Document:

exv10w1

 

$4,000,000,000 AGGREGATE PRINCIPAL AMOUNT

Medtronic, Inc.

1.5% CONVERTIBLE SENIOR NOTES

DUE 2011

1.625% CONVERTIBLE SENIOR NOTES

DUE 2013

PURCHASE AGREEMENT

April 12, 2006

 

 

Purchase Agreement

April 12, 2006

BANC OF AMERICA SECURITIES LLC

9 West 57th Street

New York, New York 10019

MORGAN STANLEY & CO. INCORPORATED

1585 Broadway

New York, New York 10036

As Representatives of the several Initial Purchasers

Ladies and Gentlemen:

     Medtronic, Inc., a Minnesota corporation (the “Company”), proposes to issue and sell to the several
purchasers named in Schedule A (the “Initial Purchasers”) $2,000,000,000 in aggregate principal
amount of its 1.5% Convertible Senior Notes due 2011 (the “2011 Notes”) to be issued pursuant to
the provisions of an Indenture, to be dated as of April 18, 2006 (the “2011 Notes Indenture”),
between the Company and Wells Fargo Bank, N.A., as Trustee (the “Trustee”) and $2,000,000,000 in
aggregate principal amount of its 1.625% Convertible Senior Notes due 2013 (the “2013 Notes” and,
together with the 2011 Notes, the “Firm Securities”) to be issued pursuant to the provisions of an
Indenture, to be dated as of April 18, 2006 (the “2013 Notes Indenture,” and together with the 2011
Notes Indenture, the “Indentures”), between the Company and the Trustee. In addition, the Company
has granted to the Initial Purchasers an option to purchase up to an additional $200,000,000 in
aggregate principal amount of its 1.5% Convertible Senior Notes due 2011 and an additional
$200,000,000 in aggregate principal amount of its 1.625% Convertible Senior Notes due 2013 (the
“Additional Securities” and, together with the Firm
Securities, the “Securities”). Banc of America
Securities LLC (“BAS”) and Morgan Stanley and Co. Incorporated (“Morgan Stanley”) have agreed to
act as representatives of the several Initial Purchasers (in such capacity, the “Representatives”)
in connection with the offering and sale of the Securities. To the extent that there are no
additional Initial Purchasers listed on Schedule I other than you, the terms Representatives and
Initial Purchasers as used herein shall mean you, as Initial Purchasers. The terms Representatives
and Initial Purchasers shall mean either the singular or plural as the context requires.

     The Securities will be convertible on the terms, and subject to the conditions, set forth in the
Indentures. As used herein, “Conversion Shares”

 

 

means the shares of common stock, par value $0.10 per share, of the Company (the “Common Stock”),
into which the Securities are convertible.

     The Securities and the Conversion Shares will be offered and sold by the Initial Purchasers without
being registered under the Securities Act of 1933, as amended, and the rules and regulations of the
Securities and Exchange Commission (the “Commission”) thereunder (the “Securities Act”), to
qualified institutional buyers in compliance with the exemption from registration provided by Rule
144A under the Securities Act.

     Holders of the Securities (including the Initial Purchasers and their direct and indirect
transferees) will be entitled to the benefits of a Resale Registration Rights Agreement, dated the
Closing Date, between the Company and the Initial Purchasers (the “Registration Rights Agreement”),
pursuant to which the Company will agree to file or have on file with the Commission a shelf
registration statement pursuant to Rule 415 under the Securities Act (the “Registration Statement”)
covering the resale of the Securities and the Conversion Shares. This Agreement, the Indentures,
the Securities 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 Securities
on the terms and in the manner set forth herein and in the Preliminary Offering Memorandum (as
defined below) and the Final Offering 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
Securities to purchasers (the “Subsequent Purchasers”) at any time after the date of this
Agreement.

     The Company has prepared an offering memorandum, dated the date hereof, setting forth information
concerning the Company, the Securities, the Registration Rights Agreement and the Common Stock, in
form and substance reasonably satisfactory to the Initial Purchasers. As used in this Agreement,
“Offering Memorandum” means, collectively, the Preliminary Offering Memorandum dated as of April
11, 2006 (the “Preliminary Offering Memorandum”) and the offering memorandum dated the date hereof
(the “Final Offering Memorandum”), each as then 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 term “Disclosure Package” shall mean (i) the Preliminary
Offering Memorandum, as amended and supplemented as of the Initial Sale Time (as defined herein)
and (ii) the term sheet attached as Exhibit E hereto.

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     The Company hereby confirms its agreements with the Initial Purchasers as follows:

     1. Representations,
Warranties and Covenants of the Company. The Company hereby represents,
warrants and covenants to each Initial Purchaser as follows:

     (a) The Preliminary Offering Memorandum, at the date thereof, did not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading. At the date and time that this Agreement is executed and delivered by the
parties hereto (the “Execution Time” ) and on the Closing Date, the Final Offering Memorandum did
not and will not (and any amendment or supplement thereto, at the date thereof and at the Closing
Date will not) contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that the Company makes
no representation or warranty as to the information contained in or omitted from the Offering
Memorandum, or any amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the Initial Purchasers through
the Representatives specifically for inclusion therein.

     (b) As of 11:00 pm (Eastern Time) on the date of this Agreement (the “Initial Sale Time”), the
Disclosure Package did not contain any untrue statement of material fact or omit to state any
material fact necessary in order to make the statement therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence does not apply to statements in
or omissions from the Disclosure Package based upon and in conformity with written information
furnished to the Company by or on behalf of the Initial Purchasers specifically for the inclusion
thereof. No statement of material fact included in the Final Offering Memorandum will be omitted
from the Disclosure Package available at the Initial Sale Time, and no statement of material fact
included in the Disclosure Package available at the Initial Sale Time that is required to be
included in the Final Offering Memorandum will be omitted therefrom.

     (c) None of the Company, its Affiliates (as defined in Rule 501(b) of Regulation D under
the Securities Act, an “Affiliate”), or any person acting on its or their behalf 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 Securities or the Conversion Shares in a

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manner that would require registration under the Securities Act of the Securities or the Conversion
Shares.

     (d) None of the Company, its Affiliates, or any person acting on its or their behalf has
directly, or through any agent, offered, solicited offers to buy or sold the Securities by any form
of general solicitation or general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.

