PLY GEM INDUSTRIES, INC. PURCHASE AGREEMENT
EXECUTION VERSION
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$700,000,000
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PLY
GEM INDUSTRIES, INC.
11.75%
Senior Secured Notes due 2013
June 2,
2008
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CREDIT
SUISSE SECURITIES (USA) LLC
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UBS
Securities LLC
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As
Representatives of the Several Initial
Purchasers
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c/o
Credit Suisse Securities (USA) LLC (“Credit
Suisse”)
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Eleven
Xxxxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000-0000
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Dear
Sirs:
1. Introductory. Ply
Gem Industries, Inc., a Delaware corporation (the “Issuer”) proposes, subject to
the terms and conditions stated herein, to issue and sell to the several
purchasers named in Schedule A hereto
(the “Initial
Purchasers”) U.S. $700,000,000 principal amount of its 11.75% Senior
Secured Notes due 2013 (the “Offered
Securities”).
The Offered Securities will be offered
and sold to the Initial Purchasers pursuant to an exemption from the
registration requirements of the United States Securities Act of 1933, as
amended (the “Securities
Act”). The Offered Securities will be issued under an
indenture to be dated as of June 9, 2008 (the “Closing Date”) (the “Indenture”), among the Issuer,
the Subsidiary Guarantors (as hereinafter defined), Ply Gem Holdings, Inc.
(“Holdings”) and US Bank
Trust National Association, as trustee (the “Trustee”).
The
Offered Securities will be unconditionally guaranteed (the “Guarantees”) on a senior
secured basis by Holdings and the Issuer’s subsidiaries listed as such on Schedule B
hereto (the “Subsidiary
Guarantors” and, together with Holdings, the “Guarantors”). The
Issuer, the Guarantors, the Trustee and the collateral agent (in such capacity,
the “Notes Collateral
Agent”), will enter into the Collateral Agreement (the “Collateral
Agreement”). On the Closing Date, the Issuer will also enter
into a credit agreement (the “Credit Agreement”) among the
Issuer, Holdings, the subsidiaries of the Issuer identified therein as
guarantors, the lenders from time to time party thereto and Credit Suisse as
administrative agent, that will provide for a new asset-based senior secured
revolving credit facility in an aggregate principal amount of up to
U.S. $150,000,000 (the “New Credit
Facility”). The Offered Securities and the Guarantees will be
secured (i) on a first-priority lien basis (subject to certain exceptions and
permitted liens) on substantially all the tangible and intangible assets of the
Issuer and the Guarantors (other than accounts receivable, inventory, cash,
deposit accounts,
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securities
accounts, chattel paper and proceeds and products of the foregoing and certain
assets such as contract rights, instruments and documents related thereto in
each case held by the Issuer and the Guarantors (the “Bank Collateral”)), including
all of the capital stock of the Issuer and any material subsidiary held by the
Issuer or any guarantor (which, in the case of any foreign subsidiary, will be
limited to 100% of the non-voting stock (if any) and 66% of the voting stock of
such foreign subsidiary) (the “Notes Collateral” and,
together with the Bank Collateral, the “Collateral”) and (ii) on a
second-priority lien basis by the Bank Collateral. The obligations
under the Credit Agreement will be secured by (i) a first-priority lien on
and security interest in the Bank Collateral and (ii) a second-priority
lien on and security interest in the Notes Collateral. The Collateral
will be more fully described in the Intercreditor Agreement to be dated as of
the Closing Date, among the Issuer, the Guarantors, the Bank Collateral Agent,
the Trustee and the Notes Collateral Agent (the “Intercreditor Agreement”), the
Credit Agreement and the Collateral Agreement (the Collateral Agreement together
with the Credit Agreement, the Intercreditor Agreement, the Mortgages (as
defined below) to the extent executed and delivered pursuant to the Indenture
and the Security Documents (as defined below) on the Closing Date, the
Copyright, Patent, and Trademark Agreements (as defined in the Collateral
Agreement) and each of the other documents executed and delivered securing the
whole or any part of the obligations thereunder or confirming the existence of
the security interests, the “Security Documents”), each to
be delivered to the Notes Collateral Agent, granting a security interest in the
Collateral subject only to the liens or encumbrances permitted under the
Indenture for the benefit of the Trustee, the Notes Collateral Agent and each
holder of the Offered Securities and the successors and assigns of the foregoing
(collectively, the “Secured
Parties”). For purposes of this Agreement, the term “Mortgage” means a mortgage,
deed of trust, assignment of leases and rents, leasehold mortgage, land charge
or other security document granting a lien or encumbrance on any mortgaged
property to secure the Obligations (as defined in the Collateral Agreement) of
the Issuer and the Guarantors, as applicable.
