Exhibit 10.1
Execution Version
Acquicor Technology Inc.
$145,000,000
8% Convertible Senior Notes due 2011
 
PURCHASE AGREEMENT
 
December 18, 2006
 
CRT Capital Group LLC
Needham & Company, LLC
c/o CRT Capital Group LLC
262 Harbor Drive
Stamford, CT 06902
 
Ladies and Gentlemen:
 
Acquicor Technology Inc., a corporation organized under the laws of the State of
Delaware (the “Company”), hereby confirms to CRT Capital Group LLC (“CRT”) and
Needham & Company, LLC (“Needham” and together with CRT, the “Initial
Purchasers”), its agreement to issue and sell its 8% Convertible Senior Notes
due 2011 to the Initial Purchasers, as set forth below.
 
1.  The Transactions.
 
(a)  Subject to the terms and conditions herein contained, the Company proposes
to issue and sell to the Initial Purchasers $145,000,000 aggregate principal
amount of its 8% Convertible Senior Notes due 2011 (the “Firm Notes”). The
Company also agrees to issue to the Initial Purchasers an option to purchase up
to an additional $21,750,000 aggregate principal amount of its 8% Convertible
Senior Notes due 2011 (the “Option Notes” and, together with the Firm Notes, the
“Notes”). The initial conversion rate of the Notes is 136.426 shares of common
stock, $0.0001 par value per share, of the Company (the “Common Stock” or
“Conversion Shares”) per each $1,000 principal amount of Notes, subject to
adjustment in certain circumstances. The Notes will (i) have the terms and
provisions which are described in the Offering Memorandum (as defined below)
under the heading “Description of Notes” and such other terms as are customary,
and (ii) be issued pursuant to the provisions of the Indenture (the
“Indenture”), to be dated as of December 19, 2006, between the Company and U.S.
Bank National Association, as trustee (the “Trustee”) on a private placement
basis pursuant to an exemption from registration under Section 4(2) and
Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”). The Notes and the Conversion Shares are hereinafter referred to
collectively as the “Securities.” The offer and sale of the Securities is
hereinafter referred to as the “Offering.” Holders of the Securities will have
the registration rights set forth in a registration rights agreement (the
“Registration Rights Agreement”), to be dated as of December 19, 2006, among the
Company and the Initial Purchasers, relating to the resale of the Securities
under the Securities Act.
 

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(b)  Subject to approval by the Company’s stockholders, it is proposed that a
wholly-owned subsidiary of the Company will merge with and into Jazz
Semiconductor, Inc. (“Jazz”), pursuant to an Agreement and Plan of Merger (the
“Merger Agreement”), dated as of September 26, 2006, by and among the Company,
Joy Acquisition Corp., Jazz and TC Group, L.L.C. as Jazz’s stockholders’
representative (the “Merger”), and the Company intends to use all or a portion
of the proceeds of the Offering to effect the Merger. Pending the satisfaction
of certain release conditions contained in an escrow agreement (the “Escrow
Agreement”), to be dated as of December 19, 2006, among the Company, the Trustee
and U.S. Bank National Association, as escrow agent (the “Escrow Agent”), the
gross proceeds from the Offering, including the Initial Purchasers’ discount,
will be placed in an escrow account (the “Escrow Account”) with the Escrow
Agent. Pending (i) the release of the funds in the Escrow Account upon
stockholder approval of the Merger and the Authorized Share Increase (as defined
below) to pay the merger consideration in connection with the Merger upon the
terms described in the Offering Memorandum (as defined below) and other costs
payable in connection with the Merger and general purposes or (ii) application
of the funds in the Escrow Account for payment of the redemption price in
connection with a Special Mandatory Redemption (as defined in the Indenture),
such funds will be invested by the Escrow Agent only in specified securities
such as a money market fund meeting the criteria of Rule 2a-7 under the
Investment Company Act of 1940, as amended, or in securities that are direct
obligations of, or obligations guaranteed as to principal and interest by, the
United States. The Escrow Agreement will provide that the Escrow Agent will
release the funds as directed by the Trustee upon satisfaction of certain
conditions and that the Merger will occur immediately after the release of the
funds. If the Company’s stockholders have not approved the Merger and certain
amendments to the Company’s certificate of incorporation on or before May 31,
2007, or prior to such date the Company’s stockholders vote not to approve the
Merger or certain amendments to the Company’s certificate of incorporation, the
funds in the Escrow Account will be released to redeem all of the Notes at 100%
of the principal amount plus any interest income earned on the funds in the
Escrow Account. While the gross proceeds from the Offering are held in the
Escrow Account, the Trustee will have a perfected first priority security
interest in the gross proceeds, pursuant to the terms of a Pledge and Security
Agreement (the “Security Agreement”), to be dated as of December 19, 2006,
between the Company and the Trustee, as collateral agent (the “Collateral
Agent”), which security interest will have been perfected pursuant to a Control
Agreement (the “Control Agreement”) dated as of December 19, 2006 among the
Company, the Collateral Agent, the Escrow Agent and U.S. Bank, National
Association, as securities intermediary.
 
(c)  In connection with the sale of the Securities, the Company has prepared and
delivered to the Initial Purchasers an Offering Memorandum, dated December 12,
2006, in form and substance satisfactory to the Initial Purchasers and a
Supplement to Offering Memorandum dated December 15, 2006 (together, the
“Offering Memorandum”), and a Preliminary Offering Memorandum, dated November
22, 2006, and Supplements to Preliminary Offering Memorandum dated December 7,
2006 and December 11, 2006, each in form and substance satisfactory to the
Initial Purchasers (together, the “Preliminary Offering Memorandum”), each
setting forth information regarding the Company, the Securities and the terms of
the Offering and the transactions contemplated by the Offering Documents (as
defined below). The Preliminary Offering Memorandum and the Offering Memorandum
each incorporates by reference the following filings by the Company:
 
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(i)  Registration Statement on Form S-1 filed with the Securities and Exchange
Commission (the “Commission”) on March 9, 2006;
 
(ii)  Post-Effective Amendment No. 1, filed March 15, 2006, to Registration
Statement on Form S-1;
 
(iii)  Prospectus dated March 15, 2006, filed with the Commission on March 16,
2006;
 
(iv)  Current Reports on Form 8-K filed with the Commission on March 21, 2006,
March 27, 2006, April 14, 2006, September 29, 2006 and November 21, 2006;
 
(v)  Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
2006, June 30, 2006 and September 30, 2006, filed with the Commission on May 15,
2006, August 14, 2006 and November 14, 2006, respectively; and
 
(vi)  Preliminary Proxy Statement on Schedule 14A, filed with the Commission on
November 20, 2006 (the “Proxy Statement”).
 
(all such documents listed in clauses (i) through (vi) above (including any
exhibits thereto that are expressly incorporated by reference therein) are
referred to herein as the “Incorporated Documents”). Any references herein to
the Offering Memorandum or the Preliminary Offering Memorandum shall be deemed
to include, in each case, all amendments and supplements thereto as of the date
of this Agreement and the Incorporated Documents and any amendments thereto made
prior to the completion of the Offering, including without limitation the
Current Report on Form 8-K filed with the Commission on December 15, 2006. The
Company hereby confirms that it has authorized the use of the Offering
Memorandum and the Preliminary Offering Memorandum in connection with the
offering and resale of the Securities by the Initial Purchasers.
 
(d)  This Agreement, the Securities, the Indenture, the Registration Rights
Agreement, the Escrow Agreement and the Security Agreement are herein referred
to as the “Offering Documents.”
 
2.  Representations and Warranties of the Company. The Company represents and
warrants to and agrees with the Initial Purchasers:
 
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(a)  On the date hereof, the Offering Memorandum does not contain any untrue
statement of a material fact, and does not omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 2 do not apply to statements or omissions
made in reliance upon and in conformity with information relating to the Initial
Purchasers and furnished to the Company in writing by the Initial Purchasers
expressly for use in the Offering Memorandum. No injunction or written order has
been issued to the Company that either (i) asserts that any of the transactions
contemplated by the Offering Documents is subject to the registration
requirements of the Securities Act or (ii) would prevent or suspend the issuance
or sale of any of the Securities or the use of the Offering Memorandum in any
jurisdiction. The Company has not distributed, and will not distribute, prior to
the later of the Closing Date (or any Additional Closing Date) and the
completion of the Initial Purchasers’ distribution of the Securities, any
offering material in connection with the offering and sale of the Securities
other than the Preliminary Offering Memorandum and the Offering Memorandum.
 
