EXHIBIT 10.15
EXECUTION COPY
NEBRASKA BOOK COMPANY, INC.
$175,000,000
8-5/8% Senior Subordinated Notes due 2012
Purchase Agreement
February 27, 2004
X.X. Xxxxxx Securities Inc.
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Nebraska Book Company, Inc., a Kansas corporation (the "Company"),
proposes to issue and sell to the several Initial Purchasers listed in Schedule
1 hereto (the "Initial Purchasers"), for whom you are acting as representative
(the "Representative"), $175,000,000 principal amount of its 8-5/8% Senior
Subordinated Notes due 2012 (the "Securities"). The Securities will be issued
pursuant to an Indenture to be dated as of March 4, 2004 (the "Indenture") among
the Company, Specialty Books, Inc. (the "Guarantor") and BNY Midwest Trust
Company, as trustee (the "Trustee"), and will be guaranteed on an unsecured
senior subordinated basis by the Guarantor (the "Guarantee").
The Securities will be sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon an exemption therefrom. The Company has prepared a preliminary
offering memorandum dated February 19, 2004 (the "Preliminary Offering
Memorandum") and will prepare an offering memorandum dated the date hereof (the
"Offering Memorandum") setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. The Company hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum and the
Offering Memorandum in connection with the offering and resale of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Offering Memorandum. References herein to the Preliminary
Offering Memorandum and the Offering Memorandum shall be deemed to refer to and
include any document incorporated by reference therein.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, to be dated the Closing Date (as defined below)
and substantially in the form attached hereto as Exhibit A (the "Registration
Rights Agreement"), pursuant to which the Company and the Guarantor will agree
to file one or more registration statements with the Securities and Exchange
Commission (the "Commission") providing for the registration under the
Securities Act of the Securities or the Exchange Securities referred to (and as
defined) in the Registration Rights Agreement.
Concurrently with the consummation of the offering of the Securities,
the Company, NBC Acquisition Corp. ("Holdings") and the Guarantor will enter
into a recapitalization transaction pursuant to which (i) Weston Presidio
Capital and its affiliates (the "WPC Funds") will make an equity investment of
approximately $27.5 million in NBC Holdings Corp. a ("New Holdings"), (ii) WPC
Funds will contribute approximately 510,687 shares of Holdings to New Holdings,
(iii) WPC Funds will purchase approximately 38,179 shares of common stock of
Holdings from its holders, (iv) a merger will occur, as a result of which the
outstanding shares of Holdings will convert into the right to receive a portion
of the approximately $289.6 million in merger consideration, and the shares of a
newly formed subsidiary will be converted into a like number of shares of the
common stock of Holdings, (v) the Company will repurchase or call for redemption
its $110,000,000 aggregate principal amount of 8-3/4% Senior Subordinated Notes
due 2008 (the "Old Notes") and will issue the Securities, (vi) Holdings will
repurchase or call for redemption its $76,000,000 aggregate principal amount of
10-3/4% Senior Discount Debentures due 2009 (the "Old Debentures") and will
issue $77,000,000 principal amount at maturity of new 11% Senior Discount Notes
due 2013 (the "Debentures") and (vii) all indebtedness of the Company under the
Amended and Restated Credit Agreement, dated as of February 13, 1998, as amended
and restated as of December 10, 2003 (the "Existing Credit Agreement"), among
the Company, Holdings, the several banks and other financial institutions or
entities from time to time parties thereto, the eligible subsidiaries referred
to therein, JPMorgan Chase Bank, as administrative agent, documentation agent
and collateral agent, and Citigroup Global Markets Inc., as syndication agent,
will be refinanced and the Company, the Guarantor and New Holdings will enter
into a new revolving credit facility in the amount of $50.0 million and a new
term loan facility in the amount of $180.0 million pursuant to a credit
agreement (the "Credit Agreement"), among the Company, the Guarantor and New
Holdings, JPMorgan Chase Bank and Citicorp North America, Inc., as Arrangers,
Citigroup Global Markets, Inc., as Syndication Agent, JPMorgan Chase Bank, as
Administrative Agent, Fleet National Bank as Documentation Agent and the other
lenders party thereto, (the "Credit Facility") (the foregoing, collectively
referred to herein as the "Transactions"). The proceeds from the sale of the
Securities and the Debentures, together with the borrowings under the Credit
Facility, will be used (i) to repay outstanding indebtedness of the Company
under its Existing Credit Agreement, (ii) to purchase the Old Notes and Old
Debentures and (iii) to pay other related fees and expenses.
The Company hereby confirms its agreement with the several Initial
Purchasers concerning the purchase and resale of the Securities, as follows:
1. Purchase and Resale of the Securities. (a) Subject to the
Transactions occurring prior to or concurrently with the closing of the offering
of the Securities, the Company agrees to issue and sell the Securities to the
several Initial Purchasers as provided in this Agreement, and each Initial
Purchaser, on the basis of the representations, warranties and agreements set
forth
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herein and subject to the conditions set forth herein, agrees, severally and not
jointly, to purchase from the Company the respective principal amount of
Securities set forth opposite such Initial Purchaser's name in Schedule 1 hereto
at a price equal to 97.50% of the principal amount thereof plus accrued
interest, if any, from March 4, 2004 to the Closing Date. The Company will not
be obligated to deliver any of the Securities except upon payment for all the
Securities to be purchased as provided herein.
(b) The Company understands that the Initial Purchasers intend to
offer the Securities for resale on the terms set forth in the Offering
Memorandum. Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it is a qualified institutional buyer within the
meaning of Rule 144A under the Securities Act (a "QIB") and an
accredited investor within the meaning of Rule 501(a) under the
Securities Act;
(ii) neither it, nor any of its affiliates referenced in
Section 1(d) below, has solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities by means
of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and
(iii) it has not solicited offers for, or offered or sold,
and will not solicit offers for, or offer or sell, the Securities as
part of their initial offering except:
(A) within the United States to persons whom it
reasonably believes to be QIBs in transactions pursuant to
Rule 144A under the Securities Act ("Rule 144A") and in
connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of the
Securities is aware that such sale is being made in reliance
on Rule 144A; or
(B) in accordance with the restrictions set
forth in Annex A hereto.