The
Initial Purchasers have advised the Issuer that the Initial Purchasers intend,
as soon as they deem practicable after this Purchase Agreement (this “Agreement”) has been executed
and delivered, to resell (the “Exempt Resales”) the
Securities in private sales exempt from registration under the Act on the terms
set forth in the Preliminary Offering Circular (as defined below) and Final
Offering Circular (as defined below), as amended or supplemented, solely to
(i) persons whom the Initial Purchasers reasonably believe to be “qualified
institutional buyers” (“QIBs”), as defined in
Rule 144A under the Act (“Rule 144A”), in
accordance with Rule 144A and (ii) other eligible purchasers pursuant to
offers and sales to non-U.S. persons that occur outside the United States within
the meaning of Regulation S under the Act (“Regulation S”) in
accordance with Regulation S (the persons specified in clauses (i) and
(ii), the “Eligible
Purchasers”).
Holders
(including subsequent transferees) of the Offered Securities will have the
registration rights set forth in the registration rights agreement (the “Registration Rights
Agreement”), among the Issuer, the Guarantors and the Initial Purchasers,
to be dated the Closing Date, substantially in the form attached hereto as Exhibit E, for so
long as such Offered Securities constitute “Transfer Restricted
Securities” (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement,
the
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Issuer
and the Guarantors will agree to (i) file with the Securities and Exchange
Commission (the “Commission”) under the
circumstances set forth therein, (a) a registration statement under the
Securities Act (the “Exchange
Offer Registration Statement”) relating to the Offered Securities in a
like aggregate principal amount as the Issuer issued under the Indenture,
identical in all material respects to the Offered Securities and registered
under the Securities Act (the “Exchange Securities”), to be
offered in exchange for the Offered Securities (such offer to exchange being
referred to as the “Exchange
Offer”) and (b) if necessary under the Registration Rights
Agreement, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the “Shelf
Registration Statement” and, together with the Exchange Offer
Registration Statement, the “Registration Statements”)
relating to the resale by certain holders of the Offered Securities (ii) to use
its commercially reasonable efforts to cause such Registration Statements to be
declared effective and cause such Registration Statements to remain effective
and usable for the periods specified in the Registration Rights Agreement and
(iii) to use its commercially reasonable efforts to consummate the Exchange
Offer. The Offered Securities and the Exchange Securities are
referred to collectively as the “Securities.”
This
Agreement, the Guarantees, the Offered Securities, the Indenture and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the “Operative
Documents.” The issuance and sale of the Offered Securities,
the issuance of the Guarantees, the initial borrowings under the Credit
Agreement and the use of proceeds therefrom described in the General Disclosure
Package (as defined herein) and Final Offering Circular are collectively
referred to as the “Transactions.”