(b)  As of their respective filing dates, each of the Incorporated Documents
complied in all material respects with the requirements of the Securities Act or
the Exchange Act of 1934, as amended (the “Exchange Act”), as applicable, and
the rules and regulations of the Commission thereunder applicable to the
Incorporated Documents. Except as disclosed in the Offering Memorandum, as of
their respective filing dates, the financial statements of each of the Company
and Jazz included or incorporated by reference in the Offering Memorandum
complied as to form in all material respects with then applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto, were prepared in accordance with generally accepted accounting
principles in the United States, applied consistently with the past practices of
the Company or Jazz, as applicable, and as of their respective dates, fairly
presented in all material respects the financial position of the Company or
Jazz, as applicable, and the results of their respective operations as of the
time and for the periods indicated therein (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted by Form
10-Q, and Regulations S-K and S-X of the Commission). The financial and
statistical information included or incorporated by reference in the Offering
Memorandum presents fairly the information included therein and, if so required,
has been prepared on a basis consistent with that of the financial statements
that are included in the Incorporated Documents and is derived from the books
and records of the respective entities presented therein and, to the extent such
information is a range, projection or estimate, is based on the good faith
belief and estimates of the management of the Company. The assumptions used in
preparing the pro forma financial statements included or incorporated by
reference in the Offering Memorandum provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or events
described therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
 
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(c)  Subsequent to the respective dates as of which information is given in the
Offering Memorandum, except as disclosed in the Offering Memorandum, the Company
has not declared, paid or made any dividends or other distributions of any kind
on or in respect of its capital stock and there has been no material adverse
change or any development which could, individually or in the aggregate, have or
result in a material adverse change, whether or not arising from transactions in
the ordinary course of business, in or affecting (i) the business, condition
(financial or otherwise), results of operations, properties or prospects of the
Company and the Company’s subsidiary (the “Subsidiary”) taken as a whole; (ii)
the long-term debt or capital stock of the Company and the Subsidiary taken as a
whole; or (iii) the ability of the Company to consummate the Offering or any of
the other transactions contemplated by the Offering Documents (any such change
or development being a “Material Adverse Effect”). Since the date of the latest
balance sheet included or incorporated by reference in the Offering Memorandum,
neither the Company nor the Subsidiary has incurred or undertaken any
liabilities or obligations, whether direct or indirect, accrued or absolute,
liquidated or contingent, matured or unmatured, or entered into any
transactions, including any acquisition or disposition of any business or asset,
which are material to the Company and the Subsidiary, individually or taken as a
whole, except for liabilities, obligations and transactions which are disclosed
in the Offering Memorandum.
 
(d)  Except as contemplated by this Agreement, the Offering Documents or as
disclosed in the Offering Memorandum, since September 30, 2006, through the date
immediately preceding the Closing Date, the Company has not (i) issued any
stock, options, bonds or other corporate securities other than pursuant to the
Company’s option plans, (ii) borrowed any amount or incurred or become subject
to any liabilities (absolute, accrued or contingent), other than current
liabilities incurred in the ordinary course of business and liabilities under
contracts entered into in the ordinary course of business, (iii) discharged or
satisfied any lien, charge, mortgage, pledge, security interest, claim, equity,
trust or other encumbrance, preferential arrangement, defect or restriction of
any kind whatsoever (any “Lien”) or adverse claim or paid any obligation or
liability (absolute, accrued or contingent), other than current liabilities
shown on the balance sheets of the Company and current liabilities incurred in
the ordinary course of business, (iv) declared or made any payment or
distribution of cash or other property to the stockholders of the Company or
purchased or redeemed any securities of the Company, (v) mortgaged, pledged or
subjected to any Lien or adverse claim any of its properties or assets, except
for Liens for taxes not yet due and payable or otherwise in the ordinary course
of business, (vi) sold, assigned or transferred any of its assets, tangible or
intangible, except in the ordinary course of business or in an aggregate amount
less than $250,000, (vii) suffered any extraordinary losses or waived any rights
of material value other than in the ordinary course of business, (viii) made any
capital expenditures or commitments therefor other than in the ordinary course
of business or in an aggregate amount less than $250,000, (ix) entered into any
other transaction other than in the ordinary course of business in an aggregate
amount less than $250,000 or entered into any material transaction, whether or
not in the ordinary course of business, (x) made any charitable contributions or
pledges, (xi) suffered any damages, destruction or casualty loss, whether or not
covered by insurance, affecting any of the properties or assets of the Company
or any other properties or assets of the Company which could, individually or in
the aggregate, have or result in a Material Adverse Effect, (xii) made any
material change in the nature or operations of the business of the Company or
(xiii) entered into any agreement or commitment to do any of the foregoing.
 
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(e)  The authorized, issued and outstanding capital stock of the Company is as
set forth in the Offering Memorandum and, after giving effect to the Offering,
will be as set forth in the Offering Memorandum. Except as disclosed in the
Offering Memorandum, all of the issued and outstanding shares of capital stock
of the Company are fully paid and non-assessable and have been duly and validly
authorized and issued, in compliance with all applicable federal, state and
foreign securities laws and are not in violation of or subject to any preemptive
or similar right that does or will entitle any person, upon the issuance or sale
of any security, to acquire from the Company any Common Stock or other security
of the Company or any security convertible into, or exercisable or exchangeable
for, Common Stock or any other such security (any “Relevant Security”).
 
(f)  The Common Stock (including the Conversion Shares) conforms to the
descriptions thereof contained in the Offering Memorandum in all material
respects. Except as disclosed in, and as of the date or dates disclosed in, the
Offering Memorandum, neither the Company nor the Subsidiary has outstanding
warrants, options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, or any contracts or commitments to issue or sell,
any Common Stock or other security of the Company or the Subsidiary or any
security convertible into, or exercisable or exchangeable for, Common Stock or
any other such security.
 
(g)  Upon the stockholders’ approval of a proposal to increase the Company’s
authorized shares of Common Stock sufficient to allow for the issuance of the
Conversion Shares (the “Authorized Share Increase”), the Conversion Shares will
have been duly authorized and reserved, and if and when issued upon conversion
of the Notes in accordance with their terms and the Indenture, will be validly
issued, fully paid and non-assessable, free of any preemptive or similar rights
and any Liens; and will not be subject to any restriction upon the voting or
transfer thereof pursuant to applicable law or the Company’s certificate of
incorporation, bylaws or governing documents or any agreement to which the
Company or the Subsidiary is a party or by which any of them may be bound.
 
(h)  The Subsidiary is wholly-owned by the Company. The Subsidiary is the only
subsidiary of the Company. All of the issued shares of capital stock of or other
ownership interests in the Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable and are owned directly or
indirectly by the Company free and clear of any Lien.
 
(i)  Each of the Company and the Subsidiary has been duly organized and validly
exists as a corporation in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and the Subsidiary has all requisite
corporate power and authority to carry on its business as described in the
Offering Memorandum, and to own, lease and operate its respective properties.
Each of the Company and the Subsidiary is duly qualified to do business and is
in good standing as a foreign corporation in each state in the United States in
which the character or location of its properties (owned, leased or licensed) or
the nature or conduct of its business makes such qualification necessary, except
for those failures to be so qualified or in good standing which would not
reasonably be expected to cause (individually and in the aggregate) a Material
Adverse Effect.
 
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(j)  The Company has the requisite power and authority to execute, deliver and
perform its obligations under the Notes. The Notes have been duly and validly
authorized by the Company for issuance and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture
and when delivered to and paid for by the Initial Purchasers in accordance with
the terms hereof, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company free of any
Liens, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms except insofar as indemnification and
contribution provisions may be limited by applicable law and except that the
enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors’ rights generally, and general
principles of equity (regardless of whether such enforcement is considered in a
proceeding at law or in equity) (the preceding exceptions, collectively, the
“Enforceability Exceptions”) and will be convertible into the Conversion Shares
in accordance with their terms. At the Closing Date, the Notes will be in the
form contemplated by the Indenture in all material respects.
 
(k)  The Company has the requisite power and authority to execute, deliver and
perform its obligations under the Indenture. The Indenture has been duly and
validly authorized by the Company and meets the requirements for qualification
under the Trust Indenture Act of 1939, as amended (the “TIA”), and, when
executed and delivered by the Company (assuming the due authorization, execution
and delivery by the Trustee), will constitute a valid and legally binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except that the enforcement thereof may be limited by the Enforceability
Exceptions.
 
(l)  The Company has the requisite power and authority to execute, deliver and
perform its obligations under this Agreement, the Registration Rights Agreement,
the Security Agreement and the Escrow Agreement. This Agreement, the
Registration Rights Agreement, the Security Agreement and the Escrow Agreement
have been duly and validly authorized by the Company and when executed and
delivered by the Company (assuming the due authorization, execution and delivery
by the other parties thereto), will constitute valid and legally binding
agreements of the Company, enforceable against the Company in accordance with
their respective terms, except that the enforcement thereof may be limited by
the Enforceability Exceptions.
 
(m)  There exists as of the date hereof (after giving effect to the transactions
contemplated by each of the Offering Documents) no event or condition that would
constitute a default or an event of default under any of the Offering Documents.
 
