Texas Industries, Inc. and the Guarantors listed on Schedule A hereto 7.25% Senior Notes due 2013 Purchase Agreement dated August 7, 2008 Banc of America Securities LLC UBS Securities LLC Wachovia Capital Markets, LLC Wells Fargo Securities, LLC...
EXECUTION
VERSION
Texas
Industries, Inc.
and
the Guarantors
listed
on Schedule A hereto
$300,000,000
7.25%
Senior Notes due 2013
dated
August 7, 2008
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
SunTrust
Xxxxxxxx Xxxxxxxx, Inc.
August
7,
2008
BANC
OF
AMERICA SECURITIES LLC
UBS
SECURITIES LLC
WACHOVIA
CAPITAL MARKETS, LLC
XXXXX
FARGO SECURITIES, LLC
COMERICA
SECURITIES, INC.
SUNTRUST
XXXXXXXX XXXXXXXX, INC.
As
Initial Purchasers
c/o
BANC
OF AMERICA SECURITIES LLC
One
Bryant Park
Ladies
and Gentlemen:
Texas
Industries Inc., a Delaware corporation (the “Company”), proposes to issue and
sell to the several Initial Purchasers named in Schedule B
(the
“Initial Purchasers”), acting severally and not jointly, the respective amounts
set forth in such Schedule B
of
$300,000,000 aggregate principal amount of the Company’s 7.25% Senior Notes due
2013 (the “Notes”).
The
Notes
will be issued pursuant to an existing indenture, dated as of July 6, 2005
(the
“Existing Indenture”), among the Company, the Guarantors (as defined below) and
Xxxxx Fargo Bank, National Association, as trustee (the “Trustee”), as
supplemented by a first supplemental indenture to be dated on or prior to the
Closing Date (as defined in Section 2) (the “First Supplemental
Indenture” and,
together with the Existing Indenture, the “Indenture”). Notes issued in
book-entry form will be issued in the name of Cede & Co., as nominee of The
Depository Trust Company (the “Depositary”) pursuant to a DTC Agreement, to be
dated on or prior to the Closing Date (as defined in Section 2) (the “DTC
Agreement”), among the Company and the Depositary.
The
payment of principal of, premium and Liquidated Damages (as defined in the
Indenture), if any, and interest on the Notes and the Exchange Notes (as defined
below) will be fully and unconditionally guaranteed on a senior basis, jointly
and severally by the Guarantors listed on Schedule
A
hereto
(collectively, the “Guarantors”) pursuant to their guarantees (the
“Guarantees”). The Notes and the Guarantees attached thereto are herein
collectively referred to as the “Securities” and the Exchange Notes and the
Guarantees attached thereto are herein collectively referred to as the “Exchange
Securities.”
The
holders of the Notes will be entitled to the benefits of a registration rights
agreement, to be dated as of the Closing Date (the “Registration Rights
Agreement”), among the Company, the Guarantors and the Initial Purchasers,
pursuant to which the Company and the Guarantors will agree, to the extent
the
Notes are not Freely Tradable (as defined in the Registration Rights Agreement)
as of the 375th
day
after the Closing Date, to file a registration statement with the Securities
and
Exchange Commission (the “Commission”) registering under the Securities Act of
1933 (as amended, the “Securities Act,” which term, as used herein, includes the
rules and regulations of the Commission promulgated thereunder) debt securities
of the Company and the Guarantors with terms substantially identical to the
Notes (the “Exchange Notes”) and the Guarantees thereof to be offered in
exchange for the Notes and the Guarantees thereof (the “Exchange Offer”) and, to
the extent required by the Registration Rights Agreement, a shelf registration
statement relating to resales of the Notes.
1
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
Pricing Disclosure Package and the Final Offering Memorandum (each 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 subsequent
purchasers (the “Subsequent Purchasers”) at any time after the date of this
Purchase Agreement (this “Agreement”). The Securities 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 Securities and the Indenture will require that investors that
acquire Securities expressly agree that Securities may only be resold or
otherwise transferred, after the date hereof, if such Securities are 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”) or Regulation S
(“Regulation S”) thereunder).
The
Company has prepared a preliminary offering memorandum, dated as of August
7,
2008 (the “Preliminary Offering Memorandum”) and a pricing supplement thereto
dated the date hereof (the “Pricing Supplement”). The Preliminary Offering
Memorandum and the Pricing Supplement are herein referred to as the “Pricing
Disclosure Package.” Promptly after the execution of this Agreement, the Issuers
will prepare a final offering memorandum dated the date hereof (the “Final
Offering Memorandum”). Unless stated to the contrary, any references herein to
the terms “Pricing Disclosure Package” and “Final Offering Memorandum” shall be
deemed to refer to and include any information filed under the Securities
Exchange Act of 1934 (as amended, the “Exchange Act,” which term, as used
herein, includes the rules and regulations of the Commission promulgated
thereunder), prior to the date hereof and incorporated by reference therein,
and
any references herein to the terms “amend,” “amendment” or “supplement” with
respect to the Final Offering Memorandum shall be deemed to refer to and include
any information filed under the Exchange Act subsequent to the date hereof
that
is incorporated by reference therein. All references in this Agreement to
financial statements and schedules and other information which is “contained,”
“included” or “stated” (or other references of like import) in the Pricing
Disclosure Package (including the Preliminary Offering Memorandum) or Final
Offering Memorandum shall be deemed to mean and include all such financial
statements and schedules and other information which are incorporated by
reference in the Pricing Disclosure Package or Final Offering Memorandum, as
the
case may be.
In
connection with the issuance of the Notes, the Company is soliciting consents
to
a proposed amendment (the “Amendment”) to the Indenture (the “Consent
Solicitation”) pursuant to the terms of a Consent Solicitation Statement dated
August 7, 2008 (the “Consent Solicitation Statement”). If the Amendment is
approved, it will be set forth in a second supplemental indenture (the “Second
Supplemental Indenture”) to the Indenture.
Each
of
the Company and the Guarantors hereby confirms its agreements with the Initial
Purchasers as follows:
Section
1. Representations
and Warranties.
Each of
the Company and the Guarantors hereby jointly and severally represents, warrants
and covenants to each Initial Purchaser, as of the date hereof and as of the
Closing Date (references in this Section 1 to the “Offering Memorandum” are to
(x) the Pricing Disclosure Package in the case of representations and warranties
made as of the date hereof and (y) the Final Offering Memorandum in the case
of
representations and warranties made as of the Closing Date), as
follows:
(a) No
Registration Required.
Subject
to compliance by the Initial Purchasers with the representations and warranties
set forth in Section 2 hereof and with the procedures set forth in
Section 7 hereof, it is not necessary in connection with the offer, sale
and delivery of the Securities to the Initial Purchasers and to each Subsequent
Purchaser in the manner contemplated by this Agreement and the Offering
Memorandum to register the Securities under the Securities Act or, until such
time, if any, as the Exchange Securities are issued pursuant to an effective
registration statement, to qualify the Indenture under the Trust Indenture
Act
of 1939 (the “Trust Indenture Act,” which term, as used herein, includes the
rules and regulations of the Commission promulgated thereunder).
(b) No
Integration of Offerings or General Solicitation.
Neither
the Company nor any Guarantor has, directly or indirectly, solicited any offer
to buy or offered to sell, and will not, directly or indirectly, solicit any
offer to buy or offer to sell, in the United States or to any United States
citizen or resident, any security which is or would be integrated with the
sale
of the Securities in a manner that would require the Securities to be registered
under the Securities Act. None of the Company, the Guarantors, their respective
affiliates (as such term is defined in Rule 501(b) under the Securities Act
(each, an “Affiliate”)), or any person acting on its or any of their behalf
(other than the Initial Purchasers, as to whom neither the Company nor the
Guarantors makes any representation or warranty) has engaged or will engage,
in
connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under
the
Securities Act. With respect to those Securities sold in reliance upon
Regulation S, (i) none of the Company, the Guarantors, their respective
Affiliates or any person acting on their behalf (other than the Initial
Purchasers, as to whom neither the Company nor any Guarantor makes any
representation or warranty) has engaged or will engage in any directed selling
efforts within the meaning of Regulation S and (ii) each of the Company and
the
Guarantors and their respective Affiliates and any person acting on their behalf
(other than the Initial Purchasers, as to whom neither the Company nor any
Guarantor makes any representation or warranty) has complied and will comply
with the offering restrictions set forth in Regulation S.
2
(c) Eligibility
for Resale under Rule 144A.
The
Securities are eligible for resale pursuant to Rule 144A and will not be,
at the Closing Date, of the same class as securities listed on a national
securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated interdealer quotation system.
(d) Pricing
Disclosure Package and Offering
Memorandum. Neither
the Pricing Disclosure Package, as of the date hereof or as of the Closing
Date,
nor the Final Offering Memorandum, as of its date or (as amended or supplemented
in accordance with Section 3(a), if applicable) as of the Closing Date, contains
or represents 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
this
representation, warranty and agreement shall not apply to statements in or
omissions from the Pricing Disclosure Package, the Final Offering Memorandum
or
any amendment or supplement thereto made in reliance upon and in conformity
with
information furnished to the Company in writing by any Initial Purchaser through
Banc of America Securities LLC expressly for use in the Pricing Disclosure
Package, the Final Offering Memorandum or amendment or supplement thereto,
as
the case may be. Each of the Pricing Disclosure Package and the Final Offering
Memorandum, as of its date, contains all the information specified in, and
meeting the requirements of, Rule 144A. No order preventing the use of the
Preliminary Offering Memorandum, the Pricing Supplement or the Final Offering
Memorandum, or any amendment or supplement thereto, or any order asserting
that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act, has been issued or, to the
knowledge of the Company, has been threatened.
(e) Other
Written Communications. The
Company (including its agents and representatives, other than the Initial
Purchasers in their capacity as such) has not prepared, made, used, authorized,
approved or referred to and will not prepare, make, use, authorize, approve
or
refer to any written communication that constitutes an offer to sell or
solicitation of an offer to buy the Securities (each such communication by
the
Company or its agents and representatives an “Issuer Written Communication”)
other than (i) the Pricing Disclosure Package, (ii) the Final Offering
Memorandum, (iii) the documents listed on Annex A hereto and (iv) any electronic
road show or other written communications. Each such Issuer Written
Communication, when taken together with the Pricing Disclosure Package, did
not,
and at the Closing Date 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.
The
documents incorporated by reference in the Offering Memorandum at the time
they
were or hereafter are filed with the Commission complied and will comply in
all
material respects with the requirements of the Exchange Act.
(f) The
Purchase Agreement.
This
Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company and each Guarantor, enforceable 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.
(g) The
Registration Rights Agreement.
At
the
Closing Date, the Registration Rights Agreement will have been duly authorized,
executed and delivered by, and will be a valid and binding agreement of, the
Company and each of the Guarantors, enforceable against the Company and each
Guarantor in accordance with its terms, 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 and except as rights to indemnification thereunder may
be
limited by applicable law.
3
(h) The
DTC Agreement. At
the
Closing Date, the DTC Agreement will have been duly authorized, executed and
delivered by the Company, and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, will be a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its
terms, 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.
(i) Authorization
of the Securities and the Exchange Securities.
(i)
The
Notes to be purchased by the Initial Purchasers from the Company are in the
form
contemplated by the Indenture, have been duly authorized for issuance and sale
pursuant to this Agreement and the Indenture, at the Closing Date will have
been
duly executed by the Company and, when authenticated in the manner provided
for
in the Indenture and delivered against payment of the purchase price therefor,
will constitute valid and binding agreements of the Company, enforceable in
accordance with their terms, 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 and will be entitled to the benefits of the Indenture.
(ii)
The Exchange Notes have been duly and validly authorized for issuance by the
Company and, if and when issued and authenticated in accordance with the terms
of the Indenture, the Registration Rights Agreement and the Exchange Offer,
will
constitute valid and binding obligations of the Company, enforceable against
the
Company in accordance with their terms, except as the enforcement thereof may
be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or affecting enforcement of the rights and remedies of creditors
or
by general principles of equity and will be entitled to the benefits of the
Indenture. (iii) The Guarantees of the Notes and the Exchange Notes are in
the
respective forms contemplated by the Indenture, have been duly authorized for
issuance and sale pursuant to this Agreement and the Indenture and, when duly
executed by each of the Guarantors, when the Notes have been authenticated
in
the manner provided for in the Indenture and delivered against payment of the
purchase price therefor, and if and when the Exchange Notes have been issued
and
authenticated in accordance with the terms of the Indenture, the Registration
Rights Agreement and the Exchange Offer, the Guarantees thereof, respectively,
will constitute valid and binding agreements of the Guarantors, enforceable
against the Guarantors in accordance with their terms, 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 and will be entitled to the benefits of
the
Indenture.
(j) Authorization
of the Indenture.
The
Existing Indenture has been duly authorized, executed and delivered by the
Company and each of the Guarantors and, at the Closing Date, the First
Supplemental Indenture will have been duly authorized, executed and delivered
by
the Company and each of the Guarantors and the Indenture will constitute a
valid
and binding agreement of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its terms,
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.
