 any further documents so
filed and incorporated by reference in the Preliminary Circular and the
Final Circular, when such documents become effective or are filed with
the Commission, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable,
and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(c) Since the date of the most recent financial
statements of the Company included or incorporated by reference in the
Circular, (i) there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries), or any
dividend or distribution of any kind declared, set aside for payment,
paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, properties,
management, financial position, stockholders' equity, or results of
operations of the Company and its Subsidiaries taken as a whole; (ii)
neither the Company nor any of its Subsidiaries has entered into any
transaction or agreement that is material to the Company and its
Subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Company and its
Subsidiaries taken as a whole; and (iii) neither the Company nor any of
its Subsidiaries has sustained any material loss or interference with
its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental
or regulatory authority, except in each case (i) through (iii) as
otherwise disclosed in the Final Circular.
(d) The Company and each of its Significant Subsidiaries
(as that term is defined in Rule l-02(w) of Regulation S-X under the
Securities Act) have been duly organized and are validly existing and
in good standing under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or
leasing of property or the conduct of their respective businesses
requires such qualification, and
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have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or
authority would not, individually or in the aggregate, have a material
adverse effect on the business, properties, management, financial
position, stockholders' equity or results of operations of the Company
and its Subsidiaries taken as a whole (a "Material Adverse Effect").
The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiaries
listed in Schedule I to this Agreement.
(e) The Company has an authorized capitalization as set
forth in the Circular under the heading "Description of Capital Stock";
all the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar
rights; except as described in or expressly contemplated by the Final
Circular, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of capital
stock or other equity interest in the Company or any of its
Subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock
of the Company or any such subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options; the
capital stock of the Company conforms in all material respects to the
description thereof contained in the Final Circular; and all the
outstanding shares of capital stock or other equity interests of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except as otherwise
described in the Final Circular) are owned directly or indirectly by
the Company, free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of any
third party, except for any pledges by the Company, Arris
International, Inc. and Arris Interactive L.L.C. of their capital stock
and other equity interests of 65% of Foreign Subsidiaries and all of
the Domestic Subsidiaries (as both terms are defined in that Credit
Agreement, dated as of August 3, 2001, by and among Arris
International, Inc. and Arris Interactive L.L.C., Credit Suisse First
Boston, The CIT Group/Business Credit, Inc., and a syndicate of banks,
financial institutions and other investors party thereto, as amended)
pursuant to the Credit Agreement, as amended.
(f) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Notes. The Notes have been duly and validly authorized by the Company
for issuance and, when executed by the Company and authenticated by the
Trustee in accordance with the provisions of the Indenture, and
delivered to and paid for by the Initial Purchaser in accordance with
the terms hereof, will have been duly executed, issued and delivered
and will constitute valid and legally binding obligations of the
Company, entitled to the benefits of the
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Indenture and enforceable against the Company in accordance with their
terms except that the enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
or affecting creditors' rights generally or (ii) general principles of
equity and the discretion of the court before which any proceeding
therefor may be brought (regardless of whether such enforcement is
considered in a proceeding at law or in equity) (collectively, the
"Enforceability Exceptions"); the Notes are in the form contemplated by
the Indenture.
(g) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture. The Indenture has been duly and validly authorized by the
Company and meets the requirements for qualification under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and,
when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee), will constitute
a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms except that the
enforcement thereof may be limited by the Enforceability Exceptions.
(h) The Company has duly authorized and duly reserved the
Underlying Securities in sufficient numbers for issuance by the Company
upon conversion of the Notes and, when issued upon conversion of the
Notes in accordance with the terms of the Notes, the Underlying
Securities will be validly issued, fully paid and nonassessable, and
the issuance of the Underlying Securities is not and upon issuance will
not be subject to any preemptive rights or similar rights.
(i) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. This Agreement has been duly and validly authorized by the
Company and, when executed and delivered by the Company, will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms except
that the enforcement thereof may be limited by the Enforceability
Exceptions and except as any rights to indemnity or contribution
hereunder may be limited by federal and state securities laws and
public policy considerations.
(j) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations under the
Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Company and, when executed and
delivered by the Company, will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms except that the enforcement thereof may be limited by
the Enforceability Exceptions and except as any rights to indemnity or
contribution
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hereunder may be limited by federal and state securities laws and
public policy considerations. The Notes, the Underlying Securities, the
Indenture, this Agreement and the Registration Rights Agreement conform
in all material respects to the descriptions thereof in the Final
Circular.
(k) No consent, approval, authorization, license,
qualification, exemption or order of any court or governmental, or
regulatory, agency or body (or third party in respect of any "Material
Contracts" of the Company, as such term is defined in Rule 601 of
Regulation S-K under the Securities Act) is required for the
performance of the Transaction Documents by the Company or for the
consummation by the Company of any of the transactions contemplated
hereby and thereby, or the application of the proceeds of the issuance
of the Notes as described in the Final Circular, except as has already
been acquired or as may be required: (a) under state securities or
"Blue Sky" laws in connection with the purchase and distribution of the
Notes by the Initial Purchaser and (b) by federal and state securities
laws with respect to the Company's obligations under the Registration
Rights Agreement; all such consents, approvals, authorizations,
licenses, qualifications, exemptions and orders set forth in the Final
Circular which are required to be obtained by the Closing Date, or the
Additional Closing Date, as the case may be, have been obtained or
made, as the case may be, and are in full force and effect and not the
subject of any pending or, to the best knowledge of the Company,
threatened attack by appeal or direct proceeding or otherwise.
(1) Neither the Company nor any of its Subsidiaries is
(i) in violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound
or to which any of the property or assets of the Company or any of its
Subsidiaries is subject; or (iii) in violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses
(ii) and (iii) above, for any such default or violation that would not,
individually or in the aggregate, have a Material Adverse Effect.
(m) The execution, delivery and performance by the
Company of the Transaction Documents and the consummation by the
Company of the transactions contemplated hereby and thereby and by the
Final Circular and the fulfillment of the terms hereof and thereof will
not (i) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant
to, any indenture, mortgage, deed of trust,
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loan agreement or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound or to which any of the property or assets of
the Company or any of its Subsidiaries is subject; (ii) result in any
violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its Subsidiaries or
(iii) result in the violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority.
(n) The audited consolidated financial statements
included in the Final Circular present fairly the consolidated
financial position, results of operations and cash flows of such
entities at the dates and for the periods to which they relate and have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis; the interim unaudited
consolidated financial statements included in the Final Circular
present fairly the consolidated financial position, results of
operations and cash flows of such entities at the dates and for the
periods to which they relate subject to year-end audit adjustments and
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis with the audited consolidated
financial statements included therein; the summary and selected
financial and statistical data included in the Final Circular present
fairly the information shown therein and have been prepared and
compiled on a basis consistent with the audited financial statements
included therein, except as otherwise stated therein.