(c) Each Initial Purchaser acknowledges and agrees that the
Company and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Sections 5(f) and 5(g), counsel for the Company and
counsel for the Initial Purchasers, respectively, may rely upon the accuracy of
the representations and warranties of the Initial Purchasers, and compliance by
the Initial Purchasers with their agreements, contained in paragraph (b) above
(including Annex A hereto), and each Initial Purchaser hereby consents to such
reliance.
(d) The Company acknowledges and agrees that the Initial
Purchasers may offer and sell Securities to or through any affiliate of an
Initial Purchaser and that any such affiliate may offer and sell Securities
purchased by it to or through any Initial Purchaser.
2. Payment and Delivery. (a) Payment for and delivery of the
Securities will be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP at
10:00 A.M., New York City time, on March 4, 2004, or at such other time or place
on the same or such other date, not later than the
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fifth business day thereafter, as the Representative and the Company may agree
upon in writing. The time and date of such payment and delivery is referred to
herein as the "Closing Date".
(b) Payment for the Securities shall be made by wire transfer in
immediately available funds to the account(s) specified by the Company to the
Representative against delivery to the nominee of The Depository Trust Company,
for the account of the Initial Purchasers, of one or more global notes
representing the Securities (collectively, the "Global Note"), with any transfer
taxes payable in connection with the sale of the Securities duly paid by the
Company. The Global Note will be made available for inspection by the
Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.
3. Representations and Warranties of the Company and the
Guarantor. The Company and the Guarantor jointly and severally represent and
warrant to each Initial Purchaser that:
(a) Offering Memorandum. The Preliminary Offering Memorandum, as
of its date, did not, and the Offering Memorandum, as of its date and as of 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;
provided that the Company and the Guarantor make no representation or warranty
with respect to any statements or omissions made in reliance upon and in
conformity with information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through the Representative
expressly for use in the Preliminary Offering Memorandum and the Offering
Memorandum.
(b) Incorporated Documents. The documents incorporated by
reference in the Preliminary Offering Memorandum and the Offering Memorandum,
when filed with the Commission, conformed or will conform, as the case may be,
in all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder, and did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Financial Statements. The financial statements and the related
notes thereto included or incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum present fairly the financial position of
the Company and its subsidiaries as of the dates indicated and the results of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby; and the other financial information included or
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum has been derived from the accounting records of the Company
and its subsidiaries and presents fairly the information shown thereby; and the
pro forma financial information and the related notes thereto included or
incorporated by reference in the Preliminary Offering Memorandum and the
Offering Memorandum has been prepared in accordance with the Commission's rules
and guidance with respect to pro forma financial information, and the
assumptions underlying such pro forma
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financial information are reasonable and are set forth in the Preliminary
Offering Memorandum and the Offering Memorandum.
(d) No Material Adverse Change. Since the date of the most recent
financial statements of the Company included or incorporated by reference in the
Preliminary Offering Memorandum and the Offering Memorandum, excluding the
Transactions, (i) there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries (other than, in the
case of such long-term debt, the accrual of interest in accordance with terms
thereof), or any dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, properties, management, financial
position, results of operations or prospects of the Company and its subsidiaries
taken as a whole; (ii) neither the Company nor any of its subsidiaries has
entered into any transaction or agreement that is material to the Company and
its subsidiaries taken as a whole or incurred any liability or obligation,
direct or contingent, that is material to the Company and its subsidiaries taken
as a whole; and (iii) neither the Company nor any of its subsidiaries has
sustained any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, except in each case as
otherwise disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum.
(e) Organization and Good Standing. The Company and each of its
subsidiaries have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are
duly qualified to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified or have such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
management, financial position, results of operations or prospects of the
Company and its subsidiaries taken as a whole or on the performance by the
Company and the Guarantor of their obligations under the Securities and the
Guarantee (a "Material Adverse Effect"). The Guarantor is the only subsidiary of
the Company.
(f) Capitalization. The Company and Holdings have an authorized
capitalization as set forth in the Preliminary Offering Memorandum and the
Offering Memorandum under the heading "Capitalization"; all the outstanding
shares of capital stock or other equity interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party; and the capital stock of the
Company and Holdings will conform in all material respects to the description
thereof set forth in the Offering Memorandum.
(g) Due Authorization. The Company and the Guarantor have full
right, power and authority to execute and deliver this Agreement, the
Securities, the Indenture (including each Guarantee set forth therein), the
Exchange Securities, the Registration Rights Agreement and any
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other agreement or instrument entered into or to be entered into in connection
with the Transactions, contemplated hereby or thereby, including, without
limitation, the Agreement and Plan of Merger, Stock Purchase Agreement and
Credit Agreement (collectively, the "Transaction Documents") and to perform
their respective obligations hereunder and thereunder; and all action required
to be taken for the due and proper authorization, execution and delivery of each
of the Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly taken.
(h) The Indenture. The Indenture has been duly authorized by the
Company and the Guarantor and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and the Guarantor enforceable against
the Company and the Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (collectively, the "Enforceability
Exceptions"); and on the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder.
(i) The Securities and the Guarantee. The Securities have been
duly authorized by the Company and, when duly executed, authenticated, issued
and delivered as provided in the Indenture and paid for as provided herein, will
be duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company enforceable against the Company in accordance
with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the Guarantee has been duly authorized by
the Guarantor and, when the Securities have been duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as provided
herein, will be valid and legally binding obligations of the Guarantor,
enforceable against the Guarantor in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(j) The Exchange Securities. On the Closing Date, the Exchange
Securities (including the related guarantee) will have been duly authorized by
the Company and the Guarantor and, when duly executed, authenticated, issued and
delivered as contemplated by the Registration Rights Agreement, will be duly and
validly issued and outstanding and will constitute valid and legally binding
obligations of the Company, as issuer, and the Guarantor, as guarantor,
enforceable against the Company and the Guarantor in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the
benefits of the Indenture.
