Execution Copy
EXHIBIT 10.1
MAXTOR CORPORATION
$300,000,000 AGGREGATE PRINCIPAL AMOUNT
2.375% CONVERTIBLE SENIOR NOTES DUE 2012
Purchase Agreement
dated as of August 9, 2005

 

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TABLE OF CONTENTS

                              Page Section 1.   Representations and Warranties
of the Company     2  
 
  (a)   No Registration     2  
 
  (b)   No Integration     2  
 
  (c)   Rule 144A     2  
 
  (d)   Offering Memorandum     3  
 
  (e)   The Purchase Agreement     3  
 
  (f)   The Indenture     3  
 
  (g)   The Notes     3  
 
  (h)   The Conversion Shares     4  
 
  (i)   Authorization of the Registration Rights Agreement     4  
 
  (j)   No Material Adverse Change     4  
 
  (k)   Independent Accountants     4  
 
  (l)   Preparation of the Financial Statements     4  
 
  (m)   Incorporation and Good Standing of the Company and its Subsidiaries    
5  
 
  (n)   Capitalization and Other Capital Stock Matters     5  
 
  (o)   Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required     5  
 
  (p)   No Material Actions or Proceedings     6  
 
  (q)   No Labor Disputes     6  
 
  (r)   Intellectual Property Rights     6  
 
  (s)   All Necessary Permits, etc.     6  
 
  (t)   Title to Properties     7  
 
  (u)   Tax Law Compliance     7  
 
  (v)   Company Not Required to Register As an Investment Company     7  
 
  (w)   Insurance     7  
 
  (x)   No Price Stabilization or Manipulation     7  
 
  (y)   Related Party Transactions     8  
 
  (z)   Recent Sales     8  
 
  (aa)   No General Solicitation     8  

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TABLE OF CONTENTS
(continued)

                              Page
 
  (bb)   No Directed Selling Efforts     8  
 
  (cc)   Company’s Accounting System     8  
 
  (dd)   Compliance with Environmental Laws     8  
 
  (ee)   Compliance with Laws     9  
 
  (ff)   Securities Exchange Act of 1934     9  
 
  (gg)   Compliance with ERISA     9  
 
  (hh)   UK Stabilising Rules     10  
 
  (ii)   No Unlawful Payments     10  
 
  (jj)   No Prohibition of Dividends     10  
 
  (kk)   Compliance with Money Laundering Laws     10  
 
  (ll)   Regulated Foreign Assets     10  
 
  (mm)   Statistical and Market-Related Data     10  
 
  (nn)   Sarbanes-Oxley     10   Section 2.   Purchase, Sale and Delivery of the
Notes     11  
 
  (a)   The Firm Notes     11  
 
  (b)   The First Closing Date     11  
 
  (c)   The Optional Notes; the Second Closing Date     11  
 
  (d)   Payment for the Notes     12  
 
  (e)   Delivery of the Notes     12   Section 3.   Additional Covenants of the
Company     12  
 
  (a)   Representative’s Review of Proposed Amendments and Supplements     12  
 
  (b)   Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters     13  
 
  (c)   Copies of Offering Memorandum     13  
 
  (d)   Blue Sky Compliance     13  
 
  (e)   Rule 144A Information     13  
 
  (f)   No Directed Selling     13  
 
  (g)   Statements to Publishers of Databases     14  
 
  (h)   Legends     14  
 
  (i)   Clearance and Settlement     14  

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TABLE OF CONTENTS
(continued)

                              Page
 
  (j)   No General Solicitation     14  
 
  (k)   No Integration     14  
 
  (l)   Rule 144 Tolling     14  
 
  (m)   Use of Proceeds     14  
 
  (n)   Transfer Agent     14  
 
  (o)   Company to Provide Interim Financial Statements     14  
 
  (p)   Agreement Not to Offer or Sell Additional Securities     14  
 
  (q)   Future Reports to the Representative     15  
 
  (r)   Investment Limitation     15  
 
  (s)   No Manipulation of Price     15  
 
  (t)   Existing Lock-Up Agreements     15  
 
  (u)   Reservation of Conversion Shares     15  
 
  (v)   Inclusion of Conversion Shares     15  
 
  (w)   FSMA     15   Section 4.   Payment of Expenses     16   Section 5.  
Conditions of the Obligations of the Initial Purchasers     16  
 
  (a)   Accountants’ Comfort Letters     16  
 
  (b)   No Material Adverse Change or Rating Agency Change     16  
 
  (c)   Opinion of Counsel for the Company     17  
 
  (d)   Opinion of Foreign Counsel for the Company     17  
 
  (e)   Opinion of Counsel for the Initial Purchasers     17  
 
  (f)   Officers’ Certificate     17  
 
  (g)   Bring-down Comfort Letter     17  
 
  (h)   Registration Rights Agreement     17  
 
  (i)   Lock-Up Agreement from Officers and Directors of the Company     18  
 
  (j)   PORTAL Designation     18  
 
  (k)   Additional Documents     18   Section 6.   Representations, Warranties
and Agreements of Initial Purchasers     18   Section 7.   Reimbursement of
Initial Purchasers’ Expenses     19   Section 8.   Indemnification     20  

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TABLE OF CONTENTS
(continued)

                              Page
 
  (a)   Indemnification of the Initial Purchasers     20  
 
  (b)   Indemnification of the Company, its Directors and Officers     20  
 
  (c)   Notifications and Other Indemnification Procedures     21  
 
  (d)   Settlements     21   Section 9.   Contribution     22   Section 10.  
Default of One or More of the Several Initial Purchasers     23   Section 11.  
Termination of this Agreement     24   Section 12.   Representations and
Indemnities to Survive Delivery     24   Section 13.   Notices     24  
Section 14.   Successors     25   Section 15.   Partial Unenforceability     25
  Section 16.   Governing Law Provisions     25   Section 17.   General
Provisions     26   Section 18.   No Fiduciary Duty     26  

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Purchase Agreement
August 9, 2005
CITIGROUP GLOBAL MARKETS INC.
As Representative of the several Initial Purchasers
388 Greenwich Street
New York, NY 10013
Ladies and Gentlemen:
               Maxtor Corporation, a Delaware corporation (the “Company”),
proposes to issue and sell to the several purchasers named in Schedule A (the
“Initial Purchasers”) $300,000,000 in aggregate principal amount of its 2.375%
Convertible Senior Notes Due 2012 (the “Firm Notes”). In addition, the Company
has granted to the Initial Purchasers an over-allotment option to purchase up to
an additional $45,000,000 in aggregate principal amount of its 2.375%
Convertible Senior Notes Due 2012 (the “Optional Notes” and, together with the
Firm Notes, the “Notes”). Citigroup Global Markets Inc. (“Citigroup”) has agreed
to act as representative of the several Initial Purchasers (in such capacity,
the “Representative”) in connection with the offering and sale of the Notes.
               The Notes will be convertible under specified circumstances into
fully paid, non-assessable shares of common stock, $.01 par value, of the
Company (the “Common Stock”). The Notes will be convertible initially at a
conversion rate of 153.1089 shares per $1,000 principal amount of the Notes, on
the terms, and subject to the conditions, set forth in the Indenture (as defined
below). As used herein, “Conversion Shares” means the shares of Common Stock
into which the Notes are convertible. The Notes will be issued pursuant to an
indenture (the “Indenture”) to be dated as of the First Closing Date (as defined
in Section 2), between the Company and U.S. Bank National Association, a
national banking association, as trustee (the “Trustee”).
               The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended, and the
rules and regulations (the “Rules and Regulations”) of the Securities and
Exchange Commission (the “Commission”) thereunder (the “Securities Act”), in
reliance upon an exemption therefrom.
               Holders of the Notes (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a Resale
Registration Rights Agreement, dated the First Closing Date, between the Company
and the Initial Purchasers (the “Registration Rights Agreement”), pursuant to
which the Company will agree to file with the Commission a shelf registration
statement pursuant to Rule 415 under the Securities Act (the “Registration
Statement”) covering the resale of the Notes and the Conversion Shares subject
to the terms and conditions therein specified. This Agreement, the Indenture,
the Notes and the Registration Rights Agreement are referred to herein
collectively as the “Operative Documents.”
               The Company understands that the Initial Purchasers propose to
make an offering of the Notes on the terms and in the manner set forth herein
and in the Offering