     (e) The Securities satisfy the requirements set forth in Rule 144A(d)(3) under the Securities
Act.

     (f) 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 Securities to the Initial Purchasers,
the offer, resale and delivery of the Securities by the Initial Purchasers and the conversion of
the Securities into Conversion Shares, in each case in the manner contemplated by this Agreement,
the Indenture and the Offering Memorandum, to register the Securities or the Conversion Shares
under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the “Trust Indenture Act”).

     (g) 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 giving effect
to the offering and sale of the Securities and the application of the proceeds thereof as described
in the Offering Memorandum will not be, an “investment company” as defined in the Investment
Company Act, without taking account of any exemption arising out of the number of holders of the
Company’s securities.

     (h) The Company is subject to and in compliance in all material respects with the reporting
requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”).

     (i) The Company has not paid or agreed to pay to any person any compensation for soliciting
another to purchase the Securities (except as contemplated in this Agreement).

     (j) Except as described in the Disclosure Package, the Company has not taken, and will not
take, directly or indirectly, any action designed to or that has constituted or that might
reasonably be expected to

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cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Securities.

     (k) Each significant subsidiary (as such term is defined in paragraph (w) of Rule 1-02 of
Regulation S-X) of the Company, as determined as of September 12, 2005, is set forth in Schedule B
hereto (each, a “Significant Subsidiary”).

     (1) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Minnesota, with corporate power and authority to own its
properties and conduct its business as described in the Preliminary Offering Memorandum and Final
Offering Memorandum, and has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification, except where the
failure to be so qualified in any such jurisdiction would not reasonably be expected to have a
material adverse effect on the business, financial position, shareholders’ equity or results of
operations of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”); and
each Significant Subsidiary of the Company has been duly organized and is validly existing in good
standing under the laws of its jurisdiction of organization except where the failure to be so
organized, qualified or in good standing would not reasonably be expected to have a Material
Adverse Effect.

     (m) All the outstanding shares of capital stock of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable, and, except as otherwise set
forth in the Disclosure Package and the Final Offering Memorandum, all outstanding shares of
capital stock of the Significant Subsidiaries are owned by the Company either directly or through
wholly-owned subsidiaries free and clear of any security interest, claim, lien or encumbrance.

     (n) The statements in the Final Offering Memorandum under the headings “Description of Notes,”
“Certain U.S. Federal Income Tax Considerations,” “Plan of Distribution” and “Legal Matters” fairly
summarize the matters therein described in all material respects.

     (o) This Agreement has been duly authorized, executed and delivered by the Company; the
Indentures have been duly authorized and, assuming due authorization, execution and delivery
thereof by the Trustee, when executed and delivered by the Company, will constitute legal, valid,
binding instruments enforceable against the Company in accordance with their terms (subject, as to
the enforcement of remedies, to applicable

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bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’ rights
generally from time to time in effect and to general principles of equity); the Securities have
been duly authorized, and, when executed and authenticated in accordance with the provisions of the
Indentures and delivered to and paid for by the Initial Purchasers, will have been duly executed
and delivered by the Company and will constitute the legal, valid and binding obligations of the
Company entitled to the benefits of the Indentures (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors’
rights generally from time to time in effect and to general principles of equity); the Conversion
Shares have been duly authorized and reserved and, when issued upon conversion of the Securities in
accordance with the terms of the Securities, 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; and the
Registration Rights Agreement has been duly authorized by the Company and, when executed and
delivered by the Company, will constitute the legal, valid, binding and enforceable instrument of
the Company (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors’ rights generally from
time to time in effect and to general principles of equity), provided that no representation is
made with respect to Section 4 thereof.

     (p) Except as otherwise disclosed in the Disclosure Package and the Final Offering Memorandum
(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 Preliminary 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, properties or operations, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as one entity (a
“Material Adverse Change”); and (ii) other than the Company’s previously announced quarterly
dividend, 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.

     (q) No consent, approval, authorization, filing with or order of any court or governmental
agency or body 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 such as may be required under the “Blue

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Sky” laws of any jurisdiction in the United States in which the Securities are offered and sold
and, in the case of the Registration Rights Agreement, such as will be obtained under the Act and
the Trust Indenture Act (as defined below).

     (r) None of the execution and delivery of the Operative Documents, or the consummation of any
other of the transactions herein or therein contemplated, or the fulfillment of the terms hereof or
thereof will result in a breach or violation of or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Significant Subsidiaries pursuant to (i)
the articles of incorporation or bylaws of the Company or any of its Significant Subsidiaries; (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which the Company or
any of its subsidiaries is a party or bound or to which its or their property is subject; or (iii)
any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority having jurisdiction over
the Company or any of its subsidiaries or any of its or their properties; except, in the case of
clauses (ii) and (iii), where such violation, breach, conflict or lien would not reasonably be
expected to have a Material Adverse Effect.

     (s) The consolidated historical financial statements and schedules of the Company and its
consolidated subsidiaries included or incorporated by reference in the Preliminary Offering
Memorandum and the Final Offering Memorandum present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of Regulation S-X and have
been prepared in conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as otherwise noted therein).

     (t) Except as set forth in the Disclosure Package, 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 Significant Subsidiaries or its or their property is pending or, to the best knowledge of
the Company, threatened that (i) would reasonably be expected to have a material adverse effect on
the performance of the Operative Documents, or the consummation of any of the transactions
contemplated hereby or thereby or (ii) would reasonably be expected to have a Material Adverse
Effect.

     (u) Neither the Company nor any of its Significant Subsidiaries is in violation or default of
(i) any provision of its charter or bylaws; (ii)

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the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to which it is a party
or bound or to which its property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its Significant Subsidiaries of any
court, regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or such Significant Subsidiary or any of its properties, as
applicable except, in the case of clauses (ii) and (iii), where such violation or default would not
reasonably be expected to have a Material Adverse Effect.

     (v) PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company
and its consolidated subsidiaries and delivered their report with respect to the audited
consolidated financial statements and schedules included or incorporated by reference in the
Preliminary Offering Memorandum and the Final Offering Memorandum, is, to the Company’s knowledge,
an independent registered public accounting firm with respect to the Company within the meaning of
the Act.