(o) The pro forma financial statements and other pro
forma financial information (including the notes thereto) included in
the Final Circular (i) have been prepared in accordance with applicable
requirements of Regulation S-X promulgated under the Exchange Act and
(ii) the assumptions used in the preparation of the pro forma financial
statements and other pro forma financial information included in the
Final Circular are reasonable, are appropriate to give effect to the
transactions or circumstances referred to therein and are set forth in
the Final Circular.
(p) Except as described in the Final Circular, there are
no legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its Subsidiaries is
or may be a party or to which any property of the Company or any of its
Subsidiaries is or may be the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse
Effect or materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; no such investigations,
actions, suits or proceedings are threatened or, to the best knowledge
of the Company, contemplated by any governmental or regulatory
authority or threatened by others.
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(q) Ernst & Young LLP, who have certified certain
financial statements of the Company and its Subsidiaries, are
independent public accountants with respect to the Company and its
Subsidiaries as required by the Securities Act.
(r) The Company and its Subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights, licenses and know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
necessary for the conduct of their respective businesses; and the
conduct of their respective businesses will not conflict in any
material respect with any such rights of others, and the Company and
its Subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others except as could
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(s) The Company and its Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and
have made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective properties or
the conduct of their respective businesses as described in the Final
Circular, except where the failure to possess or make the same would
not, individually or in the aggregate, have a Material Adverse Effect;
and except as described in the Final Circular, neither the Company nor
any of its Subsidiaries has received notice of any revocation or
modification of any material license, certificate, permit or
authorization or has any reason to believe that any material license,
certificate, permit or authorization will not be renewed in the
ordinary course.
(t) There are no legal or governmental proceedings, nor
are there any contracts or other documents required by the Securities
Act to be described in a prospectus that are not described in the Final
Circular. Except as described in the Final Circular, none of the
Company or any of its Subsidiaries is in default under any of the
contracts described in the Final Circular, has received a notice or
claim of any such default or has knowledge of any breach of such
contracts by the other party or parties thereto, except such defaults
or breaches as would not, individually or in the aggregate, have a
Material Adverse Effect.
(u) None of the Company or any of its Subsidiaries has
taken or will take any action that would cause this Agreement or the
issuance or sale of the Notes to violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System, in each case as in
effect, or as the same may hereafter be in effect, on the Closing Date,
or the Additional Closing Date, as the case may be.
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(v) Other than liens imposed by the Credit Agreement, the
Company and its Subsidiaries have good and marketable title in fee
simple to, or have valid rights to lease or otherwise use, all items of
real and personal property that are material to the respective
businesses of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections
of title except those that (i) do not materially interfere with the use
made and proposed to be made of such property by the Company and its
Subsidiaries or (ii) could not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.
(w) The Company and its Significant Subsidiaries have
paid all federal, state, local and foreign taxes and filed all tax
returns required to be paid or filed through the date hereof; and
except as otherwise disclosed in the Final Circular, there is no tax
deficiency that has been, or could reasonably be expected to be,
asserted against the Company or any of its Subsidiaries or any of their
respective properties or assets.
(x) (i) Immediately after the consummation of the
transactions contemplated by the Transaction Documents, the fair value
and present fair saleable value of the assets of each of the Company
and its Subsidiaries will exceed the sum of its stated liabilities and
identified contingent liabilities and (ii) each of the Company and its
Subsidiaries is not, nor will it be, after giving effect to the
execution, delivery and performance of the Transaction Documents, and
the consummation of the transactions contemplated hereby and thereby,
(A) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (B) unable to pay its debts
(contingent or otherwise) as they mature or (C) otherwise insolvent
under applicable law.
(y) The Company and its Subsidiaries (i) are in
compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants (collectively,
"Environmental Laws"); (ii) have received and are in compliance with
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses;
and (iii) have not received notice of any actual or potential liability
for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants,
except in any such case for any such failure to comply, or failure to
receive required permits, licenses or approvals, or liability as would
not, individually or in the aggregate, have a Material Adverse Effect.
(z) The Company is not and, after giving effect to the
offering and sale of the Notes and the application of the proceeds
thereof as described in the Circular, will
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not be an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, "Investment Company Act").
(aa) None of the Company or its Subsidiaries or any of
such entities' directors, officers, employees, agents or controlling
persons has taken, directly or indirectly, any action designed, or that
might reasonably be expected, to cause or result, under the Securities
Act or otherwise, in, or that has constituted, stabilization or
manipulation of the price of the Notes.
(bb) None of the Company, its Subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Securities Act) directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of
any "security" (as defined in the Securities Act) which is or could be
integrated with the sale of the Notes in a manner that would require
the registration under the Securities Act of the Notes or (ii) engaged
in any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) in connection
with the offering of the Notes or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
Assuming (i) the accuracy of the representations and warranties of the
Initial Purchaser in Section 9 hereof, it is not necessary in
connection with the offer, sale and delivery of the Notes to the
Initial Purchaser in the manner contemplated by this Agreement to
register any of the Notes under the Securities Act or to qualify the
Indenture under the Trust Indenture Act.
(cc) No securities of the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the Notes
and listed on a national securities exchange registered under Section 6
of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system.
(dd) No labor disturbance by or dispute with employees of
the Company or any of its Subsidiaries exists or, to the best knowledge
of the Company, is contemplated or threatened.
(ee) The Company and its Subsidiaries have insurance
covering their respective properties, operations, personnel and
businesses, including business interruption insurance, which insurance
is in amounts and insures against such losses and risks as is adequate
to protect the Company and its Subsidiaries and their respective
businesses; and neither the Company nor any of its Subsidiaries has (i)
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made
in order to continue such insurance or (ii) any reason to believe that
it will not be able to renew its existing
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insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be
necessary to continue its business.
(ff) Each of the Company and its Subsidiaries (i) makes
and keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in
accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(gg) Except for persons or entities holding rights which
have been expressly waived in connection with the sale of the Notes, or
as set forth in the Final Circular, no holder of securities of the
Company or any of its Subsidiaries will be entitled to have such
securities registered under the registration statements required to be
filed by the Company pursuant to the Registration Rights Agreement
other than as expressly permitted thereby.
(hh) The statistical and market and industry-related data
included in the Final Circular are based on or derived from sources
which the Company believes to be reliable and accurate or represent the
Company's good faith estimates that are made on the basis of data
derived from such sources.
(ii) Except as stated in the Final Circular, the Company
does not know of any claims for services, either in the nature of a
finder's fee or financial advisory fee, with respect to the offering of
the Notes and the transactions contemplated by the Final Circular.
(jj) None of the Company, its Subsidiaries, any of its
respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchaser) has engaged in any directed selling
efforts (as that term is defined in Regulation S under the Securities
Act ("Regulation S")) with respect to the Notes and the Company, its
Subsidiaries and their respective Affiliates and any person acting on
its or their behalf have acted in accordance with the offering
restrictions requirement of Regulation S.