(k) Authorization
of the Consent Solicitation.
The
Company has taken all necessary corporate action to authorize the Consent
Solicitation. As of the date on which the Consent Solicitation is consummated
(assuming receipt by the Company of the requisite consents pursuant to the
Consent Solicitation), the Company will have all necessary corporate power
and
authority to execute and deliver the Second Supplemental Indenture and perform
all of its obligations contemplated under the Consent Solicitation Statement.
(l) Description
of the Securities and the Indenture.
The
Notes, the Guarantees of the Notes and the Indenture and, if applicable, the
Exchange Notes and the Guarantees of the Exchange Notes will conform in all
material respects to the respective statements relating thereto contained in
the
Offering Memorandum. The Exchange Notes and the Guarantees of the Exchange
Securities will conform in all material respects to the respective statements
relating thereto contained in the Offering Memorandum and the Registration
Statement at the time such Registration Statement becomes effective, if
applicable.
4
(m) No
Material Adverse Change.
Except
as otherwise disclosed in the Offering Memorandum, 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 could reasonably be
expected to result in such a material adverse change, in the condition,
financial or otherwise, or in the earnings, business, operations or prospects,
whether or not arising from transactions in the ordinary course of business,
of
the Company and its subsidiaries, considered as one entity, or the Guarantors,
considered as one entity (any such change is called a “Material Adverse
Change”); (ii) neither the Company and its subsidiaries, considered as one
entity, nor the Guarantors, considered as one entity, have incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not
in
the ordinary course of business; and (iii) except as disclosed in the Offering
Memorandum and except for the regular quarterly dividends on the Common Stock
in
amounts per share that are consistent with past practice, 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.
(n) Independent
Accountants.
Xxxxx
& Young LLP, who have expressed their opinion with respect to the financial
statements (which term as used in this Agreement includes the related notes
thereto) filed with the Commission and included in the Offering Memorandum
is an
independent registered public accounting firm within the meaning of Regulation
S-X under the Securities Act and the Exchange Act.
(o) Preparation
of the Financial Statements.
The
financial statements, together with the related notes, included in the Offering
Memorandum present fairly the consolidated financial position of the Company
and
its 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
caption “Summary-Summary Historical Consolidated Financial and Other Data”
fairly present the information set forth therein on a basis consistent with
that
of the audited financial statements contained in the Offering
Memorandum.
(p) Incorporation
and Good Standing of the Company and its Subsidiaries.
Each of
the Company and its subsidiaries has been duly incorporated or organized, as
applicable, and is validly existing as a corporation, trust, limited liability
company, limited partnership or general partnership in good standing under
the
laws of the jurisdiction of its incorporation or organization and has corporate,
trust, limited liability company, or partnership 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 and each of the Guarantors,
to enter into and perform its obligations, as applicable, under each of this
Agreement, the Registration Rights Agreement, the DTC Agreement, the Securities,
the Exchange Securities and the Indenture. The Company and each subsidiary
is
duly qualified as a foreign corporation, trust, limited liability company,
limited partnership, or general partnership, as applicable, to transact business
and is in good standing in each 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. The only jurisdictions in which the Company
and its subsidiaries are required to be so qualified are set forth in
Schedule
C
hereto.
All of the issued and outstanding capital stock or partnership or other
ownership interest of each subsidiary has been duly authorized and validly
issued, is fully paid and nonassessable and, except as disclosed in the Offering
Memorandum, is owned by the Company, directly or through subsidiaries, free
and
clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
(q) Capitalization
and Other Capital Stock Matters.
As
of May
31, 2008, on a consolidated basis, after giving pro forma effect to the
transaction contemplated hereby, the Company will have an outstanding
capitalization as set forth in the Offering Memorandum under the caption
“Capitalization” (other than for subsequent issuances of capital stock, if any,
pursuant to employee benefit plans). All of the outstanding shares of capital
stock of the Company have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with federal and
state
securities laws. None of the outstanding shares of capital stock of the Company
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.
5
(r) Stock
Exchange Listing.
The
Common Stock of the Company is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the New York Stock Exchange (the “NYSE”), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the NYSE, nor has the Company received any
notification that the Commission or the NYSE is contemplating terminating such
registration or listing.
(s) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required.
Neither
the Company nor any of its subsidiaries is in violation of its charter or
by-laws, or in default (or, with the giving of notice or lapse of time or both,
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 Instrument”), except for such
Defaults as would not, individually or in the aggregate, result in a Material
Adverse Change. The Company’s and each Guarantors’ execution, delivery and
performance of this Agreement, the Registration Rights Agreement and the First
Supplemental Indenture, the issuance and delivery of the Securities and, if
applicable, the Exchange Securities and the Company’s execution, delivery and
performance of the DTC Agreement (i) have been duly authorized by all necessary
corporate, trust, limited liability company or partnership action of the Company
and the Guarantors and will not result in any violation of the provisions of
the
charter or by-laws, trust agreement, operating agreement or partnership
agreement of the Company or any subsidiary, (ii) will not conflict with or
constitute a breach of, or constitute a Default or a Debt Repayment Triggering
Event (as defined below) under, or result in the creation or imposition of
any
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, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and such consents as have been obtained and are
in
full force and effect and (iii) will not 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 or any
Guarantor’s, as applicable, execution, delivery and performance of this
Agreement, the Registration Rights Agreement, the DTC Agreement or the First
Supplemental Indenture, or the issuance and delivery of the Securities or,
if
applicable, the Exchange Securities, except such as have been obtained or made
by the Company or such Guarantors and are in full force and effect and except
such as may be required by federal and state securities laws with respect to
the
filing and effectiveness of the applicable registration statement under the
Securities Act and qualification of the Indenture under the Trust Indenture
Act
in connection with the Registration Rights Agreement. As used herein, a “Debt
Repayment Triggering Event” means any event or condition which gives, or with
the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.
The Existing Agreements listed in Schedule
D
hereto
(the “Material Existing Instruments”) are the only agreements that are material
to the Company and its subsidiaries taken as a whole.
(t) No
Material Actions or Proceedings.
Except
as
otherwise disclosed in the Offering Memorandum, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company’s and the Guarantors’ knowledge, threatened (i) against or affecting the
Company or any of its subsidiaries, or (ii) which has as the subject thereof
any
property owned or leased by, the Company or any of its subsidiaries, 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. No material
labor
dispute with the employees of the Company or any of its subsidiaries exists
or,
to the best of the Company’s and the Guarantors’ knowledge, is threatened or
imminent.
(u) Intellectual
Property Rights.
The
Company and its subsidiaries own or possess sufficient trademarks, trade names,
patent rights, copyrights, 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 reasonably be expected to result
in
a Material Adverse Change. 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 reasonably be expected to result in a Material
Adverse Change.
6
(v) All
Necessary Permits,
etc.
The
Company and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate local, state, federal or
foreign regulatory agencies or bodies necessary to conduct their respective
businesses, each such certificate, authorization and permit being in full force
and effect, and the Company and each subsidiary is in compliance with the terms
of each such certificate, authorization and permit, except where the failure
to
so possess or comply would not, individually or in the aggregate, result in
a
Material Adverse Change. Except as disclosed in the Offering Memorandum, 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, would result in a
Material Adverse Change.
(w) Title
to Properties.
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 referred
to
in Section 1(o) above (or elsewhere 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 materially and
adversely affect the value of such property and do not 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
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.
(x) Tax
Law Compliance.
The
Company and its consolidated subsidiaries have filed all necessary material
federal, state and foreign income and franchise tax returns and have paid all
material 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 for such taxes that are contested in good faith by proper proceedings.
The Company has made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1(o) above 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.
(y) Company
Not an “Investment Company”.
The
Company is not, and after giving effect to the Transactions, will not be, an
“investment company” within the meaning of Investment Company Act of 1940, as
amended (the “Investment Company Act”) and will conduct its business in a manner
so that it will not become subject to the Investment Company Act.
(z) Insurance.
Except
as otherwise disclosed in the Offering Memorandum, each of the Company and
its
subsidiaries are insured by recognized, financially sound institutions with
coverage in such amounts and with such deductibles and covering such risks
as
are generally deemed prudent and customary for their businesses including,
but
not limited to, policies covering real and personal property owned or leased
by
the Company and its subsidiaries against theft, damage, destruction, acts of
vandalism and earthquakes. 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.
Neither the Company nor any subsidiary has been denied any insurance coverage
that it has sought or for which it has applied.
(aa) No
Price Stabilization or Manipulation.
Neither
the Company nor any Guarantor has taken or will 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 any security of the Company
to
facilitate the sale or resale of the Securities.
(bb) Solvency.
Each of
the Company and the Guarantors is, and as of the Closing Date will be, Solvent.
As used herein, the term “Solvent” means, with respect to the Company and each
Guarantor on a particular date, that on such date (i) the fair market value
of its assets is greater than the total amount of its liabilities (including
contingent liabilities), (ii) the present fair salable value of its assets
is greater than the amount that will be required to pay its probable liabilities
on its debts as they become absolute and matured, (iii) it is then able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature, (iv) it does not have unreasonably
small capital to carry on its business as conducted and as proposed to be
conducted and (v) it does not intend to, and does not believe that it will,
incur debts and liabilities beyond its ability to pay as such debts and
liabilities mature.
7
(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. Except as otherwise disclosed in the Offering Memorandum, the
Company is not aware, and the Company’s auditors have not brought to the
Company’s attention: (i) any significant deficiencies or material
weaknesses in the design or operation of internal controls which could adversely
affect the Company’s ability to record, process, summarize, and report financial
data; or (ii) any fraud, whether or not material, that involves management
or other employees who have a role in the Company’s internal
controls.
(dd) Xxxxxxxx-Xxxxx.
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
respect with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and
regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(ee) Compliance
with Environmental Laws.
Except
as
otherwise disclosed in the Offering Memorandum or would not, individually or
in
the aggregate, reasonably be expected to 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 Environmental 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 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 of which the
Company has been served, notified or otherwise made aware, no investigation
with
respect to which the Company or any of its subsidiaries 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 best of the
Company’s or any Guarantor’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 best of the Company’s and
each Guarantor’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 an 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.
8
(ff) Periodic
Review of Costs of Environmental Compliance.
In
the
ordinary course of its business, the Company conducts a periodic review of
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 and the amount of its established
reserves, the Company has reasonably concluded that such associated costs and
liabilities would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Change.
(gg) ERISA
Compliance.
The
Company and its subsidiaries and any “employee benefit plan” (as defined under
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, “ERISA”))
established or maintained by the Company, its subsidiaries or their “ERISA
Affiliates” (as defined below) are in compliance in all material respects with
the applicable provisions of ERISA, or if not in material compliance would
not
result in a Material Adverse Change. “ERISA Affiliate” means, with respect to
the Company or a subsidiary, any member of any group of organizations described
in Sections 414(b), (c), (m) or (o) of the Code of which the Company or such
subsidiary is a member. No “reportable event” (as defined under ERISA) for which
notice requirements have not been waived has occurred or is reasonably expected
to occur with respect to any “employee benefit plan” established or maintained
by the Company, its subsidiaries or any of their ERISA Affiliates and which
is
covered by Title IV of ERISA, except for such reportable events which would
not,
individually or in the aggregate, result in a Material Adverse Change. No
“employee benefit plan” established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan”
were terminated as of the most recent annual valuation date for such plan,
would
have an “amount of unfunded benefit liabilities” (as defined under ERISA) that
would result in a Material Adverse Change. None of the Company, its subsidiaries
or any of their ERISA Affiliates has incurred or reasonably expects to incur
any
material liability under (i) Title IV of ERISA with respect to termination
of,
or withdrawal from, any “employee benefit plan” or (ii) Sections 4971, 4975 or
4980B(a) of the Code. Each “employee benefit plan” established or maintained by
the Company, its subsidiaries or any of their ERISA Affiliates that is intended
to be qualified under Section 401(a) of the Code is so qualified and nothing
has
occurred, whether by action or failure to act, which would cause the loss of
such qualification.
(hh) Compliance
with Regulation S.
The
Company, the Guarantors and their respective affiliates and all persons acting
on their behalf (other than the Initial Purchasers, as to whom the Company
and
the Guarantors make no representation) have complied with and will comply with
the offering restrictions requirements of Regulation S in connection with
the offering of the Securities outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required by
Rule 902(g)(2)
of the Securities Act.
(ii) Reporting
Issuer.
The
Company is a “reporting issuer,” as defined in Rule 902 under the Securities
Act.
Any
certificate signed by an officer of the Company or any Guarantor and delivered
to the Initial Purchasers or to counsel for the Initial Purchasers on the
Closing Date shall be deemed to be a representation and warranty by the Company
or such Guarantor to each Initial Purchaser as to the matters set forth
therein.
Section
2. Purchase,
Sale and Delivery of the Securities.
(a) The
Securities.
