EXHIBIT 10.1
ARCHER-DANIELS-MIDLAND COMPANY
(a Delaware corporation)
$1,150,000,000
0.875% Convertible Senior Notes due 2014
PURCHASE AGREEMENT
February 15, 2007
Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
    as Representatives of the several Initial Purchasers
c/o     Merrill Lynch, Pierce, Fenner & Smith Incorporated
           4 World Financial Center
           New York, New York 10080
Ladies and Gentlemen:
     Archer-Daniels-Midland Company, a Delaware corporation (the “Company”),
confirms its agreement with Citigroup Global Markets Inc., J.P. Morgan
Securities Inc. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the “Representatives”) and each of the other Initial Purchasers
named in Schedule A hereto (collectively, the “Initial Purchasers,” which term
shall also include any initial purchaser substituted as hereinafter provided in
Section 11 hereof), for whom the Representatives are acting as representatives
(in such capacity, the “Representatives”), with respect to the issue and sale by
the Company and the purchase by the Initial Purchasers, acting severally and not
jointly, of the respective principal amounts set forth in said Schedule A of
$1,150,000,000 aggregate principal amount of the Company’s 0.875% Convertible
Senior Notes due 2014 (the “Securities”). The Securities are to be issued
pursuant to an indenture dated as of February 22, 2007 (the “Indenture”) between
the Company and The Bank of New York, as trustee (the “Trustee”).
     The Securities are convertible into shares of common stock, no par value,
of the Company (the “Common Stock”) in accordance with the terms of the
Securities and the Indenture, at the initial conversion price specified in
Schedule B hereto.
     The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers (“Subsequent
Purchasers”) at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold to qualified institutional buyers
through the Initial Purchasers without being registered under the Securities Act
of 1933, as amended (the “1933 Act”), in reliance upon the exemptions provided
by Rule 144A under the 1933 Act. Pursuant to the terms of the Securities and the
Indenture, investors that acquire Securities may

 

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only resell or otherwise transfer such Securities if such Securities are
hereafter registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available (including the exemption afforded by
Rule 144A (“Rule 144A”) of the rules and regulations promulgated under the 1933
Act by the Securities and Exchange Commission (the “Commission”)).
     The Securities will have the benefit of a registration rights agreement
(the “Registration Rights Agreement”), to be dated as of the Closing Time (as
defined below), between the Company and the Initial Purchasers, pursuant to
which the Company will agree to register the resale of the Securities under the
1933 Act subject to the terms and conditions therein specified.
     The Company has prepared and delivered to each Initial Purchaser copies of
a preliminary offering memorandum dated February 14, 2007 (the “Preliminary
Offering Memorandum”) and has prepared and will deliver to each Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated February 15, 2007 (the “Final Offering Memorandum”),
each for use by such Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Securities. “Offering Memorandum” means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including exhibits thereto and any documents incorporated therein by reference,
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Securities.
     All references in this Agreement to financial statements and schedules and
other information which is “contained,” “included” or “stated” in the Offering
Memorandum (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Offering Memorandum; and all references in
this Agreement to amendments or supplements to the Offering Memorandum shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the “1934 Act”) which is incorporated by reference in the
Offering Memorandum.
     SECTION 1. Representations and Warranties by the Company.
     (a) Representations and Warranties. The Company represents and warrants to
each Initial Purchaser as of the date hereof and as of the Closing Time referred
to in Section 2(b) hereof, and agrees with each Initial Purchaser, as follows:
     (i) Disclosure Package and Final Offering Memorandum. As of the Applicable
Time (as defined below), neither (x) the Offering Memorandum as of the
Applicable Time as supplemented by the final pricing term sheet, in the form
attached hereto as Schedule C (the “Pricing Supplement”), that has been prepared
and delivered by the Company to the Initial Purchasers in connection with their
solicitation of offers to purchase Securities, all considered together
(collectively, the “Disclosure Package”), nor (y) any individual Supplemental
Offering Materials (as defined below), when considered together with the
Disclosure Package, included any untrue statement of a material fact or

 

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omitted to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. “Applicable Time” means 5:00 pm. (Eastern time) on February 15, 2007
or such other time as agreed by the Company and the Representatives.
     “Supplemental Offering Materials” means any “written communication” (within
the meaning of the 1933 Act Regulations (as defined below)) prepared by or on
behalf of the Company, or used or referred to by the Company, that constitutes
an offer to sell or a solicitation of an offer to buy the Securities other than
the Offering Memorandum or amendments or supplements thereto (including the
Pricing Supplement), including, without limitation, any road show relating to
the Securities that constitutes such a written communication.
     As of its issue date and as of the Closing Time, the Final 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 under which they were made, not misleading.
     The representation and warranties in this subsection shall not apply to
statements in or omissions from the Disclosure Package or the Final Offering
Memorandum made in reliance upon and in conformity with written information
furnished to the Company by any Initial Purchaser through the Representatives
expressly for use therein.
     (ii) Incorporated Documents. The Offering Memorandum as delivered from time
to time shall incorporate by reference the most recent Annual Report of the
Company on Form 10-K filed with the Commission and each Quarterly Report of the
Company on Form 10-Q and each Current Report of the Company on Form 8-K filed
with (and not merely furnished to) the Commission since the end of the fiscal
year to which such Annual Report relates. The documents incorporated by
reference in the Offering Memorandum, when they were filed with the Commission,
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the “1934 Act Regulations”),
and none of such documents, when they were so filed, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Offering Memorandum, when such documents are
filed with the Commission, will comply in all material respects with the
requirements of the 1934 Act, as applicable, and 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 under which
they were made, not misleading.
     (iii) Good Standing of the Company. The Company has been duly incorporated
and is validly existing as a corporation under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Disclosure Package and the Final
Offering Memorandum, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing (or the local equivalent)
under the laws of each other

 