(kk) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), that is maintained, administered or contributed to
by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in
compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Internal Revenue Code of 1986, as amended (the "Code");
no prohibited transaction, within the meaning
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of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption, and for each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302
of ERISA, no "accumulated funding deficiency" as defined in Section 412
of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these
purposes accrued but unpaid contributions) exceeds the present value of
all benefits accrued under such plan determined using reasonable
actuarial assumptions.
(ll) No relationship, direct or indirect, exists between
or among the Company or any of its Subsidiaries, on the one hand, and
the directors, officers, stockholders, customers or suppliers of the
Company or any of its Subsidiaries, on the other, that is required by
the Securities Act to be described in the Circular and that is not so
described.
(mm) The Company and its Subsidiaries maintain systems 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.
(nn) Neither the Company nor any of its Subsidiaries nor,
to the best knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company or any of its Subsidiaries has (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(oo) Other than restrictions imposed by the Company's
primary credit facility, no subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, 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 properties or assets to the Company or any other
subsidiary of the Company.
-13-
(pp) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Final Circular has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
3. Purchase, Sale and Delivery of the Notes. On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, the Firm Notes, at 96.5% of their principal
amount.
In addition, the Initial Purchaser may, upon written notice
(the "Notice") given to the Company at any time (but not more than once) on or
before the forty-fifth (45th) day subsequent to the date of this Agreement,
purchase all or less than all of the Optional Securities at the purchase price
of the Notes plus imputed interest from the Closing Date to the related
Additional Closing Date at the rate per annum equal to the interest rate borne
by the Notes. The Company agrees to sell to the Initial Purchaser the aggregate
principal amount of Optional Notes specified in the Notice and the Initial
Purchaser agrees to purchase such Optional Notes. No Optional Notes shall be
sold or delivered unless the Firm Notes previously have been, or simultaneously
are, sold and delivered. Within forty-five (45) days subsequent to the date of
this Agreement, the right to purchase the Optional Notes may be surrendered and
terminated at any time upon notice by the Initial Purchaser to the Company.
One or more certificates in definitive form for the Notes that
the Initial Purchaser has agreed to purchase hereunder, and in such denomination
or denominations and registered in such name or names as the Initial Purchaser
requests upon notice to the Company at least 48 hours prior to the Closing Date
or the Additional Closing Date, as the case may be, shall be delivered by or on
behalf of the Company, against payment by or on behalf of the Initial Purchaser,
of the purchase price therefore by wire transfer of immediately available funds
to the account of the Company previously designated by it in writing. Such
delivery of and payment for the Notes shall be made at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, with respect to the
Firm Notes, at 9:00 A.M., New York time, on March 18, 2003, or at such date as
the Initial Purchaser and the Company may agree upon, such time and date of
delivery against payment being herein referred to as the "Closing Date," and
with respect to the Optional Notes, such time and date as is set forth in the
Notice which may be the same time and date as the Closing Date but shall not be
earlier than the Closing Date nor later than the tenth full business day after
the date of the Notice, such time and date of delivery against payment being
herein referred to as the "Additional Closing Date." Any such notice shall be
given at least two business days prior to the time and date of delivery
specified therein. The Company will make such certificate or certificates for
the Notes available for checking and packaging by the Initial Purchaser at the
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offices in New York, New York of CIBC World Markets Corp. at least 24 hours
prior to the Closing Date or the Additional Closing Date, as the case may be.
4. Offering by the Initial Purchaser. The Initial
Purchaser proposes to make an offering of the Notes at the price and upon the
terms set forth in the Final Circular as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchaser is
advisable.
5. Certain Covenants. The Company covenants and agrees
with the Initial Purchaser that:
(i) The Company will not amend or supplement the Final
Circular or any amendment or supplement thereto of which the Initial
Purchaser shall not have been advised and furnished a copy for a
reasonable period of time prior to the proposed amendment or supplement
and as to which the Initial Purchaser shall not have given its consent
(which consent shall not be unreasonably withheld). The Company will
promptly, upon the reasonable request of the Initial Purchaser or
counsel for the Initial Purchaser, make any amendments or supplements
to the Preliminary Circular or the Final Circular that may be necessary
in connection with the resale of the Notes by the Initial Purchaser.
(ii) The Company will advise the Initial Purchasers
promptly, and confirm such advice in writing, (a) of the issuance by
any governmental or regulatory authority of any order preventing or
suspending the use of the Preliminary Circular or the Final Circular or
the initiation or threatening of any proceeding for that purpose; (b)
of the occurrence of any event at any time prior to the completion of
the initial offering of the Notes as a result of which the Circular as
then amended or supplemented would include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances existing
when the Circular is delivered to a purchaser, not misleading; and (c)
of the receipt by the Company of any notice with respect to any
suspension of the qualification of the Notes for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and the Company will use its best efforts to prevent the
issuance of any such order preventing or suspending the use of the
Preliminary Circular or the Final Circular or suspending any such
qualification of the Notes and, if issued, to obtain as soon as
possible the withdrawal thereof.
(iii) The Company will cooperate with the Initial Purchaser
in arranging for the qualification of the Notes for offering and sale
under the securities or "Blue Sky" laws of such jurisdictions as the
Initial Purchaser may designate and will continue such qualifications
in effect for as long as may be necessary to complete the resale of the
Notes by the Initial Purchaser; provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to execute a
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general consent to service of process in any jurisdiction or to take
any other action that would subject it to general service of process or
to taxation in excess of a nominal amount in respect of doing business
in any jurisdiction in which it is not otherwise subject.
(iv) The Company agrees that, without the prior written
consent of the Initial Purchaser, it will not, during the period ending
ninety (90) days after the date of the Final Circular, offer, pledge,
sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of its common stock (other than the issuance of
common stock upon conversion of the notes) or any securities
convertible into or exercisable or exchangeable for its common stock
(other than pursuant to employee stock option, stock purchase and
401(k) plans and other than upon the conversion or exchange of
outstanding convertible or exchangeable securities outstanding as of
the date of the Final Circular); provided, however, that the Company
may, in connection with its acquisition of Atoga Systems, issue and
deliver up to 500,000 shares of its common stock to employees of
Atoga as purchase consideration.
(v) If, at any time prior to the completion of the resale
by the Initial Purchaser of the Notes, any event shall occur as a
result of which it is necessary, in the opinion of counsel for the
Initial Purchaser, to amend or supplement the Final Circular in order
to make such Final Circular not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if for any other reason it shall be necessary to amend or supplement
the Final Circular in order to comply with applicable laws, rules or
regulations, the Company shall (subject to Section 5(i)) forthwith
amend or supplement such Final Circular at its own expense so that, as
so amended or supplemented, such Final Circular will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading and will comply with all applicable laws, rules or
regulations.
(vi) The Company will, without charge, provide to the
Initial Purchaser and to counsel for the Initial Purchaser as many
copies of each Preliminary Circular or Final Circular or any amendment
or supplement thereto as the Initial Purchaser may reasonably request.