The
Issuer and each of the Guarantors hereby agree with the several Purchasers as
follows:
2. Representations and
Warranties of the Issuer, Holdings and the Subsidiary
Guarantors. The Issuer and each of the Guarantors jointly and
severally represent and warrant to, and agree with, the several Purchasers
that:
(a) A
preliminary offering circular (the “Preliminary Offering
Circular”) relating to the Offered Securities to be offered by the
Purchasers and a final offering circular (the “Final Offering Circular”)
disclosing the offering price and other final terms of the Offered Securities
and is dated as of the date of this Agreement (even if finalized and issued
subsequent to the date of this Agreement) has been or will be prepared by the
Issuer. “General
Disclosure Package” means the Preliminary Offering Circular, together
with any Issuer Free Writing Communication (as hereinafter defined) existing at
the Applicable Time (as hereinafter defined) and the other information, if any,
distributed at or prior to the Applicable Time to prospective investors of the
Offered Securities, as evidenced by its being specified in Schedule C to this
Agreement (including the term sheet listing the final terms of the Offered
Securities and their offering, included in Schedule C to
this
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Agreement,
which is referred to as the “Terms
Communication”). “Applicable Time” means
3:30 p.m. (New York City time) on the date of this Agreement. As
of the date of this Agreement and as of the Closing Date, the Final Offering
Circular does not and will not include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. At the Applicable Time and as of the Closing Date neither
(i) the General Disclosure Package, nor (ii) any individual Supplemental
Marketing Material (as hereinafter defined), when considered together with the
General Disclosure Package, included or will include any untrue statement of a
material fact or omitted or will omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding two sentences do
not apply to statements in or omissions from the Preliminary or Final Offering
Circular, the General Disclosure Package or any Supplemental Marketing Material
based upon written information furnished to the Issuer by any Purchaser through
Credit Suisse specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section 8(b)
hereof.
Subject
to the foregoing paragraph, any references herein to the terms “amend,” “amendment” or “supplement” with respect to
the Preliminary or Final Offering Circular shall be deemed to refer to and
include any document filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or
otherwise filed with the Commission, subsequent to the date hereof that is
incorporated by reference therein; and all references in this Agreement to
financial statements and schedules and other information which are “contained,” “included,” “stated,” “set forth” or “described” in the Preliminary
or Final Offering Circular (or other references of like import) shall be deemed
to mean and include all such financial statements and schedules and other
information which are included in any document filed under the Act or the
Exchange Act, as applicable, and incorporated by reference in the Preliminary or
Final Offering Circular.
“Free Writing Communication”
means a written communication (as such term is defined in Rule 405 under
the Securities Act) that constitutes an offer to sell or a solicitation of an
offer to buy the Offered Securities and is made by means other than the
Preliminary Offering Circular or the Final Offering Circular. “Issuer Free Writing
Communication” means a Free Writing Communication prepared by or on
behalf of the Issuer, used or referred to by the
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Issuer or
containing a description of the final terms of the Offered Securities or of
their offering, in the form retained in the Issuer’s records. “Supplemental Marketing
Material” means any Issuer Free Writing Communication other than any
Issuer Free Writing Communication specified in Schedule C to this
Agreement, and which is specified in Schedule D to
this Agreement.
(b) As of
March 29, 2008, the Issuer had the capitalization as set forth under the heading
“Capitalization” under the column “Actual” in the Preliminary Offering
Circular. On the Closing Date, all of the issued and outstanding
equity interests of the Issuer will have been duly authorized and validly
issued, will be fully paid and nonassessable and not have been issued in
violation of any preemptive or similar right and will be owned by Holdings free
and clear of all liens (other than transfer restrictions imposed by the Act, the
securities or Blue Sky laws of certain jurisdictions and security interests
granted pursuant to the Security Documents). Attached as Schedule E is a
true and complete list of each entity in which the Issuer has a direct or
indirect majority equity or voting interest (each a “Subsidiary” and, together, the
“Subsidiaries”), their
jurisdictions of formation or organization, names of their equityholder(s) and
percentage held by each equityholder. All of the issued and
outstanding equity interests of each Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable, were not issued in violation
of any preemptive or similar right and, except as set forth in the General
Disclosure Package, are owned, directly or indirectly through Subsidiaries, by
the Issuer free and clear of all liens (other than transfer restrictions imposed
by the Act, the securities or Blue Sky laws of certain jurisdictions and
security interests granted pursuant to the Security
Documents). Except as set forth in the General Disclosure Package,
there are no outstanding options, warrants or other rights to acquire or
purchase, or instruments convertible into or exchangeable for, any equity
interests of the Issuer or any of the Subsidiaries. No holder of any
securities of the Issuer or any of the Subsidiaries is entitled to have such
securities (other than the Securities) registered under any registration
statement contemplated by the Registration Rights Agreement.
