Exhibit 4.1
EXECUTION COPY
$75,000,000
ARTESYN TECHNOLOGIES, INC.
5.50% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2010
PURCHASE AGREEMENT
August 7, 2003
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇▇ INC.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Madams:
Artesyn Technologies, Inc., a Florida corporation (the "Company"),
proposes, upon the terms and considerations set forth herein, to issue and sell
$75,000,000 in aggregate principal amount of its 5.50% Convertible Senior
Subordinated Notes due 2010 (the "Firm Notes") to ▇▇▇▇▇▇ Brothers Inc. and
▇▇▇▇▇▇▇▇ Inc. (together, the "Initial Purchasers"). In addition, the Company
proposes to grant to the Initial Purchasers an option (the "Option") to purchase
up to an additional $15,000,000 in aggregate principal amount of 5.50%
Convertible Senior Subordinated Notes due 2010 (the "Optional Notes" and,
together with the Firm Notes, the "Notes"). The Notes will (i) have terms and
provisions which are summarized in the Offering Memorandum (as defined below)
and (ii) be issued pursuant to an indenture (the "Indenture") to be entered into
between the Company and The Bank of New York, as trustee (the "Trustee").
Pursuant to the Indenture, the Notes shall be convertible, at the option of the
holders of the Notes (the "Holders"), into the Company's common stock, par value
$0.01 per share (the "Common Stock"). As used herein, "Conversion Shares" means
the shares of Common Stock into which the Notes are convertible.
The Notes will be offered and sold to the Initial Purchasers without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on one or more exemptions under the Act. The Company has prepared a
preliminary offering memorandum, dated August 4, 2003 (the "Preliminary Offering
Memorandum"), and an offering memorandum, dated August 7, 2003 (the "Offering
Memorandum"), setting forth information regarding the Company and the Notes. Any
references herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto and
all information incorporated by reference therein. The Company hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering and resale of the Notes by
the Initial Purchasers.
You have advised the Company that you will make offers (the "Exempt
Resales") of the Notes purchased by you hereunder on the terms set forth in the
Offering Memorandum only inside the United States to persons you reasonably
believe to be qualified institutional buyers as defined in Rule 144A under the
Act (each, a "Qualified Institutional Buyer") in reliance on Rule 144A under the
Act. You will offer the Notes initially at a price equal to 100% of the
principal amount thereof. You may change such price at any time without notice.
Holders of the Notes (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a Resale
Registration Rights Agreement, dated the First Delivery Date (as defined in
Section 2(a)), between the Company and the Initial Purchasers (the "Registration
Rights Agreement"), pursuant to which the Company will agree to file with the
Securities and Exchange Commission (the "Commission") a shelf registration
statement pursuant to Rule 415 under the Act (the "Registration Statement")
covering the resale of the Notes and the Conversion Shares, and to use its
commercially reasonable efforts to cause the Registration Statement to be
declared effective.
This Agreement, the Indenture, the Notes and the Registration Rights
Agreement are referred to herein collectively as the "Operative Documents".
This is to confirm the agreement between the Company and the Initial
Purchasers concerning the issue, offer and sale of the Notes.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company represents, warrants and agrees that:
(a) When the Notes are issued and delivered pursuant to this
Agreement, they will not be of the same class (within the meaning of Rule 144A
under the Act) as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or that are quoted in a United States
automated inter-dealer quotation system.
(b) Assuming the accuracy of the representations and warranties of the
Initial Purchasers contained in Section 6 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Notes to the Initial Purchasers and the offer, resale
and delivery of the Notes by the Initial Purchasers in the manner contemplated
by this Agreement, the Indenture, the Registration Rights Agreement and the
Offering Memorandum, to register the Notes or the Conversion Shares under the
Act.
(c) The Company is an issuer that is subject to filing requirements
under Section 13 or 15(d) of the Exchange Act.
(d) The Preliminary Offering Memorandum and Offering Memorandum have
been prepared by the Company for use by the Initial Purchasers in connection
with the Exempt Resales. No order or decree preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, and no order
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asserting that the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued and, to the knowledge
of the Company, no proceeding for that purpose has commenced or is pending or is
contemplated.
(e) The Preliminary Offering Memorandum and the Offering Memorandum,
as of their respective dates and the Offering Memorandum as of the Closing Date,
did not and will not contain an 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, except that this representation and warranty does not
apply to statements in or omissions from the Preliminary Offering Memorandum
and/or Offering Memorandum made in reliance upon and in conformity with
information relating to the Initial Purchasers furnished to the Company in
writing by or on behalf of the Initial Purchasers expressly for use therein.
(f) The Company and each of its subsidiaries (as defined in Section
14) have been duly organized and are validly existing entities in good standing
(if applicable) under the laws of their respective jurisdictions of
organization, are duly qualified to do business and are in good standing (if
applicable) as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective
businesses requires such qualification except where the failure to be so
qualified would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"), and have all
corporate or comparable power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged;
and all of the issued shares of capital stock or other ownership interests of
each subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable.
(g) The Company has an authorized capitalization as set forth in the
Offering Memorandum, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the Offering
Memorandum; the shares of Common Stock into which the Notes are convertible at
the initial conversion price have been duly and validly authorized and reserved
for issuance upon conversion of the Notes and are free of preemptive rights; all
Conversion Shares, when so issued and delivered upon such conversion in
accordance with the terms of the Indenture, will be duly and validly authorized
and issued, fully paid and nonassessable and free and clear of all liens,
encumbrances, equities or claims.