(k) Purchase and Registration Rights Agreements. This Agreement
has been duly authorized, executed and delivered by the Company and the
Guarantor; and the Registration Rights Agreement has been duly authorized by the
Company and the Guarantor and, when duly executed and delivered in accordance
with its terms by each of the parties thereto, will constitute a valid and
legally binding agreement of the Company and the Guarantor enforceable against
the Company and the Guarantor in accordance with its terms, subject to the
Enforceability Exceptions, and except that rights to indemnity and contribution
thereunder may be limited by applicable law and public policy.
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(l) Other Transaction Documents. The Transaction Documents have
been duly authorized by the Company and the Guarantor party thereto and, when
duly executed and delivered in accordance with their terms by each of the
parties thereto, assuming that each of the Transaction Documents is a valid and
legally binding obligation of each of the parties thereto other than the Company
and the Guarantor, will constitute valid and legally binding agreements of the
Company and the Guarantor enforceable against the Company and the Guarantor in
accordance with its terms, subject to the Enforceability Exceptions.
(m) Descriptions of the Transaction Documents. Each Transaction
Document conforms in all material respects to the description thereof contained
in the Preliminary Offering Memorandum and the Offering Memorandum.
(n) No Violation or Default. Neither the Company nor any of its
subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject; or
(iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) No Conflicts. Subject to (A) the execution and delivery of the
supplemental indenture for the Old Notes as contemplated by the Offer to
Purchase and Consent Solicitation Statement of the Company dated February 4,
2004 (consents to which have already been obtained), (B) the execution and
delivery of the supplemental indenture for the Old Debentures as contemplated by
the Offer to Purchase and Consent Solicitation Statement of Holdings dated
February 4, 2004 (consents to which have already been obtained), and (C) the
refinancing of the Existing Credit Agreement, the execution, delivery and
performance by the Company and the Guarantor of each of the Transaction
Documents to which each is a party, the issuance and sale of the Securities
(including the Guarantee) and compliance by the Company and the Guarantor with
the terms thereof and the consummation of the transactions contemplated by the
Transaction Documents will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default 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,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, (ii)
result in any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of its subsidiaries or (iii)
result in the violation of any law or statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (i) and (iii) above, for any such
conflict, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
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(p) No Consents Required. No consent, approval, authorization,
order, registration or qualification of or with any court or arbitrator or
governmental or regulatory authority is required for the execution, delivery and
performance by the Company and the Guarantor of each of the Transaction
Documents to which each is a party, the issuance and sale of the Securities
(including the Guarantee) and compliance by the Company and the Guarantor with
the terms thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
orders and registrations or qualifications as may be required (i) under
applicable state securities laws in connection with the purchase and resale of
the Securities by the Initial Purchasers, (ii) to release existing liens in
connection with the refinancing of the Existing Credit Agreement, and (iii) with
respect to the Exchange Securities (including the related guarantee) under the
Securities Act and applicable state securities laws as contemplated by the
Registration Rights Agreement.
(q) Legal Proceedings. Except as described in the Preliminary
Offering Memorandum and the Offering Memorandum, there are no legal,
governmental or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries is or may be a party or to which
any property or assets of the Company or any of its subsidiaries is or may be
the subject that, individually or in the aggregate, if determined adversely to
the Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect; and no such investigations, actions, suits or
proceedings are threatened or, to the best knowledge of the Company and the
Guarantor, contemplated by any governmental or regulatory authority or
threatened by others.
(r) Independent Accountants. Deloitte & Touche LLP, who have
certified certain financial statements of the Company and its subsidiaries are
the independent public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants and its
interpretations and rulings thereunder.
(s) Title to Real and Personal Property. The Company and its
subsidiaries have good and marketable title in fee simple to, or have valid
rights to lease or otherwise use, all items of real and personal property that
are material to the respective businesses of the Company and its subsidiaries,
in each case free and clear of all liens, encumbrances, claims and defects and
imperfections of title except those that (i) do not materially interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries or (ii) could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(t) Title to Intellectual Property. The Company and its
subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses except where the failure to so own or possess such rights
would not, singularly or in the aggregate, have a Material Adverse Effect; and
the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement of or conflict with
any
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such rights of others which would, singularly or in the aggregate, have a
Material Adverse Effect.
(u) Investment Company Act. Neither the Company nor any of its
subsidiaries is, and after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Offering Memorandum none of them will be, an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, "Investment Company Act").
(v) Public Utility Holding Company Act. Neither the Company nor
any of its subsidiaries is a "holding company" or a "subsidiary company" of a
holding company or an "affiliate" thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(w) Taxes. The Company and its subsidiaries have paid all federal,
state, local and foreign taxes and filed all tax returns required to be paid or
filed through the date hereof; and except as otherwise disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum, there is no tax
deficiency that has been, or could reasonably be expected to be, asserted
against the Company or any of its subsidiaries or any of their respective
properties or assets, except where the failure to so file or make such payments
would not, singularly or in the aggregate, have a Material Adverse Effect.
(x) Licenses and Permits. The Company and its subsidiaries possess
all licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Preliminary Offering Memorandum and
the Offering Memorandum, except where the failure to possess or make the same
would not, individually or in the aggregate, have a Material Adverse Effect; and
except as described in the Preliminary Offering Memorandum and the Offering
Memorandum, neither the Company nor any of its subsidiaries has received notice
of any revocation or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license, certificate,
permit or authorization will not be renewed in the ordinary course.
(y) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the best
knowledge of the Company and the Guarantor, is contemplated or threatened which
could, singularly or in the aggregate, have a Material Adverse Effect.