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Memorandum (as defined below) and agrees that the Initial Purchasers may resell,
subject to the conditions set forth herein, all or a portion of the Notes to
purchasers (the “Subsequent Purchasers”) at any time after the date of this
Agreement. The Notes are to be offered and sold to or through the Initial
Purchasers without being registered with the Commission under the Securities Act
in reliance upon exemptions therefrom. The terms of the Notes and the Indenture
will require that investors that acquire Notes expressly agree that Notes (and
any Conversion Shares) may only be resold or otherwise transferred, after the
date hereof, if such resale or other transfer of such Notes (or Conversion
Shares) is registered for sale under the Securities Act or if an exemption from
the registration requirements of the Securities Act is available (including the
exemptions afforded by Rule 144A (“Rule 144A”) thereunder and by Regulation S
thereunder (“Regulation S”).
               The Company has prepared an offering memorandum setting forth
information concerning the Company, the Notes, the Registration Rights Agreement
and the Common Stock. As used in this Agreement, “Offering Memorandum” means,
collectively, the preliminary offering memorandum dated as of August 9, 2005
(the “Preliminary Offering Memorandum”) and the offering memorandum dated the
date hereof (the “Final Offering Memorandum”), each as amended or supplemented
by the Company. As used herein, each of the terms “Offering Memorandum,”
“Preliminary Offering Memorandum” and “Final Offering Memorandum” shall include
in each case the documents incorporated or deemed to be incorporated by
reference therein.
               The Company hereby confirms its agreements with the Initial
Purchasers as follows:
          Section 1. Representations and Warranties of the Company.
               The Company hereby represents, warrants and covenants to each
Initial Purchaser as follows:
     (a) No Registration. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 6 and their compliance
with the agreements set forth therein, it is not necessary, in connection with
the issuance and sale of the Notes to the Initial Purchasers, the offer, resale
and delivery of the Notes by the Initial Purchasers, and the conversion of the
Notes into Conversion Shares, in each case in the manner contemplated by this
Agreement, the Indenture and the Offering Memorandum, to register any such
offer, sale, resale, delivery and conversion of such Notes or the Conversion
Shares under the Securities Act, or prior to the effectiveness of any
registration statement prepared in connection with the Company’s obligations
under the Registration Rights Agreement, to qualify the Indenture under the
Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
     (b) No Integration. None of the Company or any of its subsidiaries (other
than the Initial Purchasers in connection with the transactions contemplated by
this Agreement, about which no representation is made by the Company) has,
directly or through any agent, sold, offered for sale, solicited offers to buy
or otherwise negotiated in respect of, any “security” (as defined in the
Securities Act) that is or will be integrated with the sale of the Notes or the
Conversion Shares in a manner that would require registration under the
Securities Act of the Notes or the Conversion Shares.
     (c) Rule 144A. No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Notes are listed on any
national securities exchange registered

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under Section 6 of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the “Exchange Act”), or quoted on
an automated inter-dealer quotation system.
     (d) Offering Memorandum. The Company hereby confirms that it has authorized
the use of the Offering Memorandum in connection with the offer and sale of the
Notes by the Initial Purchasers. Each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in the Offering
Memorandum complied or will comply when it is filed in all material respects
with the Exchange Act and the rules and regulations of the Commission
thereunder. The Preliminary Offering Memorandum does not contain and the Final
Offering Memorandum, as of each Closing Date (as defined in Section 2) and in
the form used by the Initial Purchasers to confirm sales, will not contain, any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that the Company makes no
representation or warranty as to information contained in or omitted from the
Offering Memorandum in reliance upon and in conformity with written information
furnished to the Company by or on the behalf of the Initial Purchasers
specifically for inclusion therein. Except as disclosed in the Offering
Memorandum, on the date of this Agreement, the Company’s Annual Report on Form
10-K/A most recently filed with the Securities and Exchange Commission and all
subsequent reports which have been filed by the Company with the Commission,
sent to stockholders pursuant to the Securities Exchange Act of 1934 or
incorporated by reference in the Offering Memorandum do not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
     (e) The Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
     (f) The Indenture. The Indenture has been duly authorized by the Company;
upon effectiveness of the Registration Statement, the Indenture will be
qualified under the Trust Indenture Act; on the First Closing Date, the
Indenture will have been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery of the Indenture by the
Trustee, will constitute a legally valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles; and the Indenture will
conform in all material respects to the description thereof contained in the
Offering Memorandum.
     (g) The Notes. The Notes have been duly authorized by the Company; when the
Notes are executed, authenticated and issued in accordance with the terms of the
Indenture and delivered to and paid for by the Initial Purchasers pursuant to
this Agreement on the respective Closing Date (assuming due authentication of
the Notes by the Trustee), such Notes will constitute legally valid and binding
obligations of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general

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equitable principles; and the Notes will conform in all material respects to the
description thereof contained in the Offering Memorandum.
     (h) The Conversion Shares. The shares of Common Stock initially issuable
upon conversion of the Notes have been duly authorized and reserved and, when
issued upon conversion of the Notes in accordance with the terms of the Notes,
will be validly issued, fully paid and non-assessable, and the issuance of such
shares will not be subject to any preemptive or similar rights.
     (i) Authorization of the Registration Rights Agreement. On the First
Closing Date, the Registration Rights Agreement will have been duly authorized,
executed and delivered by, and will constitute a valid and binding agreement of,
the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnification thereunder may be limited by applicable law
and except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles.
     (j) No Material Adverse Change. Except as otherwise disclosed in the
Offering Memorandum or the documents incorporated by reference therein
(exclusive of any amendments or supplements thereto subsequent to the date of
this Agreement), subsequent to the respective dates as of which information is
given in the Offering Memorandum: (i) there has been no material adverse change,
or any development that would reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings,
business or operations, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as one
entity (any such change is called a “Material Adverse Change”); and (ii) except
as set forth in the Offering Memorandum, there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for
dividends paid to the Company or other subsidiaries, any of its subsidiaries on
any class of capital stock or repurchase or redemption by the Company or any of
its subsidiaries of any class of capital stock.
     (k) Independent Accountants. PricewaterhouseCoopers LLP (“PwC”), who have
expressed their opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) included in or
incorporated by reference in the Offering Memorandum, are independent public
accountants with respect to the Company within the meaning of the Securities Act
and the Exchange Act.
     (l) Preparation of the Financial Statements. The financial statements
included or incorporated by reference in the Offering Memorandum present fairly
the consolidated financial position of the Company and its consolidated
subsidiaries as of and at the dates indicated and the results of their
operations and cash flows for the periods specified. Such financial statements
have been prepared in conformity with generally accepted accounting principles
as applied in the United States applied on a consistent basis throughout the
periods involved, except as may be expressly stated in the related notes
thereto. The financial data set forth in the Offering Memorandum under the
captions “Summary—Summary Consolidated Financial Information,” “Selected
Consolidated Financial Information” and “Capitalization” fairly present the
information set forth therein on a basis consistent with that of the audited
financial statements contained in the Offering Memorandum. The Company’s ratios
of earnings to fixed charges set forth in the Offering Memorandum have been
calculated in compliance with Item 503(d) of Regulation S-K under the Securities
Act. The pro forma financial data of the Company and its subsidiaries
incorporated by reference in the Offering Memorandum present fairly the
information contained