The
Company and the Guarantors agree to issue and sell to the several Initial
Purchasers, severally and not jointly, all of the Securities upon the terms
herein set forth. 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 aggregate principal amount of Securities set forth opposite
their names on Schedule B,
at a
purchase price of 92.35% of the principal amount thereof plus accrued and unpaid
interest thereon from July 15, 2008, payable on the Closing Date.
(b) The
Closing Date.
Delivery
of certificates for the Securities in definitive form to be purchased by the
Initial Purchasers and payment therefor shall be made at the offices of Shearman
& Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such
other place as may be agreed to by the Company and the Initial Purchasers)
at
9:00 a.m., New York City time, on August 18, 2008, or such other time and date
as Banc of America Securities LLC shall designate by notice to the Company
(the
time and date of such closing are called the “Closing Date”). The Company hereby
acknowledges that circumstances under which Banc of America Securities LLC
may
provide notice to postpone the Closing Date as originally scheduled include,
but
are in no way limited to, any determination by the Company or Banc of America
Securities LLC to recirculate to investors copies of an amended or supplemented
Offering Memorandum or a delay as contemplated by the provisions of Section
16
hereof.
9
(c) Delivery
of the Securities.
The
Company shall deliver, or cause to be delivered, to Banc of America Securities
LLC for the accounts of the several Initial Purchasers certificates for the
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 certificates for the Securities shall be in such denominations
and
registered in the name of Cede & Co., as nominee of the Depositary,
pursuant to the DTC Agreement, and shall be made available for inspection on
the
business day preceding the Closing Date at a location in New York City, as
the
Initial Purchasers 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.
(d) Delivery
of Final Offering Memorandum to the Initial Purchasers.
As
promptly as practicable following the execution and delivery of this Agreement
and in any event not later than 12:00 p.m., New York City time, on the second
business day following the date hereof, to prepare and deliver to the Initial
Purchasers the Final Offering Memorandum, which shall consist of the Preliminary
Offering Memorandum as modified only by the information contained in the Pricing
Supplement.
(e) Initial
Purchasers as Qualified Institutional Buyers.
Each
Initial Purchaser severally and not jointly represents and warrants to, and
agrees with, the Company that it is a “qualified institutional buyer” within the
meaning of Rule 144A (a “Qualified Institutional Buyer”) and an “accredited
investor” within the meaning of Rule 501(a) under the Securities Act (an
“Accredited Investor”).
(f) Consent
to Amendment. By
execution hereof each Initial Purchaser agrees (x) that by purchasing the Notes
in accordance with the terms hereof it shall be deemed to have irrevocably
consented to the Amendment and (y) not to transfer the Notes to any Subsequent
Purchaser unless such Subsequent Purchaser agrees to deliver a consent form
to
the Company’s Depositary and Tabulation Agent (as described in the Consent
Solicitation Statement ) and that any such sale shall be deemed to be an
assignment of the right to the Consent Payment (as defined in the Consent
Solicitation Statement ) to such Subsequent Purchaser.
Section
3. Additional
Covenants.
Each of
the Company and the Guarantors, jointly and severally, further covenants and
agrees with each Initial Purchaser, as follows:
(a) Initial
Purchasers’ Review of Proposed Amendments and Supplements.
Prior
to
amending or supplementing the Preliminary Offering Memorandum or the Pricing
Supplement, or the Final Offering Memorandum prior to the Closing Date, the
Company shall furnish to the Initial Purchasers for review a copy of each such
proposed amendment or supplement, and the Company shall not use any such
proposed amendment or supplement to which the Initial Purchasers reasonably
object.
(b) Amendments
and Supplements to the Offering Memorandum and Other Securities Act
Matters.
If,
prior
to the later of (x) the Closing Date and (y) completion of the placement of
the
Securities by the Initial Purchasers with the Subsequent Purchasers, any event
shall occur or condition exist as a result of which it is necessary to amend
or
supplement the Final Offering Memorandum, as then amended or supplemented,
in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, or if in the opinion of the Initial
Purchasers or counsel for the Initial Purchasers it is otherwise necessary
to
amend or supplement the Final Offering Memorandum to comply with law, the
Company agrees to promptly prepare (subject to Section 3(a) hereof), and furnish
at its own expense to the Initial Purchasers, amendments or supplements to
the
Final Offering Memorandum so that the statements in the Final Offering
Memorandum, as so amended or supplemented, will not, in the light of the
circumstances at the Closing Date and at the time of sale of Securities, be
misleading or so that the Final Offering Memorandum, as amended or supplemented,
will comply with applicable law.
10
Following
the consummation of the Exchange Offer or the effectiveness of an applicable
shelf registration statement and for so long as the Securities are outstanding
if, in the reasonable judgment of the Initial Purchasers, the Initial Purchasers
or any of their affiliates (as such term is defined in the rules and regulations
under the Securities Act) are required to deliver a prospectus in connection
with sales of, or market-making activities with respect to, such securities,
each of the Company and the Guarantors agree (A) to periodically amend the
applicable registration statement so that the information contained therein
complies with the requirements of Section 10(a) of the Securities Act,
(B) to amend the applicable registration statement or supplement the
related prospectus or the documents incorporated therein when necessary to
reflect any material changes in the information provided therein so that the
registration statement and the prospectus will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make
the statements therein, in the light of the circumstances existing as of the
date the prospectus is so delivered, not misleading and to provide the
Initial Purchasers with copies of each amendment or supplement filed and (C)
to
provide the Initial Purchasers with such other documents as the Initial
Purchasers may reasonably request.
The
Company and the Guarantors hereby expressly acknowledge that the indemnification
and contribution provisions of Sections 8 and 9 hereof are
specifically applicable and relate to each offering memorandum, registration
statement, prospectus, amendment or supplement referred to in this
Section 3(b).
(c) Copies
of the Offering Documents.
The
Company agrees to furnish the Initial Purchasers, without charge, as many copies
of the Preliminary Offering Memorandum, the Pricing Supplement, any Issuer
Written Communication and the Final Offering Memorandum, and any amendments
or
supplements thereto, as they shall have reasonably requested; provided that
such
requests are made prior to the original printing of such requested
document.
(d) Blue
Sky Compliance.
The
Company and the Guarantors shall cooperate with the Initial Purchasers and
counsel for the Initial Purchasers to qualify or register the Securities for
sale under (or obtain exemptions from the application of) the Blue Sky or state
securities laws of those jurisdictions designated by the Initial Purchasers,
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 and the Guarantors 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 and the Guarantors will advise the Initial Purchasers 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 and the Guarantors shall use their reasonable best
efforts to obtain the withdrawal thereof as soon as possible.
(e) Use
of Proceeds.
The
Company shall apply the net proceeds from the sale of the Securities sold by
it
in the manner described under the caption “Use of Proceeds” in the Pricing
Disclosure Package.
(f) The
Depositary.
The
Company will cooperate with the Initial Purchasers and use its best efforts
to
permit the Securities to be eligible for clearance and settlement through the
facilities of the Depositary.
(g) Additional
Issuer Information.
Prior
to the completion of the placement of the Securities by the Initial Purchasers
with the Subsequent Purchasers, the Company shall file, on a timely basis,
with
the Commission and the NYSE all reports and documents required to be filed
under
Section 13 or 15(d) of the Exchange Act. Additionally, at any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, for the
benefit of holders and beneficial owners from time to time of Securities, the
Company shall furnish, at its expense, upon request, to holders and beneficial
owners of Securities and prospective purchasers of Securities information
(“Additional Issuer Information”) satisfying the requirements of subsection
(d)(4) of Rule 144A.
(h) Agreement
Not To Offer or Sell Additional Securities.
During
the period of 180 days following the date of the Final Offering Memorandum,
the Company will not, without the prior written consent of Banc of America
Securities LLC (which consent may be withheld at the sole discretion of Banc
of
America Securities LLC), directly or indirectly, issue, sell, offer to sell,
contract or grant any option to sell, pledge, transfer or establish an open
“put
equivalent position” within the meaning of Rule 16a-1 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 debt
securities of the Company or securities exchangeable for or convertible into
debt securities of the Company (other than as contemplated by this Agreement
and, if applicable, to register the Exchange Securities).
11
(i) Future
Reports to the Initial Purchasers.
For
so
long as any Securities or Exchange Securities remain outstanding, the Company,
upon request, will furnish to Banc of America Securities LLC (i) as soon as
reasonably 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 registered public accounting firm; (ii) as soon as reasonably
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 NYSE 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
or
debt securities (including the holders of the Securities).
(j) No
Integration.
The
Company agrees that it will not and will cause its Affiliates not to make any
offer or sale of securities of the Company of any class if, as a result of
the
doctrine of “integration” referred to in Rule 502 under the Securities Act,
such offer or sale would render invalid (for the purpose of (i) the sale of
the Securities by the Company to the Initial Purchasers, (ii) the resale of
the Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the Securities by such Subsequent Purchasers to others)
the exemption from the registration requirements of the Securities Act provided
by Section 4(2) thereof or by Rule 144A or by Regulation S
thereunder or otherwise.
(k) Legended
Securities.
Each
certificate for a Security will bear the legend contained in “Notice to
Investors” in the Offering Memorandum for the time period and upon the other
terms stated in the Offering Memorandum.
(l) PORTAL.
The
Company will use its reasonable best efforts to cause the Securities to be
eligible for the Financial Industry Regulatory Authority PORTAL market (the
“PORTAL market”).
(m) Rating
of Securities. The
Company shall take all reasonable action necessary to enable Standard &
Poor’s Ratings Services, a division of McGraw Hill, Inc. (“S&P”), and
Xxxxx’x Investor Services, Inc. (“Moody’s”) to provide their respective credit
ratings to the Securities at or prior to the time of their initial
issuance.
(n) Distribution
of Offering Documents. The
Company will not, and will not permit any of its Affiliates or anyone acting
on
its or its Affiliates behalf to (other than the Initial Purchasers and their
affiliates), distribute prior to the Closing Date any offering material in
connection with the offer and sale of the Securities other than the Preliminary
Offering Memorandum, the Pricing Supplement, any electronic roadshow and the
Final Offering Memorandum. Before making, preparing, using, authorizing,
approving or refer-ring to any Issuer Written Communication, the Company will
furnish to Banc of America Securities LLC and counsel for the Initial Purchasers
a copy of such written communication for review and will not make, prepare,
use,
authorize, approve or refer to any such written communication to which Banc
of
America Securities LLC reasonably objects.
Banc
of
America Securities LLC, on behalf of the several Initial Purchasers, may, in
its
sole discretion, waive in writing the performance by the Company or any
Guarantor of any one or more of the foregoing covenants or extend the time
for
their performance.
Section
4. Payment
of Expenses.
Each of
the Company and the Guarantors jointly and severally agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder (except as otherwise agreed in writing between the Company and any
Initial Purchaser), including without limitation (i) all expenses incident
to
the issuance and delivery of the Securities (including all printing and
engraving costs), (ii) all necessary issue, transfer and other stamp taxes
in
connection with the issuance and sale of the Securities to the Initial
Purchasers, (iii) all fees and expenses of the Company’s and the Guarantors’
counsel, independent registered public accounting firm and other advisors,
(iv)
all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of each Preliminary Offering Memorandum and
the Offering Memorandum (including financial statements and exhibits), and
all
amendments and supplements thereto, this Agreement, the Registration Rights
Agreement, the First Supplemental Indenture, the DTC Agreement and the
Securities, (v) all filing fees, attorneys’ fees and expenses incurred by the
Company, the Guarantors 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 Securities for offer and sale under the Blue Sky
laws
and, if requested by the Initial Purchasers, preparing and printing a “Blue Sky
Survey” or memorandum, and any supplements thereto, advising the Initial
Purchasers of such qualifications, registrations and exemptions, (vi) the fees
and expenses of the Trustee, including the reasonable fees and disbursements
of
counsel for the Trustee in connection with the Indenture, the Securities and,
if
applicable, the Exchange Securities, (vii) any fees payable in connection with
the rating of the Securities or, if applicable, the Exchange Securities with
the
ratings agencies and the listing of the Securities with the PORTAL market,
(viii) any filing fees incident to, and any reasonable fees and disbursements
of
counsel to the Initial Purchasers in connection with the review by the National
Association of Securities Dealers, Inc., if any, of the terms of the sale of
the
Securities or the Exchange Securities, (ix) all fees and expenses (including
reasonable fees and expenses of counsel) of the Company and the Guarantors
in
connection with approval of the Securities by DTC for “book-entry” transfer, and
(x) the performance by the Company and the Guarantors of their respective other
obligations under this Agreement. Except as provided in this Section 4, Section
6, Section 8, Section 9, and Section 10 hereof (or as otherwise agreed in
writing between the Company and any Initial Purchaser), the Initial Purchasers
shall pay their own expenses, including the fees and disbursements of their
counsel.
12
Section
5. Conditions
of the Obligations
of
the Parties.