(c) Each of
the Issuer and each Guarantor (i) is a corporation, limited liability
company, partnership or other entity duly organized and validly existing under
the laws of the jurisdiction of its organization; (ii) has all requisite
corporate or other power and authority necessary to own its property and carry
on its business as now being conducted and (iii) is qualified to do
business and is in good standing in all jurisdictions in which the nature of the
business conducted by it or its ownership of property
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makes
such qualification necessary, except where the failure to be so qualified and be
in good standing, individually or in the aggregate, could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect. A “Material
Adverse Effect” means (i) a material adverse effect on the business,
condition (financial or otherwise), results of operations, assets or liabilities
of the Issuer and the Subsidiaries, taken as a whole or (ii) a material
adverse effect on the ability to consummate the Transactions on a timely
basis.
(d) The
Issuer and each of the Guarantors have all requisite corporate or other power
and authority to execute, deliver and perform all of their obligations under the
Operative Documents to which each is a party and to consummate the transactions
contemplated thereby, and, without limitation, the Issuer has all requisite
corporate power and authority to issue, sell and deliver and perform its
obligations under the Notes.
(e) The
Indenture has been duly and validly authorized by the Issuer and the Guarantors
and, when duly executed and delivered by the Issuer and the Guarantors (assuming
the due authorization, execution and delivery thereof by the Trustee), will be a
legally binding and valid obligation of each such Issuer, enforceable against it
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity and the discretion of the court
before which any proceeding therefor may be brought (the “Bankruptcy
Exceptions”). The Indenture, when executed and delivered, will
conform in all material respects to the description thereof in the General
Disclosure Package and the Final Offering Circular.
(f) The
Offered Securities have been duly and validly authorized for issuance and sale
to the Initial Purchasers by the Issuer. When the Offered Securities
are issued by the Issuer, authenticated by the Trustee and delivered by the
Issuer against payment therefor by the Initial Purchasers in accordance with the
terms of this Agreement and the Indenture, the Offered Securities will be
legally binding and valid obligations of the Issuer, entitled to the benefits of
the Indenture and enforceable against the Issuer in accordance with their terms,
except as the enforcement thereof may be limited by the Bankruptcy
Exceptions. The Offered Securities, when issued, authenticated and
delivered, will conform in all material respects to the description thereof in
the General Disclosure Package and the Final Offering Circular. The
Exchange Securities have been, or on or before the Closing Date will be, duly
and validly
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authorized
for issuance by the Issuer, and when issued by the Issuer, authenticated by the
Trustee and delivered by the Issuer in accordance with the terms of the Exchange
Offer and the Indenture, the Exchange Securities will be legally binding and
valid obligations of the Issuer, entitled to the benefits of the Indenture and
enforceable against the Issuer in accordance with their terms, except as the
enforcement thereof may be limited by the Bankruptcy Exceptions.
(g) The
Guarantees have been duly and validly authorized by each of the Guarantors and,
when the Offered Securities are issued by the Issuer, authenticated by the
Trustee and delivered by the Issuer against payment by the Initial Purchasers in
accordance with the terms of this Agreement and the Indenture, will be legally
binding and valid obligations of the Guarantors, enforceable against each of
them in accordance with their terms, except that enforceability thereof may be
limited by the Bankruptcy Exceptions and will conform in all material respects
to the description thereof in the General Disclosure Package and the Final
Offering Circular. The guarantees of the Exchange Securities have
been, on or before the Closing Date will be, duly and validly authorized by each
of the Guarantors and, when the Exchange Securities are issued by the Issuer,
authenticated by the Trustee and delivered in accordance with the terms of the
Exchange Offer and the Indenture, will be legally binding and valid obligations
of the Guarantors, enforceable against each of them in accordance with their
terms, except that enforceability thereof may be limited by the Bankruptcy
Exceptions.