(h) The Company has all necessary corporate right, power and authority
to execute and deliver the Indenture and perform its obligations thereunder; the
Indenture has been duly authorized by the Company, and upon the effectiveness of
the Registration Statement, will be qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"); on the First Delivery Date, the
Indenture will have been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery of the Indenture by the
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Trustee, will constitute a legally valid and binding agreement of the Company
enforceable in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, moratorium, insolvency, reorganization or
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and the implied covenants of good faith and
fair dealing; and the Indenture will conform in all material respects to the
description thereof contained in the Offering Memorandum.
(i) The Company has all necessary corporate right, power and authority
to execute and deliver the Registration Rights Agreement and perform its
obligations thereunder; the Registration Rights Agreement and the transactions
contemplated thereby have been duly authorized by the Company; when the
Registration Rights Agreement is duly executed and delivered by the Company
(assuming due authorization, execution and delivery by the Initial Purchasers),
it will be a legally valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, moratorium, insolvency, reorganization
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and the implied covenants of good faith and
fair dealing, and except with respect to the rights of indemnification and
contribution thereunder, where enforcement thereof may be limited by federal or
state securities laws or the policies underlying such laws; and the Registration
Rights Agreement conforms in all material respects to the description thereof
contained in the Offering Memorandum.
(j) The Company has all necessary corporate right, power and authority
to execute, issue and deliver the Notes and perform its obligations thereunder;
the Notes have been duly authorized by the Company; when the Notes are executed,
authenticated and issued in accordance with the terms of the Indenture and
delivered to and paid for by the Initial Purchasers pursuant to this Agreement
on the respective Delivery Date, such Notes will constitute legally valid and
binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable in accordance with their terms, except as such enforceability
may be limited by applicable bankruptcy, moratorium, insolvency, reorganization
or other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and the implied covenants of good faith and
fair dealing; and will conform in all material respects to the description
thereof contained in the Offering Memorandum.
(k) The Company has all necessary corporate right, power and authority
to execute and deliver this Agreement and perform its obligations hereunder; and
this Agreement and the transactions contemplated hereby have been duly
authorized, executed and delivered by the Company.
(l) The execution, delivery and performance of the Operative Documents
by the Company, the consummation of the transactions contemplated thereby, and
the issuance and delivery of the Conversion Shares will not (i) assuming the
Company obtains the requisite consent of Fleet Capital Corporation as required
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under the Loan Agreement, dated March 28, 2003, by and among the Company,
Artesyn North America, Inc., Artesyn Communications Products, Inc. and Fleet
Capital Corporation (the "Senior Credit Agreement"), conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, 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, which indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument is material to the Company and its subsidiaries, taken
as a whole; (ii) result in any violation of the provisions of the charter or
by-laws of the Company or any of its subsidiaries; or (iii) conflict with or
violate any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets. Except for the registration
for resale of the Notes and the Conversion Shares under the Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state law, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of any of the Operative Documents by the Company and the
consummation of the transactions contemplated thereby, including the issuance of
the Conversion Shares.
(m) Except as set forth or contemplated in the Offering Memorandum,
the Company has not sold or issued any shares of Common Stock during the
six-month period preceding the date of the Offering Memorandum, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the Act, other than
shares issued pursuant to employee benefit or savings plans, qualified stock
options plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(n) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included in the
Offering Memorandum, any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Memorandum; and,
since such date, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries, other than certain mergers of
wholly owned subsidiaries of the Company with or into wholly owned subsidiaries
of the Company and shares issued pursuant to employee benefit or savings plans,
qualified stock options plans or other employee compensation plans or pursuant
to outstanding options, rights or warrants or any event which has resulted in or
would reasonably be expected to result in a Material Adverse Effect otherwise
than as set forth or contemplated in the Offering Memorandum.
(o) The financial statements (including the related notes and
supporting schedules) included in the Offering Memorandum present fairly the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on
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a consistent basis throughout the periods involved except that the financial
statements as of December 27, 2002 and December 28, 2001 for the years ending
December 27, 2002, December 28, 2001 and December 29, 2000 exclude the financial
statements schedules required by Article 12 of Regulation S-X.
(p) Ernst & Young LLP, who have certified certain financial statements
of the Company, whose report appears in the Offering Memorandum and who have
delivered the initial letter referred to in Section 5(e) hereof, are independent
public accountants as required by the Act and the rules and regulations
promulgated thereunder.
(q) The Company and each of its subsidiaries have good and marketable
title in fee simple to all material real property and good and marketable title
to all material personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such liens, encumbrances and defects
as are set forth or contemplated in the Offering Memorandum or as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and all real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries.
(r) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is customary for companies
engaged in similar businesses in similar industries.
(s) The Company and each of its subsidiaries own, or possess adequate
rights to use, all trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses and patents
currently used by them in connection with their respective businesses except as
set forth or contemplated in the Offering Memorandum and except where the
failure to so own or possess would not result in a Material Adverse Effect, and
the Company has not received any notice of any claim of conflict with, any such
rights of others which, if the subject of an unfavorable decision, ruling or
finding would have a Material Adverse Effect, except as set forth or
contemplated in the Offering Memorandum.