(a) 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 shall be subject to the
accuracy of the representations and warranties on the part of the Company and
the Guarantors set forth in Section 1 hereof as of the date hereof and as
of the Closing Date as though then made and to the timely performance by the
Company and each Guarantor of its covenants and other obligations hereunder,
and
to each of the following additional conditions:
(i) Accountants’
Comfort Letter.
On the
date hereof, the Initial Purchasers shall have received from Ernst & Young
LLP, an independent registered public accounting firm for the Company, a letter
dated the date hereof addressed to the Initial Purchasers, in form and substance
satisfactory to the Initial Purchasers, containing statements and information
of
the type ordinarily included in accountant’s “comfort letters” to Initial
Purchasers, delivered according to Statement of Auditing Standards Nos. 72
and
76 (or any successor bulletins), with respect to the audited and unaudited
financial statements and certain financial information contained in the
Preliminary Offering Memorandum and the Pricing Supplement.
(ii) No
Material Adverse Change or Ratings Agency Change.
For the
period from and after the date of this Agreement and prior to the Closing
Date:
(1) in
the
judgment of the Initial Purchasers there shall not have occurred any Material
Adverse Change; and
(2) 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.
(iii) Opinion
of Outside Counsel for the Company
and the
Guarantors.
On the
Closing Date the Initial Purchasers shall have received the favorable opinion
of
Xxxxxxxx & Xxxxxx LLP, counsel for the Company and the Guarantors, dated as
of such Closing Date, the form of which is attached as Exhibit
A.
(iv) Opinion
of General Counsel for the Company. On the Closing Date the Initial Purchasers
shall have received the favorable opinion of Xxxxxxxxx X. Xxxxxxxx, General
Counsel for the Company, dated as of such Closing Date, the form of which is
attached as Exhibit
B.
13
(v) Opinion
of Counsel for the Initial Purchasers.
On the
Closing Date the Initial Purchasers shall have received the favorable opinion
of
Xxxxxxxx & Sterling LLP, counsel for the Initial Purchasers, dated as of
such Closing Date, with respect to such matters as may be reasonably requested
by the Initial Purchasers.
(vi) Officers’
Certificate.
On the
Closing Date the Initial Purchasers shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer, President or
Treasurer of the Company and the Chairman of the Board, Chief Executive Officer,
President or Vice President of each of the Guarantors and the Chief Financial
Officer or Chief Accounting Officer of the Company and the Chief Financial
Officer or chief accounting officer of each of the Guarantors, dated as of
the
Closing Date, to the effect set forth in subsection (a)(ii)(2) of this
Section 5, and further to the effect that:
(1) for
the
period from and after the date of this Agreement and prior to the Closing Date
there has not occurred, to the best of their knowledge, any Material Adverse
Change;
(2) the
representations, warranties and covenants of the Company or such Guarantor
set
forth in Section 1 of this Agreement are true and correct with the same
force and effect as though expressly made on and as of the Closing Date;
and
(3) the
Company or such Guarantor has complied with all the agreements and satisfied
all
the conditions on their respective parts to be performed or satisfied at or
prior to the Closing Date.
(vii) Bring-down
Comfort Letter.
On the
Closing Date the Initial Purchasers shall have received from Ernst & Young
LLP, an independent registered public accounting firm for the Company, a letter
dated such date, in form and substance satisfactory to the Initial Purchasers,
to the effect that they reaffirm the statements made in the letter furnished
by
them pursuant to subsection (a)(i) of this Section 5, except that (i) it shall
cover the financial and accounting information in the Final Offering Memorandum
and any amendment or supplement thereto and (ii) 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.
(viii) PORTAL
Listing.
At the
Closing Date the Securities shall have been designated for trading on the PORTAL
market.
(ix) Registration
Rights Agreement.
The
Company and the Guarantors shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received executed counterparts
thereof.
(x) Wire
Instructions. The Company shall have furnished the Initial Purchasers with
wiring instructions for the application of the proceeds of the Securities in
accordance with this Agreement.
(xi) Consent
Solicitation. (a) The Company shall have received consents (which consents
have
not been revoked) from Holders (as defined in the Indenture) of a majority
of
all outstanding notes issued under the Indenture as of the Closing Date
(including the Notes) to the Amendment and (b) all conditions precedent to
the
execution of the Second Supplemental Indenture to the Indenture effecting the
Amendment shall have been satisfied.
(xii) Additional
Documents.
On or
before the Closing Date, the Initial Purchasers and counsel for the Initial
Purchasers shall have received such other information, documents and opinions
as
they may reasonably require for the purposes of enabling them to pass upon
the
issuance and sale of the Securities 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.
14
If
any
condition specified in this Section 5(a) is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the Initial
Purchasers by notice to the Company at any time on or prior to the Closing
Date,
which termination shall be without liability on the part of any party to any
other party, except that Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such
termination
(b) Conditions
of the Obligations of the Company and the Guarantors.
The
obligations of the Company and the Guarantors to issue the Securities shall
be
subject to the following conditions:
(i) Requisite
Consent. The Company shall have received consents (which consents have not
been
revoked) from Holders (as defined in the Indenture) of a majority of all
outstanding notes issued under the Indenture as of the Closing Date (including
the Notes) to the Amendment.
(ii) Satisfaction
of Condition Precedent to Execution of Second Supplemental Indenture. All
conditions precedent to the execution of the Second Supplemental Indenture
to
the Indenture effecting the Amendment shall have been satisfied.
Section
6. Reimbursement
of Initial Purchasers’ Expenses.
If this
Agreement is terminated by the Initial Purchasers pursuant to Section 5(a),
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 or any Guarantor to perform any agreement herein or to comply with
any
provision hereof (other than as a result of a breach of this Agreement by the
Initial Purchasers or failure of the conditions set forth in Section 5(b) to
be
met), each of the Company and the Guarantors jointly and severally agrees to
reimburse the Initial Purchasers (or such Initial Purchasers as have terminated
this Agreement with respect to themselves for any of the foregoing reasons),
severally, upon demand for all out-of-pocket expenses that shall have been
reasonably incurred by the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including but not limited
to reasonable fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges. The obligations of the
Company and the Guarantors under this Section 6 and the provisions of Section
8
and Section 9 shall at all times be effective and shall survive any termination
of this Agreement.
Section
7. Offer,
Sale and Resale Procedures.
Each of
the Initial Purchasers, on the one hand, and the Company and the Guarantors,
on
the other hand, hereby establish and agree to observe the following procedures
in connection with the offer and sale of the Securities:
(a) Offers
and Sales to Qualified Institutional Buyers.
Offers
and sales of the Securities will be made only by the Initial Purchasers or
Affiliates thereof qualified to do so in the jurisdictions in which such offers
or sales are made. Each such offer or sale shall only be made (i) to persons
whom the offeror or seller reasonably believes to be qualified institutional
buyers (as defined in Rule 144A under the Securities Act), or (ii) to
non-U.S. persons outside the United States to whom the offeror or seller
reasonably believes offers and sales of the Securities may be made in reliance
upon Regulation S under the Securities Act, upon the terms and conditions
set forth in Annex B hereto, which Annex B is hereby expressly made a part
hereof.
(b) No
General Solicitation.
The
Securities will be offered by approaching prospective Subsequent Purchasers
on
an individual basis. No general solicitation or general advertising (within
the
meaning of Rule 502 under the Securities Act) will be used in the United
States in connection with the offering of the Securities.
(c) Restrictions
on Transfer.
Upon
original issuance by the Company and the Guarantors, and until such time as
the
same is no longer required under the applicable requirements of the Securities
Act, the Securities (and all securities issued in exchange therefor or in
substitution thereof, other than the Exchange Securities) shall bear the
following legend:
“THE
SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY
MAY
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i)(a) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904
OF REGULATION S UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT
(AN “INSTITUTIONAL ACCREDITED INVESTOR”)) THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN
$100,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER
IS
IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (ii) TO THE ISSUER,
OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION; AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.”
15
Following
the sale of the Securities by the Initial Purchasers to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchasers shall not be liable or
responsible to the Company and the Guarantors for any losses, damages or
liabilities suffered or incurred by the Company or the Guarantors, including
any
losses, damages or liabilities under the Securities Act, arising from or
relating to any resale or transfer of any Security by a Subsequent Purchaser
or
a subsequent transferee.
Section
8. Indemnification.
(a) Indemnification
of the Initial Purchasers.
Each
of
the Company and the Guarantors, jointly and severally, agrees to indemnify
and
hold harmless each Initial Purchaser, its directors, officers, employees and
agents, and each person, if any, who controls any Initial Purchaser within
the
meaning of the Securities Act and the Exchange Act and the directors, officers,
employees and agents of any such controlling person from and 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,
or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company and/or any
Guarantor sought to be bound), insofar as such loss, claim, damage, liability
or
expense (or actions in respect thereof as contemplated below) arises out of
or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Pricing Disclosure Package, any Issuer Written
Communication (including, but not limited to, any electronic roadshow), the
Final Offering Memorandum, or in any amendment or supplement thereto, or the
omission or alleged omission therefrom of a material fact necessary in order
to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading; or (ii) upon any act or failure to act or any
alleged act or failure to act by any Initial Purchaser in connection with,
or
relating in any manner to, the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon any matter covered by clause (i) above,
provided that the Company and the Guarantors shall not be liable under this
clause (ii) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Initial Purchaser through its gross negligence
or
willful misconduct; and to reimburse each Initial Purchaser and each such
controlling person for any and all expenses (including the reasonable fees
and
disbursements of counsel chosen by Banc of America Securities LLC) as such
expenses are reasonably incurred by such Initial Purchaser 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 relating to such Initial Purchaser made in reliance
upon and in conformity with written information furnished to the Company by
such
Initial Purchaser expressly for use in the Pricing Disclosure Package and the
Final Offering Memorandum (or any amendment or supplement thereto). The
indemnity agreement set forth in this Section 8(a) shall be in addition to
any liabilities that the Company or the Guarantors may otherwise have.
16
(b) Indemnification
of the Company, its Directors and Officers.
Each
Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Guarantors, and each of their directors and each
person, if any, who controls the Company or the Guarantors 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, the Guarantors or
any
such director, or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation,
or
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 Pricing Disclosure
Package or the Final Offering Memorandum, or in any amendment or supplement
thereto, or arises out of or is based upon the omission or alleged omission
to
state therein a material fact required to be stated therein or necessary to
make
the statements therein 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 relating to such Initial Purchaser was made therein, in
reliance upon and in conformity with written information furnished to the
Company by such Initial Purchaser expressly for use therein; and to reimburse
the Company, the Guarantors or any such director or controlling person for
any
legal and other expenses reasonably incurred by the Company, the Guarantors
or
any such director or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The Company and the Guarantors hereby acknowledge
that the only information that the Initial Purchasers have furnished to the
Company expressly for use in the Pricing Disclosure Package, the Final Offering
Memorandum or any amendment or supplement thereto, as the case may be, are
the
statements set forth (A) as the ninth paragraph on the inside front cover page
of the Preliminary Offering Memorandum and the Final Offering
Memorandum concerning
stabilization by the Initial Purchasers and (B) in the tenth paragraph under
the
caption “Plan of Distribution” in the Preliminary Offering Memorandum and the
Final Offering Memorandum; and the Initial Purchasers severally confirm that
such statements are correct.
(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 is to 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 under this Section 8,
under
Section 9 hereof or otherwise, to the extent it is not materially 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 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 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 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 (Banc of America Securities LLC in the case of Section 8(b)
and Section 9), representing the indemnified parties who are parties to such
action), (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 or (iii) the employment of such counsel by the indemnified
parties shall have been authorized in writing by the indemnifying parties in
connection with the defense of such action.
17
(d) Settlements.
The
indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent (which consent
may not be unreasonably withheld), but if settled with such consent or if there
be 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 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 60 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 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 (i) 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 (ii) does not include a statement as to
or
an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
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 and the Guarantors, 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 and the Guarantors, 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 and the Guarantors, 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
Guarantors, 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 and the Guarantors, 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 and the Guarantors, 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.
18
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, 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 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 for purposes of
indemnification.
The
Company, the Guarantors and the Initial Purchasers agree that it would not
be
just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which
does
not take 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 discount received by such Initial
Purchaser in connection with the Securities distributed by it. 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 B.
For
purposes of this Section 9, 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 and the directors,
officers, employees and agents of any such controlling person shall have the
same rights to contribution as such Initial Purchaser, and each director of
the
Company or any Guarantor, and each person, if any, who controls the Company
or
any Guarantor within the meaning of the Securities Act and the Exchange Act
shall have the same rights to contribution as the Company or any
Guarantor.
Section
10. Termination
of this Agreement.