(z) Compliance With Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any actual or
potential liability for the
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investigation or remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except in any such case for
any such failure to comply with, or failure to receive required permits,
licenses or approvals, or liability, as would not, individually or in the
aggregate, have a Material Adverse Effect.
(aa) Compliance With ERISA. Each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its affiliates has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"); no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code, has occurred with respect to any such
plan excluding transactions effected pursuant to a statutory or administrative
exemption which could reasonably be expected to have a Material Adverse Effect;
and for each such plan that is subject to the funding rules of Section 412 of
the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined
in Section 412 of the Code has been incurred, whether or not waived, which could
reasonably be expected to have a Material Adverse Effect and the fair market
value of the assets of each such plan (excluding for these purposes accrued but
unpaid contributions) exceeds the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions.
(bb) Accounting Controls. The Company and its subsidiaries maintain
systems of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (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 the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(cc) Insurance. The Company and its subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are adequate to protect the Company and
its subsidiaries and their respective businesses; and neither the Company nor
any of its subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.
(dd) No Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company and the Guarantor, any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries has (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in
10
violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(ee) Solvency. On and immediately after the Closing Date, the
Company (after giving effect to the issuance of the Securities and the other
transactions related thereto as described in the Offering Memorandum) will be
Solvent. As used in this paragraph, the term "Solvent" means, with respect to a
particular date, that on such date (i) the present fair market value (or present
fair saleable value) of the assets of the Company is not less than the total
amount required to pay the liabilities of the Company on its total existing
debts and liabilities (including contingent liabilities) as they become absolute
and matured; (ii) the Company is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and commitments as they
mature and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Securities as contemplated by this Agreement
and the Offering Memorandum, the Company is not incurring debts or liabilities
beyond its ability to pay as such debts and liabilities mature; (iv) the Company
is not engaged in any business or transaction, and does not propose to engage in
any business or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which the Company is engaged; and (v) the Company is
not a defendant in any civil action that would result in a judgment that the
Company is or would become unable to satisfy.
(ff) No Restrictions on Subsidiaries. No subsidiary of the Company
is currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary's properties or
assets to the Company or any other subsidiary of the Company.
(gg) No Broker's Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
any of them or any Initial Purchaser for a brokerage commission, finder's fee or
like payment in connection with the offering and sale of the Securities.
(hh) Rule 144A Eligibility. On the Closing Date, the Securities
will not be of the same class as securities listed on a national securities
exchange registered under Section 6 of the Exchange Act or quoted in an
automated inter-dealer quotation system; and each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its respective date, contains or
will contain all the information that, if requested by a prospective purchaser
of the Securities, would be required to be provided to such prospective
purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(ii) No Integration. Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
11
(jj) No General Solicitation or Directed Selling Efforts. None of
the Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no representation is
made) has (i) solicited offers for, or offered or sold, the Securities by means
of any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act or (ii) engaged in any
directed selling efforts within the meaning of Regulation S under the Securities
Act ("Regulation S"), and all such persons have complied with the offering
restrictions requirement of Regulation S.
(kk) Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in Section
1(b) (including Annex A hereto) and their compliance with their agreements set
forth therein, it is not necessary, in connection with the issuance and sale of
the Securities to the Initial Purchasers and the offer, resale and delivery of
the Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
(ll) No Stabilization. Neither the Company nor the Guarantor has
taken, directly or indirectly, any action designed to or that could reasonably
be expected to cause or result in any stabilization or manipulation of the price
of the Securities.
(mm) Margin Rules. Neither the issuance, sale and delivery of the
Securities nor the application of the proceeds thereof by the Company as
described in the Offering Memorandum will violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System or any other regulation of such
Board of Governors.
(nn) Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Preliminary Offering Memorandum and the Offering
Memorandum has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(oo) Statistical and Market Data. Nothing has come to the attention
of the Company that has caused the Company to believe that the statistical and
market-related data included or incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum is not based on or derived from
sources that are reliable and accurate in all material respects.
4. Further Agreements of the Company and the Guarantor. The
Company and the Guarantor jointly and severally covenant and agree with each
Initial Purchaser that:
(a) Delivery of Copies. The Company will deliver to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum and the
Offering Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.
(b) Amendments or Supplements. Before making or distributing any
amendment or supplement to the Preliminary Offering Memorandum or the Offering
Memorandum or filing with the Commission any document that will be incorporated
by reference therein, the Company will furnish to the Representative and counsel
for the Initial Purchasers a copy of the proposed
12
amendment or supplement or document to be incorporated by reference therein for
review, and will not distribute any such proposed amendment or supplement or
file any such document with the Commission to which the Representative
reasonably objects.
(c) Notice to the Representative. The Company will advise the
Representative promptly, and confirm such advice in writing, (i) of the issuance
by any governmental or regulatory authority of any order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or the initiation or threatening of any proceeding for that purpose;
(ii) of the occurrence of any event at any time prior to the completion of the
initial offering of the Securities as a result of which the Offering Memorandum
as then amended or supplemented would include 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 existing when the Offering Memorandum
is delivered to a purchaser, not misleading; and (iii) of the receipt by the
Company of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or suspending any such qualification of the Securities and, if any
such order is issued, will obtain as soon as possible the withdrawal thereof.
(d) Ongoing Compliance of the Offering Memorandum. If at any time
prior to the completion of the initial offering of the Securities (i) any event
shall occur or condition shall exist as a result of which the Offering
Memorandum as then amended or supplemented would include 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 when the
Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is
necessary to amend or supplement the Offering Memorandum to comply with law, the
Company will immediately notify the Initial Purchasers thereof and forthwith
prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers
such amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (or including such document to be incorporated by reference
therein) will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.
(e) Blue Sky Compliance. The Company will qualify the Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Representative shall reasonably request and will continue such
qualifications in effect so long as required for the offering and resale of the
Securities; provided that neither the Company nor the Guarantor shall be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.