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(n)  The execution, delivery, and performance of this Agreement, the Indenture,
the Registration Rights Agreement, the Security Agreement and the Escrow
Agreement and the consummation of the transactions contemplated by the Offering
Documents do not and will not conflict with, require consent under or result in
a breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default)
under or violate or result in the creation or imposition of any Lien upon any
property or assets of the Company or the Subsidiary pursuant to, (i) any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant, instrument,
franchise, license or permit to which the Company or the Subsidiary is a party
or by which the Company or the Subsidiary or their respective properties,
operations or assets may be bound; (ii) any provision of the certificate or
articles of incorporation, bylaws or other organizational documents of the
Company or the Subsidiary; or (iii) any law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company, the Subsidiary or any of its or their properties; except, in the
case of clauses (i) and (iii) above as have been or will be obtained, as may be
required under Federal or state securities laws in connection with the filing
and effectiveness of the Shelf Registration Statement as contemplated by the
Registration Rights Agreement, under Federal or state securities laws in
connection with the distribution of the Securities by the Initial Purchasers, in
connection with the qualification of the Indenture under the TIA or in
connection with the listing of the Conversion Shares on the American Stock
Exchange, or could not reasonably be expected to have a Material Adverse Effect.
 
(o)  On the Closing Date, the Security Agreement will be effective to create, in
favor of the Trustee for the benefit of the holders of the Notes as security for
the Notes, a valid and enforceable security interest in the Collateral (as
defined in the Security Agreement). Each of the Company and the Subsidiary is a
“registered organization” (as defined in Article 9 of the applicable Uniform
Commercial Code) under the law of the state in which it is identified in the
Indenture as being organized, and on the Closing Date all security interests
granted under the Security Agreement will be duly perfected pursuant to Section
9-314 of the New York Uniform Commercial Code upon execution and delivery of the
Control Agreement.
 
(p)  Except as disclosed in the Offering Memorandum, each of the Company and the
Subsidiary has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, a “Consent”) of, and has made all
filings with and given all notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other tribunals
as are necessary to own, lease, license and operate its respective properties
and to conduct its business, and, in all material respects complying therewith,
except where the failure to have any such Consent or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse Effect.
Each of the Company and the Subsidiary is in compliance in all material respects
with the rules, regulations and applicable laws and orders of the authorities
and governing bodies having jurisdiction with respect thereto; and to the
knowledge of the Company no event has occurred (including), without limitation,
the receipt of any written notice from any such authority or governing body)
that would result in or, after notice or lapse of time or both, would result in,
revocation, suspension or termination of any such Consent or would result in or,
after notice or lapse of time or both, would result in any other impairment of
the rights of the holder of any such Consent; except where such failure to be in
compliance or the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
 
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(q)  Except as disclosed in the Offering Memorandum, no Consent, filing, order,
registration, approval, authorization qualification of, with or from any
judicial, regulatory or other legal or governmental agency or body or any third
party, foreign or domestic, is required by the Company for the execution,
delivery and performance of this Agreement, the Indenture, the Registration
Rights Agreement, the Security Agreement and the Escrow Agreement or
consummation of the Offering and the other transactions contemplated by the
Offering Documents, including the issuance, sale and delivery of the Notes (and
the issuance of the Conversion Shares upon conversion of the Notes), except such
Consents as may be required under the rules of the American Stock Exchange or
state securities or “blue sky” laws or the approval of the Commission of a
resale registration statement as contemplated by the Registration Rights
Agreement. No consent, approval or authorization of the stockholders of the
Company is required in connection with the issuance of the Securities.
 
(r)  Except as disclosed in the Offering Memorandum, there is no judicial,
regulatory, arbitral or other legal or governmental proceeding or other claim,
action, suit, inquiry, litigation, or arbitration, domestic or foreign, pending
to which the Company or the Subsidiary is a party or of which any property,
operations or assets of the Company or the Subsidiary is the subject which,
individually or in the aggregate, if determined adversely to the Company or the
Subsidiary, could reasonably be expected to have a Material Adverse Effect, and
to the best of the Company’s knowledge, no such proceeding, claim, action, suit,
litigation or arbitration is threatened or contemplated. The Company has
delivered to the Initial Purchasers all comment letters received from the
Commission.
 
(s)  BDO Seidman, LLP, which examined the financial statements of the Company at
December 31, 2005 and the period from August 12, 2005 (inception) to December
31, 2005 contained in the Incorporated Documents, is, to the best of the
Company’s knowledge, an independent public accounting firm as required by the
Securities Act and the Exchange Act.
 
(t)  The Company is subject to and in full compliance with the reporting
requirements of Section 13 or 15(d) of the Exchange Act and files reports with
the Commission on the EDGAR System. The Common Stock is registered pursuant to
Section 12(b) of the Exchange Act and the outstanding shares of Common Stock are
listed on the American Stock Exchange, and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or de-listing the Common Stock from the
American Stock Exchange, nor has the Company received any written notification
that the Commission or the American Stock Exchange is contemplating terminating
such registration or listing or that the Company is not in compliance with the
continuing listing or maintenance requirements of the American Stock Exchange.
 
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(u)  The Company and the Subsidiary have filed in a timely manner each document
or report required to be filed by each pursuant to the Exchange Act, including,
without limitation, the Incorporated Documents. The Company has provided the
Initial Purchasers copies of all correspondence between the Company and the
Commission regarding the Proxy Statement.
 
(v)  The Company and the Subsidiary maintain a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with United States generally accepted accounting
principles and to maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization, and (iv) the recorded accounting for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
 
(w)  To the extent required by the Exchange Act, the Company and the Subsidiary
has established and maintains and evaluates “disclosure controls and procedures”
(as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and
“internal control over financial reporting” (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act); such disclosure controls and
procedures and internal control over financial reporting are designed to ensure
that material information relating to the Company, including its consolidated
subsidiaries, is made known to each of the Company’s chief executive officer and
chief financial officer by others within the Company, and such disclosure
controls and procedures and internal control over financial reporting are
effective to perform the functions for which they were established; the
Company’s independent auditors and audit committee have been advised of: (i) all
significant deficiencies, if any, in the design or operation of internal control
over financial reporting which could adversely affect the Company’s ability to
record, process, summarize and report financial data and (ii) all fraud, if any,
whether or not material, that involves management or other employees who have a
role in the Company’s internal control over financial reporting; all material
weaknesses, if any, in internal control over financial reporting have been
identified to the Company’s independent auditors and audit committee; since the
date of the most recent evaluation of such disclosure controls and procedures
and internal control over financial reporting, there have been no significant
changes in internal control over financial reporting or in other factors that
could significantly affect internal control over financial reporting, except for
any corrective actions with regard to significant deficiencies and material
weaknesses disclosed in the Offering Memorandum; the principal executive
officers (or their equivalents) and principal financial officers (or their
equivalents) of the Company have made all certifications required by the
Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and any related rules and
regulations promulgated by the Commission, and the statements contained in each
such certification are complete and correct; and the Company, the Subsidiary and
the Company’s board of directors and officers are each in compliance in all
material respects with all applicable effective provisions of the Sarbanes-Oxley
Act and the rules and regulations of the Commission promulgated thereunder.
 
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(x)  None of the Company, the Subsidiary or any of their affiliates or any
person acting on its or their behalf (i) has, within the six-month period prior
to the date hereof, offered or sold in the United States or to any U.S. person
(as such terms are defined in Regulation S) the Securities or any security of
the same class or series of the Securities or (ii) has offered or will offer or
sell the Securities (A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the
Securities Act or (B) with respect to any such securities sold in reliance on
Rule 903 of Regulation S under the Securities Act, by means of any directed
selling efforts within the meaning of Rule 902(c) of Regulation S. Neither the
Company nor the Subsidiary has entered or will enter into any contractual
arrangement with respect to the distribution of the Securities except for this
Agreement and the Registration Rights Agreement.
 
(y)  The proceeds to the Company from the offering of the Securities will not be
used to purchase or carry any security in violation of Regulation T, U and X of
the Board of Governors of the Federal Reserve System.
 
(z)  Neither the Company nor any of its affiliates (within the meaning of Rule
144 under the Securities Act) has taken, directly or indirectly, any action that
constitutes or is designed to cause or result in, or which could reasonably be
expected to constitute, cause or result in, the stabilization or manipulation of
the price of any security to facilitate the sale or resale of the Securities.
 
(aa)  Except as described in the Offering Memorandum, no holder of any Relevant
Security has any rights to require registration of any Relevant Security as part
or on account of, or otherwise in connection with the Offering and any of the
other transactions contemplated by the Offering Documents.
 
(bb)  The Company is not and, immediately after the sale of the Securities as
contemplated hereunder will not be an “investment company” within the meaning of
the Investment Company Act of 1940, as amended, and the rules and regulations of
the Commission thereunder.
 
(cc)  Except as disclosed in the Offering Memorandum, no relationship, direct or
indirect, exists between or among the Company or any affiliate of the Company,
on the one hand, and any director, officer, stockholder, customer or supplier of
the Company or any affiliate of the Company, on the other hand, which is
required by the Exchange Act to be described in the Company’s periodic reports,
which is not so described as required in such reports.
 
(dd)  Each of the Company and the Subsidiary owns or leases all such properties
as are necessary to the conduct of their respective businesses as presently
operated and as proposed to be operated as described in the Offering Memorandum.
The Company and the Subsidiary have good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by them, in each case free and clear of all Liens except such as are described
in the Offering Memorandum or such as could not reasonably be expected to have a
Material Adverse Effect; and any real property and buildings held under lease or
sublease by the Company and the Subsidiary are held by them under valid,
subsisting and enforceable leases or subleases with such exceptions as are not
material to, and do not interfere with, the use made and proposed to be made of
such property and buildings by the Company and the Subsidiary.
 