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jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to so qualify or to
be in good standing would not have a material adverse effect on the condition
(financial or other), earnings, business or properties of the Company and its
subsidiaries taken as a whole (a “Material Adverse Effect”).
     (iv) Good Standing of Subsidiaries. Each of the Company’s subsidiaries that
constitutes a “significant subsidiary” (as such term is defined in Rule 1-02 of
Regulation S-X) (each a “Subsidiary” and collectively, the “Subsidiaries”) has
been duly organized and is validly existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction of its
incorporation or organization, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Disclosure
Package or the Final Memorandum, and has been duly qualified as a foreign
corporation or limited liability company for the transaction of business and is
in good standing (or the local equivalent) under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to so qualify or to
be in good standing would not result in a Material Adverse Effect. All the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable, and, except as
otherwise set forth in the Disclosure Package and the Final Memorandum, all
outstanding shares of capital stock of the Subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and clear of any
security interest, claim, lien or encumbrance, other than any such security
interests, claims, liens or encumbrances which would not, individually or in the
aggregate, have a Material Adverse Effect.
     (v) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
     (vi) Authorization of the Indenture. The Indenture has been duly
authorized, executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms (except as the enforceability thereof may be limited by
bankruptcy, insolvency and other laws affecting the enforceability of creditors’
rights generally and general principles of equity and an implied covenant of
good faith and fair dealing).
     (vii) Authorization of the Securities. The Securities have been duly
authorized by the Company and, when executed and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will have been duly
executed and delivered by the Company, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture and
enforceable in accordance with their terms and the terms of the Indenture
(except as the enforceability thereof may be limited by bankruptcy, insolvency
and other laws affecting the enforceability of creditors’ rights generally and
general principles of equity and an implied covenant of good faith and fair
dealing); and the Securities and the Indenture conform in all material respects
to the descriptions thereof in the Disclosure Package and the Final Offering
Memorandum.

 

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     (viii) Authorization of the Registration Rights Agreement. The Registration
Rights Agreement has been duly authorized by the Company and, when executed and
delivered by the Company, will constitute the legal, valid, binding and
enforceable instrument of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors’ rights generally from time to time in effect and
to general principles of equity).
     (ix) Authorization and Description of Common Stock. The unaudited
consolidated capitalization of the Company as of December 31, 2006 is as set
forth in the Disclosure Package and the Final Offering Memorandum in the column
entitled “Actual” under the caption “Capitalization.” The shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company. The Common Stock conforms
as to legal matters to all statements relating thereto contained or incorporated
by reference in the Disclosure Package and the Final Offering Memorandum and
such description conforms as to legal matters to the rights set forth in the
instruments defining the same. Upon issuance and delivery of the Securities in
accordance with this Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof for shares of Common Stock in
accordance with the terms of the Securities and the Indenture; the shares of
Common Stock issuable upon conversion of the Securities have been duly
authorized and reserved for issuance upon such conversion by all necessary
corporate action and such shares, when issued upon such conversion, will be
validly issued and will be fully paid and non-assessable; and the issuance of
such shares upon such conversion will not be subject to the preemptive or other
similar rights of any securityholder of the Company.
     (x) Absence of Defaults and Conflicts. The execution, delivery and
performance of this Agreement, the Registration Rights Agreement, the Indenture
and any other agreement or instrument entered into or issued or to be entered
into or issued by the Company in connection with the transactions contemplated
hereby or thereby or in the Disclosure Package and the Final Offering Memorandum
and the consummation of the transactions contemplated herein and in the
Disclosure Package and the Final Offeing Memorandum and compliance by the
Company with its obligations hereunder and thereunder do not and will not
conflict with or result in a breach of, or constitute a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon any
assets, properties or operations of the Company or any of its subsidiaries
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound or
to which any of the assets, properties or operations of the Company or any of
its subsidiaries is subject (collectively, the “Agreements and Instruments”) the
result of which would have a Material Adverse Effect, nor will such action
result in any violation of (i) the provisions of the charter or bylaws of the
Company or any of its Subsidiaries or (ii) any applicable law or statute or any
order, rule, regulation or judgment of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
assets,

 

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properties or operations, except, with respect to (ii) above, for any such
violations that would not, individually or in the aggregate, result in a
Material Adverse Effect.
     (xi) Absence of Further Requirements. No consent, approval, authorization,
order, registration or qualification of or with any court or governmental agency
or body is required for the due authorization, execution and delivery by the
Company of this Agreement or for the performance by the Company of the
transactions contemplated under the Disclosure Package and the Final Offering
Memorandum, this Agreement, the Registration Rights Agreement or the Indenture,
except such as have already been made, obtained or rendered, as applicable, such
as may be required under state securities laws and, in the case of the
Registration Rights Agreement, such as will be obtained under the 1933 Act and
the 1939 Act (as defined below).
     (xii) Financial Statements. The financial statements and schedules of the
Company and its consolidated subsidiaries included or incorporated by reference
in the Disclosure Package and the Final Offering Memorandum present fairly in
all material respects the consolidated financial condition, results of
operations and cash flows of the Company and its consolidated subsidiaries as of
the dates and for the periods indicated, comply as to form with the applicable
accounting requirements of the 1933 Act or the 1934 Act, as applicable, and have
been prepared in conformance with United States generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as otherwise noted therein).
     (xiii) Independent Accountants. Ernst & Young LLP, who have certified the
financial statements included or incorporated by reference in the Disclosure
Package and the Final Offering Memorandum, are independent public accountants as
required by the 1933 Act and the rules and regulations thereunder (the “1933 Act
Regulations”).
     (xiv) Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries which
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, or which would reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated by this
Agreement or the Registration Rights Agreement or the performance by the Company
of its obligations hereunder or thereunder.
     (xv) No Material Adverse Change in Business. Since the date of the most
recent financial statements included or incorporated by reference in the
Disclosure Package and the Final Offering Memorandum (exclusive of any
supplement thereto), (A) there has been no material adverse change, or any
development involving a prospective material adverse change, in the condition
(financial or other), earnings, business or properties of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions in the
ordinary course of business (a “Material Adverse Change”), except as set forth
or contemplated in the Disclosure Package and the Final Offering Memorandum
(exclusive of any supplement thereto) and (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those

 