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therein, have been prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma data and has been properly presented on the
bases described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein.
     (m) Incorporation and Good Standing of the Company and its Subsidiaries.
Each of the Company and its subsidiaries has been duly incorporated and is
validly existing as a corporation and (to the extent such concept is applicable
in the applicable jurisdiction) in good standing under the laws of the
jurisdiction of its incorporation and has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Offering Memorandum and, in the case of the Company, to enter into and perform
its obligations under this Agreement. Each of the Company and each subsidiary is
duly qualified, registered or otherwise licensed to do business as a foreign
corporation and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and
outstanding capital stock of each subsidiary has been duly authorized and
validly issued, is fully paid and (to the extent such concept is applicable in
the applicable jurisdiction) nonassessable and is owned by the Company, directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
(i) the subsidiaries listed in Exhibit 21.1 to the Company’s Annual Report on
Form 10-K/A for the fiscal year ended December 25, 2004 and (ii) certain other
subsidiaries which are not individually or in the aggregate, “significant”
subsidiaries as defined in Rule 1-02(w) of Regulation S-X promulgated by the
Securities and Exchange Commission.
     (n) Capitalization and Other Capital Stock Matters. The authorized, issued
and outstanding capital stock of the Company is as set forth in the Offering
Memorandum under the caption “Capitalization” (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the Offering
Memorandum or upon exercise of outstanding options described in the Offering
Memorandum). The Common Stock (including the Conversion Shares) conforms in all
material respects to the description thereof contained in the Offering
Memorandum. All of the issued and outstanding shares of Common Stock have been
duly authorized and validly issued, are fully paid and nonassessable and have
been issued in compliance with federal and state securities laws, except for
11,100,000 shares which were offered and sold under the Company’s 1998 Employee
Stock Purchase Plan for which no registration statement was filed pursuant to
the Securities Act prior to such offer and sale. None of the outstanding shares
of Common Stock were issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase securities of
the Company. The description of the Company’s stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in documents incorporated by reference in the Offering
Memorandum accurately and fairly presents and summarizes such plans,
arrangements, options and rights.
     (o) Non-Contravention of Existing Instruments; No Further Authorizations or
Approvals Required. Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws (or similar organizations
documents) or is in default (or, with the giving of notice or lapse of time,
would be in default) (“Default”) under any indenture, mortgage, loan or credit
agreement, note, contract, franchise, lease or other instrument to which the
Company or any of its subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any of its
subsidiaries is subject (each, an “Existing

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Instrument”), except for such Defaults as would not, individually or in the
aggregate, result in a Material Adverse Change.
               The Company’s execution, delivery and performance of the
Operative Documents and consummation of the transactions contemplated thereby
and by the Offering Memorandum will not (i) result in any violation of the
provisions of the charter or by-laws of the Company or any subsidiary, (ii)
materially conflict with or constitute a material breach of, or material Default
under, or result in the creation or imposition of any material lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument or (iii) result in any violation of any law, administrative
regulation or administrative or court decree applicable to the Company or any
subsidiary. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company’s execution, delivery and
performance of the Operative Documents and consummation of the transactions
contemplated thereby and by the Offering Memorandum, except (i) as may be
required under the Securities Act, the Trust Indenture Act and the Rules and
Regulations promulgated thereunder with respect to the transactions contemplated
by the Registration Rights Agreement and (ii) such as have been obtained or made
by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the NASD.
     (p) No Material Actions or Proceedings. Except as otherwise disclosed or
incorporated by reference in the Offering Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement),
there are no legal or governmental actions, suits or proceedings pending or, to
the Company’s knowledge, threatened (i) against or affecting the Company or any
of its subsidiaries, (ii) which has as the subject thereof any officer or
director (in such capacity) of, or property owned or leased by, the Company or
any of its subsidiaries or (iii) relating to environmental or discrimination
matters, where in any such case (A) there is a reasonable possibility that such
action, suit or proceeding might be determined adversely to the Company or such
subsidiary and (B) any such action, suit or proceeding, if so determined
adversely, would reasonably be expected to result in a Material Adverse Change
or adversely affect the consummation of the transactions contemplated by this
Agreement.
     (q) No Labor Disputes. No material labor dispute with the employees of the
Company or any of its subsidiaries exists or, to the Company’s knowledge, is
threatened.
     (r) Intellectual Property Rights. The Company and its subsidiaries own or
possess sufficient trademarks, trade names, patent rights, copyrights, domain
names, licenses, approvals, trade secrets and other similar rights
(collectively, “Intellectual Property Rights”) reasonably necessary to conduct
their businesses as now conducted; and the expected expiration of any of such
Intellectual Property Rights would not result in a Material Adverse Change.
Except as otherwise disclosed or incorporated by reference in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), neither the Company nor any of its subsidiaries has
received any notice of infringement or conflict with asserted Intellectual
Property Rights of others, which infringement or conflict, if the subject of an
unfavorable decision, would result in a Material Adverse Change. None of the
technology employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the Company or, to
the Company’s knowledge, any of its officers, directors or employees or
otherwise in violation of the rights of any persons.
     (s) All Necessary Permits, etc. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or

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foreign regulatory agencies or bodies necessary to conduct their respective
businesses in each case, with such exceptions as would not, individually or in
the aggregate, result in a Material Adverse Change. Neither the Company nor any
subsidiary has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could result in a Material Adverse Change.
     (t) Title to Properties. Except as described in the Offering Memorandum,
the Company and each of its subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the financial statements
included or incorporated by reference in the Offering Memorandum, in each case
free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not, singly or in the
aggregate, materially and adversely affect the value of such property and do
not, singly or in the aggregate, materially interfere with the use made or
proposed to be made of such property by the Company or such subsidiary. The real
property, improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not, singly or in the aggregate,
materially interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by the Company or such
subsidiary.
     (u) Tax Law Compliance. The Company and its consolidated subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
or have properly requested extensions thereof and have paid all taxes required
to be paid by any of them and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them except as may be being
contested in good faith and by appropriate proceedings. The Company has made
adequate charges, accruals and reserves in the financial statements included or
incorporated by reference in the Offering Memorandum in respect of all federal,
state and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of its consolidated subsidiaries has not been
finally determined.
     (v) Company Not Required to Register As an Investment Company. The Company
has been advised of the rules and requirements under the Investment Company Act
of 1940, as amended (the “Investment Company Act”). The Company is not, and,
after receipt of payment for the Notes and application of the proceeds as
described in the Offering Memorandum, will not be, required to register as an
“investment company” within the meaning of the Investment Company Act and will
conduct its business in a manner so that it will not become subject to the
Investment Company Act.
     (w) Insurance. Each of the Company and its subsidiaries maintains insurance
policies in such amounts and with such deductibles and covering such risks as
are generally deemed adequate and customary for their businesses. The Company
has no reason to believe that it or any subsidiary will not be able (i) to renew
its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change.
     (x) No Price Stabilization or Manipulation. The Company has not taken and
will not take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Notes or the Conversion Shares to facilitate the sale or resale of
the Notes. The Company acknowledges that the Initial Purchasers may engage in
stabilization transactions as described in the Offering Memorandum.