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(ee)  The Company and the Subsidiary each owns, licenses or possesses all
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed by them in the connection with the business now
operating by them that are necessary for the conduct of the business
(“Intellectual Property”) of the Company and the Subsidiary, except where
failure to own, license or possess or otherwise to be able to acquire such
intellectual property would not singly, or in the aggregate, have a Material
Adverse Effect. To the knowledge of the Company, the Intellectual Property does
not infringe on or conflict with the rights or intellectual property of third
parties, and neither the Company nor the Subsidiary has received any notice of
infringement of or conflict with asserted rights of others with respect to any
intellectual property that, singly or in the aggregate, if the subject of
unfavorable decision, ruling or finding, would have a Material Adverse Effect,
in each case except as described in the Offering Memorandum.
 
(ff)  Each of the Company and the Subsidiary has prepared and timely filed all
federal, state, local, foreign and other material tax returns that are required
to be filed by it and has paid or made provision for the payment of all taxes,
assessments, governmental or other similar charges, including, without
limitation, all material sales and use taxes and all taxes which the Company or
the Subsidiary is obligated to withhold from amounts owing to employees,
creditors and third parties, with respect to the periods covered by such tax
returns (whether or not such amounts are shown as due on any tax return). There
is no tax Lien, whether imposed by any federal, state, local, foreign or other
taxing authority, outstanding against the assets, properties or business of the
Company or the Subsidiary.
 
(gg)  No collective bargaining agreement covering any employee of the Company or
the Subsidiary exists that is binding on either the Company or the Subsidiary,
and, to the Company’s knowledge, no petition has been filed or proceeding
instituted by an employee or group of employees of either the Company or the
Subsidiary with the National Labor Relations Board seeking recognition of a
bargaining representative. To the Company’s knowledge, no organizational effort
currently is being made or threatened by or on behalf of any labor union to
organize any employees of either the Company or the Subsidiary, and there is no
threatened, imminent or current labor strike, dispute or organized work stoppage
in effect by the employees of either the Company or the Subsidiary which could
have or result in a Material Adverse Effect.
 
(hh)  No “prohibited transaction” (as defined in either Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”), or Section 4975
of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”)), “accumulated funding deficiency” (as defined in Section 302 of ERISA)
or other event of the kind described in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived) has occurred with respect to any employee benefit plan
(as defined in Section 3(3) of ERISA) for which the Company or the Subsidiary
would have any liability; each employee benefit plan (as defined in Section 3(3)
of ERISA) for which the Company or the Subsidiary would have any liability is in
compliance in all material respects with applicable law, including, without
limitation, ERISA and the Code; the Company has not incurred and does not expect
to incur material liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any “pension plan” (as defined in Section
3(2)); and each pension plan (as defined in Section 3(2)) for which the Company
would have any material liability that is intended to be qualified under Section
401(a) of the Code is so qualified and, to the Company’s knowledge, nothing has
occurred, whether by action or by failure to act, which could cause the loss of
such qualification.
 
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(ii)  Each of the Company and the Subsidiary is in compliance in all material
respects with all rules, laws and regulations relating to the use, treatment,
storage and disposal of toxic substances and protection of health or the
environment (“Environmental Law”) which are applicable to its business;
(ii) neither the Company nor the Subsidiary has received any written notice from
any governmental authority or third party of an asserted claim under
Environmental Laws; (iii) each of the Company and the Subsidiary has received
all permits, licenses and other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance with all terms
and conditions of any such permit, license or approval; (iv) to the Company’s
knowledge, no facts currently exist that will require the Company or the
Subsidiary to make future material capital expenditures to comply with
Environmental Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or the Subsidiary has been designated as a Superfund
site pursuant to the Comprehensive Environmental Response, Compensation of
Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.) (the “CERCLA
1980”) or otherwise designated as a contaminated site under applicable state or
local law. Neither the Company nor the Subsidiary has been named as a
“potentially responsible party” under the CERCLA 1980. In the ordinary course of
its business, the Company periodically reviews the effect of Environmental Laws
on the business, operations and properties of the Company and the Subsidiary, in
the course of which the Company identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a Material
Adverse Effect.
 
(jj)  The Company and the Subsidiary maintain insurance of the types, against
such losses and in the amounts and with such insurers as are customary in the
Company’s industry and otherwise reasonably prudent, including risks customarily
insured against by similarly situated companies, all of which insurance is in
full force and effect, except where failure of the Company or the Subsidiary to
maintain such insurance or failure of such insurance to be in full force and
effect would not reasonably be expected to have, singly or in the aggregate, a
Material Adverse Effect.
 
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(kk)  All material agreements to which the Company and the Subsidiary are
parties and which are required to have been filed by the Company pursuant to the
Securities Act, the Exchange Act, and the rules and regulations thereunder have
been filed by the Company with the Commission. As of the date hereof, except as
disclosed in the Incorporated Documents, except for those agreements that by
their terms are no longer in effect and except as would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each such
agreement is in full force and effect and is binding on the Company and, to the
Company’s knowledge, is binding upon such other parties, in each case in
accordance with its terms, and neither the Company nor, to the Company’s
knowledge, any other party thereto is in breach of or default under any such
agreement. Except as disclosed in the Incorporated Documents, the Company has
not received any written notice regarding the termination of any such
agreements.
 
(ll)  Neither the Company nor the Subsidiary (i) is in violation of its
certificate of incorporation, bylaws, or other organizational documents, or (ii)
is in default under, and no event has occurred which, with notice or lapse of
time or both, would constitute a default under or result in the creation or
imposition of any Lien upon any of its property or assets pursuant to, any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant, instrument,
franchise, license or permit to which it is a party or by which it is bound or
to which any of its property or assets is subject, or has received a notice or
claim of any such default or has knowledge of any breach of such contracts by
the other party or parties thereto, except where the consequences of such
violation would not reasonably be expected to have a Material Adverse Effect,
and except (in the case of clause (ii) above) defaults or Liens disclosed in the
Offering Memorandum.
 
(mm)  The certificates for the shares of Common Stock (including the Conversion
Shares) conform to the requirements of the American Stock Exchange and the
General Corporation Law of the State of Delaware.
 
(nn)  Except as described in the Offering Memorandum, the Company and the
Subsidiary have complied with and established such boards and policies as
required by the Sarbanes-Oxley Act of 2002. The Company is subject to and is in
compliance with all of the requirements of the American Stock Exchange.
 
(oo)  Other than CRT or Needham (as the Initial Purchasers), no finder, broker,
agent, financial person or other intermediary has acted on behalf of the Company
in connection with the sale of the Securities to the Initial Purchasers, the
resale of the Notes by the Initial Purchasers or the consummation of this
Agreement or any of the transactions contemplated hereby.
 
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(pp)  The Merger Agreement is in full force and effect, and there has been no
amendment to the Merger Agreement or waiver thereunder. To the Company’s
knowledge, the representations and warranties made in the Merger Agreement by
each of the Company and Jazz were true and complete as of the date made and are
true and complete as of the date hereof (except for any representation or
warranty that speaks as of a specific date, which representation or warranty is
true and complete as of such date). There are no actions pending or, to the
Company’s knowledge, threatened, before any court or governmental agency in
which it is sought to restrain or prohibit, or obtain material damages or other
relief in connection with, the Merger Agreement or the transaction contemplated
therein.
 
(qq)  Assuming the accuracy of the Initial Purchasers’ representations and
warranties in Section 4 hereof and their compliance with their agreements in
Section 4 hereof, the offer and sale of the Securities in the manner
contemplated by this Agreement will be exempt from the registration requirements
of the Securities Act by reason of Section 4(2) and Regulation D thereof; and
except in connection with the registration contemplated by the Registration
Rights Agreement, it is not necessary to qualify an indenture in respect of the
Securities under the TIA.
 
The Company acknowledges that the Initial Purchasers and, for purposes of the
opinions to be delivered to the Initial Purchasers pursuant to Section 7 hereof,
counsel to the Company and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
 
3.  Purchase, Sale and Delivery of the Securities
 
(a)  On the basis of the representations, warranties, agreements and covenants
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Initial Purchasers, and the Initial
Purchasers agree, severally and not jointly, to purchase from the Company, at
100% of their principal amount (subject to Section 3(c) hereof), the respective
aggregate principal amount of the Firm Notes set forth opposite the Initial
Purchasers’ names on Schedule 1 hereto; provided, however, that upon
satisfaction of certain release conditions contained in the Escrow Agreement,
3.5% of the principal amount of the Firm Notes set forth opposite an Initial
Purchaser’s name on Schedule 1 hereto will be released to such Initial
Purchaser.
 