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arising in the ordinary course of business, which are material with respect to
the Company and its subsidiaries taken as a whole.
     (xvi) Investment Company Act. The Company is not and, after giving effect
to the offering and sale of the Securities and the application of the proceeds
thereof as described in the Disclosure Package and the Final Offering
Memorandum, will not be an “investment company” as defined under the Investment
Company Act of 1940, as amended (the “1940 Act”).
     (xvii) Accounting Controls and Disclosure Controls. The Company has
established and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15 under the 1934 Act) that (i) are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s chief executive officer and its
chief financial officer by others within those entities, (ii) have been
evaluated for effectiveness as of a date within 90 days prior to the filing of
the Company’s most recent Annual Report on Form 10-K filed with the Commission
and (iii) are effective to perform the functions for which they were
established. Additionally, the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management’s general or specific authorizations,
(B) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, (C) access to assets is permitted only in
accordance with management’s general or specific authorization, and (D) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as disclosed in the Disclosure Package and the Final
Offering Memorandum or in any document incorporated by reference therein, since
December 31, 2006 there has been (i) no material weakness in the Company’s
internal control over financial reporting (whether or not remediated) and
(ii) no change in the Company’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
     (xix) Similar Offerings. Neither the Company nor any of its affiliates, as
such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”),
has, directly or indirectly, solicited any offer to buy, sold or offered to sell
or otherwise negotiated in respect of, or will solicit any offer to buy, sell or
offer to sell or otherwise negotiate in respect of, in the United States or to
any United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would require the
offered Securities to be registered under the 1933 Act.
     (xx) Rule 144A Eligibility. The Securities are eligible for resale pursuant
to Rule 144A and will not be, at Closing Time, of the same class as securities
listed on a national securities exchange registered under Section 6 of the 1934
Act, or quoted in a U.S. automated interdealer quotation system.
     (xxi) No General Solicitation. None of the Company, its Affiliates or any
person acting on its or any of their behalf (other than the Initial Purchasers,
as to whom

 

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the Company makes no representation) has engaged or will engage, in connection
with the offering of the offered Securities, in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the 1933 Act.
     (xxii) No Registration Required. Subject to compliance by the Initial
Purchasers with the representations and warranties of the Initial Purchasers and
the procedures set forth in Section 6 hereof, it is not necessary in connection
with the offer, sale and delivery of the offered Securities to the Initial
Purchasers and to each Subsequent Purchaser in the manner contemplated by this
Agreement and the Offering Memorandum to register the Securities under the 1933
Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the “1939 Act”).
     (b) Officer’s Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.
     SECTION 2. Sale and Delivery to Initial Purchasers; Closing.
     (a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Initial Purchaser, severally and not jointly, and each Initial
Purchaser, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Initial Purchaser, plus any
additional principal amount of Securities which such Initial Purchaser may
become obligated to purchase pursuant to the provisions of Section 11 hereof.
     (b) Payment of the purchase price for, and delivery of certificates for,
the Securities shall be made at the Chicago, Illinois offices of Mayer, Brown,
Rowe & Maw LLP, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Central time) on the fourth
business day after the date hereof (unless postponed in accordance with the
provisions of Section 11), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called “Closing Time”).
     Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Initial Purchasers of
certificates for the Securities to be purchased by them. It is understood that
each Initial Purchaser has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. The Representatives, individually
and not as representatives of the Initial Purchasers, may (but shall not be
obligated to) make payment of the purchase price for the Securities to be
purchased by any Initial Purchaser whose funds have not been received by Closing
Time, but such payment shall not relieve such Initial Purchaser from its
obligations hereunder.

 

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     (d) Denominations; Registration. Certificates for the Securities shall be
in such denominations ($100,000 or integral multiples of $1,000 in excess
thereof) and registered in such names as the Representatives may request in
writing at least one full business day before Closing Time. The certificates
representing the Securities shall be made available for examination and
packaging by the Initial Purchasers in The City of New York not later than
10:00 A.M. on the last business day prior to Closing Time.
     SECTION 3. Covenants of the Company. The Company covenants with each
Initial Purchaser as follows:
     (a) Offering Memorandum. The Company, as promptly as possible, will furnish
to each Initial Purchaser, without charge, such number of copies of the Offering
Memorandum and any amendments and supplements thereto and documents incorporated
by reference therein as such Initial Purchaser may reasonably request.
     (b) Notice and Effect of Material Events. The Company will promptly notify
each Initial Purchaser, and confirm such notice in writing, of (x) any filing
made by the Company of information relating to the offering of the Securities
with any securities exchange or any other regulatory body in the United States
or any other jurisdiction, and (y) prior to the completion of the placement of
the offered Securities by the Initial Purchasers (notice of such completion to
be provided to the Company by the Initial Purchasers in writing), any material
changes in or affecting the condition (financial or other), earnings, business
or properties of the Company and its subsidiaries taken as a whole which
(i) make any statement in the Disclosure Package, any Offering Memorandum or any
Supplemental Offering Material false or misleading or (ii) are not disclosed in
the Disclosure Package or the Offering Memorandum. In such event or if during
such time any event shall occur as a result of which it is necessary, in the
reasonable opinion of any of the Company, its counsel, the Initial Purchasers or
counsel for the Initial Purchasers, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum not include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in the light of the circumstances
then existing, the Company will forthwith amend or supplement the Offering
Memorandum by preparing and furnishing to each Initial Purchaser an amendment or
amendments of, or a supplement or supplements to, the Offering Memorandum (in
form and substance satisfactory in the reasonable opinion of counsel for the
Initial Purchasers) so that, as so amended or supplemented, 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 Subsequent
Purchaser, not misleading.
     (c) Amendment and Supplements to the Offering Memorandum; Preparation of
Pricing Supplement; Supplemental Offering Materials. The Company will advise
each Initial Purchaser promptly of any proposal to amend or supplement the
Offering Memorandum and will not effect such amendment or supplement without the
consent of the Initial Purchasers. Neither the consent of the Initial
Purchasers, nor the Initial Purchaser’s delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof. The Company will prepare the Pricing Supplement, in form and
substance satisfactory to the Representatives, and shall furnish as soon as
practicable to each Initial Purchaser, without charge, as many copies of the
Pricing Supplement as such Initial Purchaser may reasonably

 