(vii) None of the Company or any of its Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Securities Act) which
could be integrated with the sale of the Notes in a manner which would
require the registration under the Securities Act of the Notes.
-16-
(viii) For so long as any of the Notes remain outstanding,
the Company will furnish to the Initial Purchaser (a) as soon as
available, a copy of each report or other communication (financial or
otherwise) of the Company mailed to the Trustee or holders of the Notes
or stockholders or filed with the Commission or any national securities
exchange on which any class of securities of the Company may be listed
and (b) from time to time such other information concerning the Company
as the Initial Purchaser may reasonably request.
(ix) The Company will apply the net proceeds from the sale
of the Notes as set forth under "Use of Proceeds" in the Final
Circular.
(x) Prior to the Closing Date, and again prior the
Additional Closing Date, if any, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company and its Subsidiaries, for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Circular.
(xi) The Company will not, and will not permit any of its
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) in connection with the offering of the Notes or in any
manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.
(xii) For so long as any of the Notes remain outstanding,
the Company will make available at its expense, upon request, to any
holder of Notes and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Securities Act, unless the
Company is then subject to Section 13 or 15(d) of the Exchange Act.
(xiii) The Company will use its best efforts to (a) permit
the Notes to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of Securities
Dealers, Inc. (the "NASD") relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"PORTAL Market") and (b) permit the Notes to be eligible for clearance
and settlement through The Depository Trust Company.
(xiv) In connection with Notes offered and sold in an
offshore transaction (as defined in Regulation S), the Company will not
register any transfer of such Notes not made in accordance with the
provisions of Regulation S and will not, except in accordance with the
provisions of Regulation S, if applicable, issue any such Notes in the
form of definitive securities.
-17-
(xv) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof (other than
by reason of a default or omission by the Initial Purchaser of its
obligations hereunder) or if this Agreement shall be terminated by the
Initial Purchaser because of any failure or refusal on the part of the
Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Initial Purchaser
for all reasonable out-of-pocket expenses (including fees and expenses
of counsel for the Initial Purchaser) incurred by the Initial Purchaser
in connection herewith, but in no event will the Company be liable to
the Initial Purchaser for damages on account of loss of anticipated
profits from the sale of the Notes.
(xvi) The Company will not become, at any time prior to the
expiration of three years after the Closing Date, or the Additional
Closing Date, if any, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company
that is or is required to be registered under Section 8 of the
Investment Company Act.
(xvii) During the period of three years after the Closing
Date, or the Additional Closing Date, if any, the Company will not, and
will not permit any of its "affiliates" (as defined in Rule 144 under
the Securities Act) to, resell any of the Notes which constitute
"restricted securities" under Rule 144 that have been reacquired by any
of them.
(xviii) The Company will use its reasonable best efforts to list,
subject to notice of issuance, the Underlying Securities on the Nasdaq
National Market (the "Nasdaq").
6. Expenses. Notwithstanding any termination of this
Agreement (pursuant to Section 11 or otherwise), the Company agrees to pay the
following costs and expenses and all other costs and expenses incident to the
performance by the Company of its obligations hereunder: (i) the preparation,
printing, typing, reproduction and delivery of this Agreement and of the other
Transaction Documents, any amendment or supplement to or modification of any of
the foregoing and any and all other documents furnished pursuant hereto or
thereto or in connection herewith or therewith; (ii) the preparation, printing
or reproduction of each Preliminary Circular, the Final Circular and each
amendment or supplement to any of them; (iii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of each Preliminary Circular, the Final Circular and
all amendments or supplements to any of them as may be reasonably requested for
use in connection with the offering and sale of the Notes; (iv) the preparation,
printing, authentication, issuance and delivery of certificates for the Notes,
including any stamp taxes in connection with the original issuance and sale of
the Notes and Trustees' fees; (v) the reproduction and delivery of this
Agreement and the other
-18-
Basic Documents, the preliminary and supplemental "Blue Sky" memoranda and all
other agreements or documents reproduced and delivered in connection with the
offering of the Notes; (vi) the registration or qualification of the Notes for
offer and sale under the securities or Blue Sky laws of the several states
(including filing fees and the fees, expenses and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel to the Initial Purchaser, relating to such registration and
qualification); (vii) the filing fees in connection with any filings required to
be made with the NASD (including the fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel to the Initial Purchaser, in respect thereof and in connection
with obtaining an opinion of the NASD concerning the fairness of the terms and
arrangements of the underwriting of the Notes); (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in connection
with presentations to prospective purchasers of the Notes; (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; (x) fees and expenses of
the Trustee including fees and expenses of its counsel; (xi) all expenses and
listing fees incurred in connection with the application for quotation of the
Notes on the PORTAL Market, (xii) any fees charged by investment rating agencies
for the rating of the Notes and (xiii) all expenses and application fees related
to the listing of the Underlying Securities.
7. Conditions of the Initial Purchaser's Obligations.
The obligation of the Initial Purchaser to purchase and pay for the Firm Notes
on the Closing Date and the Optional Notes on the Additional Closing Date, if
any, is subject to the accuracy of the representations and warranties contained
herein, to the performance by the Company of its covenants and agreements
hereunder and to the following additional conditions unless waived in writing by
the Initial Purchaser:
(i) The Initial Purchaser shall have received an opinion
of counsel to the Company in form and substance satisfactory to the
Initial Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial
Purchaser, dated the Closing Date, and again on the Additional Closing
Date, if any, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, substantially in the form of
Exhibit A hereto. In rendering such opinion, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP shall
have received and may rely upon such certificates and other documents
and information, including one or more opinions of local counsel
reasonably acceptable to the Initial Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel to the Initial Purchaser, as they may reasonably
request to pass upon such matters.
(ii) The Initial Purchaser shall have received an opinion,
dated the Closing Date, and again on the Additional Closing Date, if
any, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Initial Purchaser, with
respect to the sufficiency of certain legal matters relating to this
Agreement and such other related matters as the Initial Purchaser may
require. In rendering such opinion, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have
received and may rely upon such certificates and other documents and
information as they may reasonably request to pass upon such matters.
In addition, in rendering their opinion,
-19-
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may state that their opinion is limited to
matters of New York, Delaware corporate and federal law.
(iii) On the date of this Agreement and on the Closing Date
and again on the Additional Closing Date, if any, Ernst & Young LLP
shall have furnished to the Initial Purchaser, at the request of the
Company, a letter, dated the respective dates of delivery thereof and
addressed to the Initial Purchaser, in form and substance reasonably
satisfactory to the Initial Purchaser, containing statements and
information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Final Circular; provided, that the letter delivered on the Closing
Date or the Additional Closing Date, as the case may be, shall use a
"cutoff date no more than three business days prior to such Closing
Date or such Additional Closing Date, as the case may be.
(iv) The representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the
Closing Date, and again on the Additional Closing Date, if any; the
Company shall have complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, or the Additional
Closing Date, as the case may be.