(b)  In addition, on the basis of the representations, warranties, agreements
and covenants contained herein, and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Initial Purchasers to
purchase, severally and not jointly, up to $21,750,000 in aggregate principal
amount Option Notes from the Company at the same price as the purchase price to
be paid by the Initial Purchasers for the Firm Notes. The option granted
hereunder may be exercised at any time, regardless of whether any of the Firm
Notes have been converted or repurchased by the Company, on or after the Closing
Date to and including the forty-fifth (45th) day following the Closing Date upon
written or telegraphic notice by the Initial Purchasers to the Company, which
notice may be given from time to time on one or more occasion. Such notice shall
set forth (i) the amount (which shall be an integral multiple of $1,000 in
aggregate principal amount at issuance) of Option Notes as to which the Initial
Purchasers are exercising the option, and (ii) the time, date and place at which
such Option Notes will be delivered. Such time and date of delivery is called
the “Additional Closing Date.” The Additional Closing Date must not be later
than eight (8) full business days after the Initial Purchasers exercise the
option, with the actual date determined by the Initial Purchasers. If any Option
Notes are to be purchased (x) each Initial Purchaser agrees, severally and not
jointly, to purchase the respective aggregate principal amount of Option Notes
that bears the same proportion to the total aggregate principal amount of Option
Notes to be purchased as the aggregate principal amount of Firm Notes set forth
on Schedule 1 hereto opposite the name of such Initial Purchaser bears to the
total aggregate principal amount of Firm Notes and (y) the Company agrees to
sell such Option Notes to the Initial Purchasers. The Initial Purchasers may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Company.
 
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(c)  Delivery of and payment for the Notes shall be made at the offices of
Bingham McCutchen LLP, at 150 Federal Street, Boston, MA 02110, on December 19,
2006, or such other date as the Initial Purchasers and the Company shall
mutually agree, at such time and date being herein referred to as the “Closing
Date.” The Notes shall be delivered on the Closing Date against payment of the
purchase price therefore by wire transfer of immediately available funds to an
account specified in writing to the Initial Purchasers by the Company. If
requested by the Initial Purchasers, one or more global securities representing
the Notes shall be registered by the Trustee in the name of Cede & Co., the
nominee of The Depository Trust Company (“DTC”), and credited to such accounts
as the Initial Purchasers shall request, upon notice to the Company at least 48
hours prior to the Closing Date.
 
(d)  Notwithstanding anything to the contrary herein, to the extent that any
subsequent purchaser of the Notes from the Initial Purchasers identified in a
list to be delivered by the Initial Purchasers on the date hereof (a “Subsequent
Purchaser”) has withdrawn its commitment, as set forth in such list, to purchase
all or a portion of the Notes, or such Subsequent Purchaser has actually made or
has threatened to make any amendments, alterations, modifications, withdrawals,
waivers or breaches of commitment to purchase Notes or fails to perform in any
under its commitment to purchase Notes, the Initial Purchasers’ obligation to
purchase the Notes under this Agreement shall be terminated or adjusted downward
on a dollar for dollar basis accordingly, at the sole discretion of the Initial
Purchasers.
 
(e)  Delivery to the Initial Purchasers of and payment for the Option Notes
shall be made on the Additional Closing Date in the same manner as payment for
the Firm Notes.
 
4.  Offering by the Initial Purchasers; Representations and Warranties of the
Initial Purchasers.
 
(a)  The Initial Purchasers propose to make an offering of the Notes at the
price and upon the terms set forth in the Offering Memorandum as soon as
practicable after the date of this Agreement and as in the judgment of the
Initial Purchasers is advisable.
 
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(b)  Each of the Initial Purchasers, severally and not jointly, represents and
warrants (as to itself only) that:
 
(i)  It is a Qualified Institutional Buyer as defined in Rule 144A under the
Securities Act (a “QIB”) and it will offer the Notes for resale only upon the
terms and conditions set forth in this Agreement and in the Offering Memorandum.
 
(ii)  It is not acquiring the Notes with a view to any distribution thereof that
would violate the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction. It will solicit offers to
buy the Notes only from, and will offer and sell the Notes only to persons
reasonably believed by it to be, QIBs; provided, however, that in purchasing
such Notes, such persons are deemed to have represented and agreed as provided
under the caption “Transfer Restrictions” contained in the Preliminary Offering
Memorandum and the Offering Memorandum.
 
(iii)  No form of general solicitation or general advertising in violation of
the Securities Act has been or will be used nor will any offers in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act.
 
5.  Certain Covenants. For the purposes of this Section 5, “Closing Date” shall
refer to the Closing Date for the Firm Notes and any Additional Closing Date for
the Option Notes.
 
(a)  The Company covenants and agrees with the Initial Purchasers that:
 
(i)  The Company shall use the proceeds of the Offering in the manner described
in the Offering Memorandum under the heading “Use of Proceeds.”
 
(ii)  The Company will not amend or supplement the Offering Memorandum or any
amendment or supplement thereto of which the Initial Purchasers shall not
previously have been advised and furnished a copy for a reasonable period of
time prior to the proposed amendment or supplement and as to which the Initial
Purchasers shall not have given their consent, which consent shall not be
unreasonably withheld or delayed, other than by filing documents under the
Exchange Act that are incorporated by reference therein, without notice to the
Initial Purchasers. The Company will promptly, upon the reasonable request of
the Initial Purchasers or counsel to the Initial Purchasers, make any amendments
or supplements to the Offering Memorandum that may be reasonably necessary or
advisable in connection with the resale of the Notes by the Initial Purchasers.
As soon as the Company is advised thereof, the Company will notify the Initial
Purchasers and their counsel, and confirm the notice in writing, of any order
preventing or suspending the use of the Offering Documents, or the suspension of
the qualification or registration of the Securities for offering or the
suspension of any exemption for such qualification or registration of the
Securities for offering in any jurisdiction, or of the institution or threatened
institution of any proceedings for any of such purposes, and the Company will
use its best efforts to prevent the issuance of any such order and, if issued,
to obtain as soon as reasonably possible the lifting thereof.
 
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(iii)  In connection with the Offering, until the Initial Purchasers shall have
notified the Company of the completion of the resale of the Notes, neither the
Company nor any of its affiliates has or will, either alone or with one or more
other persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Notes or attempt to induce any person
to purchase any Notes; and neither the Company nor any of its affiliates will
make bids or purchases for the purpose of creating actual, or apparent, active
trading in, or of raising the price of, the Notes.
 
(iv)  For a period of 90 days after the date of the initial offering of the
Notes by the Initial Purchasers, the Company will not offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any securities of
the Company that are substantially similar to the Securities, including but not
limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Stock or any such substantially similar
securities, except with the consent of the Initial Purchasers (which consent
shall not be unreasonably withheld) and except the filing of a shelf
registration statement covering the Securities and the filing of a registration
statement, or post-effective amendment to the Registration Statement filed on
March 9, 2006, covering the issuance of Common Stock upon exercise of the
Company’s outstanding warrants and the issuance of units upon exercise of the
Company’s outstanding unit purchase options, issuances of securities pursuant to
the conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options, in each case outstanding on the date hereof,
grants of employee stock options or restricted stock pursuant to the terms of a
plan approved by the Company’s stockholders, or issuances of securities pursuant
to the exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof. The Company will not at any time offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any securities under circumstances where such offer, sale, pledge, contract or
disposition would cause the exemption afforded by Section 4(2) of the Securities
Act to cease to be applicable to the offer and sale of the Notes, except with
the consent of the Initial Purchasers (which consent will not be unreasonably
withheld).
 
(v)  The Company will use its best efforts to qualify or exempt the Notes for
offer and sale under the securities or “blue sky” laws of such jurisdictions as
the Initial Purchasers may reasonably designate and the Company will make such
applications and furnish information as may be required for such purposes, and
will continue any such qualifications or exemptions in effect for as long as may
be reasonably necessary to complete the distribution of the Securities by the
Initial Purchasers; provided, however, that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction or to take any other
action that would subject it to general service of process or to taxation in
respect of doing business in any jurisdiction in which it is not otherwise
subject.
 
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(vi)  If, at any time prior to the completion of the resale by the Initial
Purchasers of the Securities, any event shall occur as a result of which it is
necessary, in the opinion of the Company and its counsel or the reasonable
judgment of the Initial Purchasers, to amend or supplement the Offering
Memorandum in order to make such Offering Memorandum not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser, or if
for any other reason it shall be necessary to amend or supplement the Offering
Memorandum in order to comply with applicable laws, rules or regulations, the
Company shall notify the Initial Purchasers of any such event and forthwith
amend or supplement such Offering Memorandum at its own expense so that, as so
amended or supplemented, such 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 are made, not misleading and will comply with all applicable laws, rules or
regulations.
 
(vii)  The Company will, without charge, provide to the Initial Purchasers and
to counsel to the Initial Purchasers as many copies of each of the Offering
Memorandum or any amendment or supplement thereto as the Initial Purchasers or
their counsel may reasonably request.
 
(viii)  The Company will not take any action prohibited by Regulation M under
the Exchange Act in connection with the distribution of the Securities
contemplated hereby.
 
(ix)  Neither the Company nor any of its affiliates (within the meaning of Rule
144 under the Securities Act) will take, directly or indirectly, any action that
constitutes or is designed to cause or result in, or which could reasonably be
expected to constitute, cause or result in, the stabilization or manipulation of
the price of any security to facilitate the sale or resale of the Securities.
 
(x)  The Company will cause the Notes to be eligible for clearance and
settlement through DTC.
 