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request. The Company represents and agrees that, unless it obtains the prior
consent of the Representatives, it has not made and will not make any offer
relating to the Securities by means of any Supplemental Offering Materials.
     (d) Qualification of Securities for Offer and Sale. The Company will use
its best efforts, in cooperation with the Initial Purchasers, to qualify the
offered Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions as the Initial Purchasers may designate and
to maintain such qualifications in effect as long as required for the sale of
the Securities; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject.
     (e) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor’s Ratings Services, a division of McGraw
Hill, Inc. (“S&P”), and Moody’s Investors Service Inc. (“Moody’s”) to provide
their respective credit ratings of the Securities.
     (f) DTC. The Company will cooperate with the Initial Purchasers and use its
best efforts to permit the offered Securities to be eligible for clearance and
settlement through the facilities of The Depository Trust Company.
     (g) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Offering
Memorandum under “Use of Proceeds.”
     (h) Listing. The Company will use its best efforts to effect the listing of
the Common Stock issuable upon conversion of the Securities on the New York
Stock Exchange.
     (i) Restriction on Sale of Debt Securities. During a period of 60 days from
the date of the Final Offering Memorandum, the Company will not, without the
prior written consent of the Representatives, directly or indirectly, offer,
sell, contract to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected to, result in
the disposition (whether by actual disposition or effective economic disposition
due to cash settlement or otherwise) by the Company or any entity affiliate of
the Company or any person in privity with the Company or any entity affiliate of
the Company) directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the 1934 Act, any debt
securities issued or guaranteed by the Company that have terms, including with
respect to conversion, that are substantially similar to the Securities (other
than the Securities and any debt securities that mature within one year of their
date of issue) or publicly announce an intention to effect any such transaction.
     (j) Restriction on Sale of Common Stock. During a period of 60 days from
the date of the Final Offering Memorandum, the Company will not, without the
prior written consent of the Representatives, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to

 

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purchase or otherwise transfer, lend or dispose of any share of Common Stock or
any securities convertible into or exchangeable or exercisable for or repayable
with Common Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Securities to be
sold hereunder, (B) Common Stock issuable upon conversion of the Securities, (C)
any shares of Common Stock to be issued in connection with a business
acquisition, (D) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof and referred to in the Disclosure Package and the Final
Memorandum, (E) any shares of Common Stock issuable in connection with the
transactions described in the Disclosure Package and the Final Memorandum under
the caption “Plan of Distribution — Other Relationships” and (F) any shares of
Common Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company.
     (k) Reporting Requirements. Until the offering of the Securities is
complete, the Company will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
     SECTION 4. Payment of Expenses.
     (a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation,
printing, delivery to the Initial Purchasers and any filing of the Disclosure
Package or any Offering Memorandum (including financial statements and any
schedules or exhibits and any document incorporated therein by reference) and of
each amendment or supplement thereto or of any Supplemental Offering Material,
(ii) the preparation, printing and delivery to the Initial Purchasers of this
Agreement, any Agreement among Initial Purchasers, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Initial Purchasers,
including any transfer taxes, any stamp or other duties payable upon the sale,
issuance and delivery of the Securities to the Initial Purchasers and any
charges of DTC in connection therewith, (iv) the fees and disbursements of the
Company’s counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Initial Purchasers in connection therewith and in connection]
with the preparation of the Blue Sky Survey, any supplement thereto, (vi) the
fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Securities and
(vii) any fees payable in connection with the rating of the Securities.
     (b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5(j) or
Section 10(a)(i) hereof, the Company shall reimburse the Initial Purchasers for
all of their reasonably incurred out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Initial Purchasers.

 

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     SECTION 5. Conditions of Initial Purchasers’ Obligations. The obligations
of the several Initial Purchasers hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
     (a) Opinion of Counsel for Company. At Closing Time, the Representatives
shall have received the favorable opinion, dated as of Closing Time, of each of
Faegre & Benson LLP, counsel for the Company, Dewey Ballantince LLP, special tax
counsel to the Company, and David J. Smith, Esq., General Counsel of the
Company, or Stuart E. Funderburg, Esq., Corporate Counsel of the Company, each
in form and substance satisfactory to counsel for the Initial Purchasers,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers to the effect set forth in Exhibit A-1, Exhibit A-2 and
Exhibit A-3, respectively, hereto.
     (b) Opinion of Counsel for Initial Purchasers. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Mayer, Brown, Rowe & Maw LLP, counsel for the Initial Purchasers,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers with respect to the matters set forth in (i) — (v) and (x)
and the last paragraph of Exhibit A-1 hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United States
and the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
     (c) Officers’ Certificate. At Closing Time, there shall not have been,
since the date hereof or since the date as of which information is given in the
Final Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), any Material Adverse Change, and the
Representatives shall have received a certificate of the Chairman of the Board,
the President or any Vice President and the principal financial or accounting
officer of the Company, dated as of the Closing Time, to the effect that the
signers of such certificate have carefully examined the Disclosure Package and
the Final Offering Memorandum, any supplements to the Final Offering Memorandum
and this Agreement and that to their knowledge:
     (i) the representations and warranties of the Company in this Agreement are
true and correct in all material respects on and as of the Closing Time with the
same effect as if made on the Closing Time and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Time; and
     (ii) since the date of the most recent financial statements included or
incorporated by reference in the Disclosure Package and the Final Offering
Memorandum (exclusive of any supplement thereto), there has been no Material
Adverse Change, except

 

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as set forth or contemplated in the Disclosure Package and the Final Offering
Memorandum (exclusive of any supplement thereto).
     (d) Accountants’ Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Initial Purchasers containing statements and information of
the type ordinarily included in accountants’ “comfort letters” to Initial
Purchasers with respect to the financial statements and certain financial
information contained in the Offering Memorandum.
     (e) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Ernst & Young LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (d) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
     (f) Maintenance of Rating. At Closing Time, the Securities shall be rated
at least A2 by Moody’s and A by S&P, and the Company shall have delivered to the
Representatives a letter dated Closing Time, from each such rating agency, or
other evidence satisfactory to the Representatives, confirming that the
Securities have such ratings; and subsequent to the Applicable Time, there shall
not have been any decrease in the rating of any of the Company’s debt securities
by any “nationally recognized statistical rating organization” (as defined for
purposes of Rule 436(g) under the 1933 Act) and no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company’s debt securities.
     (g) Approval of Listing. At Closing Time, the Common Stock issuable on
conversion thereof shall have been approved for listing on the New York Stock
Exchange, subject only to official notice of issuance.
     (h) Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit B hereto
signed by the persons listed on Schedule D hereto.
     (j) Additional Documents. At Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Initial Purchasers.
     (k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, the obligations of the several Initial Purchasers to purchase the
relevant Securities, may be terminated by the Representatives by notice to the
Company at any time at or prior to Closing Time, and such termination shall be

 