(t) There are no actions, suits or judicial proceedings pending
relating to patents or proprietary information to which the Company and each of
its subsidiaries are parties or of which any property of the Company and each of
its subsidiaries is subject, and, to the knowledge of the Company, no actions,
suits or judicial proceedings are threatened by governmental authorities, except
as set forth or contemplated in the Offering Memorandum which could reasonably
be expected to result in a Material Adverse Effect. The Company is not aware of,
except as set forth or contemplated in the Offering Memorandum, any claim by
others that the Company or its subsidiary is infringing or otherwise violating
any patents or other intellectual property rights of others and is not aware of
any rights of third parties to any of the Company and its subsidiaries' patent
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applications, licensed patents or licenses which could reasonably be expected to
result in a Material Adverse Effect.
(u) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, could reasonably
be expected to result in a Material Adverse Effect, other than as set forth in
the Offering Memorandum; and to the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(v) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent which might
be expected to have a Material Adverse Effect.
(w) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any material liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and,
to the Company's knowledge, nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(x) The Company has timely and properly filed with the Commission all
reports and other documents required to have been filed by it with the
Commission pursuant to the Exchange Act and the rules and regulations
promulgated under the Exchange Act.
(y) The Company has filed all material federal, state and local income
and franchise tax returns required to be filed through the date hereof, other
than those filings being contested in good faith, and has paid all material
taxes due thereon, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has resulted in (nor does the Company
have any knowledge of any tax deficiency which, if determined adversely to the
Company or any of its subsidiaries, would result in) a Material Adverse Effect.
(z) Since the date as of which information is given in the Preliminary
Offering Memorandum through the date hereof, and except as may otherwise be
disclosed in the Offering Memorandum, the Company has not (i) issued or granted
any securities other than options and shares issued pursuant to employee benefit
or savings plans, qualified stock options plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants, (ii) incurred any
liability or obligation, direct or contingent, other than liabilities and
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obligations which were incurred in the ordinary course of business, (iii)
entered into any material transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock.
(aa) The Company (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.
(bb) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material respect,
and no event has occurred which, 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 material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject. Each of the Company and its subsidiaries has such
licenses, permits, franchises or other governmental authorizations or permits
(the "Authorizations") necessary to the ownership of its property or to the
conduct of its business except where the failure to have any such Authorization
would not result in a Material Adverse Effect.
(cc) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(dd) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not result in, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has been no
material spill, discharge, leak, emission, injection, escape, dumping or release
of any kind onto such property or into the environment surrounding such property
of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances due to or caused by the Company or any of its subsidiaries or with
8
respect to which the Company or any of its subsidiaries have knowledge, except
for any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not result in, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms "hazardous wastes", "toxic
wastes", "hazardous substances" and "medical wastes" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(ee) The Company is not an "investment company" or a company
"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.
(ff) None of the Company or any of its affiliates (as defined in Rule
501(b) of Regulation D under the Act ("Regulation D")) (other than the Initial
Purchasers, about which no representation is made by the Company), has, directly
or through an agent, engaged in any form of general solicitation or general
advertising in connection with the offering of the Notes (as those terms are
used in Regulation D) under the Act or in any manner involving a public offering
within the meaning of Section 4(2) of the Act; the Company has not entered into
any contractual arrangement with respect to the distribution of the Notes except
for this Agreement.
(gg) The Company has not taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company in connection with the offering of the
Notes.
2. PURCHASE, SALE AND DELIVERY OF NOTES.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
each Initial Purchaser, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 96.50% of the
principal amount thereof (the "purchase price") the principal amount of Firm
Notes set forth opposite such Initial Purchaser's name in Schedule I hereto.
Delivery of and payment for the Firm Notes shall be made at the office
of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, at 10:00 a.m. (New York time), or such other location as may be mutually
acceptable, on August 13, 2003, or such later date as the Initial Purchasers and
the Company shall agree, which date and time may be postponed as provided in
Section 8 (such date and time of delivery and payment for the Firm Notes being
herein called the "First Delivery Date"). Delivery of the Firm Notes shall be
made to the Initial Purchasers against payment of the purchase price by the
Initial Purchasers. Payment for the Firm Notes shall be effected either by wire
transfer of immediately available funds to an account with a bank acceptable to
the Initial Purchasers, the account number and the ABA number for such bank to
be provided by the Company to the Initial Purchasers at least two business days
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in advance of the First Delivery Date, or by such other manner of payment as may
be agreed by the Company and the Initial Purchasers.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants the
Option to the Initial Purchasers to purchase, severally and not jointly, the
Optional Notes at the same price as the Initial Purchasers shall pay for the
Firm Notes and the principal amount of the Optional Notes to be sold to be each
Initial Purchaser shall be that principal amount which bears the same ratio to
the aggregate principal amount of Optional Notes being purchased as the
principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser in Schedule I hereto bears to the aggregate principal amount of Firm
Notes being purchased hereunder (or such number increased as set forth in
Section 8). The Option may be exercised at the sole discretion of the Initial
Purchasers. The Option may be exercised once in whole or in part at any time not
more than 30 days subsequent to the date of this Agreement upon notice in
writing or by facsimile by the Initial Purchasers to the Company setting forth
the amount (which shall be an integral multiple of $1,000) of Optional Notes as
to which the Initial Purchasers are exercising the Option.