(h) Except as
disclosed in the General Disclosure Package, there are no contracts, agreements
or understandings between the Issuer or Holdings and any person granting such
person the right to require Holdings or the Issuer to file a registration
statement under the Securities Act with respect to any securities of the Issuer
or to require the Issuer to include such securities with the Securities
registered pursuant to any Registration Statement.
(i) On the
Closing Date, the Indenture, (including the Supplemental Indenture, to the
extent applicable), will conform in all material respects to the requirements of
the United States Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder.
(j) Except as
described in the section entitled “Plan of Distribution” in the General
Disclosure Package, there are no contracts, agreements or understandings between
the Issuer, Holdings or any other person other than the Initial Purchasers
that
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would
give rise to a valid claim against the Issuer, any Guarantor or any of the
Initial Purchasers for a brokerage commission, finder’s fee or like payment in
connection with the issuance, purchase and sale of the Securities.
(k) Except as
set forth in the General Disclosure Package and assuming the accuracy of, and
compliance with, the representations, warranties and agreements of the
Purchasers under Section 4 of this Agreement, no consent, approval,
authorization or order of, or filing with, registration, qualification, license
or permit of or with, any Governmental Authority (collectively, a “Consent”) is required for the
consummation of the transactions contemplated by this Agreement and the
Registration Rights Agreement in connection with the issuance and sale of the
Offered Securities by the Issuer or the issuance of the Guarantees by the
Guarantors except (i) for the order (and filings to obtain such order) of the
Commission declaring the Exchange Offer Registration Statement or the Shelf
Registration Statement effective, (ii) as may be required under the securities
or Blue Sky laws of the various states and foreign jurisdictions (iii) such
Consents as have been or will be obtained or made on or prior to the Closing
Date, (iv) such filings and recordings with Governmental Authorities as may be
required to perfect liens under the Security Documents, and (v) where the
failure to obtain such Consents could not reasonably be expected to have a
Material Adverse Effect.
(l) Except as
set forth in the General Disclosure Package, and assuming the accuracy of, and
the Initial Purchasers’ compliance with, the representations, warranties and
agreements of the Initial Purchasers set forth in Section 4 of this Agreement,
and the compliance by the holders of the Securities with the offering and
transfer restrictions set forth in the General Disclosure Package, the
execution, delivery and performance of the Operative Documents and consummation
of the Transactions does not and will not (i) violate the charter, bylaws
or other constitutive documents of the Issuer or any Subsidiary of the Issuer or
the Guarantors, (ii) constitute a breach of or a default under (or an event
that with notice or the lapse of time, or both, would constitute a default), or
require consent under, or result in a Repayment Event (as defined below), other
than or a Repayment Event that will be satisfied at the Closing Date as
contemplated by the General Disclosure Package, or the creation or imposition of
a lien, charge or encumbrance on any property or assets of the Issuer or any
Subsidiary (other than as created pursuant to the Indenture and the Security
Documents) under any of the Agreements and Instruments (as defined below) or
(iii) violate any law, statute, rule or regulation, including, without
limitation, Regulation T, U or X of the Board of Governors of
the
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Federal
Reserve System or any judgment, order or decree of any Governmental Authority,
except for such violations, breaches, defaults, Repayment Events or liens that,
singly or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 4 of this Agreement no
Consent is required to be obtained or made by the Issuer or any Subsidiary for
the execution, delivery and performance by the Issuer or any Subsidiary of the
Operative Documents and the consummation of the Transactions, except
(i) such Consents as have been or will be obtained or made on or prior to
the Closing Date, (ii) registration of the Exchange Offer or resale of the
Notes under the Act pursuant to the Registration Rights Agreement, and
qualification of the Indenture under the Trust Indenture Act, in connection with
the issuance of the Exchange Securities, (iii) such filings and recordings
with Governmental Authorities as may be required to perfect liens under the
Security Documents and (iv) where the failure to obtain such consents,
approvals, authorizations or orders, filings, registration, qualifications,
licenses or permits could not reasonably be expected to have a Material Adverse
Effect. No consents or waivers from any other person or entity are
required for the execution, delivery and performance of the Operative Documents
and the consummation of the Transactions, (i) other than such consents and
waivers as have been obtained or will be obtained on or prior to the Closing
Date and will be in full force and effect and (ii) except where the failure to
obtain such consents or waivers could not reasonably be expected to have a
Material Adverse Effect. As used herein, a “Repayment Event” means any
event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the
right to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Issuer or any Subsidiary.