     (w) The Company has filed all non-U.S., U.S. federal, state and local tax returns that are
required to be filed or has requested extensions thereof (except in any case in which the failure
so to file would not reasonably be expected to have a Material Adverse Effect and except as set
forth in or contemplated in the Final Offering Memorandum (exclusive of any amendment or supplement
thereto)) and has paid all taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested in good faith or as would
not reasonably be expected to have a Material Adverse Effect and except as set forth in or
contemplated in the Final Offering Memorandum (exclusive of any amendment or supplement thereto).

     (x) The Company and each of its Significant Subsidiaries maintain effective internal control
over financial reporting as defined in Rule 13a-15 under the Exchange Act.

     (y) Except as disclosed in the Disclosure Package and the Final Offering Memorandum, since the
end of the Company’s most recent audited fiscal year, there has been (i) no material weakness in
the Company’s internal control over financial reporting (whether or not remediated) and (ii) no
change in the Company’s internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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     (z) The Company and its Significant Subsidiaries (i) are in compliance with any and all
applicable non-U.S., U.S. federal, state and local laws and regulations relating to the protection
of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“Environmental Laws”); (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) have not received notice of any actual or potential liability
known to management of the Company under any Environmental Law, except where such non-compliance
with Environmental Laws, failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, except as set forth in or contemplated in the Disclosure Package or the Final
Offering Memorandum (exclusive of any amendment or supplement thereto). Except as set forth in the
Final Offering Memorandum, neither the Company nor any of its Significant Subsidiaries has been
named as a “potentially responsible party” under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.

     (aa) The operations of the Company and its Significant Subsidiaries are and have been conducted
at all times in material 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 Significant Subsidiaries with respect to the Money Laundering Laws is pending or, to the
best knowledge of the Company, threatened.

     (bb) There is and has been no failure in any material respect on the part of the Company and
any of the Company’s directors or officers, in their capacities as such, to comply 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.

     (cc) None of the Company, any of its Significant Subsidiaries or, to the knowledge of the
Company, any director, officer, employee or Affiliate of the Company or any of its Significant
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

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the Securities 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.

     (dd) Except as would not reasonably be expected to have a Material Adverse Effect or as
described in the Disclosure Package, the Company and its Significant Subsidiaries own, possess,
license or have other rights to use on reasonable terms, all patents, trade and service marks,
trade names, copyrights, domain names (in each case including all registrations and applications to
register same), inventions, trade secrets, technology, know-how, and other intellectual property,
(collectively, the “Intellectual Property”) currently employed by it in connection with the conduct
of the Company’s business as now conducted. Except as set forth in the Disclosure Package and
except as would not reasonably be expected to have a Material Adverse Effect, (i) the Company owns,
or has rights to use under license, all such Intellectual Property free and clear in all material
respects of all adverse claims, liens or other encumbrances; (ii) to the knowledge of the Company,
there is no material infringement by third parties of any such Intellectual Property; (iii) there
is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by any
third party challenging the Company’s or its Significant Subsidiaries’ rights in or to any such
Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis
for any such claim; (iv) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by any third party challenging the validity, scope or enforceability of
any such Intellectual Property, and the Company is unaware of any facts that would form a
reasonable basis for any such claim; (v) there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by any third party that the Company or any Significant
Subsidiary infringes or otherwise violates any patent, trademark, copyright, trade secret or other
proprietary rights of any third party, and the Company is unaware of any other fact which would
form a reasonable basis for any such claim; and (vi) to the knowledge of the Company, there is no
valid and subsisting patent or published patent application that would preclude the Company, in any
material respect, from practicing any such Intellectual Property.

     (ee) Except as disclosed in the Disclosure Package and the Final Offering Memorandum, the
Company (i) does not have any material lending or other relationship with any Initial Purchaser or
affiliate of any Initial Purchaser and (ii) does not intend to use any of the proceeds from the
sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of any Initial
Purchaser.

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     (ff) Except as disclosed in the Disclosure Package and Final Offering Memorandum and except as
would not reasonably be expected to have a Material Adverse Effect, (i) the Company and its
subsidiaries have all licenses, certificates, permits, consents, orders, approvals and
authorization from domestic and foreign governmental authorities, including the United States Food
and Drug Administration (the “FDA”) and any agency of any U.S. state or foreign government
exercising comparable authority (including any non-governmental entity whose approval or
authorization is required under foreign law comparable to that administered by the FDA) in a
jurisdiction where the Company’s or any of its significant subsidiaries’ products are sold
(collectively, “Permits”), which are necessary to own their properties and/or to conduct their
business in the manner and to the extent now conducted, with no material restrictions or
qualifications, and such Permits are in full force and effect and no proceeding has been instituted
or is pending or, to the best knowledge of the Company and its significant subsidiaries, is
contemplated or threatened which in any manner affects or draws into question the validity or
effectiveness thereof; and (ii) the Company and its significant subsidiaries are not in violation
of any statutes, orders, standards, rules or regulations relating to or affecting the properties or
Permits of the Company or its significant subsidiaries or the operation of the Company’s or any of
its significant subsidiaries’ business in the manner and to the extent now conducted and are not in
violation of any Permit.

     (gg) The Company self-insures against losses in a manner which it believes to be reasonable.

     Any certificate signed by an officer of the Company and delivered to the Representatives 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.

     2. Agreements to Sell and Purchase. The Company agrees, upon the terms but subject to the
conditions herein set forth, to issue and sell to the several Initial Purchasers the Firm
Securities. 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
Securities set forth opposite their names on Schedule A at a purchase price of 98.50% of the
aggregate principal amount thereof.

     3. The Closing Date. Delivery of the Firm Securities to be purchased by the Initial Purchasers
and payment therefor shall be made at the offices of Davis Polk & Wardwell, 450 Lexington Avenue,
New York, New York, 10017 at 9:00 a.m. New York City time, on April 18, 2006 or such other time and
date not

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later than April 21, 2006 as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the “Closing Date”).