Prior
to the Closing Date, this Agreement may be terminated by the Initial Purchasers
by notice given to the Company if at any time after the date of this Agreement
(i) trading or quotation in any of the Company’s securities shall have been
suspended or limited by the Commission or by the NYSE, or trading in securities
generally on either the Nasdaq Stock Market or the NYSE 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 of federal, New
York,
Delaware, Texas or California authorities; (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 Initial Purchasers is material and adverse
and makes it impracticable to market the Securities in the manner and on the
terms described in the Offering Memorandum or to enforce contracts for the
sale
of securities; (iv) in the judgment of the Initial Purchasers there shall have
occurred any Material Adverse Change; or (v) the Company or any of its
subsidiaries shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the Initial
Purchasers may interfere materially with the conduct of the business and
operations of the Company and its subsidiaries regardless of whether or not
such
loss shall have been insured. Any termination pursuant to this Section 10 shall
be without liability on the part of (a) the Company or any Guarantor to any
Initial Purchaser, except that the Company and the Guarantors shall be obligated
to reimburse the expenses of the Initial Purchasers pursuant to Sections 4
and 6
hereof, (b) any Initial Purchaser to the Company or any Guarantor, or (c) 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
11. Representations
and Indemnities to Survive Delivery.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company, the Guarantors, of their respective officers and
of
the several Initial Purchasers set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made
by or
on behalf of any Initial Purchaser or the Company or any Guarantor or any of
its
or their partners, officers or directors or any controlling person, as the
case
may be, and will survive delivery of and payment for the Securities sold
hereunder and any termination of this Agreement.
Section
12. Notices.
All
communications hereunder shall be in writing and shall be mailed, hand delivered
or facsimiled and confirmed to the parties hereto as follows:
19
If
to the
Initial Purchasers:
Banc
of
America Securities LLC
One
Bryant Park
Facsimile:
(000) 000-0000
Attention:
High Yield Capital Markets
with
a
copy to:
Xxxxxxxx
& Sterling LLP
000
Xxxxxxxxx Xxxxxx
New
York,
New York 10022
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxxxx
If
to the
Company and the Guarantors:
Texas
Industries, Inc.
0000
Xxxx
Xxxxxxxxxxx Xxxx
Dallas,
Texas 75247
Attention:
General Counsel
with
a
copy to:
Xxxxxxxx
& Xxxxxx LLP
0000
Xxxxx Xxxxxx
Suite
1500
Dallas,
Texas 75201
Facsimile:
(000) 000-0000
Attention:
Xxx Xxxxxxxxxxx
Any
party
hereto may change the address for receipt of communications by giving written
notice to the others.
Section
13. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Initial Purchasers pursuant to Section 16 hereof,
and to the benefit of the employees, officers, directors and agents and
controlling persons and their respective employees, officers, directors, and
agents 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
Securities as such from any of the Initial Purchasers merely by reason of such
purchase.
Section
14. 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
15. Governing
Law;
Consent to Jurisdiction.
(a) Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK.
(b) Consent
to Jurisdiction.
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 United States District Court for the Southern District of New York or the
courts of the State of New York in each case located in the City and County
of
New York (collectively, the “Specified Courts”), and each party irrevocably
submits to the non-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.
20
Section
16. Default
of One or More of the Several Initial Purchasers.
If 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 the Closing
Date, and the aggregate number of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase does
not exceed 10% of the aggregate number of the Securities to be purchased on
such
date, the other Initial Purchasers shall be obligated, severally, in the
proportions that the number of Securities set forth opposite their respective
names on Schedule B
bears to
the aggregate number of Securities set forth opposite the names of all such
non-defaulting Initial Purchasers, or in such other proportions as may be
specified by the Initial Purchasers 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 any one or more of the Initial Purchasers shall fail or refuse to
purchase Securities and the aggregate number of Securities with respect to
which
such default occurs exceeds 10% of the aggregate number of Securities to be
purchased on the Closing Date, and arrangements satisfactory to the Initial
Purchasers and the Company for the purchase of such Securities are not made
within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of
Section 4, Section 6, Section 8 and Section 9 shall at all times
be effective and shall survive such termination. In any such case either the
Initial Purchasers or the Company shall have the right to postpone the 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 16. Any action taken under this Section 16 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser
under this Agreement.
Section
17. No
Fiduciary Relationship.
Each of
the Company and the Guarantors hereby acknowledge that the Initial Purchasers
are acting solely as initial purchasers in connection with the purchase and
sale
of the Securities. Each of the Company and the Guarantors further acknowledge
that each of the Initial Purchasers is acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length
basis and in no event do the parties intend that any Initial Purchaser act
or be
responsible as a fiduciary to the Issuers, their management, stockholders,
creditors or any other person in connection with any activity that such Initial
Purchaser may undertake or has undertaken in furtherance of the purchase and
sale of the Securities, either before or after the date hereof. The Initial
Purchasers hereby expressly disclaim any fiduciary or similar obligations to
either the Company or the Guarantors, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Issuers hereby confirm their understanding and agreement to that effect.
Each of the Company and the Guarantors and each Initial Purchaser agree that
they are each responsible for making their own independent judgments with
respect to any such transactions, and that any opinions or views expressed
by
any Initial Purchaser to either the Company or the Guarantors regarding such
transactions, including but not limited to any opinions or views with respect
to
the price or market for the Securities, do not constitute advice or
recommendations to the Company or the Guarantors. Each of the Company and the
Guarantors hereby waive and release, to the fullest extent permitted by law,
any
claims that such Company or Guarantors may have against the Initial Purchasers
with respect to any breach or alleged breach of any fiduciary or similar duty
to
the either the Company or the Guarantors in connection with the transactions
contemplated by this Agreement or any matters leading up to such
transactions
21
Section
18. 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, and no condition herein (express
or implied) may be waived unless waived in writing by each party whom the
condition is meant to benefit. 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.
[Signature
Page Follows]
22
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.
Very
truly yours,
|
|
TEXAS
INDUSTRIES, INC.
|
|
/s/
Xxxxxxx X. Xxxxx
|
|
Name:
Xxxxxxx X. Xxxxx
|
|
Title:
Vice President, Finance and Chief Financial
Officer
|
BROOKHOLLOW
CORPORATION
|
|
BROOK
HOLLOW PROPERTIES, INC.
|
|
BROOKHOLLOW
OF ALEXANDRIA, INC.
|
|
BROOKHOLLOW
OF VIRGINIA, INC.
|
|
SOUTHWESTERN
FINANCIAL CORPORATION
|
|
CREOLE
CORPORATION
|
|
PACIFIC
CUSTOM MATERIALS, INC.
|
|
RIVERSIDE
CEMENT COMPANY
|
|
XXXXXX
LIMESTONE PRODUCTS, INC.
|
|
RIVERSIDE
CEMENT HOLDINGS COMPANY
|
|
TXI
AVIATION, INC.
|
|
TXI
CALIFORNIA INC.
|
|
TXI
CEMENT COMPANY
|
|
TXI
POWER COMPANY
|
|
TXI
RIVERSIDE INC.
|
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
Authorized
Officer
|
TEXAS
INDUSTRIES HOLDINGS, LLC
|
|
TEXAS
INDUSTRIES TRUST
|
|
TXI
LLC
|
|
TXI
OPERATING TRUST
|
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
Authorized
Officer
|
|
TXI
OPERATIONS, LP
|
|
By:
|
TXI
Operating Trust, its general partner
|
By:
|
/s/
Xxxxxxx X. Xxxxx
|
Authorized
Officer
|
The
foregoing Purchase Agreement is hereby confirmed and accepted by the Initial
Purchasers as of the date first above written.
BANC
OF AMERICA SECURITIES LLC
|
|
UBS
SECURITIES LLC
|
|
WACHOVIA
CAPITAL MARKETS, LLC
|
|
XXXXX
FARGO SECURITIES, LLC
|
|
COMERICA
SECURITIES, INC.
|
|
SUNTRUST
XXXXXXXX XXXXXXXX, INC.
|
|
By:
|
BANC
OF AMERICA SECURITIES LLC
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
Name:
Xxxxxxx Xxxxxx
|
|
Title:
Managing Director
|
SCHEDULE A
GUARANTORS
Brookhollow
Corporation
Brook
Hollow Properties, Inc.
Brookhollow
of Alexandria, Inc.
Brookhollow
of Virginia, Inc.
Southwestern
Financial Corporation
Creole
Corporation
Pacific
Custom Materials, Inc.
Riverside
Cement Company
Xxxxxx
Limestone Products, Inc.
Riverside
Cement Holdings Company
Texas
Industries Holdings, LLC
Texas
Industries Trust
TXI
Aviation, Inc.
TXI
California Inc.
TXI
Cement Company
TXI
LLC
TXI
Operating Trust
TXI
Operations, LP
TXI
Power
Company
TXI
Riverside Inc.
TXI
Transportation Company
A-1
SCHEDULE
B
Initial
Purchasers
|
Aggregate Principal
Amount of
Securities to be
Purchased
|
|||
BANC
OF AMERICA SECURITIES LLC
|
$
|
180,000,000
|
||
UBS
SECURITIES LLC
|
60,000,000
|
|||
WACHOVIA
CAPITAL MARKETS, LLC
|
21,000,000
|
|||
XXXXX
FARGO SECURITIES, LLC
|
21,000,000
|
|||
COMERICA
SECURITIES, INC.
|
9,000,000
|
|||
SUNTRUST
XXXXXXXX XXXXXXXX, INC.
|
9,000,000
|
|||
Total
|
$
|
300,000,000
|
B-1
SCHEDULE
C
TEXAS
INDUSTRIES, INC.
SUBSIDIARIES
State of
|
||||
Authorized to
|
Incorporation
|
|||
Do business in:
|
or Organization:
|
|||
Texas
Industries, Inc. (“TXI”)
|
AR,
CO, DE, LA, OK, TX
|
Delaware
|
||
Brookhollow
Corporation
|
DE,
TX
|
Delaware
|
||
Brook
Hollow Properties, Inc.
|
TX
|
Texas
|
||
Brookhollow
of Alexandria, Inc.
|
LA
|
Louisiana
|
||
Brookhollow
of Virginia, Inc.
|
VA
|
Virginia
|
||
Creole
Corporation
|
DE,
CA
|
Delaware
|
||
Pacific
Custom Materials, Inc.
|
CA
|
California
|
||
Riverside
Cement Company
|
CA
|
California
|
||
Xxxxxx
Limestone Products, Inc.
|
CA
|
California
|
||
Riverside
Cement Holdings Company
|
CA,
DE
|
Delaware
|
||
Texas
Industries Holdings, LLC
|
DE
|
Delaware
|
||
Texas
Industries Trust
|
DE
|
Delaware
|
||
TXI
Aviation, Inc.
|
TX
|
Texas
|
||
TXI
California Inc.
|
DE,
CA
|
Delaware
|
||
TXI
Cement Company
|
DE,
TX
|
Delaware
|
||
TXI
LLC
|
DE
|
Delaware
|
||
TXI
Operating Trust
|
DE
|
Delaware
|
||
TXI
Operations, LP
|
DE,
TX, AR, LA, OK, CO
|
Delaware
|
||
Southwestern
Financial Corporation
|
TX
|
Texas
|
||
TXI
Power Company
|
TX
|
Texas
|
||
DE,
CA
|
Delaware
|
|||
TXI
Transportation Company
|
TX,
LA
|
Texas
|
C-1
SCHEDULE
D
MATERIAL
EXISTING INSTRUMENTS
1.
|
Tax
Sharing and Indemnification Agreement dated July 6, 2005 between
Chaparral
Steel Company and Texas Industries,
Inc.;
|
2.
|
Separation
and Distribution Agreement dated July 6, 2005 between Chaparral Steel
Company and Texas Industries, Inc.;
|
3.
|
Amendment
No. 1 to Separation and Distribution Agreement between Chaparral
Steel
Company and Texas Industries, Inc. dated July 27,
2005;
|
4.
|
First
Amended and Restated Credit Agreement, dated August 15, 2007, among
the
Company, Bank of America, N.A., as Administrative Agent and lender,
L/C
Issuer and Swing Line Lender, UBS Securities LLC, as Syndication
Agent,
Xxxxx Fargo Bank, National Association, and Wachovia Bank, National
Association, as Co-Documentation Agents and as lenders, and UBS Loan
Finance LLC, General Electric Capital Corporation, Suntrust Bank,
Capital
One, National Association, U.S. Bank National Association and Comerica
Bank, as lenders, as amended;
|
5.
|
First
Amendment to First Amended and Restated Credit Agreement dated as
of
January 28, 2008 among the Company, Bank of America, N.A., as
Administrative Agent, Swing Line Lender, L/C Issuer and lender and
other
lenders.
|
6.
|
Second
Amendment to First Amended and Restated Credit Agreement dated as
of March
20, 2008 among the Company, Bank of America, N.A., as Administrative
Agent, Swing Line Lender, L/C Issuer and lender and other
lenders
|
7.
|
Indenture;
|
8.
|
Registration
Rights Agreement to be dated as of August 18, 2008, by and among
Texas
Industries, Inc., the guarantors named therein and the initial purchasers
named therein;
|
9.
|
Rights
Agreement dated as of November 1, 2006, between Texas Industries,
Inc. and
Mellon Investor Services, L.L.C.;
|
10.
|
Registration
Rights Agreement, dated July 6, 2005, by and among Texas Industries,
Inc.,
the guarantors named therein and the initial purchasers named therein;
|
11.
|
Purchase
Agreement dated June 29, 2005 among Texas Industries, Inc. and the
initial
purchasers named therein;
|
12.
|
Contract
dated September 27, 2005 between Riverside Cement Company and Oro
Grande
Contractors; and
|
13.
|
Contract
signed September 21, 2007 between the Company and AMEX-Xxxxxxx
Contractors.
|
14.
|
Term
Credit Agreement dated as of March 20, 2008 among the Company, Bank
of
America, N.A., as Administrative Agent and the lenders party
thereto.
|
D-1
EXHIBIT
A
[DATE]
BANC
OF
AMERICA SECURITIES LLC
UBS
SECURITIES LLC
WACHOVIA
CAPITAL MARKETS, LLC
XXXXX
FARGO SECURITIES, LLC
COMERICA
SECURITIES, INC.