(f) Clear Market. During the period from the date hereof through
and including the date that is 180 days after the date hereof, the Company and
the Guarantor will not, without the prior written consent of the Representative,
offer, sell, contract to sell or otherwise dispose of
13
any debt securities issued or guaranteed by the Company or the Guarantor and
having a term of more than one year, provided, that this paragraph (f) shall not
prevent the Company from entering into capitalized lease obligations in the
ordinary course of business, borrowing amounts pursuant to the Credit Facility
or issuing notes to the seller of an asset or a security.
(g) Use of Proceeds. The Company will apply the net proceeds from
the sale of the Securities as described in the Offering Memorandum under the
heading "Use of Proceeds".
(h) Supplying Information. While the Securities remain outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, the Company and the Guarantor will, during any period in which
the Company is not subject to and in compliance with Section 13 or 15(d) of the
Exchange Act, furnish to holders of the Securities and prospective purchasers of
the Securities designated by such holders, upon the request of such holders or
such prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
(i) PORTAL and DTC. The Company will assist the Initial Purchasers
in arranging for the Securities to be designated Private Offerings, Resales and
Trading through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of Securities
Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and for the
Securities to be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
(j) No Resales by the Company. Until the issuance of the Exchange
Securities, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities
that have been acquired by any of them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered under
the Securities Act.
(k) No Integration. Neither the Company nor any of its affiliates
(as defined in Rule 501(b) of Regulation D) will, directly or through any agent,
sell, offer for sale, solicit offers to buy or otherwise negotiate in respect
of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.
(l) No General Solicitation or Directed Selling Efforts. None of
the Company or any of its affiliates or any other person acting on its or their
behalf (other than the Initial Purchasers, as to which no covenant is given)
will (i) solicit offers for, or offer or sell, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will
comply with the offering restrictions requirement of Regulation S.
(m) No Stabilization. Neither the Company nor the Guarantor will
take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in any stabilization or manipulation of the price of
the Securities.
14
5. Conditions of Initial Purchasers' Obligations. The obligation
of each Initial Purchaser to purchase Securities on the Closing Date as provided
herein is subject to the performance by the Company and the Guarantor of their
respective covenants and other obligations hereunder and to the following
additional conditions:
(a) Representations and Warranties. The representations and
warranties of the Company and the Guarantor contained herein shall be true and
correct on the date hereof and on and as of the Closing Date; and the statements
of the Company, the Guarantor and their respective officers made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date.
(b) No Downgrade. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock issued or guaranteed
by the Company or the Guarantor by any "nationally recognized statistical rating
organization", as such term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act; and (ii) no such organization shall have
publicly announced that it has under surveillance or review, or has changed its
outlook with respect to, its rating of the Securities or of any other debt
securities or preferred stock issued or guaranteed by the Company or the
Guarantor (other than an announcement with positive implications of a possible
upgrading).
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, no event or condition of a type described in Section
3(d) hereof shall have occurred or shall exist, which event or condition is not
described in the Offering Memorandum (excluding any amendment or supplement
thereto or any document filed with the Commission after the date hereof and
incorporated by reference therein) and the effect of which in the judgment of
the Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement and the Offering Memorandum.
(d) Officer's Certificate. The Representative shall have received
on and as of the Closing Date a certificate of an executive officer of the
Company and the Guarantor who has specific knowledge of the Company's or the
Guarantor's financial matters and is satisfactory to the Representative (i)
confirming that such officer has carefully reviewed the Offering Memorandum and,
to the best knowledge of such officer, the representation set forth in Section
3(a) hereof is true and correct, (ii) confirming that the other representations
and warranties of the Company and the Guarantor in this Agreement are true and
correct and that the Company and the Guarantor have complied with all agreements
and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date and (iii) to the effect set forth in
paragraphs (b) and (c) above.
(e) Comfort Letters. On the date of this Agreement and on the
Closing Date, Deloitte & Touche LLP shall have furnished to the Representative,
at the request of the Company, letters, dated the respective dates of delivery
thereof and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, containing statements and
information of the type customarily included in accountants' "comfort letters"
to underwriters with respect to the financial statements and certain financial
information contained in the Preliminary Offering
15
Memorandum and the Offering Memorandum; provided that the letter delivered on
the Closing Date shall use a "cut-off" date no more than three business days
prior to the Closing Date.
(f) Opinions of Counsel for the Company. Xxxxxxx XxXxxxxxx LLP,
counsel for the Company, and Morris, Laing, Xxxxx, Xxxxx & Xxxxxxx, Chartered,
special Kansas counsel to the Company shall have furnished to the
Representative, at the request of the Company, their written opinion, dated the
Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, to the effect set forth in Annex
B hereto.
(g) Opinion of Counsel for the Initial Purchasers. The
Representative shall have received on and as of the Closing Date an opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Initial Purchasers, with respect
to such matters as the Representative may reasonably request, and such counsel
shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(h) No Legal Impediment to Issuance. No action shall have been
taken and no statute, rule, regulation or order shall have been enacted, adopted
or issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Date, prevent the issuance or sale of the
Securities or the issuance of the Guarantee; and no injunction or order of any
federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of
the Guarantee.
(i) Good Standing. The Representative shall have received on and
as of the Closing Date satisfactory evidence of the good standing of the Company
and its subsidiaries in their respective jurisdictions of organization and their
good standing in such other jurisdictions as the Representative may reasonably
request, in each case in writing or any standard form of telecommunication, from
the appropriate governmental authorities of such jurisdictions.
(j) Registration Rights Agreement. The Initial Purchasers shall
have received a counterpart of the Registration Rights Agreement that shall have
been executed and delivered by a duly authorized officer of the Company and the
Guarantor.
(k) PORTAL and DTC. The Securities shall have been approved by the
NASD for trading in the PORTAL Market and shall be eligible for clearance and
settlement through DTC.
(l) No Default or Event of Default. At the Closing Date, after
giving effect to the consummation of the transactions contemplated by the
Transaction Documents, there shall exist no default or event of default under
the Indenture or the Transaction Documentation.