(v) Subsequent to the execution and delivery of this
Agreement and since the date of the most recent financial statements in
the Final Circular (exclusive of any amendment or supplement thereto
after the date hereof) (a) no event or condition of a type described in
Section 2(c) hereof shall have occurred or shall exist, which event or
condition is not described in the Circular (excluding any amendment or
supplement thereto) and the effect of which in the judgment of the
Initial Purchaser makes it impracticable or inadvisable to proceed with
the offering, sale or delivery of the Notes on the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the
manner contemplated by this Agreement and the Circular; (b) there shall
not have occurred any downgrading, nor shall any notice have been given
of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible
change, in the rating accorded any securities of the Company or any of
its Subsidiaries by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and (c) there shall not have occurred any
event or development relating to or involving any of the Company or the
Subsidiaries or any of the officers or directors of the Company or the
Subsidiaries that makes any statement made in the Final Circular untrue
or that, in the opinion of the Company and its counsel or the Initial
Purchaser and its counsel, requires the making of any addition to or
change in the Final Circular in order to state a material fact required
by any applicable law, rule
-20-
or regulation to be stated therein or necessary in order to make the
statements made therein not misleading.
(vi) None of the issuance and sale of the Notes pursuant
to this Agreement or any of the transactions contemplated by any of the
other Transaction Documents shall be enjoined (temporarily or
permanently) and no restraining order or other injunctive order shall
have been issued; and there shall not have been any legal action,
order, decree or other administrative proceeding instituted or
threatened against the Company or against the Initial Purchaser
relating to the issuance of the Notes or the Initial Purchaser's
activities in connection therewith or any other transactions
contemplated by this Agreement, the Final Circular or the other
Transaction Documents.
(vii) The Initial Purchaser shall have received on and as
of the Closing Date and the Additional Closing Date, if any, a
certificate of the chief financial officer of the Company and one
additional senior executive officer of the Company who is satisfactory
to the Initial Purchaser (a) confirming that such officers have
carefully reviewed the Final Circular and, to the best knowledge of
such officers, the representation of the Company set forth in Section
2(a) hereof is true and correct, (b) confirming that the other
representations and warranties of the Company in this Agreement are
true and correct and that the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date and Additional Closing Date,
(c) to the effect set forth in paragraphs (iv), (v) and (vi) of this
Section 7; and (d) confirming that, at the Closing Date, or the
Additional Closing Date, as the case may be, and, after giving effect
to the consummation of the transactions contemplated by this Agreement
or the other Transaction Documents, there exists no Default or Event of
Default (as defined in the Indenture).
(viii) Each of the Transaction Documents and each other
agreement or instrument executed in connection with the Transactions
shall be reasonably satisfactory in form and substance to the Initial
Purchaser and shall have been executed and delivered by all the
respective parties thereto and shall be in full force and effect, and
there shall have been no material amendments, alterations,
modifications or waivers of any provision thereof since the date of
this Agreement.
(ix) All proceedings taken in connection with the issuance
of the Notes and the transactions contemplated by this Agreement, the
other Transaction Documents and all documents and papers relating
thereto shall be reasonably satisfactory to the Initial Purchaser and
counsel to the Initial Purchaser. The Initial Purchaser and counsel to
the Initial Purchaser shall have received copies of such papers and
-21-
documents as they may reasonably request in connection therewith, all
in form and substance reasonably satisfactory to them.
(x) The Company shall apply the proceeds necessary from
the issuance and sale of the Notes as described under "Use of Proceeds"
in the Final Circular.
(xi) On or before the Closing Date, the Initial Purchaser
shall have received the Registration Rights Agreement executed by the
Company and such agreement shall be in full force and effect at all
times from and after the Closing Date.
(xii) The Company shall have furnished or caused to be
furnished to the Initial Purchaser such further certificates and
documents as the Initial Purchaser shall have reasonably requested.
(xiii) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
federal, state or foreign governmental or regulatory authority that
would, as of the Closing Date or the Additional Closing Date, as the
case may be, prevent the issuance or sale of the Notes; and no
injunction or order of any federal, state or foreign court shall have
been issued that would, as of the Closing Date or the Additional
Closing Date, as the case may be, prevent the issuance or sale of the
Notes.
(xiv) The Initial Purchaser shall have received on and as
of the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and its
Significant Subsidiaries in their respective jurisdictions of
organization and their good standing as foreign entities in such other
jurisdictions as the Initial Purchaser may reasonably request, in each
case in writing or any standard form of telecommunication from the
appropriate governmental authorities of such jurisdictions.
(xv) The "lock-up" agreements, each substantially in the
form of Exhibit B hereto, between the Initial Purchaser and each of the
shareholders, officers and directors of the Company listed on Exhibit
▇-▇ hereto relating to sales and certain other dispositions of shares
of Stock or certain other securities, delivered to the Initial
Purchaser as of the date hereof, shall be in full force and effect on
the Closing Date or the Additional Closing Date, as the case may be.
All such opinions, certificates, letters, schedules, documents
or instruments delivered pursuant to this Agreement will comply with the
provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchaser and counsel to the Initial Purchaser. The
Company shall furnish to the Initial Purchaser such conformed copies of such
opinions, certificates, letters, schedules, documents and instruments in such
quantities as the Initial Purchaser shall reasonably request.
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8. Indemnification and Contribution, (a) The Company
agrees to indemnify and hold harmless the Initial Purchaser, its affiliates,
directors and officers and each person, if any, who controls the Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, the reasonable legal fees and other
expenses incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, that arise
out of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Final Circular (or any amendment or supplement
thereto) or any Preliminary Circular, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to the Initial
Purchaser furnished to the Company in writing by the Initial Purchaser expressly
for use therein, provided that the Company shall not be liable to the Initial
Purchaser under this Section 8(a) with respect to any Preliminary Circular to
the extent that any such loss, claim, damage or liability of the Initial
Purchaser results from the fact that the Initial Purchaser sold the Notes to a
person as to whom it shall be established that there was not sent or given, at
or prior to written confirmation of such sale, a copy of the Final Circular or
of the Final Circular as then amended or supplemented in any case where such
delivery is required by the Securities Act if the Company previously furnished
copies thereof in the quantity requested in accordance with Section 5(vii)
hereof to the Initial Purchaser, and if such untrue statement or omission or
alleged untrue statement or omission made in such Preliminary Circular is
eliminated or remedied in the Final Circular (or in the Final Circular as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto).