     4. The Additional Securities; any Subsequent 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 option to the several Initial Purchasers to purchase,
severally and not jointly, up to $200,000,000 aggregate principal amount of the
2011 Notes and up to $200,000,000 aggregate principal amount of the 2013 Notes
from the Company at the same price as the purchase price to be paid by the Initial
Purchasers for the Firm Securities. The option may be exercised only to cover
over-allotments in the sale of the Firm Securities by the Initial Purchasers. The
option granted hereunder may be exercised at any time and from time to time
upon notice by the Representatives to the Company, which notice may be given at
any time within 13 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 Additional Securities as to which the Initial Purchasers are
exercising the option, (ii) the names and denominations in which the Additional
Securities are to be registered and (iii) the time, date and place at which such
Securities will be delivered (which time and date may be simultaneous with, but
not earlier than, the Closing Date; and in such case the term “Closing Date” shall
refer to the time and date of delivery of the Firm Securities and the Additional
Securities). Such time and date of delivery, if subsequent to the Closing Date, is
called a “Subsequent Closing Date” and shall be determined by the
Representatives. Such date may be the same as the Closing Date but not earlier
than the Closing Date nor later than 10 business days after the date of such notice.
If any Additional Securities are to be purchased, each Initial Purchaser agrees,
severally and not jointly, to purchase the principal amount of Additional
Securities (subject to such adjustments to eliminate fractional amount as the
Representatives may determine) that bears the same proportion to the total
principal amount of Additional Securities to be purchased as the principal amount
of Firm Securities set forth on Schedule A opposite the name of such Initial
Purchaser bears to the total principal amount of Firm Securities.

     5. Payment for the Securities. Payment for the Securities shall be
made at the Closing Date (and, if applicable, at any Subsequent Closing Date) by
wire transfer of immediately available funds to the order of the Company.

     It is understood that the Representatives have been authorized, for their 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 Securities and any Additional Securities the Initial Purchasers
have agreed to purchase.

     6. Delivery of the Securities. The Company shall deliver, or cause to
be delivered, to the Representatives for the accounts of the several Initial

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Purchasers the Firm Securities at the 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 Representatives for the accounts of the
several Initial Purchasers, the Additional Securities the Initial Purchasers have agreed to
purchase at the Closing Date or any Subsequent 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. Delivery of the Securities shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct. Time shall be of the
essence, and delivery of the Securities at the time and place specified in this Agreement is a
further condition to the obligations of the Initial Purchasers.

     7. Additional Covenants of the Company

     The Company further covenants and agrees with each Initial Purchaser as follows:

     (a) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final Offering
Memorandum and any amendments and supplements thereto and the
Disclosure Package as they may reasonably request.

     (b) During such period beginning with the Initial Sale Time
and ending on the date of the completion of the resale of the Notes by the
Initial Purchasers (as notified by the Initial Purchasers to the Company),
the Company will not amend or supplement the Final Offering
Memorandum, other than by filing documents under the Exchange Act
that are incorporated by reference therein, without the prior written
consent of the Representatives; provided, however, that, prior to the
completion of the distribution of the Securities by the Initial Purchasers
(as determined by the Initial Purchasers and notified to the Company), the
Company will not file any document under the Exchange Act that is
incorporated by reference in the Final Offering Memorandum unless, prior
to such proposed filing, the Company has furnished the Representatives
with a copy of such document for their review and the Representatives
have not reasonably objected to the filing of such document. The
Company will promptly advise the Representatives when any document
filed under the Exchange Act that is incorporated by reference in the Final
Offering Memorandum shall have been filed with the Commission.

     (c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the Representatives),
any event occurs as a result of which the Final Offering Memorandum, as
then amended or supplemented, would include any untrue statement of a

14

 

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, or if it should be necessary
to amend or supplement the Final Offering Memorandum to comply with applicable law, the Company
will promptly (i) notify the Representatives of any such event; (ii) subject to the requirements of
paragraph (b) of this Section 7, prepare an amendment or supplement that will correct such
statement or omission or effect such compliance; and (ii) supply any supplemented or amended Final
Offering Memorandum to the several Initial Purchasers and counsel for the Initial Purchasers
without charge in such quantities as they may reasonably request.

     (d) During the period of two years after the last Closing Date,
the Company will not, and will not permit any of its “affiliates” (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities which constitute “restricted securities” under Rule 144 that have
been reacquired by any of them.

     (e) None of the Company, its affiliates or any person acting on
its or their behalf will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that
would require the registration of the Securities under the Act.

     (f) None of the Company, its affiliates, or any person acting on its or their behalf will
engage in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United States.

     (g) So long as any of the Securities are “restricted securities” within the meaning of
Rule 144(a)(3) under the Act, the Company will, during any period in which it is not subject to and
in compliance with Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Act. This covenant is intended to be for the
benefit of the holders, and the prospective purchasers designated by such holders, from time to
time of such restricted securities.

     (h) Until May 24, 2006, the Company will not, without the prior written consent of the
Initial Purchasers (which consent may be withheld at the sole discretion of the Initial
Purchasers), directly or indirectly, sell, offer, contract or grant any option to sell, pledge,
transfer or establish an open “put equivalent position” or liquidate or decrease a “call equivalent
position” within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer (or enter into any

15

 

transaction which is designed to, or might reasonably be expected to, result in the disposition
of), 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 Stock
or securities exchangeable or exercisable for or convertible into shares of Common Stock (other
than as contemplated by this Agreement with respect to the Securities and as contemplated by the
Registration Rights Agreement); provided, however, that the Company may issue shares of its Common
Stock or options or warrants to purchase its Common Stock, or Common Stock upon exercise of options
or warrants, pursuant to any stock option, stock bonus or other stock plan or arrangement described
in the Offering Memorandum, but only (other than with respect to warrants described in the Offering
Memorandum) if the holders of such shares, options, or shares issued upon exercise of such options,
agree in writing not to sell, offer, dispose of or otherwise transfer any such shares or options
until May 24, 2006 without the prior written consent of the Initial Purchasers (which consent may
be withheld at the sole discretion of the Initial Purchasers).

     (i) The Company will cooperate with the Representatives and use its best efforts to permit
the Securities to be eligible for clearance and settlement through The Depository Trust Company.

     (j) Except as described in the Disclosure Package, the Company will not take, directly or
indirectly, any action designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Securities.