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without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 7, 8 and 9 shall survive any such
termination and remain in full force and effect.
     SECTION 6. Subsequent Offers and Resales of the Securities.
     (a) Offer and Sale Procedures. Each of the Initial Purchasers and the
Company hereby establish and agree to observe the following procedures in
connection with the offer and sale of the Securities:
     (i) Offers and Sales. Offers and sales of the Securities shall be made to
such persons and in such manner as is contemplated by the Offering Memorandum.
     (ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the 1933 Act) will be used
in the United States in connection with the offering or sale of the Securities.
     (iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more third
parties, each third party shall, in the judgment of the applicable Initial
Purchaser, be an Institutional Accredited Investor or a “qualified institutional
buyer” within the meaning of Rule 144A under the 1933 Act (a “Qualified
Institutional Buyer”) or a non-U.S. person outside the United States.
     (iv) Subsequent Purchaser Notification. Each Initial Purchaser will take
reasonable steps to inform, and cause each of its Affiliates to take reasonable
steps to inform, persons acquiring Securities from such Initial Purchaser or
affiliate, as the case may be, that the Securities (A) have not been and will
not be registered under the 1933 Act, (B) are being sold to them without
registration under the 1933 Act in reliance on Rule 144A and (C) may not be
reoffered, resold or otherwise transferred except (1) to the Company, (2)
outside the United States in accordance with Regulation S, or (3) inside the
United States in accordance with (x) Rule 144A to a person whom the seller
reasonably believes is a Qualified Institutional Buyer that is purchasing such
Securities for its own account or for the account of a Qualified Institutional
Buyer to whom notice is given that the offer, sale or transfer is being made in
reliance on Rule 144A or (y) pursuant to another available exemption from
registration under the 1933 Act.
     (v) Minimum Principal Amount. No sale of the Securities to any one
Subsequent Purchaser will be for less than U.S. $100,000 principal amount and no
Security will be issued in a smaller principal amount. If the Subsequent
Purchaser is a non-bank fiduciary acting on behalf of others, each person for
whom it is acting must purchase at least U.S. $100,000 principal amount of the
Securities.
     (b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
     (i) Integration. The Company agrees that it will not and will cause its
Affiliates not to, directly or indirectly, solicit any offer to buy, sell or
make any offer or sale of, or otherwise negotiate in respect of, securities of
the Company of any class if, as

 

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a result of the doctrine of “integration” referred to in Rule 502 under the 1933
Act, such offer or sale would render invalid (for the purpose of (i) the sale of
the offered Securities by the Company to the Initial Purchasers, (ii) the resale
of the offered Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the offered Securities by such Subsequent Purchasers to
others) the exemption from the registration requirements of the 1933 Act
provided by Section 4(2) thereof or by Rule 144A thereunder or otherwise.
     (ii) Rule 144A Information. The Company agrees that, in order to render the
offered Securities eligible for resale pursuant to Rule 144A under the 1933 Act,
while any of the offered Securities remain outstanding, it will make available,
upon request, to any holder of offered Securities or prospective purchasers of
Securities the information specified in Rule 144A(d)(4) under the 1933 Act,
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act.
     (iii) Restriction on Repurchases. Until the expiration of two years after
the original issuance of the offered Securities, the Company will not, and will
cause its Affiliates not to, resell any offered Securities which are “restricted
securities” (as such term is defined in Rule 144(a)(3) under the 1933 Act),
whether as beneficial owner or otherwise (except as agent acting as a securities
broker on behalf of and for the account of customers in the ordinary course of
business in unsolicited broker’s transactions).
     (c) Qualified Institutional Buyer. Each Initial Purchaser severally and not
jointly represents and warrants to, and agrees with, the Company that it is a
Qualified Institutional Buyer and an “accredited investor” within the meaning of
Rule 501(a) under the 1933 Act (an “Accredited Investor”).
     SECTION 7. Indemnification.
     (a) Indemnification of Initial Purchasers. The Company agrees to indemnify
and hold harmless each Initial Purchaser, its Affiliates, its selling agents and
each person, if any, who controls any Initial Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
     (i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary offering memorandum,
the Disclosure Package, the Final Offering Memorandum (or any amendment or
supplement thereto) or any Supplemental Offering Materials, or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
     (ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to

 

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Section 7(d) below) any such settlement is effected with the written consent of
the Company; and
     (iii) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by the Representatives), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Initial Purchaser through the Representatives expressly for use in any
preliminary offering memorandum, the Disclosure Package, the Final Offering
Memorandum (or any amendment or supplement thereto) or in any Supplemental
Offering Materials.
     (b) Indemnification of Company. Each Initial Purchaser severally agrees to
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in any preliminary offering memorandum, the
Disclosure Package, the Final Offering Memorandum or any Supplemental Offering
Materials in reliance upon and in conformity with written information furnished
to the Company by such Initial Purchaser through the Representatives expressly
for use therein. The Company acknowledges that the following statements set
forth under the heading “Plan of Distribution” in the Disclosure Package and the
Final Offering Memorandum constitute the only information furnished in writing
by or on behalf of the several Initial Purchasers for inclusion in any
preliminary offering memorandum, the Disclosure Package, the Final Offering
Memorandum or any Supplemental Offering Materials: (i) the list of Initial
Purchasers and their respective participation in the sale of the Securities,
(ii) the second and third sentence of the second paragraph; (iii) the third
sentence under the subsection entitled “—New Issue of Notes” related to market
making and (iv) the two paragraphs under the subcaption “—Price Stabilization
and Short Positions.”
     (c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Representatives,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;

 

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provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section or Section 8
hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
     (d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
     SECTION 8. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Initial Purchasers on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
     The relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the Initial
Purchasers, bear to the aggregate initial offering price of the Securities.

 

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     The relative fault of the Company on the one hand and the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
     The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
     Notwithstanding the provisions of this Section, no Initial Purchaser shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities purchased and sold by it hereunder 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
     For purposes of this Section, each person, if any, who controls an Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act and each Initial Purchaser’s Affiliates and selling agents shall have
the same rights to contribution as such Initial Purchaser, and each person, if
any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the
Company. The Initial Purchasers’ respective obligations to contribute pursuant
to this Section are several in proportion to the principal amount of Securities
set forth opposite their respective names in Schedule A hereto and not joint.
     SECTION 9. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Initial Purchaser or its
Affiliates or selling agents, any person controlling any Initial Purchaser, its
officers or directors or any person controlling the Company and (ii) delivery of
and payment for the Securities.