SUNTRUST
XXXXXXXX XXXXXXXX, INC.
As
Initial Purchasers
c/o
BANC
OF AMERICA SECURITIES LLC
One
Bryant Park
New
York,
New York 10036
Ladies
and Gentlemen:
We
have
acted as special counsel for Texas Industries, Inc., a Delaware corporation
(the
“Company”),
in
connection with the transactions contemplated by the Purchase Agreement dated
as
of August 7, 2008 (the “Purchase
Agreement”),
among
the Company, the Guarantors listed on Schedule
I
hereto(the “Guarantors”),
Banc
of America Securities LLC, UBS Securities LLC, Wachovia Capital Markets, LLC,
Xxxxx Fargo Securities LLC, Comerica Securities, Inc., and SunTrust Xxxxxxxx
Xxxxxxxx, Inc. (collectively, the “Initial
Purchasers”)
(the
Company and the Guarantors are referred to herein collectively as the
“Relevant
Parties”).
This
opinion letter is furnished to you solely for purposes of complying with the
requirements of Section 5(a)(iii) of the Purchase Agreement. Capitalized terms
that are defined in the Purchase Agreement and are used but not defined herein
have the meanings given them in the Purchase Agreement.
In
connection with this opinion letter, we have examined original counterparts
or
copies of original counterparts of the documents listed in Schedule
II.A
hereto
(the “Transaction
Documents”),
the
Pricing Disclosure Package and the Final Offering Memorandum. We have also
examined originals or copies of such other records of the Company, certificates
of public officials and of officers of the Company and the Guarantors and the
representations and warranties of the Company and the Guarantors in the
Transaction Documents and agreements and other documents as we have deemed
necessary as a basis for the opinions expressed below.
In
rendering the opinions expressed below, we have assumed:
(i) The
genuineness of all signatures.
(ii) The
authenticity of the originals of the documents submitted to us.
Ex.
A-1
(iii) The
conformity to authentic originals of any documents submitted to us as
copies.
(iv) The
authenticity of the original documents of which copies were
provided.
(v) As
to
matters of fact, the truthfulness of the representations made or otherwise
incorporated in the Purchase Agreement and the other Transaction Documents
and
representations and statements made in certificates of public officials and
officers of the Relevant Parties.
(vi) That
the
Transaction Documents constitute valid, binding and enforceable obligations
of
each party thereto (other than the Relevant Parties).
(vii) That:
(A) Each
Guarantor is an entity duly organized under the laws of the jurisdiction of
its
organization.
(B) Each
Guarantor has full power to execute, deliver and perform the Transaction
Documents to which it is a party and the Exchange Notes and has duly executed
and delivered (except to the extent Applicable Laws are applicable to such
execution and delivery) such Transaction Documents.
(C) The
execution, delivery and performance by each Guarantor of the Transaction
Documents to which it is a party and the Exchange Notes have been duly
authorized by all necessary action (corporate or otherwise) and do not
contravene its certificate or articles of incorporation or certificate of
formation, bylaws or other organizational documents.
(D) The
execution, delivery and performance by each Relevant Party of the Transaction
Documents to which it is a party and the Exchange Notes do not:
(1) except
with respect to Applicable Laws, violate any law, rule or regulation applicable
to it, or
(2) result
in
any conflict with or breach of any agreement or document binding on it (other
than Applicable Contracts (as defined below)), of which any addressee hereof
has
knowledge, has received notice or has reason to know.
(E) Except
as
required by Applicable Laws and other laws, rules and regulations referred
to in
paragraphs 10, 13 and 14, no authorization, approval or other action by, and
no
notice to or filing with, any governmental authority or regulatory body or
(to
the extent the same is required under any agreement or document binding on
it of
which an addressee hereof has knowledge, has received notice or has reason
to
know, other than any Applicable Contract (as defined below)) any other third
party is required for the due execution, delivery or performance by any Relevant
Party of any Transaction Document to which it is a party or, if any such
authorization, approval, action, notice or filing is required, it has been
duly
obtained, taken, given or made and is in full force and effect.
Ex.
A-2
We
have
not independently established the validity of the foregoing
assumptions.
“Applicable
Laws”
means
those laws, rules and regulations of the State of Texas, the State of New York,
and the federal laws, rules and regulations of the United States of America,
that a New York or Texas lawyer exercising customary professional diligence
would reasonably be expected to recognize as being applicable to the Relevant
Parties, the Purchase Agreement, Registration Rights Agreement, the Indenture,
the DTC Agreement, the Notes and the Exchange Notes or transactions of the
type
contemplated by the Purchase Agreement, Registration Rights Agreement, the
Indenture, the DTC Agreement, the Notes and the Exchange Notes, and, for
purposes of our opinions in paragraphs 1, 2 and 11(a), include Delaware General
Corporation Law. However, the term “Applicable Laws” does not
include:
(i) Any
state
or federal laws, rules or regulations relating to: (A) pollution or
protection of the environment; (B) zoning, land use, building or
construction; (C) occupational safety and health or other similar matters;
(D) labor or employee rights and benefits, including without limitation the
Employee Retirement Income Security Act of 1974, as amended; (E) the
regulation of utilities; (F) antitrust and trade regulation; (G) tax;
(H) securities, including, without limitation federal and state securities
laws, rules or regulations and the Investment Company Act of 1940, as amended
(the “Investment Company Act”); (I) corrupt practices, including without
limitation the Foreign Corrupt Practices Act of 1977; and (J) copyrights,
patents, service marks and trademarks.
(ii) Any
laws,
rules or regulations of any county, municipality or similar political
subdivision or any agency or instrumentality thereof.
(iii) Any
laws,
rules or regulations that are applicable to the Relevant Parties, the
Transaction Documents or such transactions solely because such laws, rules
or
regulations are part of a regulatory regime applicable to any party to any
of
the Transaction Documents or any of its affiliates because of the specific
assets or business of such party or such affiliate.
Based
upon the foregoing, and subject to the qualifications and limitations herein
set
forth, we are of the opinion that:
Ex.
A-3
1. The
Company is a corporation that is validly existing and in good standing under
the
laws the State of Delaware.
2. The
Company has:
(a)
the
corporate power and authority to own, lease and operate its properties and
to
conduct its business as described in the Company’s Form 10-K for the year ended
May 31, 2008 and to enter into and perform its obligations under the Transaction
Documents and the Exchange Notes;
(b)
taken
all
corporate action necessary to authorize the execution, delivery and performance
of the Transaction Documents; and
(c)
duly
executed and delivered the Transaction Documents.
Each
Guarantor has duly executed and delivered each Transaction Document to which
it
is a party.
3. Based
solely on certificates of public officials, the Company is in good standing
and
authorized to do business in each state specified on Schedule
II.B
hereto
as of the date specified in such Schedule.
4. Each
of
the Registration Rights Agreement and the DTC Agreement is the valid and binding
agreement of each Relevant Party that is a party thereto, enforceable against
such Relevant Party in accordance with its terms.
5. The
Indenture, including the First Supplemental Indenture, is the valid and binding
agreement of each Relevant Party, enforceable against such Relevant Party in
accordance with its terms.
6. The
Notes
are in the form contemplated by the Indenture, and when duly authenticated
by
the Trustee in the manner provided in the Indenture and delivered against
payment of the purchase price therefor as provided in the Purchase Agreement,
will be valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture.
7. The
Guarantees of the Notes are in the form contemplated by the Indenture and,
when
the Notes have been duly authenticated by the Trustee in the manner provided
in
the Indenture and delivered against payment of the purchase price therefor
as
provided in the Purchase Agreement, such Guarantees will be valid and binding
agreements of the Guarantors, enforceable against the Guarantors in accordance
with their terms.
8. The
Notes, the form of the Exchange Notes attached as Exhibit A to the Indenture,
the Guarantees of the Notes, form of the Guarantees of the Exchange Notes
attached as Exhibit A to the Indenture, and the Indenture conform in all
material respects to the descriptions thereof contained in the Pricing
Disclosure Package and the Final Offering Memorandum.
Ex.
A-4
9. Insofar
as the statements in the Pricing Disclosure Package and the Final Offering
Memorandum under the caption “Description of Other Indebtedness” set forth a
description of the Amended and Restated Credit Agreement, dated August 15,
2007,
among the Company, Bank of America, N.A., as administrative agent, L/C issuer
and swing line lender, and the lenders party thereto, such statements are
correct in all material respects. The statements in the Pricing Disclosure
Package under the caption “Material United States Federal Income and Estate Tax
Consequences” and “Notice to Investors,” insofar as such statements constitute
summaries of legal matters referred to therein, accurately summarize in all
material respects, the legal matters referred to therein.
10. No
authorization, approval or other action by, and no notice to or filing with,
any
United States federal or New York governmental authority or regulatory body
is
required under Applicable Laws for the due execution, delivery or performance
by
the Relevant Parties of any Transaction Document to which it is a party, except
as may be required under the Securities Act of 1933, as amended (the
“Securities
Act”)
and
the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”),
in
connection with the registration statement described in the Offering Memorandum
and contemplated by the Registration Rights Agreement and as may be required
under the securities or blue sky laws of any jurisdiction in the United States
in connection with the offer and sale of the Notes and the Exchange
Notes.
11. The
execution, delivery and performance by the Company of the Purchase Agreement,
the Registration Rights Agreement, the Indenture and the DTC Agreement and
the
issuance and delivery of the Notes and the Exchange Notes:
(a) will
not
result in any violation of the certificate of incorporation or by-laws of the
Company;
(b)
will
not
constitute a breach of, or Default or a Debt Repayment Triggering Event under,
or result in the creation or imposition of any lien, charge or encumbrance
upon
any property or assets of the Company pursuant to, or require the consent of
any
other party under, the agreements listed on Schedule
II.C
(each,
an “Applicable
Contract”);
and
(c)
will
not
result in any violation by the Company of any Applicable Law.
12. The
execution, delivery and performance by each Guarantor of the Purchase Agreement,
the Registration Rights Agreement and the Indenture:
(a) will
not
constitute a breach of, or Default or a Debt Repayment Triggering Event under,
or result in the creation or imposition of any lien, charge or encumbrance
upon
any property or assets of such Guarantor pursuant to, or require the consent
of
any other party under, any Applicable Contract, and
(b)
will
not
result in any violation by such Guarantor of any Applicable Law.
Ex.
A-5
13. The
Company is not, and as a result of the transactions contemplated by the Purchase
Agreement will not be, required to register as an “investment company” under the
Investment Company Act.
14. Based
upon the representations, warranties and agreements of the Company and the
Initial Purchasers in the Purchase Agreement and assuming compliance with the
offering and transfer procedures and restrictions described in the Offering
Memorandum, it is not necessary in connection with the offer and sale of the
Notes to the Initial Purchasers under the Purchase Agreement or in connection
with the initial resale of such Notes by the Initial Purchasers in the manner
contemplated by the Purchase Agreement to register the offer and sale of the
Notes under the Securities Act of 1933, as amended, or to qualify the Indenture
under the Trust Indenture Act other than any registration or qualification
that
may be required in connection with the Exchange Offer contemplated by the
Offering Memorandum and the Registration Rights Agreement, it being understood
that no opinion is expressed as to any subsequent resale of any
Notes.
The
opinions set forth above are subject to the following qualifications and
exceptions:
(a) Our opinions
are limited to Applicable Laws, (i) in the case of our opinion in paragraphs
10
and 14 above, the Securities Act and the Trust Indenture Act, (ii) in the case
of our opinion in paragraph 13 above, the Investment Company Act, and (iii)
in
the case of our opinions in paragraph 3 above, to the limited extent set forth
therein, the law of the states referred to in Schedule
II.B
hereto,
and we do not express any opinion herein concerning any other laws.
(b) Our
opinions in paragraphs 4 through 7 are subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, receivership, moratorium or similar laws
affecting the rights and remedies of creditors generally.
(c) Our
opinions in paragraphs 4 through 7 are subject to general principles of equity
exercisable in the discretion of a court (including without limitation
obligations and standards of good faith, fair dealing, materiality and
reasonableness and defenses relating to unconscionability or to impracticability
or impossibility of performance).