     (k) The Company agrees to pay the costs and expenses relating to the following matters:
(i) the preparation of the Indentures and the Registration Rights Agreement, the issuance of the
Securities and the fees of the Trustee; (ii) the preparation, printing or reproduction of the
Offering Memorandum and each amendment or supplement to either of them; (iii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges for counting and
packaging) of such copies of the Offering Memorandum, all amendments or supplements to either of
them and the Disclosure Package, as may, in each case, be reasonably requested for use in
connection with the offering and sale of the Securities; (iv) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities; (v) any stamp or transfer
taxes in connection with the original issuance and sale of the Securities; (vi) the printing (or
reproduction) and delivery of this Agreement, any “Blue Sky” memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering of the

16

 

Securities; (vii) any registration or qualification of the Securities for offer and sale under the
securities or “Blue Sky” laws of the several states and any other jurisdictions specified pursuant
to Section 7(o) (including filing fees and the reasonable fees and expenses of counsel for the
Initial Purchasers relating to such registration and qualification); (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in connection with presentations
to prospective purchasers of the Securities; (ix) the fees and expenses of the Company’s
accountants and the fees and expenses of counsel (including local and special counsel) for the
Company; and (x) all other costs and expenses incident to the performance by the Company of its
obligations hereunder. Except as provided in this Section 7, Section 11, Section 13 and Section
14, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of
their counsel.

     (l) The Company will, for a period of 12 months following the Execution Time, furnish to
the Representatives (i) all reports or other communications (financial or other) generally made
available to shareholders, and deliver such reports and communications to the Representatives as
soon as they are available, unless such documents are furnished to or filed with the Commission or
any securities exchange on which any class of securities of the Company is listed and generally
made available to the public and (ii) such additional information concerning the business and
financial condition of the Company as the Representatives may from time to time reasonably request
(such statements to be on a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to shareholders).

     (m) The Company will comply with all applicable securities and other laws, rules and
regulations, including, without limitation, the Sarbanes-Oxley Act, and use its best efforts to
cause the Company’s directors and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of the Sarbanes-Oxley Act.

     (n) The Company will not take any action or omit to take any action (such as issuing any
press release relating to any Securities 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 FSMA.

     (o) The Company shall cooperate with the Representatives and counsel for the Initial
Purchasers, as the Initial Purchasers may reasonably request from time to time, to qualify or
register the Securities for sale under (or obtain exemptions from the application of) the state
securities or “Blue Sky” laws or Canadian provincial Securities laws of those

17

 

jurisdictions designated by the Representatives, shall comply with such laws and shall
continue such qualifications, registrations and exemptions in effect so long as required
for the distribution of the Securities. 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 Representatives
promptly of the suspension of the qualification or registration of (or any such exemption
relating to) the Securities 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 best efforts to obtain the withdrawal thereof at the earliest
possible moment.

     (p) Each of the Securities 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.

     (q) The Company will reserve and keep available at all times, free of pre-emptive
rights, the full number of Conversion Shares.

     (r) Between the date hereof and the Closing Date, the Company will not do or
authorize any act or thing that would result in an adjustment of the conversion price.

     8. Conditions of the Obligations of the Initial Purchasers. The obligations of the
several Initial Purchasers to purchase and pay for the Securities as provided herein on the Closing
Date and, with respect to the Additional Securities, any Subsequent Closing Date, shall be subject
to the accuracy of the representations, warranties and agreements on the part of the Company set
forth in Section 1 hereof as of the date hereof and as of the Closing Date as though then made and,
with respect to the Additional Securities, as of the related Subsequent Closing Date as though then
made, to the accuracy of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the timely performance by the Company of its covenants and other obligations
hereunder, and to each of the following additional conditions:

     (a) On the date hereof, the Representatives shall have received
from PricewaterhouseCoopers LLP, independent public accountants for
the Company, a letter dated the date hereof addressed to the Initial
Purchasers, the form of which is attached as Exhibit A.

     (b) For the period from and after the date of this Agreement
and prior to the Closing Date and, with respect to the Additional
Securities, any Subsequent Closing Date:

18

 

     (i) there has not occurred any Material Adverse Change, the effect of
which, in the sole judgment of the Representatives, is so material and adverse as
to make it impractical or inadvisable to proceed with the offering;

     (ii) there shall not have been any change or decrease specified in the letter
or letters referred to in paragraph (a) of this Section 8 which is, in the sole judgment
of the Representatives, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by the
Preliminary Offering Memorandum and the Final Offering Memorandum; and

     (iii) there shall not have occurred any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change, in the rating
accorded any securities of the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.

     (c) On each of the Closing Date and any Subsequent Closing
Date, the Representatives shall have received the opinions of Wilmer
Cutler Pickering Hale and Dorr LLP, counsel for the Company, Fredrikson
& Byron, PA, Minnesota counsel for the Company, and in-house counsel,
dated as of such Closing Date, substantially the forms of which are
attached as Exhibits B, C and D, respectively.

     (d) On each of the Closing Date and any Subsequent Closing
Date, the Representatives shall have received the opinion of Davis Polk &
Wardwell, counsel for the Initial Purchasers, dated as of such Closing
Date, in form and substance satisfactory to, and addressed to, the
Representatives, with respect to the issuance and sale of the Securities, the
Registration Statement, the Offering Memorandum and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.

     (e) On each of the Closing Date and any Subsequent Closing
Date, the Representatives 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 Chief Accounting Officer of
the Company, dated as of such Closing Date to the effect that:

19

 

     (i) the representations, warranties of the Company in this Agreement are true
and correct on and as of the Closing Date or the Subsequent Closing Date, as the case
may be, with the same force and effect as though expressly made on and as of such
Closing Date or such Subsequent Closing Date, as the case may be; and

     (ii) since the date of the most recent financial statements included or
incorporated by reference in the Final Offering Memorandum (exclusive of any amendment
or supplement thereto), there has not occurred any Material Adverse Change.

     (iii) the Company has 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 or such Subsequent Closing Date, as the case may be.

     (f) On each of the Closing Date and any Subsequent Closing Date, the Representatives shall
have received from PricewaterhouseCoopers LLP, independent public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the Representatives, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a)
of this Section 8, 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 Closing Date or Subsequent
Closing Date, as the case may be.

     (g) 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
Company), and the Registration Rights Agreement shall be in full force and effect.

     (h) The Securities shall have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the National Association of Securities Dealers,
Inc.