(m) Transaction Documents. The Transaction Documents shall have
been duly executed and delivered prior to or concurrently with the closing of
the offering of the Securities by the Company and the Guarantor and the other
parties thereto and the Company and the Guarantor shall have satisfied, or
ensured the satisfaction of, all conditions precedent thereto.
(n) Transactions. The Transactions (excluding the closing of the
offering of the Securities) shall have been consummated prior to or concurrently
with the closing of the offering of the Securities and there shall not be any
pending or threatened legal or governmental
16
proceedings with respect to the Transactions other than as described in the
Offering Memorandum (exclusive of any amendment or supplement thereto).
(o) Additional Documents. On or prior to the Closing Date, the
Company and the Guarantor shall have furnished to the Representative such
further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
6. Indemnification and Contribution.
(a) Indemnification of the Initial Purchasers. The Company and the
Guarantor jointly and severally agree to indemnify and hold harmless each
Initial Purchaser, its affiliates, directors and officers and each person, if
any, who controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint
or several, that arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum (or any amendment or supplement
thereto) or any omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use therein; provided, that with respect to any
such untrue statement in or omission from the Preliminary Offering Memorandum,
the indemnity agreement contained in this paragraph (a) shall not inure to the
benefit of any Initial Purchaser to the extent that the sale to the person
asserting any such loss, claim, damage or liability was an initial resale by
such Initial Purchaser and any such loss, claim, damage or liability of or with
respect to such Initial Purchaser results from the fact that both (i) a copy of
the Offering Memorandum (excluding any documents incorporated by reference
therein) was not sent or given to such person at or prior to the written
confirmation of the sale of such Securities to such person and (ii) the untrue
statement in or omission from such Preliminary Offering Memorandum was corrected
in the Offering Memorandum unless, in either case, such failure to deliver the
Offering Memorandum was a result of non-compliance by the Company with the
provisions of Section 4 hereof.
(b) Indemnification of the Company. Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, the
Guarantor and each person, if any, who controls the Company or the Guarantor
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information relating to such Initial Purchaser
17
furnished to the Company in writing by such Initial Purchaser through the
Representative expressly for use in the Preliminary Offering Memorandum and the
Offering Memorandum (or any amendment or supplement thereto), it being
understood and agreed that the only such information consists of the following:
the third paragraph, the fifth and sixth sentences of the eighth paragraph, and
the tenth paragraph under the heading "Plan of distribution."
(c) Notice and Procedures. If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 6 except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under this Section 6. If any such
proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others entitled to indemnification
pursuant to this Section 6 that the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for any Initial Purchaser, its affiliates, directors and officers
and any control persons of such Initial Purchaser shall be designated in writing
by X.X. Xxxxxx Securities Inc. and any such separate firm for the Company, the
Guarantor and any control persons of the Company and the Guarantor shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for reasonable fees and expenses of counsel as contemplated
by this paragraph, the Indemnifying Person shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii)
18
the Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (x) includes an unconditional release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in
paragraphs (a) and (b) above is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Guarantor on the one hand and
the Initial Purchasers on the other from the offering of the Securities or (ii)
if the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and the
Guarantor on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Guarantor on the one hand and
the Initial Purchasers on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions
received by the Initial Purchasers in connection therewith, as provided in this
Agreement, bear to the aggregate offering price of the Securities. The relative
fault of the Company and the Guarantor on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Guarantor or by the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company, the Guarantor and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 6 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 that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 6, in no event shall an Initial Purchaser be required to contribute any
amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No
19
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 6 are several in proportion
to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any Indemnified Person at law or in equity.
7. Termination. This Agreement may be terminated in the absolute
discretion of the Representative, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on the New
York Stock Exchange or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company, Holdings or the Guarantor shall
have been suspended on any exchange or in any over-the-counter market; (iii) a
general moratorium on commercial banking activities shall have been declared by
federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, either within or outside the United States, that, in the
judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Securities on the terms and in the manner contemplated by this Agreement and
the Offering Memorandum.
8. Defaulting Initial Purchaser. (a) If, on the Closing Date, any
Initial Purchaser defaults on its obligation to purchase the Securities that it
has agreed to purchase hereunder, the non-defaulting Initial Purchasers may in
their discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement. If, within
36 hours after any such default by any Initial Purchaser, the non-defaulting
Initial Purchasers do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of 36 hours within which to
procure other persons satisfactory to the non-defaulting Initial Purchasers to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Initial Purchaser, either the
non-defaulting Initial Purchasers or the Company may postpone the Closing Date
for up to five full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be
necessary in the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Offering Memorandum that effects any such changes. As used in this Agreement,
the term "Initial Purchaser" includes, for all purposes of this Agreement unless
the context otherwise requires, any person not listed in Schedule 1 hereto that,
pursuant to this Section 8, purchases Securities that a defaulting Initial
Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require each
non-defaulting Initial
20
Purchaser to purchase the principal amount of Securities that such Initial
Purchaser agreed to purchase hereunder plus such Initial Purchaser's pro rata
share (based on the principal amount of Securities that such Initial Purchaser
agreed to purchase hereunder) of the Securities of such defaulting Initial
Purchaser or Initial Purchasers for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph (a)
above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers. Any termination of this
Agreement pursuant to this Section 8 shall be without liability on the part of
the Company or the Guarantor, except that the Company and the Guarantor will
continue to be liable for the payment of expenses as set forth in Section 9
hereof and except that the provisions of Section 6 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company, the Guarantor or any
non-defaulting Initial Purchaser for damages caused by its default.