(xi)  The Company will use its best efforts to effect the inclusion of the
Securities in the PORTAL Market.
 
(xii)  The Company will list the Conversion Shares for quotation on the American
Stock Exchange as promptly as possible after the Merger and, in any event, no
later than the effectiveness of the Shelf Registration Statement as contemplated
by the Registration Rights Agreement.
 
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(xiii)  After the Merger, the Company will, at all times, authorize, reserve and
keep available, free of preemptive rights, enough shares of Common Stock for the
purpose of enabling the Company to satisfy its obligations to issue the
Conversion Shares upon conversion of the Notes.
 
(xiv)  Prior to the Closing, the Company will not incur any material
indebtedness or dispose of any material assets or make any material acquisition
or change in its business or operations, except with the Initial Purchasers’
consent, which consent shall not be unreasonably withheld or delayed. The
Company shall not, during the period commencing on the date hereof and ending on
the Closing Date, issue any press release or other public communication, or hold
any press conference with respect to the Company’s financial condition, results
of operations or the Offering, without the prior consent of the Initial
Purchasers, which consent shall not be unreasonably withheld or delayed, subject
to the Company’s obligation to comply with applicable laws.
 
(xv)  The Company shall use its reasonable best efforts to cause the Conversion
Shares to be issued in compliance with all applicable federal, state and foreign
securities laws and to cause the Conversion Shares not to be issued in violation
of or subject to any preemptive or similar right that does or will entitle any
person to acquire any Relevant Security from the Company upon issuance or sale
of the Notes or the Conversion Shares.
 
6.  Expenses. Whether or not the Offering is consummated or this Agreement is
terminated (pursuant to Section 11 or otherwise), the Company agrees to pay the
following costs and expenses and all other costs and expenses incident to the
performance by the Company of its obligations hereunder: (a) the negotiation,
preparation, printing, typing, reproduction, execution and delivery of this
Agreement and of the other Offering Documents, any amendment or supplement to or
modification of any of the foregoing and any and all other documents furnished
pursuant hereto or thereto or in connection herewith or therewith; (b) the
preparation, printing or reproduction of the Preliminary Offering Memorandum and
the Offering Memorandum and each amendment or supplement; (c) the delivery
(including postage, air freight charges and charges for counting and packaging)
to the Initial Purchasers of such copies of each of the Preliminary Offering
Memorandum and the Offering Memorandum and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offer and
sale of the Notes; (d) the preparation, printing, authentication, issuance and
delivery of certificates for the Notes and the Conversion Shares, including any
stamp taxes in connection with the original issuance and sale of the Securities;
(e) the exemption from, or registration or qualification of the Securities for
offer and sale under, the securities or “blue sky” laws of the several states
(including filing fees and the reasonable fees, expenses and disbursements of
counsel to the Initial Purchasers relating to such registration and
qualification); (f) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to and
related communications with prospective purchasers of the Notes; (g) the fees
and expenses of counsel (including local and special counsel, if any) for the
Company; (h) fees and expenses of the Trustee, including fees and expenses of
their counsel; (i) fees and expenses of the Escrow Agent and the collateral
agent under the Security Agreement, including fees and expenses of its counsel;
and (j) all expenses and listing fees incurred in connection with the
application for listing for quotation of the Common Stock on the American Stock
Exchange. Except as set forth above, the Initial Purchasers will pay all of
their own costs and expenses, including without limitation, the fees and
disbursements of their counsel and transfer taxes on any resales of the
Securities offered by them.
 
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7.  Conditions of the Initial Purchasers’ Obligations. For purposes of this
Section 7, “Closing Date” shall refer to the Closing Date for the Notes. The
obligations of the Initial Purchasers to purchase and pay for the Notes are
subject to the absence from any certificates, opinions, written statements or
letters furnished to the Initial Purchasers pursuant to this Section 7 of any
misstatement or omission and to the following additional conditions unless
waived in writing by the Initial Purchasers:
 
(A)  The Initial Purchasers shall have received an opinion, in substantially the
form of Exhibit A attached hereto, dated the Closing Date, of Cooley Godward
Kronish LLP, counsel to the Company.
 
(B)  The Initial Purchasers shall have received a comfort letter, in form and
substance satisfactory to the Initial Purchasers, in their sole discretion,
dated December 12, 2006, of BDO Seidman, LLP, registered independent auditor of
the Company.
 
(C)  With respect to the comfort letter of BDO Seidman, LLP referred to in the
preceding subsection, the Initial Purchasers shall have received a “bring-down”
letter of BDO Seidman, LLP, in form and substance satisfactory to the Initial
Purchasers, in their sole discretion, dated the Closing Date.
 
(D)  The Initial Purchasers shall have received a comfort letter, in form and
substance satisfactory to the Initial Purchasers, in their sole discretion,
dated December 11, 2006, of Ernst & Young LLP, registered independent auditor of
Jazz.
 
(E)  With respect to the comfort letter of Ernst & Young LLP referred to in the
preceding subsection, the Initial Purchasers shall have received a “bring-down”
letter of Ernst & Young LLP, in form and substance satisfactory to the Initial
Purchasers, in their sole discretion, dated the Closing Date.
 
(F)  The Initial Purchasers shall have received an opinion, in form and
substance satisfactory to the Initial Purchasers, in their sole discretion,
dated the Closing Date, of Bingham McCutchen LLP, counsel to the Initial
Purchasers.
 
(G)  The representations and warranties of the Company contained in this
Agreement shall be true and correct (in the case of representations and
warranties qualified as to materiality) or true and correct in all material
respects (in the case of all other representations and warranties) on and as of
the Closing Date, and the Company shall have complied in all material respects
with all covenants, agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date.
 
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(H)  The representations and warranties made in the Merger Agreement by each of
the Company and Jazz shall be true and complete (in the case of representations
and warranties qualified as to materiality) or true and correct in all material
respects (in the case of all other representations and warranties) on and as of
the Closing Date (except for any representation or warranty that speaks as of a
specific date, which representation or warranty shall be true and complete in
all material respects as of such date).
 
(I)  None of the issuance and sale of the Securities pursuant to this Agreement
or any of the transactions contemplated by this Agreement or any of the other
Offering Documents shall be enjoined (temporarily or permanently) and no
restraining order or other injunctive order shall have been issued; and there
shall not have been any legal action, statute, order, decree or other
administrative proceeding enacted, instituted or overtly threatened against the
Company or against the Initial Purchasers relating to the issuance or the
trading of the Securities or the Initial Purchasers’ activities in connection
therewith or any other transactions contemplated by this Agreement or the
Offering Memorandum or the other Offering Documents.
 
(J)  Subsequent to the date of this Agreement and since the date of the most
recent financial statements in the Offering Memorandum, there shall not have
occurred any change, or any development involving a prospective change in, or
affecting the business, condition (financial or other), properties or results of
operations of, the Company or the Subsidiary or Jazz not disclosed in the
Offering Memorandum that is, in the judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed with
the Offering on the terms and in the manner contemplated by the Offering
Memorandum.
 
(K)  The Initial Purchasers shall have received certificates, dated the Closing
Date and signed by the Chairman and Chief Executive Officer and the President,
Chief Operating Officer, Chief Financial Officer and Secretary of the Company,
to the effect that to the best of their knowledge:
 
(i)  All of the representations and warranties of the Company set forth in this
Agreement are true and correct (in the case of representations and warranties
qualified as to materiality) or true and correct in all material respects (in
the case of all other representations and warranties) on and as of the Closing
Date, and all covenants agreements, conditions and obligations of the Company to
be performed, satisfied or complied with hereunder on or prior the Closing Date
have been duly performed, satisfied or complied with, in all material respects.
 
(ii)  The representations and warranties made by the Company and Jazz in the
Merger Agreement are true and correct (in the case of representations and
warranties qualified as to materiality) or true and correct in all material
respects (in the case of all other representations and warranties) on and as of
the Closing Date (except for any such representation or warranty that speaks as
of a specific date, which representation or warranty is true and complete in all
material respects as of such date).
 
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(iii)  No event has occurred and is continuing, as a result of which the
Offering Memorandum including all exhibits and attachments thereto would contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances existing at the time it is delivered to the Initial
Purchasers, not misleading.
 
(iv)  The issuance and sale of the Notes pursuant to this Agreement and the
Offering Memorandum and the consummation of the transactions contemplated by the
Offering Documents have not been enjoined (temporarily or permanently) and no
restraining order or other injunctive order has been issued and there has not
been any legal action, order, decree or other administrative proceeding
instituted or, to such officers’ knowledge, threatened against the Company
relating to the issuance or the trading of the Securities or the Initial
Purchasers’ activities in connection therewith or in connection with any other
transactions contemplated by this Agreement or the Offering Memorandum or the
other Offering Documents.
 