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     (y) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the documents incorporated or deemed
incorporated in the Offering Memorandum which have not been described as
required.
     (z) Recent Sales. Except as disclosed in the Offering Memorandum, the
Company has not sold or issued any shares of Common Stock, any security
convertible into shares of Common Stock or any security of the same class as the
Notes during the six-month period preceding the date of the Offering Memorandum,
including any sales pursuant to Rule 144A or under Regulation D or S of the
Securities Act, other than options or shares issued pursuant to the Company’s
stock plans or pursuant to outstanding options, rights or warrants.
     (aa) No General Solicitation. None of the Company or any of its affiliates
(as defined in Rule 501(b) of Regulation D under the Securities Act
(“Regulation D”)), has, directly or through an agent, engaged in any form of
general solicitation or general advertising in connection with the offering of
the Notes or the Conversion Shares (as those terms are used in Regulation D)
under the Securities Act or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; the Company has not entered into
any contractual arrangement with respect to the distribution of the Notes or the
Conversion Shares except for its contractual arrangements with the Initial
Purchasers, and the Company will not enter into any such arrangement except for
the Registration Rights Agreement and as may be contemplated thereby.
     (bb) No Directed Selling Efforts. None of the Company, its affiliates, or
any person acting on its or their behalf has engaged in any directed selling
efforts (within the meaning of Regulation S) with respect to the Notes or the
Conversion Shares; and each of the Company, its affiliates and each person
acting on its or their behalf has complied with the offering restrictions
requirement of Regulation S.
     (cc) Company’s Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States 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 accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
     (dd) Compliance with Environmental Laws. Except as would not, individually
or in the aggregate, result in a Material Adverse Change (i) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local or
foreign law or regulation relating to pollution or protection of human health or
the environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, “Materials of Environmental Concern”), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environment Concern (collectively,
“Environmental Laws”), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a

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governmental authority, citizens group, employee or otherwise, that alleges that
the Company or any of its subsidiaries is in violation of any Environmental Law;
(ii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which the Company has
received written notice, and no written notice by any person or entity alleging
potential liability for investigatory costs, cleanup costs, governmental
responses costs, natural resources damages, property damages, personal injuries,
attorneys’ fees or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Material of Environmental
Concern at any location owned, leased or operated by the Company or any of its
subsidiaries, now or in the past (collectively, “Environmental Claims”), pending
or, to the Company’s knowledge, threatened against the Company or any of its
subsidiaries or any person or entity whose liability for any Environmental Claim
the Company or any of its subsidiaries has retained or assumed either
contractually or by operation of law; and (iii) to the Company’s knowledge,
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law.
               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 its subsidiaries, in the course of which it
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, cause a Material Adverse Change.
     (ee) Compliance with Laws. The Company has not been advised, and has no
reason to believe, that it and each of its subsidiaries are not conducting
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, except where failure to be so
in compliance would not result in a Material Adverse Change.
     (ff) Securities Exchange Act of 1934. The Company is subject to, and in
compliance with, in all material respects, the reporting requirements of either
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 and files
reports with the Commission on the Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system.
     (gg) Compliance with ERISA. Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”); no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any such plan excluding transactions effected pursuant to a statutory or
administrative exemption; and, for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated
funding deficiency” as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each such plan
(excluding for

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these purposes accrued but unpaid contributions) exceeds the present value of
all benefits accrued under such plan determined using reasonable actuarial
assumptions.
     (hh) UK Stabilising Rules. To the extent that information is required to be
publicly disclosed under the UK Financial Services Authority’s Price Stabilising
Rules (the “Stabilising Rules”) before stabilizing transactions can be
undertaken in compliance with the safe harbor provided under such Stabilising
Rules, such information has been adequately publicly disclosed (within the
meaning of the Stabilising Rules).
     (ii) No Unlawful Payments. Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee or other person associated with
or acting on behalf of the Company has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
     (jj) No Prohibition of Dividends. Except for generally applicable
restrictions arising under applicable corporate law, no subsidiary of the
Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other subsidiary of the
Company.
     (kk) Compliance with Money Laundering Laws. The operations of the Company
and its subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”)
and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.
     (ll) Regulated Foreign Assets. None of the Company, any of its subsidiaries
or, to the knowledge of the Company, any director, officer, agent, employee or
Affiliate of the Company or any of its subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Notes hereunder, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions administered by
OFAC.
     (mm) Statistical and Market-Related Data. Any statistical and
market-related data included in the Offering Memorandum are based on or derived
from sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from such
sources.
     (nn) Sarbanes-Oxley. There is and has been no failure on the part of the
Company and any of the Company’s directors or officers, in their capacities as
such, to comply in any material

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respect with any provision of the Sarbanes Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Sarbanes Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
               Any certificate signed by an officer of the Company and delivered
to the Representative or to counsel for the Initial Purchasers shall be deemed
to be a representation and warranty by the Company to each Initial Purchaser as
to the matters set forth therein.
               The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel
to the Company and counsel to the Initial Purchasers, will rely upon the
accuracy and truthfulness of the foregoing representations and hereby consents
to such reliance.
     Section 2. Purchase, Sale and Delivery of the Notes.
     (a) The Firm Notes. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions
herein set forth, the Initial Purchasers agree, severally and not jointly, to
purchase from the Company the respective principal amount of Firm Notes set
forth opposite their names under the heading “Aggregate Principal Amount of Firm
Notes to be Purchased” on Schedule A at a purchase price of 97.75% of the
aggregate principal amount thereof.
     (b) The First Closing Date. Delivery of the Firm Notes to be purchased by
the Initial Purchasers and payment therefor shall be made at the offices of
Citigroup, 1001 Page Mill Road, Building 4, Suite 100, Palo Alto, CA 94304 (or
such other place as may be agreed to by the Company and the Representative) at
7:00 a.m. Palo Alto time, on August 15, 2005, or such other time and date as may
be agreed to by the Company and the Representative (the time and date of such
closing are called the “First Closing Date”). The Company hereby acknowledges
that circumstances under which the Representative may provide notice to postpone
the First Closing Date as originally scheduled include, but are in no way
limited to, any determination by the Company or the Representative to
recirculate copies of an amended or supplemented Offering Memorandum or a delay
as contemplated by the provisions of Section 10.
     (c) The Optional Notes; the Second Closing Date. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an over-allotment option to the several Initial Purchasers to purchase,
severally and not jointly, up to $45,000,000 aggregate principal amount of
Optional Notes from the Company in the respective principal amounts set forth
opposite their name under the heading “Aggregate Principal Amount of Optional
Notes Allocated” on Schedule A and at a purchase price of 97.75% of the
aggregate principal amount thereof. The over-allotment option granted hereunder
may be exercised at any time (but not more than once) upon notice by the
Representative to the Company, which notice may be given at any time within
30 days from the date of this Agreement. Such notice shall set forth (i) the
amount (which shall be an integral multiple of $1,000 in aggregate principal
amount) of Optional Notes as to which the Initial Purchasers are exercising the
over-allotment option, (ii) the names and denominations in which the Optional
Notes are to be registered and (iii) the time, date and place at which such
Notes will be delivered (which time and date may be simultaneous with, but not
earlier than, the First Closing Date; and in such case the term “First Closing
Date” shall refer to the time and date of delivery of the Firm Notes and the
Optional Notes). Such time and date of delivery, if subsequent to the First
Closing Date, is called the “Second Closing Date” and shall be reasonably
determined by the Representative. Such date may be the same as the First Closing