The date for the delivery of and payment for the Optional Notes, being
herein referred to as an "Optional Delivery Date", which may be the First
Delivery Date (the First Delivery Date and the Optional Delivery Date, if any,
being sometimes referred to as a "Delivery Date"), shall be determined by the
Initial Purchasers but shall not be later than five full business days after
written notice of election to purchase Optional Notes is given. Delivery of the
Optional Notes shall be made to the Initial Purchasers against payment of the
purchase price by the Initial Purchasers. Payment for the Optional Notes shall
be effected either by wire transfer of immediately available funds to an account
with a bank in The City of New York, the account number and the ABA number for
such bank to be provided by the Company to the Initial Purchasers at least two
business days in advance of the Optional Delivery Date, or by such other manner
of payment as may be agreed by the Company and the Initial Purchasers.
(c) Against payment of the purchase price, the Company will deliver
the Notes in the form of one or more global certificates (the "Global Notes"),
registered in the name of Cede & Co., as nominee for The Depository Trust
Company ("DTC"). Beneficial interests in the Notes will be shown on, and
transfers thereof will be effected only through, records maintained in
book-entry form by DTC and its participants.
The Global Notes will be made available, at the request of the Initial
Purchasers, for checking at least 24 hours prior to such Delivery Date.
(d) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Initial Purchasers hereunder.
3. FURTHER AGREEMENTS OF THE COMPANY. The Company further agrees:
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(a) To advise the Initial Purchasers promptly of any proposal to amend
or supplement the Offering Memorandum and not to effect any such amendment or
supplement without the consent of the Initial Purchasers, which consent will not
be unreasonably withheld or delayed. If, at any time prior to completion of the
resale of the Notes by the Initial Purchasers, any event shall occur or
condition exist as a result of which it, in the opinion of counsel to the
Company or counsel to the Initial Purchasers, is necessary to amend or
supplement the Offering Memorandum in order that the Offering Memorandum 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, or to comply with applicable law, to promptly notify the Initial
Purchaser and prepare, subject to the first sentence of this Section 3(a), such
amendment or supplement as may be necessary to correct such untrue statement or
omission.
(b) To furnish to the Initial Purchasers and to Cleary, Gottlieb,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Initial Purchasers, copies of the Preliminary
Offering Memorandum and the Offering Memorandum (and all amendments and
supplements thereto) in each case as soon as available and in such quantities as
the Initial Purchasers reasonably request for internal use and for distribution
to prospective purchasers. The Company will pay the expenses of printing and
distributing to the Initial Purchasers all such documents.
(c) To use its reasonable efforts to take such action as the Initial
Purchasers may reasonably request from time to time, to qualify the Notes for
offering and sale under the securities laws of such jurisdictions as the Initial
Purchasers may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions in the United
States for as long as may be necessary to complete the resale of the Notes;
provided, however, that in connection therewith, the Company shall not be
required to qualify as a foreign corporation or otherwise subject itself to
taxation in any jurisdiction in which it is not otherwise so qualified or
subject.
(d) To apply the proceeds from the sale of the Notes as set forth
under "Use of Proceeds" in the Offering Memorandum.
(e) For a period of 90 days from the date of the Offering Memorandum,
not to, directly or indirectly, offer for sale, sell or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be expected
to, result in the disposition or purchase by any person at any time in the
future of), or announce an offering of any debt securities of the Company (other
than the Notes) or any shares of Common Stock (other than the Conversion Shares,
Common Stock issuable upon exercise or conversion of outstanding securities, and
securities issuable in connection with the Company's "poison pill") or sell or
grant options, rights or warrants with respect to any shares of Common Stock
(other than options to purchase Common Stock granted to new hires) without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc., which consent will not be
unreasonably withheld or delayed.
11
(f) During the period of two years after the Delivery Date, not to,
and not permit any of its affiliates to, resell any Notes or Conversion Shares
that have been acquired by any of them.
(g) Not to, and not to permit any of its affiliates or any person
acting on its behalf to, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Notes or Conversion Shares under the Act.
(h) Not to, and not to permit any of its affiliates or any person
acting on its behalf to, engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of the Notes in the United States.
(i) Each of the Notes will bear, to the extent applicable, the legend
contained in "Notice to Investors" in the Offering Memorandum for the time
period and upon the other terms stated therein, except after the Notes are
resold pursuant to a registration statement effective under the Act.
(j) Between the date hereof and the Delivery Date, not to do or
authorize any act or thing that would result in an adjustment of the conversion
price.
(k) None of the Company or any of its affiliates will take, directly
or indirectly, any action which is designed to stabilize or manipulate, or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation, of the price of any security of the Company in
connection with the offering of the Notes.
(l) To use commercially reasonable efforts to assist the Initial
Purchasers in arranging to cause the Notes to be accepted to trade in the PORTAL
market ("PORTAL") of the National Association of Securities Dealers, Inc.
("NASD").
(m) To use commercially reasonable efforts to cause the Notes to be
accepted for clearance and settlement through the facilities of DTC.
(n) To use commercially reasonable efforts to have the Conversion
Shares approved by the NASDAQ Stock Market's National Stock Exchange ("NASDAQ")
for inclusion prior to the effectiveness of the Registration Statement.