 

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     SECTION 10. Termination of Agreement.
     (a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the date as of
which information is given in the Preliminary Offering Memorandum, the
Disclosure Package or the Final Offering Memorandum (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement), any Material
Adverse Change, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the NASDAQ System has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
     (b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 7,
8 and 9 shall survive such termination and remain in full force and effect.
     SECTION 11. Default by One or More of the Initial Purchasers. If one or
more of the Initial Purchasers shall fail at Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
“Defaulted Securities”), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Initial Purchasers, or any other initial purchasers, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
     (a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Securities to be purchased hereunder, each of
the non-defaulting Initial Purchasers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Initial Purchasers, or
     (b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Securities to be purchased hereunder, this

 

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Agreement shall terminate without liability on the part of any non-defaulting
Initial Purchaser.
     No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
     In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Offering Memorandum or in any other documents
or arrangements. As used herein, the term “Initial Purchaser” includes any
person substituted for an Initial Purchaser under this Section.
     SECTION 12. Tax Disclosure. Notwithstanding any other provision of this
Agreement, immediately upon commencement of discussions with respect to the
transactions contemplated hereby, the Company (and each employee, representative
or other agent of the Company) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
contemplated by this Agreement and all materials of any kind (including opinions
or other tax analyses) that are provided to the Company relating to such tax
treatment and tax structure. For purposes of the foregoing, the term “tax
treatment” is the purported or claimed federal income tax treatment of the
transactions contemplated hereby, and the term “tax structure” includes any fact
that may be relevant to understanding the purported or claimed federal income
tax treatment of the transactions contemplated hereby.
     SECTION 13. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Initial
Purchasers shall be directed to the Representatives at 4 World Financial Center,
New York, New York 10080, attention of Joseph T. McIntosh, notices to the
Company shall be directed to it at 4666 Faries Parkway, Decatur, Illinois 62526,
Facsimile: (217) 424-2572, attention of Treasurer.
     SECTION 14. No Advisory or Fiduciary Relationship. The Company acknowledges
and agrees that (a) the purchase and sale of the Securities pursuant to this
Agreement, including the determination of the offering price of the Securities
and any related discounts and commissions, is an arm’s-length commercial
transaction between the Company, on the one hand, and the several Initial
Purchasers, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Initial Purchaser is and
has been acting solely as a principal and is not the agent or fiduciary of the
Company, or its stockholders, creditors, employees or any other party, (c) no
Initial Purchaser has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Initial
Purchaser has advised or is currently advising the Company on other matters) and
no Initial Purchaser has any obligation to the Company with respect to the
offering contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Initial Purchasers and their respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of each of the Company, and (e) the Initial Purchasers have not provided
any legal, accounting, regulatory or tax advice with respect to the offering
contemplated hereby and

 

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the Company has consulted its own legal, accounting, regulatory and tax advisors
to the extent it deemed appropriate.
     SECTION 15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Initial
Purchasers, or any of them, with respect to the subject matter hereof.
     SECTION 16. Parties. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Initial Purchasers and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
     SECTION 17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
     SECTION 18. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
     SECTION 19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
     SECTION 20. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.

 

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

 

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

            Very truly yours,

ARCHER-DANIELS-MIDLAND COMPANY
      By   /s/ Vikram Luthar         Name:   Vikram Luthar        Title:   Vice
President & Treasurer     

              CONFIRMED AND ACCEPTED,              as of the date first above
written:        
 
            CITIGROUP GLOBAL MARKETS INC.
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
     INCORPORATED        
 
           
BY:
  MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED        
 
           
By:
  /s/ Joe McIntosh        
 
           
 
  Authorized Signatory        
 
            For itself and as Representatives of the other Initial Purchasers
named in Schedule A hereto.        

 

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SCHEDULE A

              Principal       Amount of   Name of Initial Purchaser   Securities
   
Citigroup Global Markets Inc.
  $ 287,500,000  
J.P. Morgan Securities Inc.
    287,500,000  
Merrill Lynch Pierce, Fenner & Smith Incorporated
    287,500,000  
Banc of America Securities LLC
    47,917,000  
Barclays Capital Inc.
    47,917,000  
BNP Paribas Securities Corp.
    47,917,000  
Deutsche Bank Securities Inc.
    47,917,000  
Goldman, Sachs & Co.
    47,916,000  
HSBC Securities (USA) Inc.
    47,916,000  
 
     
Total
  $ 1,150,000,000  
 
     

Sch A-1

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SCHEDULE B
ARCHER-DANIELS-MIDLAND COMPANY
$1,150,000,000 0.875% Convertible Senior Notes due 2014
     1. The initial public offering price of the Securities shall be 100.00% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
     2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 98.65% of the principal amount thereof.
     3. The interest rate on the Securities shall be 0.875% per annum.
     4. The Securities shall be convertible on the terms set forth in the
Indenture at an initial conversion rate of 22.8343 shares per $1,000 principal
amount of Securities (equivalent to a conversion price of approximately $43.79
per share).
     5. If a change in control occurs and a holder elects to convert in
connection with such event, the conversion rate will be increased by a number of
shares. The number of additional shares will be determined by reference to the
following table and is based on the date on which such change in control becomes
effective and the price paid per share of common stock on the effective date:

                                                                    Stock Price
on     Make-Whole Premium Upon Fundamental Change (Increase in Applicable
Conversion Rate)   Effective Date     2/22/2007     2/15/2008     2/15/2009    
2/15/2010     2/15/2011     2/15/2012     2/15/2013     2/15/2014  
$35.75
      5.1377       5.1377       5.1377       5.1377       5.1377       5.1377  
    5.1377       5.1377  
$37.50
      4.5937       4.7056       4.7896       4.8296       4.7941       4.6410  
    4.2890       3.8324  
$40.00
      3.9353       4.0041       4.0409       4.0285       3.9335       3.7086  
    3.2436       2.1657  
$45.00
      2.9373       2.9458       2.9188       2.8394       2.6743       2.3744  
    1.8167       0.0000  
$50.00
      2.2349       2.2079       2.1453       2.0327       1.8402       1.5267  
    0.9936       0.0000  
$55.00
      1.7291       1.6817       1.6012       1.4755       1.2806       0.9862  
    0.5332       0.0000  
$60.00
      1.3575       1.2992       1.2114       1.0846       0.9003       0.6401  
    0.2816       0.0000  
$65.00
      1.0795       1.0165       0.9278       0.8065       0.6392       0.4180  
    0.1465       0.0000  
$70.00
      0.8683       0.8045       0.7186       0.6061       0.4579       0.2741  
    0.0741       0.0000  
$75.00
      0.7061       0.6432       0.5623       0.4602       0.3307       0.1804  
    0.0369       0.0000  
$100.00
      0.2838       0.2387       0.1867       0.1303       0.0701       0.0252  
    0.0027       0.0000  
$150.00
      0.0736       0.0544       0.0368       0.0214       0.0096       0.0029  
    0.0009       0.0000  

     If the price paid per share on the effective date exceeds $150.00 per
share, subject to adjustment, no adjustment to the applicable conversion rate
will be made.
     If the price paid per share on the effective date is less than $35.75 per
share, subject to adjustment, no adjustment to the applicable conversion rate
will be made.