9. Payment of Expenses. (a) Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company and the Guarantor jointly and severally agree to pay or cause to be
paid all costs and expenses incident to the performance of their respective
obligations hereunder, including without limitation, (i) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities
and any taxes payable in that connection; (ii) the costs incident to the
preparation and printing of the Preliminary Offering Memorandum and the Offering
Memorandum (including any amendment or supplement thereto) and the distribution
thereof; (iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Company's and the Guarantor's
counsel and independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Representative may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Initial Purchasers up to $5,000 in the aggregate);
(vi) any fees charged by rating agencies for rating the Securities; (vii) the
fees and expenses of the Trustee and any paying agent (including related fees
and expenses of any counsel to such parties); (viii) all expenses and
application fees incurred in connection with the application for the inclusion
of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; and (ix) all expenses incurred by the Company in
connection with any "road show" presentation to potential investors.
(b) If (i) this Agreement is terminated pursuant to Section 7,
(ii) the Company for any reason fails to tender the Securities for delivery to
the Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company and the
Guarantor jointly and severally agrees to reimburse the Initial Purchasers for
all out-of-pocket costs and expenses (including the fees and expenses of their
counsel)
21
reasonably incurred by the Initial Purchasers in connection with this Agreement
and the offering contemplated hereby.
10. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and any controlling persons referred to herein, and the
affiliates, officers and directors of each Initial Purchaser referred to in
Section 6 hereof. Nothing in this Agreement is intended or shall be construed to
give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. No purchaser of
Securities from any Initial Purchaser shall be deemed to be a successor merely
by reason of such purchase.
11. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, the Guarantor and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Company, the Guarantor or the Initial Purchasers pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination of this Agreement or any investigation made by or on behalf
of the Company, the Guarantor or the Initial Purchasers.
12. Certain Defined Terms. For purposes of this Agreement, (a)
except where otherwise expressly provided, the term "affiliate" has the meaning
set forth in Rule 405 under the Securities Act; (b) the term "business day"
means any day other than a day on which banks are permitted or required to be
closed in New York City; (c) the term "Exchange Act" means the Securities
Exchange Act of 1934, as amended; and (d) the term "subsidiary" has the meaning
set forth in Rule 405 under the Securities Act.
13. Miscellaneous. (a) Authority of the Representative. Any action
by the Initial Purchasers hereunder may be taken by X.X. Xxxxxx Securities Inc.
on behalf of the Initial Purchasers, and any such action taken by X.X. Xxxxxx
Securities Inc. shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted and confirmed by any standard form of telecommunication. Notices to
the Initial Purchasers shall be given to the Representative c/o X.X. Xxxxxx
Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (212)
000-0000); Attention: Xxxxx Xxxxxx. Notices to the Company and the Guarantor
shall be given to them at 0000 X. 00xx Xxxxxx, Xxxxxxx, XX 00000, (fax: (402)
000-0000); Attention: Chief Financial Officer.
(c) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(d) Counterparts. This Agreement may be signed in counterparts
(which may include counterparts delivered by any standard form of
telecommunication), each of which shall be an original and all of which together
shall constitute one and the same instrument.
22
(e) Amendments or Waivers. No amendment or waiver of any provision
of this Agreement, nor any consent or approval to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
parties hereto.
(f) Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
23
If the foregoing is in accordance with your understanding, please
indicate your acceptance of this Agreement by signing in the space provided
below.
Very truly yours,
NEBRASKA BOOK COMPANY, INC.
By ________________________
Title:
SPECIALTY BOOKS, INC.
By ________________________
Title:
Accepted: February 27, 2004
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
By ___________________________
Authorized Signatory
24
Schedule 1
Initial Purchaser Principal Amount
----------------- ----------------
X.X. Xxxxxx Securities Inc. $ 96,250,000
Citigroup Global Markets Inc. $ 52,500,000
Fleet Securities, Inc. $ 26,250,000
-------------
Total $ 175,000,000
25
ANNEX A
Restrictions on Offers and Sales Outside the United States
In connection with offers and sales of Securities outside the United
States:
(a) Each Initial Purchaser acknowledges that the Securities have
not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the Securities Act.
(b) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) Such Initial Purchaser has offered and sold the
Securities, and will offer and sell the Securities, (A) as part of
their distribution at any time and (B) otherwise until 40 days after
the later of the commencement of the offering of the Securities and the
Closing Date, only in accordance with Regulation S under the Securities
Act ("Regulation S") or Rule 144A or any other available exemption from
registration under the Securities Act.
(ii) None of such Initial Purchaser or any of its
affiliates or any other person acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to
the Securities, and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S.
(iii) At or prior to the confirmation of sale of any
Securities sold in reliance on Regulation S, such Initial Purchaser
will have sent to each distributor, dealer or other person receiving a
selling concession, fee or other remuneration that purchase Securities
from it during the distribution compliance period 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 or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule
144A or any other available exemption from registration under
the Securities Act. Terms used above have the meanings given
to them by Regulation S."
(iv) Such Initial Purchaser has not and will not enter
into any contractual arrangement with any distributor with respect to
the distribution of the Securities, except with its affiliates or with
the prior written consent of the Company.
Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in
this Agreement have the meanings given to them by Regulation S.
26
(c) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) it has not offered or sold and, prior to the date six
months after the Closing Date, will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and
will not result in an offer to the public in the United Kingdom within
the meaning of the United Kingdom Public Offers of Securities
Regulations 1995 (as amended);
(ii) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the United Kingdom Financial Services and Markets Act
2000 (the "FSMA")) received by it in connection with the issue or sale
of any Securities in circumstances in which Section 21(1) of the FSMA
does not apply to the Company or the Guarantor; and
(iii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom.
(d) Each Initial Purchaser acknowledges that no action has been or
will be taken by the Company that would permit a public offering of the
Securities, or possession or distribution of the Preliminary Offering
Memorandum, the Offering Memorandum or any other offering or publicity material
relating to the Securities, in any country or jurisdiction where action for that
purpose is required.
27
Annex B
[Form of Opinion of Xxxxxxx XxXxxxxxx LLP, counsel to the Company, and
Morris, Laing, Xxxxx, Xxxxx & Xxxxxxx, Chartered, special Kansas counsel
to the Company]
(a) The Company and the Guarantor have been duly organized and are
validly existing and in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a Material Adverse Effect.