     (i) The Company shall have caused the Conversion Shares to be approved for listing,
subject to issuance, on the New York Stock Exchange,

     (j) On or before each of the Closing Date and any Subsequent Closing Date, the
Representatives and counsel for the Initial Purchasers shall have received such information and
documents as they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Securities as contemplated herein.

20

 

          If any condition specified in this Section 8 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representatives by notice to the Company at any
time on or prior to the Closing Date and, with respect to the Additional Securities, at any time
prior to the applicable Subsequent Closing Date, which termination shall be without liability on
the part of any party to any other party, except that Section 7(k), Section 10, Section 11, Section
12 and Section 16 shall at all times be effective and shall survive such termination.

          9. 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 represents, warrants and agrees with the Company
that:

     (a) it has not offered or sold, and will not offer or sell, any
Securities 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 to those it reasonably believes to be
“qualified institutional buyers” (as defined in Rule 144A under the
Securities Act).

     (b) neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by means of
any form of general solicitation or general advertising (within the meaning
of Regulation D) in the United States;

     (c) in connection with each sale pursuant to Section 9(a), it has
taken or will take reasonable steps to ensure that the purchaser of such
Securities is aware that such sale is being made in reliance on Rule 144A;

     (d) any information provided by the Initial Purchasers to
publishers of publicly available databases about the terms of the Securities
shall include a statement that the Securities have not been registered under
the Securities Act and are subject to restrictions under Rule 144A under
the Securities Act;

     (e) it acknowledges that additional restrictions on the offer and
sale of the Securities and the Common Stock issuable upon conversion
thereof are described in the Offering Memorandum; and

     (f) it acknowledges that it has not requested that the Company qualify and register the
Securities for sale in any jurisdiction other than the United States.

     10. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is terminated by the
Representatives pursuant to Section 8, Section 13 or Section

21

 

14 clause (i) only, in so far as it relates to a suspension or limitation of trading in the
Company’s securities, or if the sale to the Initial Purchasers of the Securities on the 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, the Company agrees to
reimburse the Representatives and the other 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 Representatives and the Initial Purchasers
in connection with the proposed purchase and the offering and sale of the Securities, including but
not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.

11. Indemnification

     (a) Indemnification of the Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser, its directors, officers and employees,
agents, and each person, if any, who controls any Initial Purchaser within the meaning of
the Securities Act and the Exchange Act (i) against any loss, claim, damage, liability or
expense, as incurred, to which such Initial Purchaser or such controlling person may become
subject, 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 Preliminary Offering
Memorandum, the Final Offering Memorandum (or any amendment or supplement thereto) or the
Disclosure Package, or the omission or alleged omission therefrom of a material fact, in
each case, necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (ii) against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 11(d) below) any such settlement is effected
with the written consent of the Company; and (iii) against any and all reasonable
out-of-pocket expense whatsoever, as incurred (including the reasonable fees and
disbursements of counsel), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above; and to reimburse each Initial
Purchaser, its officers, directors, employees, agents and each such controlling person for
any and all expenses (including the fees and

22

 

disbursements of counsel chosen by the Initial Purchasers) as such expenses are reasonably incurred
by such Initial Purchaser, its officers, directors, employees, agents or such controlling person in
connection with investigating, defending, settling, compromising 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 Representatives expressly for use in the Preliminary Offering Memorandum or the
Final Offering Memorandum (or any amendment or supplement thereto). The indemnity agreement set
forth in this Section 11(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, 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 Preliminary Offering Memorandum, the Final Offering
Memorandum (or any amendment or supplement thereto) or the Disclosure Package, or arises out of or
is based upon the omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not
misleading, in each case to the extent, and only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Preliminary Offering
Memorandum, the Final Offering Memorandum (or any amendment or supplement thereto) or the
Disclosure Package, in reliance upon and in conformity with written information furnished to the
Company by the Representatives 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, compromising 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 Preliminary Offering Memorandum, the Final
Offering Memorandum (or any amendment or supplement thereto) or the Disclosure Package are the
statements set forth

23

 

in
Schedule C. The indemnity agreement set forth in this Section 11(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 11 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 11, notify the indemnifying party in writing of the commencement thereof, but
the failure to so notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above.
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 that 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 such 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 11
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 preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one separate counsel (other
than local counsel), reasonably approved by the indemnifying party (or by the Representatives in
the case of Section 11(b)), representing the indemnified parties who are

24

 

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 11 shall not be liable
for any settlement of any proceeding effected without its written consent, which shall not
be withheld unreasonably, 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
requested an indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 11(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, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being entered into
and (iii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such 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.

     12. Contribution. If the indemnification provided for in Section 11 is for any reason
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 Securities 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

25

 

the Initial Purchasers, on the other hand, in connection with the statements or omissions or
alleged statements or alleged omissions that 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 Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Securities pursuant to
this Agreement (before deducting expenses) received by the Company, and the total discount received
by the Initial Purchasers bear to the aggregate initial offering price of the Securities. The
relative fault of the Company, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company, 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 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 11(c), any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim.

     The Company and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 12 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
12.

     Notwithstanding the provisions of this Section 12, no Initial Purchaser shall be required to
contribute any amount in excess of the purchase discount or commission received by such Initial
Purchaser in connection with the Securities purchased by it hereunder. 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 12 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 12, each director, officer, employee and agent 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.

26

 

     13. Default of One or More of the Several Initial Purchasers. If, on the Closing Date or any
Subsequent Closing Date, as the case may be, any one or more of the several Initial Purchasers
shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on
such date, and the aggregate principal amount of Securities 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 Securities to be purchased on such date, the other Initial Purchasers shall
be obligated, severally, in the proportions that the principal amount of Firm Securities set forth
opposite their respective names on Schedule A bears to the aggregate principal amount of Firm
Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as may be specified by the Representatives with the consent of the non-defaulting
Initial Purchasers, to purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date. If, on the Closing Date or any
Subsequent Closing Date, as the case may be, any one or more of the Initial Purchasers shall fail
or refuse to purchase Securities and the aggregate principal amount of Securities with respect to
which such failure or refusal occurs exceeds 10% of the aggregate principal amount of Securities to
be purchased on such date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Securities are not made within 48 hours after such failure or refusal, 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 7(k), Section 10, Section 11
and Section 12 shall at all times be effective and shall survive such termination. In any such case
either the Representatives or the Company shall have the right to postpone the Closing Date or any
Subsequent 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 Final Offering Memorandum or any other documents or
arrangements may be effected.