(d) We
express no opinion in paragraphs 4 through 7 with respect to:
(i) The
enforceability of any Transaction Document under the laws of any jurisdiction
other than the jurisdiction whose laws such Transaction Document provides will
govern such Transaction Document.
(ii) The
enforceability of indemnification provisions or of waiver, release or
exculpation provisions, contained in the Transaction Documents to the extent
that enforcement thereof is contrary to public policy regarding the
indemnification against or release or exculpation of criminal violations,
intentional harm, or violations of securities laws.
Ex.
A-6
(iii) Any
waiver of defenses in the guaranty of the Guarantors in the
Indenture.
(iv) Any
provision of a Transaction Document that (A) contains a waiver of any objection
based on inappropriate venue or forum
non conveniens
in any
federal court of the United States, or (B) implies that a federal court of
the
United States has subject matter jurisdiction.
(e) With
respect to our opinion in paragraph 1, we have relied exclusively on
certificates issued by the Secretary of State of the State of Delaware.
In
the
course of our acting as counsel to the Company in connection with the
preparation of the Offering Memorandum dated August 7, 2008 (including the
documents incorporated by reference therein (the “Offering
Memorandum”)
relating to the Notes, we reviewed the Offering Memorandum, together with the
documents and information listed in Schedule
III
hereto
(the “Pricing
Disclosure Package”)
and
participated in conferences with officers and other representatives of the
Company, representatives of the Initial Purchasers and the Initial Purchasers’
counsel, and representatives of the independent public accountants for the
Company, at which the contents of the Offering Memorandum and the Pricing
Disclosure Package and related matters were discussed. We did not participate
in
the preparation of the documents incorporated by reference in the Offering
Memorandum. The purpose of our professional engagement was not to establish
or
confirm factual matters set forth in the Offering Memorandum or Pricing
Disclosure Package, and we have not undertaken to verify independently any
of
such factual matters. Moreover, many of the determinations required to be made
in the preparation of the Offering Memorandum and the Pricing Disclosure Package
involve matters of a non-legal nature. Subject to the foregoing, we confirm
to
you that, on the basis of the information we gained in the course of performing
the services referred to above, nothing came to our attention that caused us
to
believe that:
(a) the
Pricing Disclosure Package, as of 3:30 pm ET. on August 7, 2008 (the
“Applicable
Time”)
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading; or
(b) the
Offering Memorandum, as of its date and as of the date hereof, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
provided
that we
do not assume any responsibility for the accuracy, completeness or fairness
of
the statements contained in the Offering Memorandum or the Pricing Disclosure
Package (except as otherwise specifically stated in paragraph 9), and we do
not
express any belief with respect to the financial statements or other financial
data
or
related statistical data derived from such financial data or accounting data
contained in the Offering Memorandum or the Pricing Disclosure
Package.
Ex.
A-7
This
opinion letter is rendered to you in connection with the transactions
contemplated by the Transaction Documents. This opinion letter may not be relied
upon by any person other than you or by you, or any such person that is so
entitled to rely on this opinion letter, for any other purpose, without our
prior written consent.
This
opinion letter is limited to the matters expressly stated herein and is provided
solely for purposes of complying with the requirements of the Purchase
Agreement, and no opinions may be inferred or implied beyond the matters
expressly stated herein. The opinions expressed herein are rendered and speak
only as of the date hereof and we specifically disclaim any responsibility
to
update such opinions subsequent to the date hereof or to advise you of
subsequent developments affecting such opinions.
Respectfully
submitted,
XXX/ARC/SMM/MAM/JWR
RHS
Ex.
A-8
SCHEDULE
I
Guarantors
Type
of Entity
|
State
of Organization
|
|||
Corporation
|
Delaware
|
|||
Brook
Hollow Properties, Inc.
|
Corporation
|
Texas
|
||
Brookhollow
of Alexandria, Inc.
|
Corporation
|
Louisiana
|
||
Brookhollow
of Virginia, Inc.
|
Corporation
|
Virginia
|
||
Southwestern
Financial Corporation
|
Corporation
|
Texas
|
||
Creole
Corporation
|
Corporation
|
Delaware
|
||
Pacific
Custom Materials, Inc.
|
Corporation
|
California
|
||
Riverside
Cement Company
|
General
Partnership
|
California
|
||
Xxxxxx
Limestone Products, Inc.
|
Corporation
|
California
|
||
Riverside
Cement Holdings Company
|
Corporation
|
Delaware
|
||
Texas
Industries Holdings, LLC
|
LLC
|
Delaware
|
||
Texas
Industries Trust
|
Trust
|
Delaware
|
||
TXI
Aviation, Inc.
|
Corporation
|
Texas
|
||
TXI
California Inc.
|
Corporation
|
Delaware
|
||
TXI
Cement Company
|
Corporation
|
Delaware
|
||
TXI
LLC
|
LLC
|
Delaware
|
||
TXI
Operating Trust
|
Trust
|
Delaware
|
||
TXI
Operations, LP
|
Limited
Partnership
|
Delaware
|
||
TXI
Power Company
|
Corporation
|
Texas
|
||
TXI
Riverside Inc.
|
Corporation
|
Delaware
|
||
TXI
Transportation Company
|
Corporation
|
Texas
|
SCHEDULE
II
SECTION
A.
Transaction
Documents
1.
|
Purchase
Agreement
|
2.
|
Indenture
dated as of July 6, 2005 between the Company, the Guarantors and
Xxxxx
Fargo Bank, National Association, as
trustee.
|
3.
|
First
Supplemental Indenture dated as of _________, 2008 between the Company,
the Guarantors and Xxxxx Fargo Bank, National Association, as trustee.
|
4.
|
Global
Notes issued by the Company today in the aggregate principal amount
$300,000,000, together with the notations of Guarantee of the Guarantors
attached thereto.
|
5.
|
DTC
Agreement dated as of ________, 2008 between the Company and Cede
&
Co., as nominee for the Depositary Trust
Company.
|
6.
|
Registration
Rights Agreement dated as of ____________, 2008 between the Company,
the
Guarantors and the Initial Purchasers.
|
SECTION
B.
States
Where the Company Is Qualified to Do Business
State
|
Issuer of Certificate
|
Type of Certificate
|
Date of Certificate
|
|||
Arkansas
|
|
Secretary of
State
|
||||
Colorado
|
Secretary
of State
|
|||||
Louisiana
|
Secretary
of State
|
|||||
Oklahoma
|
Secretary
of State
|
|||||
Texas
|
Secretary
of State
|
SECTION
C.
Applicable
Contracts
1.
|
Tax
Sharing and Indemnification Agreement dated July 6, 2005 between
Chaparral Steel Company and the
Company.
|
2.
|
Separation
and Distribution Agreement dated July 6, 2005 between Chaparral Steel
Company and the Company.
|
3.
|
Amendment
No. 1 to Separation and Distribution Agreement dated July 27, 2005
between
Chaparral Steel Company and the
Company.
|
4.
|
First
Amended and Restated Credit Agreement, dated August 15, 2007, among
the
Company, Bank of America, N.A., as administrative agent, L/C issuer
and
swing line lender, and the lenders party thereto, as amended.
|
5.
|
Term
Credit Agreement dated as of March 20, 2008 among the Company, Bank
of
America, N.A., as Administrative Agent and the lenders party
thereto.
|
6.
|
Rights
Agreement dated as of November 1, 2006, between the Company. and
Mellon
Investor Services, L.L.C.
|
7.
|
Contract
dated September 27, 2005 between Riverside Cement Company and Oro
Grande
Contractors.
|
8.
|
Contract
dated September 21, 2007 by and between the Company and AMEX-Xxxxxxx
Contractors.
|
SCHEDULE
III
Pricing
Disclosure Package
Pricing
Supplement dated August 7, 2008
EXHIBIT B
___________
__, 2008
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
SunTrust
Xxxxxxxx Xxxxxxxx, Inc.
c/o Banc
of
America Securities LLC
One
Bryant Park
New
York,
New York 10036
Ladies
and Gentlemen:
I
am Vice
President and General Counsel of Texas Industries, Inc., a Delaware corporation
(the “Company”). I have been asked to deliver this opinion to Banc of America
Securities LLC, UBS Securities LLC, Wachovia Capital Markets, LLC, Xxxxx Fargo
Securities, LLC, Comerica Securities, Inc. and SunTrust Xxxxxxxx Xxxxxxxx,
Inc.
(collectively, the “Initial Purchasers”), in connection with the issuance by the
Company of $300,000,000 aggregate principal amount of the Company’s 7¼% Senior
Notes due 2013 (the “Notes”) and pursuant to Section 5(a)(iv) of the Purchase
Agreement dated _________ __, 2008 (the “Purchase Agreement”) among the Company,
the Guarantors named therein (the “Guarantors”) and the Initial Purchasers.
Capitalized terms defined in the Purchase Agreement which are used but not
defined herein shall have the respective meanings set forth in the Purchase
Agreement.
In
connection with the issuance of the Notes, I have reviewed the Purchase
Agreement, the Indenture, the First Supplemental Indenture, the Notes, the
Guarantees, the forms of the Exchange Notes, the DTC Agreement and the
Registration Rights Agreement (collectively, the “Principal Documents”), the
Pricing Disclosure Package and the Final Offering Memorandum and such other
documents and instruments as I have deemed necessary to render this opinion.
I
have assumed, with respect to all documents and instruments which I have
examined, the genuineness of all signatures thereon, the authenticity of all
documents submitted to me as originals, the conformity to originals of all
documents submitted to me as copies and the authenticity of the originals of
which copies were provided. I have also relied upon certificates of public
officials.
Based
upon the foregoing, and subject to the qualifications and limitations set forth
herein, it is my opinion that:
1. Each
Guarantor has been duly incorporated or organized and is validly existing as
a
corporation, trust, limited liability company or partnership in good standing
under the laws of the jurisdiction of its incorporation or organization, and
has
corporate, trust, limited liability company or partnership power and authority
to own, lease and operate its properties and to conduct its business as now
being conducted and to enter into and perform its obligations under the
Principal Documents to which it is a party and, to the best of my knowledge,
is
duly qualified as a foreign corporation, trust, limited liability company or
partnership to transact business and is in good standing in each 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.
Ex.
B-1
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
Suntrust
Xxxxxxxx Xxxxxxxx, Inc.
c/o Banc
of
America Securities LLC
___________
__, 2008
2. All
of
the issued and outstanding capital stock or partnership or other ownership
interest of each Guarantor has been duly authorized and validly issued, and
is
fully paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien
or
encumbrance, or to the best of my knowledge, any pending or threatened
claim.
3. To
the
best of my knowledge, all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws.
4. The
statements in, or incorporated by reference in, the Pricing Disclosure Package
and the Final Offering Memorandum under the captions “Risk Factors—Risks Related
to the Notes—Federal and state statutes allow courts, under specific
circumstances, to void the notes or the guarantees and require note holders
to
return payments received from the issuer or the subsidiary guarantors,” “Risk
Factors—Risks Relating to Our Business—We may incur substantial expenditures to
comply with environmental, health and safety laws. The enforcement of such
laws
may result in liability for civil or criminal fines or penalties or curtailment
or suspension of our operations. We may become liable for environmental injury
to persons or property,” “Item 3. Legal Proceedings,” “Item 1.
Business—Environmental,” “Item 10. Directors, Executive Officers and Corporate
Governance,” and “Item 11. Executive Compensation,” insofar as such statements
constitute matters of law, summaries of legal matters, the Company’s charter or
bylaw provisions, documents or legal proceedings, or legal conclusions, have
been reviewed by me and fairly present and summarize, in all material respects,
the matters referred to therein.
5. 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 or any Guarantors’ execution, delivery and
performance of the Purchase Agreement, the Registration Rights Agreement, the
DTC Agreement or the Indenture, or the issuance and delivery of the Securities
or the Exchange Securities, except (i) such as have been obtained or made by
the
Company or such Guarantors and are in full force and effect under the Securities
Act, (ii) such as may be required by state securities laws, and (iii) with
respect to the Registration Rights Agreement, the filing and effectiveness
of
the applicable registration statement under the Securities Act.
Ex.
B-2
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
Suntrust
Xxxxxxxx Xxxxxxxx, Inc.
c/o Banc
of
America Securities LLC
___________
__, 2008
6. The
Company’s and each Guarantor’s execution and delivery of the Purchase Agreement,
the Registration Rights Agreement and the Indenture, including the First
Supplemental Indenture, the Company’s execution, delivery and performance of the
DTC Agreement, and the issuance and delivery of the Securities and, if required
under the Registration Rights Agreement, the Exchange Securities, (i) have
been
duly authorized by all necessary corporate, trust, limited liability company
or
partnership action of the Company and the Guarantors and will not result in
any
violation of the provisions of the charter or bylaws, trust agreement, operating
agreement or partnership agreement of the Company or any subsidiary; (ii)
assuming the Company applies the net proceeds from the sale of the Securities
sold by it in the manner described under the caption “Use of Proceeds” in the
Pricing Disclosure Package, will not constitute a breach of, or Default or
a
Debt Repayment Triggering Event under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
or
any of its domestic subsidiaries pursuant to, or require the consent of any
other party to, the agreements listed on Exhibit
A
hereto
(each, a “Material Existing Instrument”); and (iii) to the best of my knowledge,
after reasonable investigation, will not result in any violation of any law,
administrative regulation or administrative or court decree applicable to the
Company or any subsidiary.