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Date but not earlier than the First Closing Date nor later than 10 business days
after the date of such notice. If any Optional Notes are to be purchased, each
Initial Purchaser agrees, severally and not jointly, to purchase the principal
amount of Optional Notes (subject to such adjustments to eliminate fractional
amount as the Representative may determine) that bears the same proportion to
the total principal amount of Optional Notes to be purchased as the principal
amount of Firm Notes set forth on Schedule A opposite the name of such Initial
Purchaser bears to the total principal amount of Firm Notes. The Representative
may cancel the over-allotment option at any time prior to its expiration by
giving written notice of such cancellation to the Company.
     (d) Payment for the Notes. Payment for the Notes shall be made at the First
Closing Date (and, if applicable, at the Second Closing Date) by wire transfer
of immediately available funds to the order of the Company.
               It is understood that the Representative has been authorized, for
its own account and the accounts of the several Initial Purchasers, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Notes and any Optional Notes the Initial Purchasers have agreed to
purchase. The Representative may (but shall not be obligated to) make payment
for any Notes to be purchased by any Initial Purchaser whose funds shall not
have been received by the Representative by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Initial Purchaser, but
any such payment shall not relieve such Initial Purchaser from any of its
obligations under this Agreement.
     (e) Delivery of the Notes. The Company shall deliver, or cause to be
delivered, to the Representative for the accounts of the several Initial
Purchasers the Firm Notes at the First Closing Date, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company shall also deliver, or cause to be
delivered, to the Representative for the accounts of the several Initial
Purchasers, the Optional Notes the Initial Purchasers have agreed to purchase at
the First Closing Date or the Second Closing Date, as the case may be, against
the irrevocable release of a wire transfer of immediately available funds for
the amount of the purchase price therefor. The Notes shall be registered in such
names and denominations as the Representative shall have requested at least two
full business days prior to the First Closing Date (or the Second Closing Date,
as the case may be) and shall be made available for inspection on the business
day preceding the First Closing Date (or the Second Closing Date, as the case
may be) at a location in New York City as the Representative may designate. Time
shall be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Initial Purchasers.
     Section 3. Additional Covenants of the Company.
               The Company further covenants and agrees with each Initial
Purchaser as follows:
     (a) Representative’s Review of Proposed Amendments and Supplements. The
Company will not amend or supplement the Offering Memorandum, other than by
filing documents under the Exchange Act that are incorporated by reference
therein, without the prior written consent of the Representative, which consent
shall not be unreasonably withheld or delayed; provided, however, that, prior to
the completion of the distribution of the Notes by the Initial Purchasers (as
determined by the Initial Purchasers), the Company will not file any document
under the Exchange Act that is incorporated by reference in the Offering
Memorandum unless, prior to such proposed filing, the Company has furnished the
Representative with a copy of such document for

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their review and the Representative has not reasonably objected to the filing of
such document. The Company will promptly advise the Representative when any
document filed under the Exchange Act that is incorporated by reference in the
Offering Memorandum shall have been filed with the Commission.
     (b) Amendments and Supplements to the Offering Memorandum and Other
Securities Act Matters. If, at any time prior to the completion of the resale of
the Notes by the Initial Purchasers (as notified by the Initial Purchasers to
the Company), any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Offering Memorandum in order that the
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, or if in the opinion of the Representative or counsel
for the Initial Purchasers it is otherwise necessary to amend or supplement the
Offering Memorandum to comply with law, the Company shall promptly notify the
Initial Purchasers and prepare, subject to Section 3(a) hereof, such amendment
or supplement as may be necessary to correct such untrue statement or omission.
     (c) Copies of Offering Memorandum. The Company agrees to furnish the
Representative, without charge, as many copies of the Offering Memorandum and
any amendments and supplements thereto as the Representative may reasonably
request.
     (d) Blue Sky Compliance. The Company shall cooperate with the
Representative and counsel for the Initial Purchasers, as the Initial Purchasers
may reasonably request from time to time, to qualify or register the Notes for
sale under (or obtain exemptions from the application of) the state securities
or blue sky laws of those jurisdictions designated by the Representative, shall
comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Notes. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representative
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Notes for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its reasonable efforts to
obtain the withdrawal thereof at the earliest possible time.
     (e) Rule 144A Information. For so long as any of the Notes are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
Company shall provide to any holder of the Notes or to any prospective purchaser
of the Notes designated by any holder, upon request of such holder or
prospective purchaser, information required to be provided by Rule 144A(d)(4) of
the Securities Act if, at the time of such request, the Company is not subject
to the reporting requirements under Section 13 or 15(d) of the Exchange Act. Any
information provided by the Company to publishers of publicly available
databases about the terms of the Notes shall include a statement that the Notes
have not been registered under the Act and are subject to restrictions under
Rule 144A under the Act.
     (f) No Directed Selling. None of the Company, its affiliates, or any person
acting on its or their behalf will engage in any directed selling efforts with
respect to the Notes, and each of them will comply with the offering
restrictions requirement of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.

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     (g) Statements to Publishers of Databases. Any information provided by the
Company to publishers of publicly available databases about the terms of the
Notes shall include a statement that the Notes have not been registered under
the Act and are subject to restrictions under Rule 144A under the Act and
Regulation S.
     (h) Legends. Each of the Notes and Conversion Shares will bear, to the
extent applicable, the legend contained in “Transfer Restrictions” in the
Offering Memorandum for the time period and upon the other terms stated therein.
     (i) Clearance and Settlement. The Company will cooperate with the
Representative and use its reasonable best efforts to permit the Notes to be
eligible for clearance and settlement through The Depository Trust Company.
     (j) No General Solicitation. Except following the effectiveness of the
Registration Statement (as defined in the Registration Rights Agreement), the
Company will not, and will cause its subsidiaries not to, solicit any offer to
buy or offer to sell the Notes or the Common Stock by means of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.
     (k) No Integration. The Company will not, and will cause its subsidiaries
not to, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any “security” (as defined in the Securities Act) in a transaction
that could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.
     (l) Rule 144 Tolling. During the period of two years after the last Closing
Date, the Company will not resell, and will not permit any of its “affiliates”
(as defined in Rule 144 under the Securities Act) to resell any of the Notes
which constitute “restricted securities” under Rule 144 that have been
reacquired by any of them.
     (m) Use of Proceeds. The Company shall apply the net proceeds from the sale
of the Notes sold by it in the manner described under the caption “Use of
Proceeds” in the Offering Memorandum.
     (n) Transfer Agent. The Company shall engage and maintain, at its expense,
a registrar and transfer agent for the Common Stock.
     (o) Company to Provide Interim Financial Statements. Prior to the Closing
Date, the Company will furnish the Initial Purchasers, as soon as they have been
prepared by or are available to the Company, a copy of any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the most recent financial statements appearing in the Offering
Memorandum.
     (p) Agreement Not to Offer or Sell Additional Securities. During the period
commencing on the date hereof and ending on the 90th day following the date of
the Final Offering Memorandum, the Company will not, without the prior written
consent of Citigroup (which consent may be withheld at the sole discretion of
Citigroup), directly or indirectly, sell, offer, contract or grant any option to
sell, pledge, transfer or establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of the Common

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Stock or securities exchangeable or exercisable for or convertible into shares
of Common Stock (other than as contemplated by this Agreement and the
Registration Rights Agreement with respect to the Notes); provided, however,
that the Company may issue shares of its Common Stock or options to purchase its
Common Stock, or Common Stock upon exercise of options, pursuant to any stock
option, stock bonus or other stock plan or arrangement described in the Final
Offering Memorandum or documents incorporated by reference in the Final Offering
Memorandum.
     (q) Future Reports to the Representative. During the period of five years
after the First Closing Date the Company will furnish to the Representative at
its request, (i) as soon as practicable after the end of each fiscal year,
copies of the annual report of the Company containing the balance sheet of the
Company as of the close of such fiscal year and statements of income,
stockholders’ equity and cash flows for the year then ended and the opinion
thereon of the Company’s independent public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K
or other report filed by the Company with the Commission, the NASD or any
securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its capital stock.
     (r) Investment Limitation. The Company shall not invest or otherwise use
the proceeds received by the Company from its sale of the Notes in such a manner
as would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.
     (s) No Manipulation of Price. The Company will not take, directly or
indirectly, any action designed to cause or result in, or that constitutes or
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company to facilitate the sale or resale of
the Notes or the Conversion Shares.
     (t) Existing Lock-Up Agreements. The Company will enforce all existing
agreements between the Company and any of its security holders that prohibit the
sale, transfer, assignment, pledge or hypothecation of any of the Company’s
securities in connection with the Company’s initial public offering. In
addition, the Company will direct the transfer agent to place stop transfer
restrictions upon any such securities of the Company that are bound by such
existing “lock-up” agreements for the duration of the periods contemplated in
such agreements.
     (u) Reservation of Conversion Shares. The Company will reserve and keep
available at all times, free of pre-emptive rights, the full number of Shares of
Common Stock issuable upon conversion of the Notes.
     (v) Inclusion of Conversion Shares. The Company will use its best efforts
to have the Conversion Shares approved by the New York Stock Exchange for
listing prior to the effectiveness of the Registration Statement.
     (w) FSMA. The Company will not take any action or omit to take any action
(such as issuing any press release relating to any Notes without an appropriate
legend) which may result in the loss by any of the Initial Purchasers of the
ability to rely on any stabilization safe harbor provided by the Financial
Services Authority under the Financial Services and Markets Act 2000 (“FSMA”).