     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 13. Any action taken under this
Section 13 shall not relieve any defaulting Initial Purchaser from liability in respect of any
default of such Initial Purchaser under this Agreement.

     14. Termination of this Agreement. On or prior to the Closing Date this Agreement may be
terminated by the Representatives by notice given to the Company if at any time (i) trading or
quotation 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 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 authority or a material
disruption in commercial banking or securities settlement or clearance services in the United

27

 

States has occurred; 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, as in the judgment of the Representatives is material and adverse
and makes it impracticable or inadvisable to market the Securities in the manner and on the terms
described in the Final Offering Memorandum or to enforce contracts for the sale of securities. Any
termination pursuant to this Section 14 shall be without liability on the part of (b) the Company
to any Initial Purchaser, except that the Company shall be obligated to reimburse the expenses of
the Representatives and the Initial Purchasers pursuant to Sections 7(k) and 10 hereof or (c) any
Initial Purchaser to the Company.

     15. No Advisory or Fiduciary Responsibility. The Company acknowledges and agrees that: (i) the
purchase and sale of the Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is an arm’s-length
commercial transaction between the Company, on the one hand, and the several Initial Purchasers, on
the other hand, and the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to such transaction
each Initial Purchaser is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary of the Company or its affiliates, stockholders, creditors or employees
or any other party; (iii) no Initial Purchaser has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser
has advised or is currently advising the Company on other matters) and no Initial Purchaser has any
obligation to the Company with respect to the offering contemplated hereby except the obligations
expressly set forth in this Agreement or agreements described in the Offering Memorandum; (iv) the
several Initial Purchasers and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and that the several
Initial Purchasers have no obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) the Initial Purchasers have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the
Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it
deemed appropriate.

The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the
Company may have against the several Initial Purchasers with respect to any breach or alleged
breach of agency or fiduciary duty.

     16. Representations and Indemnities to Survive Delivery. The respective indemnities,
contribution, agreements, representations, warranties and other statements of the Company, of its
officers and of the several Initial

28

 

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,
directors, employees, agents or any controlling person, as the case may be, (ii) acceptance of the
Securities and payment for them hereunder or (iii) any termination of this Agreement.

     17. 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 Representatives:

Bane of America Securities LLC

9 West 57th Street

New York, New York 10019

Facsimile: 212-933-2217

Attention: Syndicate Department,

With a copy to the Legal Department

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Facsimile: 212-761-0086

Attention: Convertible Debt Syndicate Desk,

With a copy to the Legal Department

     If to the Company:

Medtronic, Inc.

710 Medtronic Parkway

Minneapolis, Minnesota 55432-5603

Facsimile: 763-505-2980

Attention: General Counsel

     Any party hereto may change the address for receipt of communications by giving written
notice to the others.

     18. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto, including any substitute Initial Purchasers pursuant to Section 13 hereof, and to the
benefit of the employees, officers and directors and controlling persons referred to in Section 11
and Section 12, 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
Securities as such from any of the Initial Purchasers merely by reason of such purchase.

29

 

     19. 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.

     20. Governing Law Provisions

     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     (b) Any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the
federal courts of the United States of America located in the City and County of New York,
Borough of Manhattan or the courts of the State of New York in each case located in the
City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”),
and each party irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a “Related
Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such
suit, action or proceeding. Service of any process, summons, notice or document by mail to
such party’s address set forth above shall be effective service of process for any suit,
action or other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action or other
proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such suit, action or other proceeding brought
in any such court has been brought in an inconvenient forum.

     21. 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 Section headings herein are
for the convenience of the parties only and shall not affect the construction or interpretation of
this Agreement.

30

 

	 	 	 	 	 
	 	Very truly yours,
MEDTRONIC, INC. 

 	 
	 	By:  	/s/ Gary L. Ellis
 	 
	 	 	Name:  	Gary L. Ellis  	 
	 	 	Title:  	Senior Vice President and

Chief Financial Officer 	 

 

 

	 	 	 	 	 

     The foregoing Purchase Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.

BANC OF AMERICA SECURITIES LLC

MORGAN STANLEY AND CO. INCORPORATED

Acting as Representatives of the several Initial Purchasers named in the attached Schedule A.

BANC OF AMERICA SECURITIES LLC

	 	 	 	 	 
	By:

	 	/s/ Derek Dillon	 	 
	 

	 	 	 	 
	 

	 	Name: Derek Dillon	 	 
	 

	 	Title: Managing Director	 	 
	 

	 	 	 	 

MORGAN
STANLEY AND CO. INCORPORATED

	 	 	 	 	 
	By:
	 	/s/ [ILLEGIBLE]	 	 
	 

	 	 	 	 
	 

	 	Name:  [ILLEGIBLE]	 	 
	 

	 	Title: Executive DirectorTable of Contents
Exhibit
10.1

AMENDMENT

AMENDMENT (this
‘‘Amendment’’), dated as of
April  13,  2006, to the Credit Agreement, dated as of
August  2,  2005 (the ‘‘Credit
Agreement’’), among Aspen Insurance Holdings
Limited, a Bermuda exempted limited liability company (the
‘‘Company’’), the Subsidiary
Borrowers (together with the Company, the
‘‘Borrowers’’ and
individually, a
‘‘Borrower’’), the several
banks and other financial institutions or entities from time to time
parties thereto (the
‘‘Lenders’’), Bank of
America, N.A. and Calyon, New York Branch, as co-syndication agents (in
such capacities, each a ‘‘Co-Syndication
Agent’’), Credit Suisse, Cayman Islands Branch
and Deutsche Bank AG, New York Branch, as co-documentation agent (in
such capacities, each a ‘‘Co-Documentation
Agent’’), The Bank of New York, as collateral
agent (the ‘‘Collateral
Agent’’), and Barclays Bank Plc, as
administrative agent (the ‘‘Administrative
Agent’’).