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or
liabilities that arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with any information relating to the Initial Purchaser furnished to
the Company in writing by the Initial Purchaser expressly for use in the Final
Circular (or any amendment or supplement thereto) or any Preliminary Circular,
it being understood and agreed upon that the only such information furnished by
the Initial Purchaser consists of the information in the Final Circular
furnished on behalf of the Initial Purchaser specifically for use therein.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in
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respect of which indemnification may be sought pursuant to the preceding
paragraphs of this Section 8, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnification may be sought (the
"Indemnifying Person") in writing; provided that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have
under this Section 8 except to the extent that it has been actually prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and
provided, further, that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have to an Indemnified Person
otherwise than under this Section 8. If any such proceeding shall be brought or
asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person to represent the Indemnified
Person and any others entitled to indemnification pursuant to this Section 8
that the Indemnifying Person may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding, as incurred. In
any such proceeding, any Indemnified Person shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any imp
leaded parties) include both the Indemnifying Person and the Indemnified Person
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
and agreed that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be paid or reimbursed as they are incurred. Any such separate firm for the
Initial Purchaser, its affiliates, directors and officers and any control
persons of the Initial Purchaser shall be designated in writing by the Initial
Purchaser, and any such separate firm for the Company, its directors, its
officers and any control persons of the Company shall be designated in writing
by the Company. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 90 days after
receipt by the Indemnifying Person of such request, (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement and (iii) such Indemnified Person shall
have given the Indemnifying Person
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at least 30 days' prior notice of its intention to settle. No Indemnifying
Person shall, without the written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have
been sought hereunder by such Indemnified Person, unless such settlement (x)
includes an unconditional release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all liability
on claims that are the subject matter of such proceeding and (y) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in paragraphs (a)
and (b) above is unavailable to an Indemnified Person or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchaser on
the other from the offering of the Notes or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Initial
Purchaser on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Initial Purchaser on the other shall be deemed to be in
the same respective proportions as the net proceeds (before deducting expenses)
received by the Company from the offering of the Notes and the total discounts
and commissions received by the Initial Purchaser in connection therewith bear
to the aggregate offering price of the Notes. The relative fault of the Company
on the one hand and the Initial Purchaser on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Initial Purchaser and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Company and the Initial Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an Indemnified Person as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with any such
action or claim. Notwithstanding the provisions of this Section 8, in no event
shall the Initial Purchaser be required to contribute any amount in excess of
the amount by which the total discounts and
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commissions received by the Initial Purchaser with respect to the offering of
the Notes exceeds the amount of any damages that the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section ll(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any Indemnified Person at law or in equity.
(g) Notwithstanding anything to the contrary in this
Section 8, the indemnification and contribution provisions of the Registration
Rights Agreement shall govern any claim with respect thereto.
9. Offering of Notes; Restrictions on Transfer. (a) The
Initial Purchaser represents and warrants that it is a QIB. The Initial
Purchaser agrees with the Company that (i) it has not and will not solicit
offers for, or offer or sell, the Notes by any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act; and (ii) it has and will solicit offers
for the Notes only from, and will offer the Notes only to, (A) in the case of
offers inside the United States to persons whom the Initial Purchaser reasonably
believes to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to the Initial Purchaser that each such
account is a QIB, to whom notice has been given that such sale or delivery is
being made in reliance on Rule 144A and, in each case, in transactions under
Rule 144A, and (B) in the case of offers outside the United States, to persons
other than U.S. persons ("foreign purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate or trust)); provided,
however, that, in the case of this clause (B), in purchasing such Notes such
persons are deemed to have represented and agreed as provided under the caption
"Notice to Investors" contained in the Final Circular (or, if the Final Circular
is not in existence, the most recent Preliminary Circular).
(b) The Initial Purchaser represents and warrants with
respect to offers and sales outside the United States that (i) it has and will
comply with all applicable laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Notes or has in its possession or
distributes any Circular or any such other material, in all cases at its own
expense; (ii) the Notes have not been and will not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the
-26-
Securities Act; (iii) it has offered the Notes and will offer and sell the Notes
(A) as part of its distribution at any time and (B) otherwise until 40 days
after the later of the commencement of the offering and the Closing Date, or the
Additional Closing Date, as the case may be, only in accordance with Rule 903 of
Regulation S and, accordingly, neither it nor any persons acting on its behalf
have engaged or will engage in any directed selling efforts (within the meaning
of Regulation S) with respect to the Notes, and any such persons have complied
and will comply with the offering restrictions requirement of Regulation S; and
(iv) it agrees that, at or prior to confirmation of sales of the Notes, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Notes 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
United States Securities Act of 1933 (the "Securities Act") and may not
be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of the distribution of the
securities at any time or (ii) otherwise until 40 days after the later
of the commencement of the offering and the closing date of the
offering, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them in Regulation S."
Terms used in this Section 9 and not defined in this Agreement have the meanings
given to them in Regulation S.
10. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers and the Initial Purchaser set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, any of its officers or directors, the Initial
Purchaser or any controlling person referred to in Section 8 hereof and (ii)
delivery of, payment for or disposition of the Notes, and shall be binding upon
and shall inure to the benefit of any successors, assigns, heirs or personal
representatives of the Company, the Initial Purchaser and indemnified parties
referred to in Section 8 hereof. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Termination. (a) This Agreement may be terminated in
the sole discretion of the Initial Purchaser by notice to the Company given in
the event that the Company shall have failed, refused or been unable to satisfy
all conditions on its part to be performed or satisfied hereunder on or prior to
the Closing Date, or the Additional Closing Date, as the case may be, or if at
or prior to the Closing Date, or the Additional Closing Date, as the case may
be:
-27-
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to their respective
businesses or properties from fire, flood, hurricane, earthquake,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, which
loss or interference, in the sole judgment of the Initial Purchaser,
has had or has a Material Adverse Effect on the business, properties,
management, financial position, stockholders' equity or results of
operations of the Company and its Subsidiaries, taken as a whole, or
there shall have been any material adverse change, or any development
involving a prospective material adverse change (including without
limitation a change in management or control of the Company or any
Subsidiary), in the business, properties, management, financial
position, stockholders' equity or results of operations of the Company
and the Subsidiaries, taken as a whole, except as described in or
contemplated by the Final Circular (exclusive of any amendment or
supplement thereto);
(ii) trading in securities of the Company or any of its
Subsidiaries or in securities generally on the New York Stock Exchange,
the American Stock Exchange or Nasdaq shall have been suspended or
minimum or maximum prices shall have been established on any such
exchange;
(iii) a banking moratorium shall have been declared by New
York or U.S. authorities;
(iv) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States that, in the case of (A), (B) or (C)
above, in the sole judgment of the Initial Purchaser, makes it
impracticable or inadvisable to proceed with the delivery of the Notes
as contemplated by the Final Circular, as amended as of the date
hereof; or
(v) any securities of the Company or any of the
Subsidiaries shall have been downgraded or placed on any "watch list"
for possible downgrading by any nationally recognized statistical
rating organization.
(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party except as
provided in Section 10 hereof.
12. Notices. All communications hereunder shall be in
writing and, (i) if sent to the Initial Purchaser, shall be hand delivered,
mailed by first-class mail, couriered by next-day air courier or telecopied and
confirmed in writing to CIBC World Markets Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Investment Banking, and
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with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., and (ii) if sent to the Company, shall be
hand delivered, mailed by first-class mail, couriered by next-day air courier or
telecopied and confirmed in writing to Arris Group, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer, and with a
copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Jr., Esq.