(v)  Subsequent to the date of this Agreement and since the date of the most
recent financial statements in the Offering Memorandum, there has not occurred
(1) any change, or any development involving a prospective change, in or
affecting the business, condition (financial or other), properties or results of
operations of the Company or the Subsidiary, not contemplated by the Offering
Memorandum, except for any change or prospective change that would not
reasonably be expected to result in a Material Adverse Effect upon the Company,
(2) any change, or any development involving a prospective change, in or
affecting the business, condition (financial or other), properties or results of
operations of Jazz, not contemplated by the Offering Memorandum, except for any
change or prospective change that would not reasonably be expected to result in
a Material Adverse Effect upon Jazz, or (3) any event or development relating to
or involving the Company or the Subsidiary or any of their respective officers
or directors that makes any statement made in the Offering Memorandum untrue in
any material respect or that requires the making of any addition to or change in
the Offering Memorandum in order to state a material fact necessary in order to
make the statements made therein not misleading.
 
(vi)  At the Closing Date and after giving effect to the consummation of the
transactions contemplated by the Offering Documents there shall exist no Default
or Event of Default (as defined in the Indenture).
 
(L)  Each of the Offering Documents and each other agreement or instrument
executed in connection with the transactions contemplated thereby shall be
reasonably satisfactory in form and substance to the Initial Purchasers and
shall have been executed and delivered by all the respective parties thereto
(other than the Initial Purchasers) and shall be in full force and effect, and
there shall have been no material amendments, alterations, modifications or
waivers of any provision thereof since the date of this Agreement.
 
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(M)  The Initial Purchasers shall have confirmed sales to the Subsequent
Purchasers agreeing to fund a total of $145,000,000, none of the Subsequent
Purchasers shall have actually made or threatened to make any amendments,
alterations, modifications, withdrawals, waivers or breaches with respect to its
commitment to purchase Notes, and the Initial Purchasers shall have no
reasonable good faith belief that such commitments or purchases will not be
funded.
 
(N)  All proceedings taken in connection with the issuance of the Notes and the
transactions contemplated by this Agreement, the other Offering Documents and
all documents and papers relating thereto shall be reasonably satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers. The Initial
Purchasers and counsel to the Initial Purchasers shall have received copies of
such papers and documents as they may reasonably request in connection
therewith, all in form and substance reasonably satisfactory to them.
 
(O)  The Notes shall be eligible for clearance on DTC.
 
(P)  At the Closing Date, the Company and the Trustee shall have entered into
the Indenture, in form and substance satisfactory to the Initial Purchasers, in
their sole discretion, and the Initial Purchasers shall have received
counterparts, dated the Closing Date and executed by each of the parties thereto
and the Notes shall have been duly executed and delivered by the Company and
duly authenticated by the Trustee.
 
(Q)  At the Closing Date, each of the Registration Rights Agreement, the Escrow
Agreement, the Security Agreement and the Control Agreement shall have been
executed and delivered by all parties thereto.
 
(R)  Except as disclosed in the Offering Memorandum, there are no pending or
threatened legal or governmental proceedings to which the Company or the
Subsidiary or Jazz is a party or of which any property of the Company or the
Subsidiary is the subject, which, the Initial Purchasers believe, in their sole
discretion, if determined adversely to the Company or the Subsidiary, would
individually or in the aggregate have a Material Adverse Effect on the financial
position or results of operations of the Company and the Subsidiary taken as a
whole; and
 
(S)  The Company shall have received Limited Waivers in the form of Exhibit B
hereto from the parties named therein.
 
All such opinions, certificates, letters, schedules, documents or instruments
delivered pursuant to this Agreement will comply with the provisions hereof only
if they are satisfactory in all respects to the Initial Purchasers and counsel
to the Initial Purchasers. The Company shall furnish to the Initial Purchasers
such conformed copies of such opinions, certificates, letters, schedules,
documents and instruments in such quantities as the Initial Purchasers shall
reasonably request.
 
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8.  Indemnification.
 
(a)  The Company shall indemnify and hold harmless (i) each Initial Purchaser,
(ii) each person, if any, who controls an Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, and (iii)
the respective members, officers, directors, partners, employees, and agents of
the Initial Purchasers or any controlling person, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever as incurred
(including, but not limited to, reasonable attorneys’ fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon (x) any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum or the omission or alleged omission to state in the Preliminary
Offering Memorandum or the Offering Memorandum a material fact necessary to make
the statements therein in light of the circumstances under which they were made
not misleading, or (y) any breach by the Company or the Subsidiary of their
respective representations, warranties or agreements set forth herein or of
applicable law; provided, however, that the Company will not be liable pursuant
to clause (x) above in any such case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial Purchasers
expressly for use in the section entitled “Plan of Distribution” therein. The
parties acknowledge and agree that such information provided by or on behalf of
the Initial Purchasers consists solely of the material identified in Section 15
hereof. This indemnity agreement will be in addition to any liability that the
Company may otherwise have, including under this Agreement. In addition, with
respect to any untrue statement or alleged untrue statement in, or omission or
alleged omission from, the Preliminary Offering Memorandum, the Company shall
not be liable to any Initial Purchaser (or its directors and officers or any
person controlling such Initial Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) from whom the person
asserting any such loss, claims, damages or liabilities purchased the Notes
concerned as part of the initial placement of the Notes by the Initial
Purchasers hereunder, to the extent that any such loss, claims damages or
liabilities asserted by such person results from the fact that there was not
sent or given to such person, at or prior to the Closing, a copy of the Offering
Memorandum, as amended or supplemented, if the Company had previously furnished
copies thereof to such Initial Purchaser. Any amounts advanced by the Company to
an indemnified party pursuant to this Agreement shall be returned to the Company
if it shall be finally determined by a court of competent jurisdiction, not
subject to appeal, that such indemnified party was not entitled to
indemnification by the Company.
 
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(b)  Each Initial Purchaser, severally and not jointly, shall indemnify and hold
harmless (i) the Company, (ii) each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and (iii) the officers, directors, partners, employees,
representatives and agents of the Company, from and against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including, but
not limited to, attorneys’ fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation), joint or several, to which they or any
of them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact provided by such Initial
Purchasers and contained in the section entitled “Plan of Distribution” of the
Offering Memorandum, or arise out of or are based upon the omission or alleged
omission to state in the section entitled “Plan of Distribution” of the Offering
Memorandum a material fact necessary to make the statements therein in light of
the circumstances under which they were made not misleading, in each case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Initial Purchasers expressly for use therein; provided, however, that in no
case shall either Initial Purchaser be liable or responsible for any amount in
excess of the discounts and commissions actually received by such Initial
Purchaser in connection with the sale of the Securities. The parties acknowledge
and agree that such information provided by or on behalf of an Initial Purchaser
consists solely of the material identified in Section 15 hereof. This indemnity
will be in addition to any liability that an Initial Purchaser may otherwise
have, including under this Agreement.
 
(c)  Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify each party against whom indemnification is to be sought
in writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this Section 8, except to the extent the defense of such claim or action
has been materially prejudiced by such failure). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate, at its own expense in the defense of such action, and to the extent
it may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel satisfactory to such indemnified party; provided,
however, that counsel to the indemnifying party shall not (except with the
written consent of the indemnified party) also be counsel to the indemnified
party. Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
or parties unless (i) the employment of such counsel shall have been authorized
in writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
take charge of the defense of such action within a reasonable time after notice
of commencement of the action, (iii) the indemnifying party does not diligently
defend the action after assumption of the defense, or (iv) such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of one such counsel and any local counsel shall be
borne by the indemnifying parties. No indemnifying party shall, without the
prior written consent of the indemnified parties, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened claim, investigation, action or proceeding in respect of which
indemnity or contribution may be or could have been sought by an indemnified
party under this Section 8 or Section 9 hereof (whether or not the indemnified
party is an actual or potential party thereto), unless (x) such settlement,
compromise or judgment (A) includes an unconditional release of the indemnified
party from all liability arising out of such claim, investigation, action or
proceeding, and (B) does not include a statement as to or an admission of fault,
culpability or any failure to act, by or on behalf of the indemnified party, and
(y) the indemnifying party confirms in writing its indemnification obligations
hereunder with respect to such settlement, compromise or judgment.
 
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9.  Contribution. In order to provide for contribution in circumstances in which
the indemnification provided for in Section 8 is for any reason held to be
unavailable from an indemnifying party or is insufficient to hold harmless a
party indemnified thereunder, the Company, on the one hand, and the Initial
Purchasers, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, liabilities, claims, damages and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Initial
Purchasers, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) to which the Company and the Initial Purchasers
may be subject, in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Securities or, if such allocation is
not permitted by applicable law in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the relative fault of
the Company, on the one hand, and 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, shall be deemed to be
in the same proportion as (a) the total proceeds from the offering of the
Securities (net of discounts but before deducting expenses) received by the
Company bear to (b) the discounts and commissions actually received by the
Initial Purchasers, respectively. 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 the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or 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 9 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 into account the equitable
considerations referred to above. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an indemnified party and referred to
above in Section 8 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
judicial, regulatory or other legal or 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 9, (i) in no case shall either of the Initial Purchasers be
required to contribute any amount in excess of the amount by which the discounts
and commissions actually received by such Initial Purchaser in respect of the
Notes resold by the Initial Purchaser in the initial placement of such Notes
exceeds the amount of any damages which such Initial Purchaser has otherwise
been required to pay by reason of any untrue or alleged untrue statement or
omission, or alleged omission, and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 9, (A) each person,
if any, who controls either of the Initial Purchasers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and (B) the
respective officers, directors, partners, employees, representatives and agents
of the Initial Purchasers or any controlling person shall have the same rights
to contribution as such Initial Purchasers, and (C) each person, if any, who
controls any Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, and (D) the officers, directors, employees,
representatives and agents of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (i) and (ii) of
this Section 9. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section 9, notify such party or parties from whom
contribution may be sought, but the failure to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 9 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its prior written consent, provided that such written consent shall not
be unreasonably withheld or delayed.
 