7. The
Purchase Agreement, the Registration Rights Agreement, the Indenture, including
the First Supplemental Indenture, and the DTC Agreement have been duly executed
and delivered by the Company and each Guarantor that is a party thereto. The
Notes have been duly executed by the Company and, when authenticated by the
Trustee and delivered against payment of the purchase price therefore, will
have
been duly delivered by the Company.
8. To
the
best of my knowledge after reasonable investigation, neither the Company nor
any
subsidiary is in violation of its charter or bylaws or any law, administrative
regulation or administrative or court decree applicable to the Company or any
subsidiary or is in Default in the performance or observance of any obligation,
agreement, covenant or condition contained in any Material Existing Instrument,
except in each such case for such violations or Defaults as would not,
individually or in the aggregate, result in a Material Adverse
Change.
Ex.
B-3
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
Suntrust
Xxxxxxxx Xxxxxxxx, Inc.
c/o Banc
of
America Securities LLC
___________
__, 2008
9. Except
as
otherwise disclosed in the Pricing Disclosure Package and the Final Offering
Memorandum, there are no legal or governmental actions, suits or proceedings
pending or, to the best of my knowledge, threatened (i) against or
affecting the Company or any of its subsidiaries, or (ii) which has as the
subject thereof any property owned or leased by, the Company or any of its
subsidiaries, 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.
10. 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
reasonably be expected to result in a Material Adverse Change.
11. The
Company and each subsidiary possess such valid and current certificates,
authorizations or permits issued by the appropriate local, state, federal or
foreign regulatory agencies or bodies necessary to conduct their respective
businesses, each such certificate, authorization and permit being in full force
and effect, and the Company and each subsidiary is in compliance with the terms
of each such certificate, authorization and permit, except where the failure
to
so possess or comply 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, would result in a Material Adverse Change.
12. The
documents incorporated by reference in the Pricing Disclosure Package and the
Final Offering Memorandum (other than the financial statements and the notes
thereto and the other financial and accounting data, as to which no opinion
is
rendered), when they were filed with the Commission complied as to form in
all
material respects with the requirements of the Exchange Act.
I
have
participated in conferences with officers and other representatives of the
Company, representatives of the independent registered public accounting firm
for the Company and with representatives of the Initial Purchasers at which
the
contents of the Pricing Disclosure Package and the Final Offering Memorandum,
and any supplements or amendments thereto, and related matters were discussed
and, although I have not independently verified and am not passing upon and
do
not assume any responsibility for the accuracy, completeness or fairness of
the
statements contained in the Pricing Disclosure Package and the Final Offering
Memorandum (other than as specified in paragraph 4 above), and any supplements
or amendments thereto, on the basis of the foregoing, nothing has come to my
attention which would lead me to believe that the Pricing Disclosure Package,
as
of _____, 2008 or the Final Offering Memorandum, as of its date or at the date
hereof, contained or contains an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (it being understood that I express no belief as to the financial
statements and the related notes thereto or other financial, statistical or
accounting data derived therefrom, included in the Pricing Disclosure Package
or
the Final Offering Memorandum or any amendments or supplements
thereto).
Ex.
B-4
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
Suntrust
Xxxxxxxx Xxxxxxxx, Inc.
c/o Banc
of
America Securities LLC
___________
__, 2008
This
opinion is limited by, subject to and based on the following:
(a)
I
am a
member of the bar of the State of Texas and do not hold myself out as being
conversant with the laws of any jurisdiction other than those of the State
of
Texas, the United States of America and, to the extent relevant to the opinions
expressed above, the corporation, limited partnership, limited liability company
and trust acts of the States of Delaware, Louisiana, Virginia and California,
and I express no opinion herein with respect to the law of any such other
jurisdiction.
(b) With
respect to the opinion in paragraph 1 that the Guarantors validly exist and
are
in good standing under the laws of the states of the jurisdiction of their
incorporation or organization, I have given such opinion based solely on
certificates to that effect issued by the Secretary of State of the states
set
forth on Exhibit
B.
With
respect to the opinion in paragraph 1 that the Guarantors are duly qualified
as
a foreign corporation, trust, limited liability company or partnership to
transact business and is in good standing in each jurisdiction in which such
qualification is required, I have given such opinion based solely upon
certificates to that effect issued by the Secretaries of State of the states
set
forth on Exhibit
C.
(c) In
rendering this opinion, I have assumed:
(i)
|
that
each Principal Document has been duly authorized, executed and delivered
by each party thereto other than the Company and the Guarantors and
constitutes the valid and legally binding obligation of such other
party
enforceable in accordance with its terms;
and
|
(ii)
|
that
there has been no mutual mistake of fact or misunderstanding, fraud,
duress or undue influence with respect to, or affecting any of, the
parties to the transaction, and the conduct of the parties to the
transaction has complied with any requirements of good faith, fair
dealing, and conscionability.
|
Ex.
B-5
Banc
of
America Securities LLC
UBS
Securities LLC
Wachovia
Capital Markets, LLC
Xxxxx
Fargo Securities, LLC
Comerica
Securities, Inc.
Suntrust
Xxxxxxxx Xxxxxxxx, Inc.
c/o Banc
of
America Securities LLC
___________
__, 2008
(d) This
opinion is limited to the matters stated herein, and no opinion is implied
or
may be inferred beyond the matters expressly stated. The opinions stated herein
are as of the date hereof, and I assume no obligation to update or supplement
this opinion to reflect any facts or circumstances which may hereafter come
to
my attention or any changes in law which may hereafter occur.
(e) The
qualification of any opinion or statement herein by the use of the words “to the
best of my knowledge” means that during the course of my representation as
described in this opinion letter, no information has come to my attention which
would give me current actual knowledge of the existence of the facts so
qualified. Except as set forth herein, I have not undertaken any investigation
to determine the existence of such facts, but have relied on representations
and
warranties in the Principal Documents and on information provided to me by
officers of the Company and the Guarantors in connection with my preparation
of
this opinion letter.
This
opinion is provided to the Initial Purchasers and, without my prior written
consent, cannot be relied upon by any other person.
Sincerely,
|
Vice
President and General Counsel
|
Ex.
B-6
EXHIBIT
A
MATERIAL
EXISTING INSTRUMENTS
1.
|
Tax
Sharing and Indemnification Agreement dated July 6, 2005 between
Chaparral Steel Company and the
Company.
|
2.
|
Separation
and Distribution Agreement dated July 6, 2005 between Chaparral Steel
Company and the Company.
|
3.
|
Amendment
No. 1 to Separation and Distribution Agreement dated July 27, 2005
between
Chaparral Steel Company and the
Company.
|
4.
|
First
Amended and Restated Credit Agreement, dated August 15, 2007, among
the
Company, Bank of America, N.A., as administrative agent, L/C issuer
and
swing line lender, and the lenders party thereto.
|
5.
|
First
Amendment to First Amended and Restated Credit Agreement dated as
of
January 28, 2008 among the Company, Bank of America, N.A., as
Administrative Agent, Swing Line Lender, L/C Issuer and lender and
other
lenders.
|
6.
|
Second
Amendment to First Amended and Restated Credit Agreement dated as
of March
20, 2008 among the Company, Bank of America, N.A., as Administrative
Agent, Swing Line Lender, L/C Issuer and lender and other lenders.
|
7.
|
Rights
Agreement dated as of November 1, 2006, between the Company and Mellon
Investor Services, L.L.C.
|
8.
|
Contract
dated September 27, 2005 between Riverside Cement Company and Oro
Grande
Contractors.
|
9.
|
Contract
dated September 21, 2007 between the Company and AMEX-Xxxxxxx
Contractors.
|
10.
|
Term
Credit Agreement dated as of March 20, 2008 among the Company, Bank
of
America, N.A., as Administrative Agent and the lenders party
thereto.
|
EXHIBIT
B
Guarantor:
|
State
of Incorporation or Organization:
|
|
Brookhollow
Corporation
|
Delaware
|
|
Brook
Hollow Properties, Inc.
|
Texas
|
|
Brookhollow
of Alexandria, Inc.
|
Louisiana
|
|
Brookhollow
of Virginia, Inc.
|
Virginia
|
|
Southwestern
Financial Corporation
|
Texas
|
|
Creole
Corporation
|
Delaware
|
|
Pacific
Custom Materials, Inc.
|
California
|
|
Riverside
Cement Company
|
California
|
|
Xxxxxx
Limestone Products, Inc.
|
California
|
|
Riverside
Cement Holdings Company
|
Delaware
|
|
Texas
Industries Holdings, LLC
|
Delaware
|
|
Texas
Industries Trust
|
Delaware
|
|
TXI
Aviation, Inc.
|
Texas
|
|
TXI
California Inc.
|
Delaware
|
|
TXI
Cement Company
|
Delaware
|
|
TXI
LLC
|
Delaware
|
|
TXI
Operating Trust
|
Delaware
|
|
TXI
Operations, LP
|
Delaware
|
|
TXI
Power Company
|
Texas
|
|
TXI
Riverside Inc.
|
Delaware
|
|
TXI
Transportation Company
|
Texas
|
EXHIBIT
C
Guarantor:
|
Authorized
to do business in:
|
|
Brookhollow
Corporation
|
DE,
TX
|
|
Brook
Hollow Properties, Inc.
|
TX
|
|
Brookhollow
of Alexandria, Inc.
|
LA
|
|
Brookhollow
of Virginia, Inc.
|
VA
|
|
Southwestern
Financial Corporation
|
TX
|
|
Creole
Corporation
|
DE,
CA
|
|
Pacific
Custom Materials, Inc.
|
CA
|
|
Riverside
Cement Company
|
CA
|
|
Xxxxxx
Limestone Products, Inc.
|
CA
|
|
Riverside
Cement Holdings Company
|
DE,
CA
|
|
Texas
Industries Holdings, LLC
|
DE
|
|
Texas
Industries Trust
|
DE
|
|
TXI
Aviation, Inc.
|
TX
|
|
TXI
California Inc.
|
DE,
CA
|
|
TXI
Cement Company
|
DE,
TX
|
|
TXI
LLC
|
DE
|
|
TXI
Operating Trust
|
DE
|
|
TXI
Operations, LP
|
DE,
TX, AR, LA, OK, CO
|
|
Southwestern
Financial Corporation
|
TX
|
|
TXI
Power Company
|
TX
|
|
TXI
Riverside Inc.
|
DE,
CA
|
|
TXI
Transportation Company
|
TX,
LA
|
EXHIBIT
C
PRICING
SUPPLEMENT
Ex.
C-1
ANNEX
A
NONE
ANNEX
A
ANNEX
B
TERMS
AND CONDITIONS OF OFFERS AND SALES
The
Initial Purchaser understands that:
a) The
Initial Purchaser agrees that it has not offered or sold and will not offer
or
sell the Securities in the United States or to, or for the benefit or account
of, a U.S. Person (other than a distributor), in each case, as defined in Rule
902 under the Securities Act (i) as part of its distribution at any time and
(ii) otherwise until 40 days after the later of the commencement of the offering
of the Securities pursuant hereto and the Closing Date, other than in accordance
with Regulation S of the Securities Act or another exemption from the
registration requirements of the Securities Act. The Initial Purchaser agrees
that, during such 40-day restricted period, it will not cause any advertisement
with respect to the Securities (including any “tombstone” advertisement) to be
published in any newspaper or periodical or posted in any public place and
will
not issue any circular relating to the Securities, except such advertisements
as
permitted by and including the statements required by Regulation S.
b) The
Initial Purchaser agrees that, at or prior to confirmation of a sale of
Securities by it to any distributor, dealer or person receiving a selling
concession, fee or other remuneration during the 40-day restricted period
referred to in Rule 903 under the Securities Act, it will send to such
distributor, dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following
effect:
“The
Securities covered hereby have not been registered under the U.S. Securities
Act
of 1933, as amended (the “Securities Act”), and may not be offered and sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of your distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the Offering and the Closing Date, except
in either case in accordance with Regulation S under the Securities Act (or
Rule
144A or to Institutional Accredited Investors in transactions that are exempt
from the registration requirements of the Securities Act), and in connection
with any subsequent sale by you of the Securities covered hereby in reliance
on
Regulation S during the period referred to above to any distributor, dealer
or
person receiving a selling concession, fee or other remuneration, you must
deliver a notice to substantially the foregoing effect. Terms used above have
the meanings assigned to them in Regulation S.”
ANNEX
B