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier guaranteeing
overnight delivery; and when receipt is acknowledged by the addressee, if
telecopied.
13. Successors. This Agreement shall inure to the benefit
of and be binding upon the Initial Purchaser and the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of the directors, officers, employees and agents and any
person or persons who control the Initial Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
indemnities of the Initial Purchaser contained in Section 8 of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
of the Company and any person or persons who control the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
No purchaser of Notes from the Initial Purchaser will be deemed a successor
because of such purchase.
14. No Waiver; Modifications in Writing. No failure or
delay on the part of the Company or the Initial Purchaser in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to the Company or the Initial Purchaser at
law or in equity or otherwise. No waiver of or consent to any departure by the
Company or the Initial Purchaser from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit thereof,
provided that notice of any such waiver shall be given to each party hereto as
set forth below. Except as otherwise provided herein, no amendment, modification
or termination of any provision of this Agreement shall be effective unless
signed in writing by or on behalf of each of the Company and the Initial
Purchaser. Any amendment, supplement or modification of or to any provision of
this
-29-
Agreement, any waiver of any provision of this Agreement, and any consent to any
departure by the Company or the Initial Purchaser from the terms of any
provision of this Agreement shall be effective only in the specific instance and
for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on the Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.
15. Information Supplied by the Initial Purchaser. The
statements set forth in the second and fifth paragraphs, and the first four
sentences of the sixth paragraph, in each case under the heading "Plan of
Distribution" in the Final Circular (to the extent such statements relate to the
Initial Purchaser) constitute the only information furnished by the Initial
Purchaser to the Company for purposes of Section 8 hereof.
16. Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
18. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this Agreement shall constitute a binding agreement between
the Company and the Initial Purchaser.
Very truly yours,
ARRIS GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Name:
Title
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
CIBC WORLD MARKETS CORP.
By: /s/ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: MANAGING DIRECTOR
Schedule I
Subsidiaries of Arris Group, Inc.
Direct Subsidiaries
-------------------
Arris Interactive L.L.C.
Arris International, Inc.
Indirect Subsidiaries
---------------------
Arris Asset Management Company
Arris Licensing Company
Texscan Corporation
ANTEC Europe Limited
ANTEC International Corporation
Texscan de Mexico, S.A. de C.V.
Electronic Connector Corp. of Illinois
Electronic System Products, Inc.
Power Guard, Inc.
ANTEC Pacific, Inc.
ANTEC Spain, Inc.
Keptel, Inc.
Keptel de Mexico S. A. de C.V.
Antec Foreign Sales Corporation
ARRIS International Netherlands, B.V.
ARRIS International Iberia, S.L.
Communicaciones Broadband S.A. de C.V.
ANTEC Latin America, Inc., Sucursal Argentina
ANTEC Do Brasil LTDA
Arris International Japan Kabushiki ▇▇▇▇▇▇
▇▇▇▇▇ International Telecommunicaciones
Exhibit A
[Form of Opinion of Counsel for the Company]
(a) The Company and each of its Subsidiaries listed on
Schedule A hereto (the "Material Subsidiaries") have been duly organized and are
validly existing and in good standing under the laws of their respective
jurisdictions of organization and have all power and authority necessary to own
or hold their respective properties and to conduct their businesses as described
in the Circular. The Company and Arris International, Inc. are duly qualified to
do business in Georgia. In rendering this opinion regarding good standing, we
have relied solely on good standing certificates of the Company and the Material
Subsidiaries.
(b) The authorized capital stock of the Company is as set
forth in the Final Circular under the caption "Description of Capital Stock."
All the outstanding shares of capital stock of the Company's Common Stock have
been duly and validly authorized and issued and are fully paid and
non-assessable; all the outstanding shares of capital stock or other equity
interests of each Material Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable.
(c) The Company has the full right, power and authority
to execute and deliver the Purchase Agreement and to perform its obligations
thereunder; and the Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(d) The Company has the full right, power and authority
to execute and deliver the Notes and perform its obligations thereunder. The
Notes have been duly and validly authorized by the Company for issuance and,
when executed by the Company and authenticated by the Trustee in accordance with
the provisions of the Indenture, and, delivered to and paid for by the Initial
Purchaser in accordance with the terms of the Purchase Agreement, will have been
duly executed, issued and delivered and will constitute valid and legally
binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms except that
the enforcement thereof may be limited by the Enforceability Exceptions; the
Notes are in the form contemplated by the Indenture.
(e) The Company has the full right, power and authority
to execute and deliver the Indenture and perform its obligations thereunder. The
Indenture has been duly and validly authorized, executed and delivered by the
Company and meets the requirements for qualification under the Trust Indenture
Act, and (assuming the due authorization, execution and delivery by the Trustee)
constitutes a valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms except that the enforcement
thereof may be limited by the Enforceability Exceptions.
(f) The Company has the full right, power and authority
to execute and deliver the Registration Rights Agreement and perform its
obligations thereunder. The Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the Company and constitutes a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms except that the enforcement thereof may be
limited by the Enforceability Exceptions and except as any rights to indemnity
or contribution
-2-
thereunder may be limited by federal and state securities laws and public policy
considerations. The Notes, the Indenture and the Registration Rights Agreement
conform in all material respects to the descriptions thereof in the Final
Offering Circular.
(g) The Underlying Securities have been duly authorized
and reserved for issuance by the Company upon conversion of the Notes and, when
issued upon conversion of the Notes in accordance with the terms of the Notes,
will be validly issued, fully paid and nonassessable by the Company, and the
issuance of the Underlying Securities is not subject to any preemptive rights or
similar rights by operation of law or under the Company's charter or by-laws,
and the holders thereof will not be subject to personal liability for the debts
and obligations of the Company solely by reason of being such holders.
(h) Neither the Company nor any of its Material
Subsidiaries is in violation of its charter or by-laws or similar organizational
documents as a result of the ownership of their respective properties or the
conduct of their respective businesses as described in the Circular.
(i) The issuance and sale of the Notes and the issuance
and sale of the Underlying Securities upon conversion of the Notes and the
execution, delivery and performance by the Company of the Transaction Documents,
and compliance by the Company with the terms of, and the consummation of the
transactions contemplated by, the Purchase Agreement will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
Material Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed or incorporated by reference as
an exhibit to the Company's Form 10-K for the year ended December 31, 2001, the
Company's 10-Q for the quarter ended March 31, 2002, the Company's 10-Q for the
quarter ended June 30, 2002, the Company's 10-Q for the quarter ended September
30, 2002 or the Forms 8-K filed by the Company since December 31, 2001; (ii) to
the knowledge of such counsel, result in any violation of the provisions of the
charter or by-laws or similar organizational documents of the Company or any of
its Material Subsidiaries or (iii) result in the violation of any federal or
Georgia statute, the Delaware General Corporation Law or the Delaware Limited
Liability Company Act or any rule or regulation that has been issued pursuant to
any federal or Georgia statute, the Delaware General Corporation Law or the
Delaware Limited Liability Company Act or any order known to us issued pursuant
to any federal or Georgia statute, the Delaware General Corporation Law or the
Delaware Limited Liability Company Act by any court or regulatory authority
having jurisdiction over the Company or any of its Subsidiaries.