4. EXPENSES. The Company agrees to pay:
(a) the costs incident to the authorization, issuance, sale and
delivery of the Notes, and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendment or supplement to the Offering Memorandum, all as provided in this
Agreement;
12
(c) the costs of producing and distributing the Operative Documents;
(d) the fees and expenses of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and Ernst &
Young LLP;
(e) the costs of distributing the terms of agreement relating to the
organization of the underwriting syndicate and selling group to the members
thereof by mail, telex or other means of communication;
(f) the fees and expenses of qualifying the Notes under the securities
laws of the several jurisdictions as provided in Section 3(c) and of preparing,
printing and distributing a Blue Sky Memorandum (including reasonable related
fees and expenses of counsel to the Initial Purchasers);
(g) all costs and expenses incident to (i) the preparation of the
"road show" presentation materials and (ii) the road show travelling expenses of
the Company;
(h) all fees and expenses incurred in connection with any rating of
the Notes;
(i) the costs of preparing the Notes;
(j) all expenses and fees in connection with the application for
inclusion of the Notes in the PORTAL market and the inclusion of the Conversion
Shares on the NASDAQ;
(k) the fees and expenses (including reasonable fees and disbursements
of counsel) of the Trustee, and the costs and charges of any registrar, transfer
agent, paying agent or conversion agent; and
(l) all other costs and expenses incident to the Company's performance
of its obligations under this Agreement;
PROVIDED that, except as provided in this Section 4 and in Section 7, the
Initial Purchasers shall pay their own costs and expenses, including the costs
and expenses of their counsel and any transfer taxes on the Notes which they may
sell.
5. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on each Delivery Date, of the representations and warranties of
the Company contained herein, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) No Initial Purchaser shall have discovered and disclosed to the
Company prior to or on such Delivery Date that the Offering Memorandum or any
amendment or supplement thereto contains any untrue statement of a fact which,
in the opinion of counsel to the Initial Purchasers, is material or omits to
13
state any fact which is material and necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of the Operative Documents and the Offering
Memorandum or any amendment or supplement thereto, and all other legal matters
relating to the Operative Documents and the transactions contemplated thereby
shall be satisfactory in all material respects to counsel to the Initial
Purchasers, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(c) ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall have furnished to the Initial
Purchasers their written opinion, as counsel to the Company, addressed to the
Initial Purchasers and dated such Delivery Date, in form and substance
reasonably satisfactory to the Initial Purchasers, substantially to the effect
that:
(i) The Company is validly existing as a corporation in good
standing under the laws of the State of Florida, is duly qualified to
do business and is in good standing as a foreign corporation in
specified jurisdictions;
(ii) When the Notes are issued and delivered pursuant to this
Agreement, such Notes will not be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that
are listed on a national securities exchange registered under Section
6 of the Exchange Act or that are quoted in a United States automated
inter-dealer quotation system;
(iii) The Company has an authorized capitalization as set forth
in the Offering Memorandum, and all of the authorized shares of
capital stock of the Company conform in all material respects to the
description thereof contained in the Offering Memorandum in the
section entitled "Description of Capital Stock";
(iv) The shares of Common Stock into which the Notes are
convertible at the initial conversion price have been duly authorized
and reserved for issuance upon conversion of the Notes and, when
issued upon conversion of the Notes in accordance with the terms of
the Notes and the Indenture, will not be subject to preemptive rights
arising by operation of law or under the Company's Certificate of
Incorporation or Bylaws or, to our knowledge, similar rights under the
documents listed in the exhibits to the Company's latest Form 10-K and
Form 10-Qs filed in respect of 2003 periods; and the Conversion
Shares, when so issued and delivered upon such conversion against
payment therefor in accordance with the terms of the Note and the
Indenture, will be duly authorized and validly issued, fully paid and
nonassessable;
14
(v) The statements in the Offering Memorandum under the captions
"Description of the Notes" and "Description of Capital Stock", insofar
as they purport to summarize the provisions of the Indenture, the
Registration Rights Agreement, the Notes and the Common Stock
(including the Conversion Shares) fairly summarize in all material
respects such provisions.
(vi) The execution, delivery and performance of this Agreement,
the Indenture and the Registration Rights Agreement and the issuance
of the Notes and the Conversion Shares and the consummation of the
transactions contemplated hereby and thereby will not (A) conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument filed
by the Company as an exhibit to a registration statement or an
Exchange Act report, (B) result in any violation of the provisions of
the certificate of incorporation or bylaws of the Company or (C)
result in any violation of any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company in the United States or
any of its properties or assets that would in the case of (A) and (C)
above result in a Material Adverse Effect; and, except as may be
required by the securities or "blue sky" laws of any state of the
United States in connection with the sale of the Notes, no consent,
approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the
execution and delivery of this Agreement and the Indenture by the
Company and the issuance of the Notes and the Conversion Shares and
the consummation of the transactions contemplated hereby and thereby
(except that we give no opinion as to the registration of the Notes
and the Conversion Shares under the Act and the qualification of the
Indenture under the Trust Indenture Act other than as set forth in
subparagraph (vii) below);
(vii) No registration of the Notes or the Conversion Shares under
the Act, and no qualification of the Indenture under the Trust
Indenture Act, is required in connection with the offer, sale and
delivery of the Notes or in connection with the conversion of the
Notes into Conversion Shares, in each case, in the manner contemplated
by the Offering Memorandum, this Agreement and the Indenture;
(viii) The statements in the Offering Memorandum under the
caption "United States Federal Income Tax Consequences", insofar as
they purport to constitute summaries of matters of United States
federal income tax law and regulations or legal conclusions with
respect thereto, constitute accurate summaries of the matters
described therein in all material respects;
(ix) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
15
(x) The Company has all necessary corporate power and authority
to execute and deliver each of the Operative Documents to which it is
a party and to perform its obligations thereunder and to issue, sell
and deliver the Notes and the Conversion Shares to the Initial
Purchasers;
(xi) This Agreement has been duly authorized, executed and
delivered by the Company;
(xii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee, constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms;
(xiii) The Notes have been duly authorized by the Company and
when duly executed, issued and authenticated in accordance with terms
of the Indenture and delivered to and paid for by the Initial
Purchasers, will be duly and validly issued and outstanding, and will
constitute valid and binding obligations of the Company, entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms; and
(xiv) The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid binding
agreement of the Company, enforceable against it in accordance with
its terms.