W I T N E S S E T
H:

WHEREAS, pursuant to the Credit Agreement,
the Lenders have agreed to make, and have made, certain loans and other
extensions of credit to the Borrowers;

WHEREAS, the Borrowers
have requested that certain provisions of the Credit Agreement be
amended as set forth herein; and

WHEREAS, the Lenders are willing
to agree to such amendment on the terms set forth herein;

NOW
THEREFORE, in consideration of the premises and mutual covenants
contained herein, the undersigned hereby agree as
follows:

I. Defined Terms. Terms defined in the
Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement.

II. Amendment to Section
7.1(b). Section 7.1(b) is hereby amended and restated in its
entirety to read as follows:

‘‘(b)
Consolidated Tangible Net Worth. Permit Consolidated Tangible
Net Worth as at any date to be less than the sum of (i) $1,106,175,000,
(ii) 50% of Consolidated Net Income during the period from
January  1,  2005 to and including such date (if positive)
and (iii) 50% of the aggregate Net Cash Proceeds of all
issuances by the Company of shares of its Capital Stock during the
period from January  1,  2005 to and including such
date

III. Effective Date. This Amendment shall
become effective on the date (the ‘‘Effective
Date’’) on which the Borrowers and the Required
Lenders under the Credit Agreement shall have duly executed and
delivered to the Administrative Agent this
Amendment.

IV. No Other Amendments; Confirmation.
Except as expressly amended hereby, the provisions of the Credit
Agreement, as amended and restated, and the other Loan Documents
(including the security interests granted pursuant to the Security
Agreement) are and shall remain in full force and
effect.

V. Governing Law. This Amendment and the
rights and obligations of the parties hereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of
New York.

VI. Counterparts. This Amendment may be
executed by one or more of the parties hereto on any number of separate
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. This Amendment may be
delivered by facsimile transmission of the relevant signature pages
hereof.

[signature pages
follow]

1

Table of Contents
IN WITNESS WHEREOF, the undersigned have
caused this Amendment to be executed and delivered by their duly
authorized officers as of the date first above
written.

		ASPEN INSURANCE HOLDINGS LIMITED,
as a
Borrower

											
	 		By:		/s/
Julian
Cusack
	 		Name:		Julian
Cusack
	 		Title:		Chief
Financial Officer
	

2

Table of Contents

		ASPEN INSURANCE LIMITED, as a
Borrower

											
	 		By:		/s/
Julian
Cusack
	 		Name:		Julian
Cusack
	 		Title:		Chief
Executive Officer
	

3

Table of Contents

		ASPEN INSURANCE UK LIMITED, as a
Borrower

											
	 		By:		/s/
Sarah
Davies
	 		Name:		Sarah
Davies
	 		Title:		Director
	

4

Table of Contents

		ASPEN (UK) HOLDINGS LIMITED, as a
Borrower

											
	 		By:		/s/
Sarah
Davies
	 		Name:		Sarah
Davies
	 		Title:		Director
	

5

Table of Contents

		ASPEN SPECIALTY INSURANCE COMPANY,
as a
Borrower

											
	 		By:		/s/
Gayle
Haskell
	 		Name:		Gayle
Haskell
	 		Title:		Chief
Financial Officer
	

6

Table of Contents

		ASPEN U.S. HOLDINGS, INC., as a
Borrower

											
	 		By:		/s/
Julian
Cusack
	 		Name:		Julian
Cusack
	 		Title:		Chief
Financial Officer
	

7

Table of Contents

		BARCLAYS BANK PLC, as
Administrative Agent and a
Lender

											
	 		By:		/s/
David
Barton
	 		Name:		David
Barton
	 		Title:		Associate
Director
	

8

Table of Contents

		BANK OF AMERICA, N.A., as a
Co-Syndication Agent and a
Lender

											
	 		By:		/s/
Timothy
Cassidy
	 		Name:		Timothy
Cassidy
	 		Title:		Vice
President
	

9

Table of Contents

		CALYON, NEW YORK BRANCH, as a
Co-Syndication Agent and a
Lender

											
	 		By:		/s/
Sebastian
Rocco
	 		Name:		Sebastian
Rocco
	 		Title:		Managing
Director
	

											
	 		By:		/s/
Charles
Kornberger
	 		Name:		Charles
Kornberger
	 		Title:		Managing
Director
	

10

Table of Contents

		CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, as a Co-Documentation Agent and a
Lender

											
	 		By:		/s/
Jay
Chall
	 		Name:		Jay
Chall
	 		Title:		Director
	

											
	 		By:		/s/
James
Neira
	 		Name:		James
Neira
	 		Title:		Associate
	

11

Table of Contents

		DEUTSCHE BANK AG, NEW YORK
BRANCH, as a Co-Documentation Agent and a
Lender

											
	 		By:		 
	 		Name:		 
	 		Title:		 
	

											
	 		By:		 
	 		Name:		 
	 		Title:		 
	

12

Table of Contents

		ABN AMRO BANK N.V., as a
Lender

											
	 		By:		/s/
Neil R.
Stein
	 		Name:		Neil
R.
Stein
	 		Title:		Director
	

											
	 		By:		/s/
Eric
Oppenheimer
	 		Name:		Eric
Oppenheimer
	 		Title:		Director
	

13

Table of Contents

		CITIBANK, N.A. , as a
Lender

											
	 		By:		/s/
Michael
Taylor
	 		Name:		Michael
Taylor
	 		Title:		Managing
Director
	

14

Table of Contents

		THE BANK OF NEW YORK, as
Collateral Agent and a Lender

											
	 		By:		/s/
Lizanne T.
Eberle
	 		Name:		Lizanne
T.
Eberle
	 		Title:		Vice
President
	

15

Table of Contents

		THE BANK OF N.T. BUTTERFIELD
& SON LIMITED, as a
Lender

											
	 		By:		 
	 		Name:		 
	 		Title:		 
	

16

Table of Contents

		HSBC BANK, USA, N.A., as a
Lender

											
	 		By:		/s/ Kenneth J.
Johnson
	 		Name:		Kenneth
J.
Johnson
	 		Title:		Senior
Vice President
	

17

Table of Contents

		UBS LOAN FINANCE LLC, as a
Lender

											
	 		By:		/s/
Richard L.
Tavrow
	 		Name:		Richard
L.
Tavrow
	 		Title:		Director
	

											
	 		By:		/s/
Irja R.
Otsa
	 		Name:		Irja
R.
Otsa
	 		Title:		Associate
Director
	

18

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