(m) This
Agreement has been duly authorized, executed and delivered by the Issuer and the
Guarantors.
(n) The
Issuer, Holdings and the Subsidiaries have good and marketable title to all
items of owned real property and valid title to all personal property owned by
each of them, in each case free and clear of any pledge, lien, encumbrance,
security interest or other defect or claim of any third party, except
(i) such as do not materially interfere with the use made or proposed to be
made of such property by the Issuer, Holdings or such Subsidiary, (ii) as
described in the General Disclosure Package, (iii) as created pursuant to
the Security Documents or (iv) liens permitted by the Indenture and the
Security Documents. Any real property, personal
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property
and buildings held under lease by the Issuer, Holdings or any such Subsidiary
are held under valid, subsisting and enforceable leases, with such exceptions as
do not materially interfere with the use made or proposed to be made of such
property and buildings by the Issuer or such Subsidiary.
(o) The
Issuer, Holdings and the Subsidiaries have (i) all licenses, certificates,
permits, authorizations, approvals, franchises and other rights from, and have
made all declarations and filings with, all applicable Governmental Authorities
and all self-regulatory authorities (each, an “Authorization”) necessary to
engage in the business conducted by them in the manner described in the General
Disclosure Package, except where the failure to hold such Authorizations could
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect, and (i) the Issuer, Holdings and the Subsidiaries have not
received written notice from any Governmental Authority or self-regulatory
authority threatening to limit, suspend or revoke any such Authorization, except
where such limitation, suspension or revocation could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect. All such Authorizations are valid and in full force and
effect, and the Issuer, Holdings and the Subsidiaries are in compliance in all
material respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the authorities having jurisdiction with
respect to such Authorizations, except for any invalidity, failure to be in full
force and effect or noncompliance with any Authorization that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect
(p) Except as
could not reasonably be expected to have a Material Adverse Effect, no labor
disturbance by the employees of the Issuer, Holdings or any Subsidiary exists
or, to the knowledge of the Issuer or the Guarantors, is imminent.
(q) The
Issuer, Holdings and each Subsidiary owns, possesses or has the right to employ
all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names (collectively, the “Intellectual Property Rights”)
necessary to conduct the businesses operated by it as described in the General
Disclosure Package, except where the failure to own, possess or have the right
to employ such Intellectual Property, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. Neither
the Issuer, nor Holdings nor any Subsidiary has received any notice of
infringement of or
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conflict
with asserted rights of others with respect to any of the foregoing that could
reasonably be expected to have a Material Adverse Effect. The use of
the Intellectual Property in connection with the business and operations of the
Issuer, Holdings and the Subsidiaries does not infringe on the rights of any
person, except for such infringement as could not reasonably be expected to have
a Material Adverse Effect.