In rendering such opinion, such counsel may recite customary
assumptions, qualifications and limitations and may state that its opinion is
limited to matters governed by the federal laws of the United States of America,
the laws of the State of New York and the Florida Business Corporation Act. Such
counsel shall also have furnished to the Initial Purchasers a written statement,
addressed to the Initial Purchasers and dated such Delivery Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the effect that
during the course of preparing the Offering Memorandum, such counsel
participated in conferences with officers and other representatives of the
Company, the Company's independent public accountants, the Initial Purchasers
and their counsel, at which the contents of the Offering Memorandum were
discussed, and while such counsel has not independently verified and is not
passing upon the accuracy, completeness or fairness of the statements made in
the Offering Memorandum except as explicitly set forth above, no facts have come
to the attention of such counsel that lead it to believe that the Offering
Memorandum (other than the financial statements, financial and statistical data
and supporting schedules as to which such counsel shall make no statement), as
of its date or as of such Delivery Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall have furnished to the
Initial Purchasers their written opinion, as counsel to the Initial Purchasers,
16
addressed to the Initial Purchasers and dated such Delivery Date, in form and
substance satisfactory to the Initial Purchasers.
(e) At the time of execution of this Agreement, the Initial Purchasers
shall have received from Ernst & Young LLP a letter, in form and substance
satisfactory to the Initial Purchasers, addressed to the Initial Purchasers and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Offering Memorandum, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(f) With respect to the letter of Ernst & Young LLP delivered to the
Initial Purchasers concurrently with the execution of this Agreement (the
"initial letter"), the Company shall have furnished to the Initial Purchasers a
letter (the "bring-down letter") of such accountants, addressed to the Initial
Purchasers and dated such Delivery Date (i) confirming that they are independent
accountants within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than five days prior to the
date of the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letter.
(g) The Company shall have furnished to the Initial Purchasers on such
Delivery Date a certificate, dated such Delivery Date and delivered on behalf of
the Company by its chief executive officer or its chief financial officer, in
form and substance satisfactory to the Initial Purchasers, to the effect that:
(i) The representations and warranties of the Company in Section
1 are true and correct as of such Delivery Date; and the Company has
complied in all material respects with all its agreements contained
herein;
(ii) Such officer has examined the Offering Memorandum and, in
such officer's opinion the Offering Memorandum, as of its date and as
of the Delivery Date, did not and does not include any untrue
statement of a material fact and did not and does not omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the
circumstances under which they were made.
17
(h) The Indenture, in agreed form consistent with the Offering
Memorandum disclosures, shall have been duly executed and delivered by the
Company and the Trustee and the Notes shall have been duly executed and
delivered by the Company and duly authenticated by the Trustee.
(i) The Company and the Initial Purchasers shall have executed and
delivered the Registration Rights Agreement, which shall have terms and
provisions consistent with and substantially similar to those described in the
Offering Memorandum (in form and substance satisfactory to the Company and the
Initial Purchasers) and the Registration Rights Agreement shall be in full force
and effect.
(j) The NASD shall have accepted the Notes for trading on PORTAL.
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Memorandum any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, except as
set forth or contemplated in the Offering Memorandum (exclusive of any amendment
or supplement thereto) and (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries other than certain mergers of wholly owned subsidiaries of the
Company with or into wholly owned subsidiaries of the Company and options and
shares issued pursuant to employee benefit or savings plans, qualified stock
option plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants, or any change, or any development involving a
prospective change, in or affecting the management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Offering Memorandum (exclusive of any amendment or supplement thereto), the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or the delivery of the
Notes being delivered on such Delivery Date on the terms and in the manner
contemplated in the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(l) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ, or trading in any
securities of the Company on any exchange shall have been suspended or
minimum prices shall have been established on any such exchange or
market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction;
18
(ii) a banking moratorium shall have been declared by United
States federal or New York State authorities;
(iii) the United States shall have become engaged in hostilities,
there shall have been an escalation in hostilities involving the
United States, or there shall have been a declaration of a national
emergency or war by the United States which has a material adverse
effect on the financial markets so as to make it in the judgment of
▇▇▇▇▇▇ Brothers, impracticable or inadvisable to proceed with the
offering or delivery of the Notes as contemplated in the Offering
Memorandum (exclusive of any amendment or supplement thereto); or
(iv) there shall have occurred such a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering
or delivery of the Notes being delivered on such Delivery Date on the
terms and in the manner contemplated in the Offering Memorandum
(exclusive of any amendment or supplement thereto).
(m) The Company shall have furnished to the Initial Purchasers such
further information, certificates and documents as the Initial Purchasers may
reasonably request to evidence compliance with the conditions set forth in this
Section 5.
(n) The Company shall have obtained a waiver duly executed and
delivered by Fleet Capital Corporation as may be required under the terms of the
Senior Credit Agreement to complete the transactions contemplated hereby (in
form and substance reasonably satisfactory to the Initial Purchasers).
(o) All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel to the Initial Purchasers.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INITIAL PURCHASERS.