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     Section 4. Payment of Expenses.
               The Company agrees to pay all costs, fees and expenses incurred
in connection with the performance of its obligations hereunder and in
connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the Notes
(including all printing and engraving costs), (ii) all fees and expenses of the
Trustee under the Indenture, (iii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Notes to the Initial
Purchasers, (iv) all fees and expenses of the Company’s counsel, independent
public accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, shipping and distribution of the
Offering Memorandum, all amendments and supplements thereto and this Agreement,
(vi) all filing fees, attorneys’ fees and expenses incurred by the Company or
the Initial Purchasers in connection with qualifying or registering (or
obtaining exemptions from the qualification or registration of) all or any part
of the Notes for offer and sale under the state securities or blue sky laws,
and, if requested by the Representative, preparing and printing a “Blue Sky
Survey” or memorandum, and any supplements thereto, advising the Initial
Purchasers of such qualifications, registrations and exemptions, (vii) the
expenses of the Company and the Initial Purchasers in connection with the
marketing and offering of the Notes, (viii) the fees and expenses associated
with listing the Conversion Shares on the New York Stock Exchange, (ix) all
expenses and fees in connection with admitting the Notes for trading in the
PORTAL Market and (x) any fees charged by investment rating agencies for the
rating of the Notes. Except as provided in this Section 4, Section 7 and
Section 11 hereof, the Initial Purchasers shall pay their own expenses,
including the fees and disbursements of their counsel.
     Section 5. Conditions of the Obligations of the Initial Purchasers.
               The obligations of the several Initial Purchasers to purchase and
pay for the Notes as provided herein on the First Closing Date and, with respect
to the Optional Notes, the Second Closing Date, shall be subject to the accuracy
of the representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the First Closing Date as
though then made and, with respect to the Optional Notes, as of the Second
Closing Date as though then made, to the timely performance by the Company of
its covenants and other obligations hereunder, and to each of the following
additional conditions:
     (a) Accountants’ Comfort Letters. On the date hereof, the Representative
shall have received from PwC, independent public accountants for the Company, a
letter dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Representative, containing statements and
information of the type ordinarily included in accountants’ “comfort letters” to
Initial Purchasers, delivered according to Statement of Auditing Standards
No. 72 (or any successor bulletin) (“SAS 72”), with respect to the audited and
unaudited financial statements and certain financial information contained in
the Offering Memorandum.
     (b) No Material Adverse Change or Rating Agency Change. For the period from
and after the date of this Agreement and prior to the First Closing Date and,
with respect to the Optional Notes, the Second Closing Date:
     (i) in the reasonable judgment of the Representative there shall not have
occurred any Material Adverse Change; and
     (ii) there shall not have occurred any downgrading, nor shall any notice
have been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible change, in
the rating accorded

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any securities of the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization” as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act.
     (c) Opinion of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date the Representative shall have received an opinion of
DLA Piper Rudnick Gray Cary US, LLP, counsel for the Company, or such other
counsel as shall be reasonably acceptable to the Representative in its
discretion, dated as of such Closing Date, in substantially the form attached as
Exhibit A-1.
     (d) Opinion of Foreign Counsel for the Company. On each of the First
Closing Date and the Second Closing Date the Representative shall have received
an opinion of foreign counsel for the Company reasonably acceptable to the
Representative, dated as of such Closing Date, covering the matters set forth in
Exhibit A-2, with respect to each non-U.S. significant subsidiary (as such term
is defined in Rule 405 under the Securities Act) of the Company (each a “Foreign
Significant Subsidiary”), in form and substance satisfactory to the
Representative.
     (e) Opinion of Counsel for the Initial Purchasers. On each of the First
Closing Date and the Second Closing Date the Representative shall have received
an opinion of Cleary Gottlieb Steen & Hamilton LLP, counsel for the Initial
Purchasers, dated as of such Closing Date, in form and substance satisfactory to
the Representative.
     (f) Officers’ Certificate. On each of the First Closing Date and the Second
Closing Date the Representative shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and the Chief Financial Officer (or person acting in such capacity,
provided a different natural person executed such written certificate as
Chairman of the Board, Chief Executive Officer or President of the Company) or
Chief Accounting Officer of the Company, dated as of such Closing Date, to the
effect set forth in subsection (b)(ii) of this Section 5, and further to the
effect that:
     (i) for the period from and after the date of this Agreement and prior to
such Closing Date, there has not occurred any Material Adverse Change;
     (ii) the representations, warranties and covenants of the Company set forth
in Section 1 of this Agreement are true and correct in all material respects
with the same force and effect as though expressly made on and as of such
Closing Date; and
     (iii) the Company has, in all material respects, complied with all the
agreements hereunder and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date.
     (g) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representative shall have received from PwC, a letter
dated such date, in form and substance satisfactory to the Representative, to
the effect that they reaffirm the statements made in the letter furnished by
them pursuant to subsection (a) of this Section 5, except that the specified
date referred to therein for the carrying out of procedures shall be no more
than three business days prior to the First Closing Date or Second Closing Date,
as the case may be.
     (h) Registration Rights Agreement. The Company and the Initial Purchasers
shall have executed and delivered the Registration Rights Agreement (in form and
substance satisfactory to the Initial Purchasers), and the Registration Rights
Agreement shall be in full force and effect.

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     (i) Lock-Up Agreement from Officers and Directors of the Company. On or
prior to the date hereof, the Company shall have furnished to the Representative
an agreement in the form of Exhibit B hereto from each executive officer and
director of the Company, and each such agreement shall be in full force and
effect on each of the First Closing Date and the Second Closing Date.
     (j) PORTAL Designation. The Notes shall have been designated
PORTAL-eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc.
     (k) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Representative and counsel for the Initial
Purchasers shall have received such information, documents and opinions as they
may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Notes as contemplated herein, or in order to evidence
the accuracy of any of the representations and warranties, or the satisfaction
of any of the conditions or agreements, herein contained.
               If any condition specified in this Section 5 is not satisfied in
all material respects when and as required to be satisfied, this Agreement may
be terminated by the Representative by notice to the Company at any time on or
prior to the First Closing Date and, with respect to the Optional Notes, at any
time prior to the Second Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 4,
Section 7, Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
     Section 6. Representations, Warranties and Agreements of Initial
Purchasers.
               Each of the Initial Purchasers represents and warrants that it is
a “qualified institutional buyer,” as defined in Rule 144A of the Securities
Act. Each Initial Purchaser agrees with the Company that:
     (a) The Notes and the Conversion Shares have not been and will not be
registered under the Securities Act in connection with the initial offering of
the Notes.
     (b) The Initial Purchasers are purchasing the Notes pursuant to a private
sale exemption from registration under the Securities Act.
     (c) The Initial Purchasers have not offered or sold, and will not offer or
sell, any Notes within the United States or to, or for the account or benefit
of, U.S. persons (x) as part of their distribution at any time or (y) otherwise
until one year after the later of the commencement of the offering and the date
of closing of the offering except (1) to those it reasonably believes to be
“qualified institutional buyers” (as defined in Rule 144A under the Act) or
(2) in accordance with Rule 903 of Regulation S.
     (d) The Initial Purchasers will not engage in hedging transactions with
regard to the Notes prior to the expiration of the distribution compliance
period as (defined in Regulation S), unless in compliance with the Act.
     (e) Neither the Initial Purchasers, nor any of their affiliates nor any
person acting on their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Notes.