Sch B-1

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SCHEDULE C
Archer-Daniels-Midland Company
(ADM/NYSE)
Offering Size: $1,150,000,000
144A Convertible Senior Notes Due 2014 Terms:
Offering Price: $1,000.00 per note (100%)
Maturity: February 15, 2014
Interest Rate: 0.875% payable semi-annually in arrears in cash
Last Sale (2/15/07): $35.75
Conversion Price: Approximately $43.79
Conversion Premium: 22.50%
Conversion Rate: 22.8343
Conversion Rate Cap: 27.9720
Conversion Trigger Price: $61.31
Interest Payment Dates: February 15 and August 15, beginning August 15, 2007
Make Whole Premium upon a Change in Control: If a change in control occurs and a
holder elects to
convert in connection with such event, the conversion rate will be increased by
a number of shares.
The number of additional shares will be determined by reference to the following
table and is
based on the date on which such change in control becomes effective and the
price paid per share of
common stock on the effective date:

                                                                    Stock Price
on     Make-Whole Premium Upon Fundamental Change (Increase in Applicable
Conversion Rate)   Effective Date     2/22/2007     2/15/2008     2/15/2009    
2/15/2010     2/15/2011     2/15/2012     2/15/2013     2/15/2014  
$35.75
      5.1377       5.1377       5.1377       5.1377       5.1377       5.1377  
    5.1377       5.1377  
$37.50
      4.5937       4.7056       4.7896       4.8296       4.7941       4.6410  
    4.2890       3.8324  
$40.00
      3.9353       4.0041       4.0409       4.0285       3.9335       3.7086  
    3.2436       2.1657  
$45.00
      2.9373       2.9458       2.9188       2.8394       2.6743       2.3744  
    1.8167       0.0000  
$50.00
      2.2349       2.2079       2.1453       2.0327       1.8402       1.5267  
    0.9936       0.0000  
$55.00
      1.7291       1.6817       1.6012       1.4755       1.2806       0.9862  
    0.5332       0.0000  
$60.00
      1.3575       1.2992       1.2114       1.0846       0.9003       0.6401  
    0.2816       0.0000  
$65.00
      1.0795       1.0165       0.9278       0.8065       0.6392       0.4180  
    0.1465       0.0000  
$70.00
      0.8683       0.8045       0.7186       0.6061       0.4579       0.2741  
    0.0741       0.0000  
$75.00
      0.7061       0.6432       0.5623       0.4602       0.3307       0.1804  
    0.0369       0.0000  
$100.00
      0.2838       0.2387       0.1867       0.1303       0.0701       0.0252  
    0.0027       0.0000  
$150.00
      0.0736       0.0544       0.0368       0.0214       0.0096       0.0029  
    0.0009       0.0000  

If the price paid per share on the effective date exceeds $150.00 per share,
subject to adjustment,
no adjustment to the applicable conversion rate will be made.
If the price paid per share on the effective date is less than $35.75 per share,
subject to
adjustment, no adjustment to the applicable conversion rate will be made.

Sch C-1

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

 

Net Proceeds Before Expenses: $1.134 billion
Net Proceeds Applied for the Convertible Note Hedge and Warrant Transactions:
$129 million
Shares Underlying Convertible Note Hedge and Warrant: 26,259,445
Exercise Price of Sold Warrant: $62.56
Trade Date: 2/15/07
Settlement Date (T+4): 2/22/07
144A CUSIP: 039483AV4
Joint-Bookrunners: Citigroup, JP Morgan, Merrill Lynch
Co-Managers: Banc of America/Barclays/BNP/Deutsche Bank/Goldman Sachs/ HSBC

Sch C-2

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

 

SCHEDULE D

•   Chief Executive Officer   •   Chief Financial Officer   •   Any director of
the Company beneficially owning more than 3,500,000 shares of the Company’s
Common Stock

Sch D-1

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

 

Exhibit A-1
FORM OF OPINION OF FAEGRE & BENSON LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
     (i) the Company has been duly organized and is validly existing and in good
standing under the laws of the State of Delaware; the Company has full corporate
power and authority to conduct its business as described in the Disclosure
Package and the Final Offering Memorandum;
     (ii) this Agreement has been duly authorized, executed and delivered by the
Company;
     (iii) the Indenture has been duly authorized, executed and delivered by the
Company and constitutes a valid and legally binding instrument, enforceable in
accordance with its terms (subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors’ rights and to general equity principles);
     (iv) the Securities have been duly executed, issued and delivered by the
Company and constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture and are enforceable in
accordance with their terms (subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors’ rights and to general equity principles); and the
Securities and the Indenture conform in all material respects to the
descriptions thereof in the Disclosure Package and the Final Offering
Memorandum;
     (v) the Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and constitutes the legal, valid, binding and
enforceable instrument of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors’ rights generally from time to time in effect and
to general principles of equity);
     (vi) the Common Stock conforms as to legal matters to all statements
relating thereto contained or incorporated by reference in the Disclosure
Package and the Final Offering Memorandum and such description conforms as to
legal matters to the rights set forth in the instruments defining the same; the
shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; upon
issuance and delivery of the Securities in accordance with this Agreement and
the Indenture, the Securities will be convertible at the option of the holder
thereof for shares of Common Stock in accordance with the terms of the
Securities and the Indenture; the shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and reserved for issuance
upon such conversion by all necessary corporate action and such shares, when
issued upon such conversion, will be validly issued and will be fully paid and
non-assessable;

Ex A-1-1

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

 