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10.  Survival Clause. The respective representations, warranties, agreements,
covenants and indemnities of the Company and the Initial Purchasers set forth in
this Agreement shall remain in full force and effect, regardless of (a) any
investigation made by or on behalf of officers, directors, partners, employees,
agents, representatives or controlling persons referred to in Sections 8 and 9
hereof, and (b) delivery of and payment for the Notes, and shall, subject to
Section 13 hereof, be binding upon and shall, subject to Section 13 hereof,
inure to the benefit of, any successors, permitted assigns, heirs and legal
representatives of the Company, the Initial Purchasers and the indemnified
parties referred to in Section 8 hereof. The respective agreements, covenants
and indemnities set forth in Sections 6 and 8-20 hereof shall remain in full
force and effect, regardless of any termination of this Agreement.
 
11.  Termination. (a) This Agreement may be terminated in the sole discretion of
the Initial Purchasers by notice to the Company if (i)  any conditions to be
satisfied or obligations to be performed hereunder by the Company, including but
not limited to those set forth in Section 7, or for which the Company is
responsible, have not been satisfied or performed in all respects on or prior to
the Closing Date, or (ii) at or prior to the Closing Date or at prior to the
Additional Closing Date, as the case may be:
 
(A)  any domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Initial Purchasers will in the immediate
future materially disrupt, the market for the Company’s securities or securities
in general;
 
(B)  trading on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq Stock Market shall have been suspended or made subject to material
limitations, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required, on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market, or
by order of the Commission or other regulatory body or governmental authority
having jurisdiction;
 
(C)  a banking moratorium has been declared by any state or federal authority or
if any material disruption in commercial banking or securities settlement or
clearance services shall have occurred;
 
(D)(1) there shall have occurred any outbreak or escalation of hostilities or
acts of terrorism involving the United States or there is a declaration of a
national emergency or war by the United States, or (2) there shall have been any
other calamity or crisis or any change in political, financial or economic
conditions if the effect of any such event in (1) or (2), in the opinion of the
Initial Purchasers, makes it impracticable or inadvisable to proceed with the
offering, sale and delivery of the Notes on the terms and in the manner
contemplated by the Offering Memorandum; or
 
(b)  Subject to paragraph (c) below, termination of this Agreement pursuant to
this Section 11 shall be without liability of any party to any other party
except as provided in Section 10 hereof.
 
(c)  If this Agreement shall be terminated pursuant to any of the provisions
hereof, or if the sale of the Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchasers set forth
herein is not satisfied or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply with any provision
hereof, the Company will be responsible for expenses as provided in Section 6
herein.
 
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12.  Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing, shall be delivered by hand delivery, by
telecopier, by courier guaranteeing overnight delivery or by first-class mail,
return receipt requested, and shall be deemed given (i) when made, if made by
hand delivery, (ii) upon confirmation, if made by telecopier (provided notice is
also given by some other means permitted by this Section 12), (iii) one business
day after being deposited with such courier, if made by overnight courier, or
(iv) on the date indicated on the notice of receipt, if made by first-class
mail, to the parties as follows: to the Initial Purchasers c/o CRT Capital Group
LLC, 262 Harbor Drive, Stamford, CT 06902, Attention: Christopher Chase,
facsimile number: (203) 569-6890, and with a copy to Bingham McCutchen LLP, 150
Federal Street, Boston, MA 02110, Attention: John R. Utzschneider, Esq.,
facsimile number: (617) 951-8736, and if sent to the Company, to Acquicor
Technology Inc., 4910 Birch Street, #102, Newport Beach, CA 92660, Attention:
Secretary, facsimile number: (949) 266-9020, and with a copy to Cooley Godward
Kronish LLP, 101 California Street, 5th Floor, San Francisco, CA 94111,
Attention: Gian-Michele aMarca, facsimile number: (415) 693-2222.
 
13.  Successors. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers and the Company and their respective successors,
permitted assigns and legal representatives, and nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (a)
the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control an Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act and the respective officers, directors, partners, employees,
agents and representatives of the Initial Purchasers and any such person or
persons, and (b) the indemnities of an Initial Purchaser contained in Section 8
of this Agreement shall also be for the benefit of the directors, officers,
employees, agents and representatives of the Company and any person or persons
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act. No purchaser of Securities from the Initial
Purchasers will be deemed a successor or an assign because of such purchase.
Prior to the Closing, no party may assign this Agreement or any of its rights
hereunder without the prior written consent of the other party or parties.
 
14.  No Waiver; Modifications in Writing. No failure or delay on the part of the
Company or the Initial Purchasers in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or the Initial Purchasers at law
or in equity or otherwise. No waiver of or consent to any departure by the
Company or the Initial Purchasers from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit thereof;
provided that notice of any such waiver shall be given to each party hereto as
set forth below. Except as otherwise provided herein, no amendment, modification
or termination of any provision of this Agreement shall be effective unless
signed in writing by or on behalf of the Company and the Initial Purchasers. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by the Company or the Initial Purchasers from the terms of any provision of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement, no notice to or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances.
 
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15.  Information Supplied by the Initial Purchasers. The statements set forth in
the fourth, fifth, sixth, seventh and tenth paragraphs in the Offering
Memorandum under the heading “Plan of Distribution” constitute the only
information furnished by the Initial Purchasers to the Company for purposes of
Sections 8(a) and 8(b) hereof.
 
16.  Default by an Initial Purchaser. If either Initial Purchaser shall breach
its obligations to purchase the Notes that it has agreed to purchase hereunder
on the Closing Date or any Additional Closing Date, then the other Initial
Purchaser may, but shall not be required to, purchase such Notes or may make
arrangements satisfactory to the Company for the purchase of the Notes by other
persons. If such non-defaulting Initial Purchaser does not elect to purchase
such Notes and arrangements satisfactory to the Company for the purchase of such
Notes are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of the non-defaulting Initial Purchaser
or the Company. Nothing herein shall relieve the defaulting Initial Purchaser
from liability for its default.
 
17.  Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto and supersedes all prior agreements, representations, warranties,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.
 
18.  No Fiduciary Obligations. The Company acknowledges and agrees that (i) the
purchase and sale of the Notes pursuant to this Agreement, including the
determination of the public offering price of the Notes and any related
discounts and commissions and the conversion rate and other terms for the Notes,
is an arm’s-length commercial transaction between the Company, on the one hand,
and the Initial Purchasers, on the other hand, (ii) 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 their respective stockholders, creditors,
employees or any other party, (iii) the Initial Purchasers have not assumed or
will not 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 the Initial Purchasers have advised or are currently
advising the Company or on other matters) and the Initial Purchasers have no
obligation to the Company with respect to the offering contemplated hereby
except the obligations expressly set forth in this Agreement, (iv) the Initial
Purchasers and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company, and
(v) the Initial Purchasers have not provided any legal, accounting, regulatory
or tax advice with respect to the offering contemplated hereby and the Company
and have consulted their own legal, accounting, regulatory and tax advisors to
the extent they deemed appropriate.
 
19.  APPLICABLE LAW; JURISDICTION; WAIVER OF JURY TRIAL. THE VALIDITY AND
INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
The Company agrees that any suit, action or proceeding against the Company
arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in any state or federal court in The City of New York,
New York, and waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the
non-exclusive jurisdiction of such courts in any suit, action or proceeding. The
Company expressly accepts the non-exclusive jurisdiction of any such court in
respect of any such suit, action or proceeding. The Company agrees that a final
judgment in any such proceeding brought in any such court shall be conclusive
and binding thereupon and may be enforced in any other court in the jurisdiction
to which the Company is or may be subject by suit upon such judgment. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW
OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
 
20.  Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
 

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If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter shall constitute a binding agreement between the Company and the Initial
Purchasers.
 

       
Very truly yours,
 
ACQUICOR TECHNOLOGY INC.
a Delaware corporation
 
   
   
    By:   /s/ Gilbert F. Amelio  

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Name: Gilbert F. Amelio                                     Title:  Chairman and
Chief Executive Officer

 
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
 
CRT CAPITAL GROUP LLC
 
By: /s/ Christopher Chase                             
      Name: Christopher Chase                       
      Title: Managing Director                       
 
NEEDHAM & COMPANY, LLC
 
By: /s/ Joseph Dews                                     
Name: Joseph Dews                              
Title: Managing Director                       
 

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Schedule 1

 
 
Initial Purchasers
 
Aggregate Principal Amount of Firm Notes to be Purchased
 
CRT Capital Group LLC
 
$
116,000,000
 
Needham & Company, LLC
   
29,000,000
     
$
145,000,000
 

 

 

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