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     (f) The Initial Purchasers have not entered and will not enter into any
contractual arrangement with any distributor (within the meaning of
Regulation S) with respect to the distribution of the Notes, except with their
affiliates or with the prior written consent of the Company.
     (g) The Initial Purchasers have complied and will comply with the offering
restrictions requirement of Regulation S.
     (h) At or prior to the confirmation of sale of Notes (other than a sale of
Notes to “qualified institutional buyers” (as defined in Rule 144A)), the
Initial Purchasers shall have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases Notes
from it during the distribution compliance period (within the meaning of
Regulation S) a confirmation or notice to substantially the following effect:
“The Notes covered hereby have not been registered under the U.S. Securities Act
of 1933 (the “Act”) and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until one year after the later of the
commencement of the offering and the date of closing of the offering, except in
either case in accordance with Regulation S or Rule 144A under the Act.
Additional restrictions on the offer and sale of the Notes and the Common Stock
issuable upon conversion thereof are described in the offering memorandum for
the Notes. Terms used in this paragraph have the meanings given to them by
Regulation S.”
     (i) The Initial Purchasers have complied and will comply with all
applicable provisions of the FSMA with respect to anything done by them in
relation to the Notes in, from or otherwise involving the United Kingdom.
     (j) The Initial Purchasers have only communicated or caused to be
communicated and will only communicate or cause to be communicated an invitation
or inducement to engage in investment activity (within the meaning of Section 21
of the FSMA) received by them in connection with the issue or sale of the Notes
in circumstances in which Section 21(1) of the FSMA does not apply to the
Company.
     (k) The Initial Purchasers acknowledge that additional restrictions on the
offer and sale of the Notes are described in the Offering Memorandum.
     (l) The Initial Purchasers will not offer or sell the Notes in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D, including, but not limited
to, (i) any advertisement, article, notice or other communication published in
any newspaper, magazine or similar medium or broadcast over television or radio,
or (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States.
     Section 7. Reimbursement of Initial Purchasers’ Expenses.
               If this Agreement is terminated by the Representative pursuant to
Section 5 or if the sale to the Initial Purchasers of the Notes on the First
Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company to perform any agreement herein or to comply with any
provision hereof other than by reason of default by any of the Initial
Purchasers, the Company agrees to reimburse the Representative and the other

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Initial Purchasers (or such Initial Purchasers as have terminated this Agreement
with respect to themselves), severally, upon demand for all out-of-pocket
expenses that shall have been reasonably incurred by the Representative and the
Initial Purchasers in connection with the proposed purchase and the offering and
sale of the Notes, including but not limited to fees and disbursements of
counsel, printing expenses, travel expenses, postage, facsimile and telephone
charges.
     Section 8. Indemnification.
     (a) Indemnification of the Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, its officers and employees,
and each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Initial Purchaser or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact, in each case, necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Company will reimburse each Initial Purchaser and each such controlling person
for any and all expenses (including the fees and disbursements of counsel chosen
by Citigroup) as such expenses are reasonably incurred by such Initial Purchaser
or such controlling person in connection with investigating, defending, settling
or paying any such loss, claim, damage, liability, expense or action; provided,
however, that the foregoing indemnity agreement shall not apply to any loss,
claim, damage, liability or expense to the extent, but only to the extent,
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by the Initial Purchasers expressly
for use in the Offering Memorandum (or any amendment or supplement thereto). The
Company hereby acknowledges that the only information that the Initial
Purchasers have furnished to the Company expressly for use in the Offering
Memorandum (or any amendment or supplement thereto) are the statements set forth
in Schedule B. The indemnity agreement set forth in this Section 8(a) shall be
in addition to any liabilities that the Company may otherwise have.
     (b) Indemnification of the Company, its Directors and Officers. Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Initial Purchaser), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue or alleged untrue statement of
a material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein 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 such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Offering Memorandum (or any

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amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Company by the Initial Purchasers expressly
for use therein; and to reimburse the Company, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Company, or any such director, officer or controlling person in connection with
investigating, defending, settling or paying any such loss, claim, damage,
liability, expense or action. The Company hereby acknowledges that the only
information that the Initial Purchasers have furnished to the Company expressly
for use in the Offering Memorandum (or any amendment or supplement thereto) are
the statements set forth in Schedule B. The indemnity agreement set forth in
this Section 8(b) shall be in addition to any liabilities that each Initial
Purchaser may otherwise have.
     (c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof may be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, 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
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to the indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (Citigroup in the case of Section 8(b) and Section 9),
representing the indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
     (d) Settlements. The indemnifying party under this Section 8 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there is a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have validly requested an indemnifying party to
reimburse the indemnified party for

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fees and expenses of counsel as contemplated by Section 8(c) hereof, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such valid request prior to the date of
such settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent to the
entry of judgment in any pending or threatened action, suit or proceeding in
respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (x) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (y) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
     Section 9. Contribution.
               If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other hand, from the offering of the Notes pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Initial Purchasers, on the other hand, in connection with the offering
of the Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Notes
pursuant to this Agreement (before deducting expenses) received by the Company,
and the total discount received by the Initial Purchasers bear to the aggregate
initial offering price of the Notes. The relative fault of the Company, on the
one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact or any such inaccurate or alleged inaccurate representation or warranty
relates to information supplied by the Company, on the one hand, or the Initial
Purchasers, on the other hand, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.
               The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.

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               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 or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 9.
               Notwithstanding the provisions of this Section 9, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Notes purchased by it and distributed to
investors were offered to investors exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Initial Purchasers’ obligations
to contribute pursuant to this Section 9 are several, and not joint, in
proportion to their respective commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Initial Purchaser and each person, if any, who controls an Initial Purchaser
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Initial Purchaser, and each director of the
Company, each officer of the Company, and each person, if any, who controls the
Company within the meaning of the Securities Act and the Exchange Act shall have
the same rights to contribution as the Company.
     Section 10. Default of One or More of the Several Initial Purchasers.
     If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the several Initial Purchasers shall fail or refuse to
purchase Notes that it or they have agreed to purchase hereunder on such date,
and the aggregate principal amount of Notes which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate principal amount of the Notes to be purchased on
such date, the other Initial Purchasers may make arrangements satisfactory to
the Company for the purchase of such Notes by other persons, including any of
the Initial Purchasers, but if no such arrangements are made by such Closing
Date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the principal amount of Firm Notes set forth opposite their
respective names on Schedule A bears to the aggregate principal amount of Firm
Notes set forth opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as may be specified by the
Representative with the consent of the non-defaulting Initial Purchasers, to
purchase the Notes which such defaulting Initial Purchaser or Initial Purchasers
agreed but failed or refused to purchase on such date. If, on the First Closing
Date or the Second Closing Date, as the case may be, any one or more of the
Initial Purchasers shall fail or refuse to purchase Notes and the aggregate
principal amount of Notes with respect to which such default occurs exceeds 10%
of the aggregate principal amount of Notes to be purchased on such date, and
arrangements satisfactory to the Representative and the Company for the purchase
of such Notes are not made within 48 hours after such default, this Agreement
shall terminate without liability of any party (other than a defaulting Initial
Purchaser) to any other party except that the provisions of Section 4, Section 8
and Section 9 shall at all times be effective and shall survive such
termination. In any such case either the Representative or the Company shall
have the right to postpone the First Closing Date or the Second Closing Date, as
the case may be, but in no event for longer than seven days in order that the
required changes, if any, to the Offering Memorandum or any other documents or
arrangements may be effected.