(j) No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of the Purchase Agreement and compliance by the Company with the
terms thereof and the consummation of the transactions contemplated by the
Purchase Agreement, except for those that have been obtained or made prior to
the date hereof and except for the registration of the Notes and the Underlying
Securities under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may be required
under applicable state securities laws in connection with the purchase and
distribution of the Notes by the Initial Purchaser.
-3-
(k) To the best knowledge of such counsel, except as
described in the Final Circular, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
any of its Subsidiaries is a party or to which any property of the Company or
any of its Subsidiaries is the subject which, individually or in the aggregate,
if determined adversely to the Company or any of its Subsidiaries, could
reasonably be expected to have a Material Adverse Effect; and to the best
knowledge of such counsel, no such investigations, actions, suits or proceedings
are threatened or contemplated by any governmental or regulatory authority or
threatened by others.
(1) The descriptions in the Final Circular of statutes,
legal, governmental and regulatory proceedings and contracts and other documents
are accurate in all material respects; and, to the best knowledge of such
counsel, (A) there are no current or pending legal, governmental or regulatory
actions, suits or proceedings that are required under the Securities Act to be
described in the Final Circular and that are not so described and (B) there are
no statutes, regulations or contracts and other documents that are required
under the Securities Act to be described in the Final Circular and that have not
been so described.
(m) No securities of the Company are of the same class
(within the meaning of Rule 144A under the Securities Act) as the Notes and
listed on a national securities exchange registered under Section 6 of the
Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.
(n) The statements set forth under the captions
"Description of the Notes," "Description of Capital Stock" and "Description of
the Outstanding 4 1/2% Convertible Subordinated Notes" in the Final Circular,
insofar as such statements purport to summarize legal documents, are fair
summaries of the documents so summarized and, insofar as such statements are
summaries of matters of law or legal conclusions, are accurate summaries in all
material respects.
(o) The Circular (other than the financial statements and
related schedules therein, and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need express no
opinion) substantially complies as to form in all material respects with the
requirements of the Securities Act applicable to prospectuses that are part of
registration statements on Form S-l, except for Item 11(1), (m) and (n) and Item
12 of Form S-l.
(p) Assuming (A) Initial Purchaser is a "qualified
institutional buyer" within the meaning of Rule 144A of the Securities Act and
(ii) the accuracy of the representations and warranties and compliance with the
agreements of the Company in Sections 2 and 5 of the Purchase Agreement and of
the Initial Purchaser in Section 9 of the Purchase Agreement, it is not
necessary in connection with the offer, sale and delivery of the Notes to the
Initial Purchaser under the Purchase Agreement or in connection with the initial
resale of the Notes by the Initial Purchaser in accordance with Section 9 of the
Purchase Agreement (i) to register the Notes under the Securities Act or (ii) to
qualify the Indenture under the Trust Indenture Act, it being understood that no
opinion is expressed as to any subsequent resale of any of the Notes.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and with representatives of its
independent accountants and
-4-
counsel at which conferences the contents of the Final Circular and any
amendment and supplement thereto and related matters were discussed and,
although such counsel assume no responsibility for the accuracy, completeness or
fairness of the Final Circular (except as expressly provided above), on the
basis of the foregoing, nothing has come to the attention of such counsel to
cause such counsel to believe that the Final Circular as of its date and the
Closing Date, contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (other than the
financial statements and other financial information or statistical data
contained therein, as to which such counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters
of fact on certificates of responsible officers of the Company and public
officials that are furnished to the Initial Purchaser.
The opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP described above shall be
rendered to the Initial Purchaser at the request of the Company and shall so
state therein.
-5-
Exhibit B
[FORM OF] LOCK-UP AGREEMENT
[Month Date], 2003
CIBC World Markets Corp.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Arris Group, Inc.-- Offering of 4 1/2% Convertible
Subordinated Notes due 2008
Ladies and Gentlemen:
The undersigned understands that you have entered into a
Purchase Agreement (the "Purchase Agreement") with Arris Group, Inc., a Delaware
corporation (the "Company"), providing for the offering, pursuant to Rule 144A
under the Securities Act of 1933, as such rule may be amended from time to time
(the "Rule 144A Offering"), by you (the "Initial Purchaser") of subordinated
notes (the "Notes") convertible into common stock (the "Common Stock") of the
Company. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
In consideration of your agreement to purchase and make the
Rule 144A Offering of the Notes, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without your prior written consent, which shall not be unreasonably withheld,
the undersigned will not, during the period (the "Lock-Up Period") ending 90
days after the date of the offering circular relating to the Rule 144A Offering
(the "Circular"), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock (including, but not limited to, Common
Stock which may be deemed to be beneficially owned by the undersigned in
accordance with the rules and regulations of the Securities and Exchange
Commission and securities which may be issued upon exercise of a stock option or
warrant) other than (A) as a bona fide gift or bona fide gifts, provided,
however, that the recipient of such bona fide gift or bona fide gifts shall
execute a copy of and be bound by the terms of, this Agreement, (B) the sale of
any shares of Common Stock acquired upon the exercise of options granted under
the Company's stock option or stock incentive plans that would otherwise expire
during the Lock-Up Period, (C) in connection with the settlement of any
restricted stock units or restricted stock, pursuant to which the Company may
withhold shares to pay applicable tax withholding, or (D) in connection with an
option exchange offer or similar offer by the Company; or (2) enter into any
swap, option, future, forward or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership
-2-
of the Common Stock or any securities of the Company which are substantially
similar to the Common Stock, including, but not limited to, any security
convertible into or exercisable or exchangeable for Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. In
addition, the undersigned agrees that, without the prior written consent of the
Initial Purchaser, which shall not be unreasonably withheld, it will not, during
the period ending 90 days after the date of the Circular, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
In furtherance of the foregoing, the Company and any duly
appointed transfer agent for the registration or transfer of the securities
described herein are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the Purchase Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the Notes to be sold
thereunder, this Lock-Up Agreement shall terminate and be of no further force or
effect, and the undersigned shall be released from all obligations under this
Lock-Up Agreement.
The undersigned understands that the Initial Purchaser
proposes to proceed with the Offering in reliance upon this Lock-Up Agreement.
THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
Very truly yours,
By:
---------------------
Name:
Title
Accepted as of the date first set forth above:
CIBC WORLD MARKETS CORP.
By:
---------------------------
Name:
Title:
-2-
Exhibit B-1
[Signatories to Lock-Up Agreements]
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