Each Initial Purchaser, severally and not jointly, represents and warrants that
such Initial Purchaser is a Qualified Institutional Buyer. Each Initial
Purchaser, severally and not jointly, acknowledges and agrees with the Company
that:
(a) The Notes and the Conversion Shares have not been and will not be
registered under the Act in connection with the initial offering of the Notes.
(b) Such Initial Purchaser is purchasing the Notes pursuant to a
private sale exemption from registration under the Act;
(c) The Initial Purchaser is not acquiring the Notes with a view to
any distribution thereof or with any intention of offering or selling the Notes
in a transaction that would violate the Act or the securities laws of any state
19
in the United States or any other applicable jurisdiction in which it offers or
sells Notes or distributes the Preliminary Offering Memorandum or the Offering
Memorandum; and will be re-offering and selling the Notes only in Exempt Resales
to Qualified Institutional Buyers in reliance on the exemption from the
registration requirements under the Act provided by Rule 144A;
(d) Such Initial Purchaser has not offered and will not offer or sell
the Notes in the United States by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D).
(e) The Initial Purchaser will take reasonable steps to inform
Qualified Institutional Buyers acquiring Notes from the Initial Purchaser in the
initial offering of the Notes that the Notes are being sold to them without
registration under the Act in reliance on Rule 144A.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Initial
Purchaser, its officers and employees and each person, if any, who controls any
Initial Purchaser within the meaning of the Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Notes), to which that Initial Purchaser,
officer, employee or controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in (A) any Preliminary Offering Memorandum or
the Offering Memorandum, or in any amendment or supplement thereto,
(B) any blue sky application or other document prepared or executed by
the Company (or based upon any written information furnished by the
Company) filed in any jurisdiction specifically for the purpose of
qualifying any or all of the Notes under the securities laws of any
state or other jurisdiction (such application, document or information
being hereinafter called a "Blue Sky Application"), or (C) in any
written materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the
offering of the Notes ("Marketing Materials"), including any roadshow
or investor presentations made to investors by the Company (whether in
person or electronically), or
(ii) the omission or alleged omission to state therein any
material fact necessary to make the statements therein not misleading,
and shall reimburse each Initial Purchaser and each such officer, employee and
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Initial Purchaser, officer, employee or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
20
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Offering Memorandum or the
Offering Memorandum, or in any such amendment or supplement, or in any Blue Sky
Application or Marketing Materials in reliance upon and in conformity with the
written information furnished to the Company by or on behalf of any Initial
Purchaser specifically for inclusion therein and described in Section 7(e);
PROVIDED, FURTHER, that as to any Preliminary Offering Memorandum, this
indemnity agreement shall not inure to the benefit of any Initial Purchaser, its
officers or employees or any person controlling that Initial Purchaser on
account of any loss, claim, damage, liability or action arising from the sale of
Notes to any person by that Initial Purchaser if that Initial Purchaser failed
to send or give a copy of the Offering Memorandum, as the same may be amended or
supplemented, to that person, and the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in such Preliminary Offering Memorandum was corrected in the Offering
Memorandum, unless such failure resulted from non-compliance by the Company with
Section 3(b). The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to any Initial Purchaser or to any officer,
employee or controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless, the Company, its officers and directors, and each person, if
any, who controls the Company within the meaning of the Act from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer or controlling
person may become subject, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum or the
Offering Memorandum or in any amendment or supplement thereto, or in
any Blue Sky Application or Marketing Materials, or
(ii) the omission or alleged omission to state therein any
material fact necessary to make the statements therein not misleading,
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with the written information furnished to the Company by or on behalf
of that Initial Purchaser specifically for inclusion therein and described in
Section 7(e), and shall reimburse the Company and any such director, officer or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Company or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Initial Purchaser may otherwise have to the Company or any such
director, officer or controlling person.
21
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; PROVIDED, HOWEVER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has
been materially prejudiced (including, without limitation, the forfeiture of
substantial rights and defenses) by such failure and, PROVIDED, FURTHER, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 7. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that the Initial Purchasers shall have the right to employ separate
counsel to represent jointly the Initial Purchasers and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Initial Purchasers against the Company under this Section 7 if, (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party), and in any such event the fees and expenses
of such separate counsel shall be paid by the Company. In no event shall the
indemnifying party be liable for the fees and expenses of more than one such
counsel representing the Initial Purchasers. No indemnifying party shall:
(i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld or delayed) settle
or compromise or consent to the entry of any judgment with respect to
any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party
from all liability arising out of such claim, action, suit or
proceeding, or
(ii) be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a
22
final judgment for the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement.
(d) If the indemnification provided for in this Section 7 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof:
(i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the
Initial Purchasers on the other from the offering of the Notes, or
(ii) if the allocation provided by clause 7(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i)
but also the relative fault of the Company on the one hand and the
Initial Purchasers on the other with respect to the statements or
omissions or alleged statements or alleged omissions that resulted in
such loss, claim, damage or liability (or action in respect thereof),
as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Notes
purchased under this Agreement (before deducting expenses) received by the
Company on the one hand, and the total discounts and commissions received by the
Initial Purchasers with respect to the Notes purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the Notes
under this Agreement. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Initial Purchasers, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if the amount of contributions pursuant to this
Section 7(d) were to be determined by PRO RATA allocation (even if the Initial
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 7(d) shall be deemed to include, subject to
the limitations above, for purposes of this Section 7(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Initial Purchaser shall be required to
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contribute any amount in excess of the amount by which the total price at which
the Notes resold by it in the initial placement of such Notes were offered to
investors exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute as provided
in this Section 7(d) are several in proportion to their respective purchase
obligations and not joint.