(b) The Company and Holdings have an authorized capitalization as set
forth in the Offering Memorandum under the heading "Capitalization"; and all the
outstanding shares of capital stock or other equity interests of each subsidiary
of the Company have been duly and validly authorized and issued, are fully paid
and non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party; and the capital stock of the
Company and Holdings will conform in all material respects to the description
thereof set forth in the Offering Memorandum.
(c) The Company and the Guarantor have full right, power and authority
to execute and deliver each of the Transaction Documents to which each is a
party and to perform their respective obligations thereunder; and all action
required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.
(d) The Indenture has been duly authorized, executed and delivered by
the Company and the Guarantor and, assuming due execution and delivery thereof
by the Trustee, constitutes a valid and legally binding agreement of the Company
and the Guarantor enforceable against the Company and the Guarantor in
accordance with its terms, subject to the Enforceability Exceptions; and the
Indenture conforms in all material respects with the requirements of the Trust
Indenture Act and the rules and regulations of the Commission applicable to an
indenture that is qualified thereunder.
(e) The Securities have been duly authorized, executed and delivered by
the Company and, when duly authenticated as provided in the Indenture and paid
for as provided in this Agreement, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, subject
to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture; and the Guarantee has been duly authorized by the Guarantor and, when
the Securities have been duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided in this Agreement, will be
valid and legally binding obligations of the Guarantor, enforceable against the
Guarantor in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the Indenture.
28
(f) The Exchange Securities (including the related guarantee) have been
duly authorized by the Company and the Guarantor and, when duly executed,
authenticated, issued and delivered as contemplated by the Registration Rights
Agreement, will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Company, as issuer, and the
Guarantor, as guarantor, enforceable against the Company and the Guarantor in
accordance with their terms, subject to the Enforceability Exceptions, and will
be entitled to the benefits of the Indenture.
(g) This Agreement has been duly authorized, executed and delivered by
the Company and the Guarantor; and the Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and the Guarantor and,
when duly executed and delivered by the other parties thereto, will constitute a
valid and legally binding agreement of the Company and the Guarantor enforceable
against the Company and the Guarantor in accordance with its terms, subject to
the Enforceability Exceptions, and except that rights to indemnity and
contribution thereunder may be limited by applicable law and public policy.
(h) The Company and the Guarantor has the requisite corporate power and
authority to execute and deliver each of the Transaction Documents to which they
are a party and to perform their respective obligations thereunder; the
Transaction Documents have been duly authorized, executed and delivered by the
Company and the Guarantor party thereto.
(i) Each Transaction Document conforms in all material respects to the
description thereof contained in the Preliminary Offering Memorandum and the
Offering Memorandum.
(j) The execution, delivery and performance by the Company and the
Guarantor of each of the Transaction Documents to which each is a party, the
issuance and sale of the Securities (including the Guarantee) and compliance by
the Company and the Guarantor with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default 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, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its
subsidiaries or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of clauses (i) and (iii) above, for
any such conflict, breach or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
(k) No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company
and the Guarantor of each of the Transaction Documents to which each is a party,
the issuance and sale of the Securities (including the Guarantee) and compliance
by the Company and the Guarantor with the terms thereof and the consummation of
the transactions contemplated by the Transaction Documents, except for such
consents, approvals,
29
authorizations, orders and registrations or qualifications as may be required
(i) under applicable state securities laws in connection with the purchase and
resale of the Securities by the Initial Purchasers, (ii) to release existing
liens in connection with the refinancing of the Existing Credit Agreement, and
(iii) with respect to the Exchange Securities (including the related guarantee)
under the Securities Act and applicable state securities laws as contemplated by
the Registration Rights Agreement.
(l) To the best knowledge of such counsel, except as described in the
Offering Memorandum, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
any of its subsidiaries is or may be a party or to which any property of the
Company or any of its subsidiaries is or may be the subject that, individually
or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material Adverse Effect;
and no such investigations, actions, suits or proceedings are threatened or, to
the best knowledge of such counsel, contemplated by any governmental or
regulatory authority or threatened by others.
(m)The descriptions in the Offering Memorandum of statutes, legal,
governmental and regulatory proceedings and contracts and other documents are
accurate in all material respects; and the statements in the Offering Memorandum
under the heading "Certain Federal Income Tax Considerations", to the extent
that they constitute summaries of matters of law or regulation or legal
conclusions, fairly summarize the matters described therein in all material
respects.
(n) Neither the Company nor any of its subsidiaries is, and after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Offering Memorandum none of them will
be, an "investment company" within the meaning of the Investment Company Act.
(o) Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in the Offering
Memorandum will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
(p) Assuming the accuracy of the representations, warranties and
agreements of the Company, the Guarantor and the Initial Purchasers contained in
this Agreement, it is not necessary, in connection with the issuance and sale of
the Securities to the Initial Purchasers and the offer, resale and delivery of
the Securities by the Initial Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.
Such counsel shall also state that they have participated in
conferences with representatives of the Company and with representatives of its
independent accountants and counsel at which conferences the contents of the
Offering Memorandum and related matters were discussed and, although such
counsel assume no responsibility for the accuracy, completeness or fairness of
Offering Memorandum (except as expressly provided above), nothing has come to
the attention of such counsel to cause such counsel to believe that the Offering
Memorandum, as of its date and the Closing Date, contained or contains any
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the
30
statements therein, in the light of the circumstances under which they were
made, not misleading (other than, in each case, the financial statements and
other financial information contained or incorporated by reference therein, as
to which such counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and the Guarantor and
public officials that are furnished to the Initial Purchasers.
The opinions of Xxxxxxx XxXxxxxxx LLP and Morris, Laing, Xxxxx, Xxxxx &
Xxxxxxx, Chartered described above shall be rendered to the Initial Purchasers
at the request of the Company and shall so state therein.
31
Exhibit A
[Form of Registration Rights Agreement]
32