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     As used in this Agreement, the term “Initial Purchaser” shall be deemed to
include any person substituted for a defaulting Initial Purchaser under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
     Section 11. Termination of this Agreement.
               On or prior to the First Closing Date this Agreement may be
terminated by the Representative by notice given to the Company if at any time
(i) trading in any of the Company’s securities shall have been suspended or
limited by the Commission or by the New York Stock Exchange, or trading in
securities generally on either the Nasdaq National Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any federal or New York state authority; or (iii) there shall have
occurred any outbreak or escalation of national or international hostilities or
any crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political,
financial or economic conditions, as in the judgment of the Representative is
material and adverse and makes it impracticable to market the Notes in the
manner and on the terms described in the Offering Memorandum or to enforce
contracts for the sale of securities; or (iv) in the judgment of the
Representative there shall have occurred any Material Adverse Change. Any
termination pursuant to this Section 11 shall be without liability on the part
of (a) the Company to any Initial Purchaser, except that the Company shall be
obligated to reimburse the expenses of the Representative and the Initial
Purchasers pursuant to Section 4 hereof, (b) any Initial Purchaser to the
Company, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
     Section 12. Representations and Indemnities to Survive Delivery.
               The respective indemnities, contribution, representations,
warranties and other statements of the Company or its officers and of the
Initial Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation, or
statement as to the result hereof, made by or on behalf of any Initial Purchaser
or the Company or any of its or their partners, officers or directors or any
controlling person, as the case may be, (ii) acceptance of the Notes and payment
for them hereunder and (iii) any termination of this Agreement.
     Section 13. Notices.
               All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
  If to the Representative:
Citigroup Global Markets Inc.,
388 Greenwich Street
New York, NY 10013
Facsimile: 212-816-7912
Attention: General Counsel
  with a copy to:
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza

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New York, NY 10006
Facsimile: 212-225-3999
Attention: Raymond B. Check
  If to the Company:
Maxtor Corporation
500 McCarthy Blvd.
Milpitas, CA 95035
Facsimile: 408-894-3229
Attention: Duston M. Williams
  with a copy to:
Maxtor Corporation
2452 Clover Basin Drive
Longmont, CO 80503
Facsimile: 303-678-3111
Attention: William O. Sweeney
  with a copy to:
DLA Piper Rudnick Gray Cary US LLP
2000 University Avenue
East Palo Alto, CA 94303-2248
Facsimile: 650-833-2001
Attention: Diane Holt Frankle
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
     Section 14. Successors.
               This Agreement will inure to the benefit of and be binding upon
the parties hereto, including any substitute Initial Purchasers pursuant to
Section 10 hereof, and to the benefit of the employees, officers and directors
and controlling persons referred to in Section 8 and Section 9, and in each case
their respective successors, and no other person will have any right or
obligation hereunder. The term “successors” shall not include any purchaser of
the Notes as such from any of the Initial Purchasers merely by reason of such
purchase.
     Section 15. Partial Unenforceability.
               The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
     Section 16. Governing Law Provisions.
               This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to principles of conflicts
of laws.

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               The Company hereby submits to the non-exclusive jurisdiction of
the Federal and state courts in the Borough of Manhattan in The City of New York
in any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
     Section 17. General Provisions.
               This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. This Agreement may be executed in two or more counterparts, each
one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto. The Table of
Contents and the Section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.
               Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Offering Memorandum (and any amendments and
supplements thereto), as required by the Securities Act and the Exchange Act.
     Section 18. No Fiduciary Duty
               The Company hereby acknowledges that (a) the Initial Purchasers
are acting as principal and not as agents or fiduciaries of the Company and
(b) its engagement of the Initial Purchasers in connection with the Offering is
as independent contractors and not in any other capacity. Furthermore, the
Company agrees that it is solely responsible for making its own judgments in
connection with the Offering (irrespective of whether any of the Initial
Purchasers has advised or is currently advising the Company on related or other
matters).

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               If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.

            MAXTOR CORPORATION
      By:   /s/ C.S. Park         Name:   Dr. C.S. Park        Title:   Chairman
and Chief Executive Officer     

               The foregoing Purchase Agreement is hereby confirmed and accepted
by the Representative as of the date first above written.
CITIGROUP GLOBAL MARKETS INC.
Acting as Representative of the
several Initial Purchasers named in
the attached Schedule A.

              CITIGROUP GLOBAL MARKETS INC.       By:   /s/ James A. Perry, Jr.
        Name: James A. Perry, Jr.    
 
  Title:   Vice President    

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CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, NY 10013
August 26, 2005
William O. Sweeney, Esq.
General Counsel
Maxtor Corporation
2452 Clover Basin Drive
Longmont, CO 80503
Dear Mr. Sweeney:
     Reference is made to the Purchase Agreement, dated as of August 9, 2005, by
and between Maxtor Corporation, a Delaware corporation (the “Company”), and
Citigroup Global Markets Inc., as representative of itself, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co. (the “Purchase
Agreement”). All capitalized terms used herein which are not defined herein have
the meanings given to such terms in the Purchase Agreement.
     The reference in the table of contents of the Purchase Agreement to “The
Optional Notes; the Second Closing Date” is amended to read “The Optional Notes;
Optional Closing Dates.”
     Section 2(c) of the Purchase Agreement is amended and restated as follows:
     (a) The Optional Notes; Optional Closing Dates. In addition, on the basis
of the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Company hereby grants
an over-allotment option to the several Initial Purchasers to purchase,
severally and not jointly, up to $45,000,000 aggregate principal amount of
Optional Notes from the Company in the respective principal amounts set forth
opposite their name under the heading “Aggregate Principal Amount of Optional
Notes Allocated” on Schedule A and at a purchase price of 97.75% of the
aggregate principal amount thereof. The over-allotment option granted hereunder
may be exercised one or more times upon notice by the Representative to the
Company, which notice or notices may be given at any time within 30 days from
the date of this Agreement. Any such notice shall set forth (i) the amount
(which shall be an integral multiple of $1,000 in aggregate principal amount) of
Optional Notes as to which the Initial Purchasers are exercising the
over-allotment option, (ii) the names and denominations in which the Optional
Notes are to be registered and (iii) the time, date and place at which such
Notes subject to such exercise will be delivered (which time and date may be
simultaneous with, but not earlier than, the First Closing Date; and in such
case the term “First Closing Date” shall refer to the time and date of delivery
of the Firm Notes and the Optional Notes). Any such time and date of delivery,
if subsequent to the First Closing Date, is called an “Optional Closing Date”
and shall be reasonably determined by the Representative. Such date may be the
same as the First Closing Date but not earlier than the First Closing Date nor
later

 

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than 10 business days after the date of such notice. Upon each purchase of
Optional Notes, each Initial Purchaser agrees, severally and not jointly, to
purchase the principal amount of Optional Notes (subject to such adjustments to
eliminate fractional amounts as the Representative may determine) that bears the
same proportion to the total principal amount of Optional Notes to be purchased
as the principal amount of Firm Notes set forth on Schedule A opposite the name
of such Initial Purchaser bears to the total principal amount of Firm Notes. The
Representative may cancel the over-allotment option at any time prior to its
expiration by giving written notice of such cancellation to the Company.
     Except as otherwise amended hereby, the Purchase Agreement is amended to
replace all references to “the Second Closing Date” and “Second Closing Date” to
“any Optional Closing Date” and “Optional Closing Date,” respectively, which
term shall refer to that particular Optional Closing Date for which a notice
pursuant to Section 2(c) of the Purchase Agreement (as amended hereby) is given.
     In addition, pursuant to Section 2(c) of the Purchase Agreement (as amended
hereby), we hereby notify you that the Initial Purchasers are exercising their
option to purchase $26,000,000 aggregate principal amount of Optional Notes to
cover over-allotments.
     The closing date for the purchase of the Optional Notes referenced in the
preceding sentence will be August 31, 2005.

              Very truly yours,
 
            Citigroup Global Markets Inc. Acting as Representative of the
several Initial Purchasers named in Schedule A to the Purchase Agreement
 
       
 
  By:   /s/ William L. Frauenhofer
 
       
 
  Name:   William L. Frauenhofer
 
  Title:   Director

The foregoing agreement is hereby confirmed
and accepted as of the date first above
written.

          Maxtor Corporation    
 
       
By:
  /s/ C.S. Park    
 
 
 
Name: Dr. C.S. Park    
 
  Title: Chairman and Chief Executive Officer