(e) The Initial Purchasers severally confirm that the statements with
respect to the offering of the Notes set forth on the cover page of the Offering
Memorandum and in the sixth, eighth and fourteenth paragraphs and the allocation
table under the caption "Plan of Distribution" in the Offering Memorandum are
correct and constitute the only information furnished in writing to the Company
by or on behalf of the Initial Purchasers specifically for inclusion in the
Offering Memorandum.
8. DEFAULTING INITIAL PURCHASERS.
If, on any Delivery Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchaser shall be obligated to purchase the aggregate
principal amount of Notes which the defaulting Initial Purchaser agreed but
failed to purchase on such Delivery Date; PROVIDED, HOWEVER, that the remaining
non-defaulting Initial Purchaser shall not be obligated to purchase any Notes on
such Delivery Date if the total aggregate principal amount of Notes which the
defaulting Initial Purchaser agreed but failed to purchase on such date exceeds
9.09% of the total aggregate principal amount of Notes to be purchased on such
Delivery Date, and the remaining non-defaulting Initial Purchaser shall not be
obligated to purchase more than 110% of the aggregate principal amount of Notes
which it agreed to purchase on such Delivery Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Initial Purchaser, or those other purchasers satisfactory to the Initial
Purchasers who so agree, shall have the right, but shall not be obligated, to
purchase on such Delivery Date, in such proportion as may be agreed upon among
them, the total aggregate principal amount of Notes to be purchased on such
Delivery Date. If the remaining Initial Purchaser or other purchasers
satisfactory to the Initial Purchasers do not elect to purchase on such Delivery
Date the aggregate principal amount of Notes which the defaulting Initial
Purchaser agreed but failed to purchase, this Agreement (or with respect to the
Optional Delivery Date, the obligation of the Initial Purchasers to purchase the
Optional Notes) shall terminate without liability on the part of any
non-defaulting Initial Purchaser and the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 4 and 10. As used in this Agreement, the term "Initial Purchaser"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 8, purchases Notes which a defaulting Initial Purchaser agreed but
failed to purchase.
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Nothing contained herein shall relieve a defaulting Initial Purchaser
of any liability it may have to the Company for damages caused by its default.
If other purchasers are obligated or agree to purchase the Notes of a defaulting
or withdrawing Initial Purchaser, either the remaining non-defaulting Initial
Purchaser or the Company may postpone the Delivery Date for up to seven full
business days in order to effect any changes in the Offering Memorandum or in
any other document or arrangement that, in the opinion of counsel to the Company
or counsel to the Initial Purchasers, may be necessary.
9. TERMINATION. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers by notice given to and received by
the Company prior to delivery of and payment for the Notes if, prior to that
time, any of the events described in Sections 5(k) and (l) shall have occurred
or if the Initial Purchasers shall decline to purchase the Notes for any reason
permitted under this Agreement.
10. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If (a) the Company
shall fail to tender the Notes for delivery to the Initial Purchasers for any
reason permitted under this Agreement or (b) the Initial Purchasers shall
decline to purchase the Notes for any reason permitted under this Agreement
(including the termination of this Agreement pursuant to Section 9) the Company
shall reimburse the Initial Purchasers for the fees and expenses of their
counsel and for such other out-of-pocket expenses as shall have been incurred by
them in connection with this Agreement and the proposed purchase of the Notes,
and upon demand the Company shall pay the full amount thereof to the Initial
Purchasers. If this Agreement is terminated pursuant to Section 8 by reason of
the default of one or more Initial Purchasers, the Company shall not be
obligated to reimburse any defaulting Initial Purchaser on account of those
expenses.
11. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by
mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Syndicate
Department (Fax: ▇-▇▇▇-▇▇▇-▇▇▇▇); and
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to Artesyn Technologies, Inc., ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer (Fax: (561)
451-1050).
PROVIDED, HOWEVER, that any notice to an Initial Purchaser pursuant to Section
7(c) shall be delivered or sent by mail, telex or facsimile transmission to each
such Initial Purchaser, which address will be supplied to any other party hereto
by ▇▇▇▇▇▇ Brothers Inc. upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Initial Purchasers by ▇▇▇▇▇▇ Brothers Inc.
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12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each Initial Purchaser and the person or persons, if any, who
control each Initial Purchaser within the meaning of Section 15 of the Act and
any indemnity agreement of the Initial Purchasers contained in Section 7(b) of
this Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company, and any person controlling the Company within the
meaning of Section 15 of the Act. Nothing contained in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. SURVIVAL. The respective indemnities, representations, warranties
and agreements of the Company and the Initial Purchasers contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any person controlling any of them.
14. DEFINITION OF THE TERMS "BUSINESS DAY" AND "SUBSIDIARY". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the rules and regulations promulgated under the
Act.
15. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, including without
limitation, Section 5-1401 of the New York General Obligations Law.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. HEADINGS. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
26
If the foregoing correctly sets forth the agreement between the
Company and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
ARTESYN TECHNOLOGIES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Accepted and agreed by:
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Authorized Representative
SCHEDULE 1
Principal Amount
Initial Purchasers of Firm Notes
▇▇▇▇▇▇ Brothers Inc.................. $ 62,250,000
▇▇▇▇▇▇▇▇ Inc......................... 12,750,000
-----------------------
Total.......................... $ 75,000,000
=======================
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