     (vii) neither the issue and sale of the Securities, the execution and
delivery of the Indenture, nor the consummation of any other of the transactions
contemplated in this Agreement, the Indenture or the Registration Rights
Agreement nor the fulfillment of the terms thereof will conflict with, result in
a breach of, or constitute a default under the charter or by-laws of the Company
or the terms of any Agreement or Instrument known to such counsel, or any
statute or any order, rule or regulation known to such counsel to be applicable
to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction over
the Company or any of its subsidiaries;
     (viii) no consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the due authorization, execution and delivery by the Company of this
Agreement or for the performance by the Company of the transactions contemplated
under the Disclosure Package and the Final Offering Memorandum, this Agreement,
the Registration Rights Agreement or the Indenture, except such as have already
been made, obtained or rendered, as applicable, such as may be required under
state securities laws and, in the case of the Registration Rights Agreement,
such as will be obtained under the 1933 Act and the 1939 Act;
     (ix) the Company is not and, after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as described in
the Disclosure Package and the Final Offering Memorandum, will not be an
“investment company” as defined under the 1940 Act;
     (x) subject to compliance by the Initial Purchasers with the
representations and warranties of the Initial Purchasers and the procedures set
forth in Section 6 hereof, it is not necessary in connection with the offer,
sale and delivery of the offered Securities to the Initial Purchasers and to
each Subsequent Purchaser in the manner contemplated by this Agreement and the
Offering Memorandum to register the Securities under the 1933 Act or to qualify
the Indenture under the 1939 Act; and
     (x) the documents incorporated by reference in the Offering Memorandum
(other than the financial statements and supporting schedules and other
financial and statistical data therein, as to which no opinion need be
rendered), when they were filed with the Commission complied as to form in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.
     In addition, such counsel shall state that nothing has come to its
attention which causes such counsel to believe that (1) as of the Applicable
Time, the Disclosure Package (other than the financial statements, financial
data and supporting schedules included or incorporated by reference therein, as
to each of which such counsel need express no belief) included any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of circumstances under which
they were made, not misleading or (2) that the Final Offering Memorandum or any
amendment or supplement thereto (other than the financial statements, financial
data and supporting schedules included or incorporated by reference therein, as
to each of which such counsel need express no belief), at the time the Offering
Memorandum was issued, at the time any such amended or supplemented Offering

A-1-2

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

 

Memorandum was issued or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

A-1-3

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

 

Exhibit A-2
FORM OF OPINION OF DEWEY BALLANTINE LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
     The information in the Disclosure Package and in the Final Offering
Memorandum under “Material United States Income Tax Considerations,” to the
extent that it constitutes matters of law, summaries of legal matters or legal
conclusions, has been reviewed by us and is correct in all material respects and
the opinion of such firm set forth under “Material United States Income Tax
Considerations” is confirmed.

Ex A-2-1

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Exhibit A-3
FORM OF OPINION OF INTERNAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
     (i) the Company has been duly organized and is validly existing and in good
standing under the laws of the State of Delaware; the Company has full corporate
power and authority to conduct its business as described in the Disclosure
Package and the Final Offering Memorandum;
     (ii) the Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing (or the local equivalent) under
the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the
failure to so qualify or be in good standing would not have a Material Adverse
Effect; and
     (iii) to the knowledge of such counsel, there is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its subsidiaries which is reasonably likely to result in a Material Adverse
Effect.
     In addition, such counsel shall state that nothing has come to his
attention that would lead him to believe that (1) as of the Applicable Time, the
Disclosure Package (other than the financial statements, financial data and
supporting schedules included or incorporated by reference therein, as to each
of which such counsel need express no belief) included any untrue statement of a
material fact or omitted to state any material fact necessary in order to make
the statements therein, in the light of circumstances under which they were
made, not misleading or (2) that the Final Offering Memorandum or any amendment
or supplement thereto (other than the financial statements, financial data and
supporting schedules included or incorporated by reference therein, as to each
of which such counsel need express no belief), at the time the Offering
Memorandum was issued, at the time any such amended or supplemented Offering
Memorandum was issued or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

Ex A-3-1

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[Form of lock-up pursuant to Section 5(h)]
Exhibit B
•, 2007
Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
     as Representatives of the several Initial Purchasers
c/o     Merrill Lynch, Pierce, Fenner & Smith Incorporated
          4 World Financial Center
          New York, New York 10080
Re: Proposed Offering by Archer-Daniels-Midland Company
Dear Sirs:
     The undersigned, a stockholder and an officer and/or director of
Archer-Daniels-Midland Company, a Delaware corporation (the “Company”),
understands that Citigroup Global Markests Inc., J.P. Morgan Securities Inc. and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
representatives of the several initial purchasers (the “Representatives”)
propose to enter into a Purchase Agreement (the “Purchase Agreement”) with the
Company providing for the offering of $• aggregate principal amount of the
Company’s Convertible Senior Notes due • (the “Securities”). In recognition of
the benefit that such an offering will confer upon the undersigned as a
stockholder and an officer and/or director of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 60 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of the Representatives, directly or indirectly, (i) 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 for the sale of, or
otherwise dispose of or lend or transfer any shares of the Company’s Common
Stock, no par value (the “Common Stock”), or any securities convertible into or
exercisable or exchangeable for or repayable with Common Stock, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file, or
cause to be filed, any registration statement under the Securities Act of 1933,
as amended, with respect to any of the foregoing (collectively, the “Lock-Up
Securities”) or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities or any securities
convertible into or exchangeable for Common Stock, whether any such swap or

Ex. B-1

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

 

transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.
     Notwithstanding the foregoing, the undersigned may transfer the Lock-Up
Securities without the prior written consent of the Representatives,
(i) pursuant to the terms of planned sale arrangements implemented pursuant to
Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, (ii) as a
bona fide gift or gifts, provided that the donee or donees thereof agree to be
bound in writing by the restriction set forth herein, or (iii) to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the
undersigned, provided that the trustee of the trust agrees to be bound in
writing by the restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value and (iv) in an amount which,
together with all other shares of Common Stock sold by officers or directors of
the Company executing letters similar to this letter pursuant to an exception
similar to this clause (iv), does not exceed 3,500,000 shares of Common Stock.
For purposes of this lock-up agreement, “immediate family” shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the
transfer of the Lock-Up Securities except in compliance with the foregoing
restrictions.

                          Very truly yours,    
 
               
 
      Signature:        
 
         
 
   
 
      Print Name:        
 
         
 
   

Ex. B-2