(r) Except as
disclosed in the General Disclosure Package or as could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, (i) the Issuer, Holdings and the Subsidiaries are in
compliance with and not subject to any pending or threatened liability under
applicable Environmental Laws (as defined below), (ii) the Issuer, Holdings
and the Subsidiaries have made all filings and provided all notices required
under any applicable Environmental Law, and have, and are in compliance with,
all permits, licenses or other approvals required under any applicable
Environmental Laws for their current operations and each of them is in full
force and effect, (iii) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or
threatened against the Issuer, Holdings or any Subsidiary under any
Environmental Law, (iv) no lien, charge, encumbrance or restriction has
been recorded under any Environmental Law with respect to any assets, facility
or property owned, operated, leased or controlled by the Issuer or any
Subsidiary, (v) neither the Issuer, nor Holdings nor any Subsidiary has
received notice that it has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended (“CERCLA”), or any comparable
state law and (vi) no property or facility of the Issuer or any Subsidiary
is (a) listed or proposed for listing on the National Priorities List under
CERCLA or (b) listed on the Comprehensive Environmental Response,
Compensation and Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any Governmental
Authority. No facts or circumstances exist and no event or condition
is occurring or has occurred with respect to the Issuer, Holdings or any
Subsidiary relating to any Environmental Law, any release of any hazardous,
toxic or dangerous substance or waste, any chemical, any solid waste, any other
pollutant or contaminant, or the Issuer’s, Holdings’ or any Subsidiary’s
compliance with current requirements of Environmental Law, that, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
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For
purposes of this Agreement, “Environmental Laws” means the
common law and all applicable federal, state, local and foreign laws,
regulations, rules, ordinances, codes, orders, decrees, judgments, injunctions
or any other legally enforceable requirement issued, promulgated, approved or
entered thereunder, relating to pollution, or to protection of public or
employee health and safety from hazardous, toxic or dangerous substances or
wastes or protection of the environment, including, without limitation, laws
relating to: (i) emissions, discharges, releases or threatened
releases of hazardous materials into the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), (ii) the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport, arrangement for disposal or transport
or handling of hazardous, toxic or dangerous substances or waste, any chemical,
any solid waste, or any other pollutant or contaminant, and
(iii) underground and aboveground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(s) Except as
set forth in the General Disclosure Package, there is no action, suit or
proceeding before or by any Governmental Authority or arbitrator, now pending
or, to the knowledge of the Issuer or Guarantors, threatened, to which the
Issuer, Holdings or any Subsidiary is or may be a party or to which the
business, assets or property of the Issuer, Holdings or any Subsidiary is or may
be subject that could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect.
(t) All tax
returns required to be filed by the Issuer, Holdings or any Subsidiary have been
filed in all jurisdictions where such returns are required to be filed; and all
taxes shown on such returns that are due or claimed to be due from such entities
or that are due and payable have been paid, other than those being contested in
good faith and for which reserves have been provided in accordance with GAAP or
those currently payable without penalty or interest and except where the failure
to make such required filings or payments could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(u) Neither
the Issuer, nor Holdings nor any Subsidiary has any liability for any prohibited
transaction or accumulated funding deficiency (within the meaning of
Section 412 of the Internal Revenue Code) or any complete or partial
withdrawal liability with respect to any pension, profit sharing or other plan
which is subject to Title IV of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), to which the Issuer,
Holdings or any
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Subsidiary
makes or ever has made a contribution and in which any employee of the Issuer,
Holdings or any Subsidiary is or has ever been a participant, except for such
liability as could not reasonably be expected to have a Material Adverse
Effect. With respect to such plans, the Issuer, Holdings and each
Subsidiary is in compliance with all applicable provisions of ERISA, except for
such non-compliance as could not reasonably be expected to have a Material
Adverse Effect.
(v) As of the
date hereof and as of the Closing Date, immediately prior to and immediately
following the consummation of the Transactions, the Issuer and each Guarantor is
and will be Solvent. As used herein, “Solvent” shall mean, for any
person on a particular date, that on such date (A) the fair value of the
assets of such person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such person,
(B) the present fair salable value of the assets of such person is not less
than the amount that will be required to pay the probable liability of such
person on its debts as they become absolute and matured, (C) such person
does not intend to, and does not believe that it will, incur debts and
liabilities beyond such person’s ability to pay as such debts and liabilities
mature, (D) such person is not engaged in a business or a transaction, and is
not about to engage in a business or a transaction, for which such person’s
property would constitute an unreasonably small capital and (E) such person
is able to pay its debts as they become due and payable.
(w) The
public accountants whose report is included in the General Disclosure Package
and Final Offering Circular are independent with respect to the Issuer and
Guarantors within the meaning of the Act and the rules of the Public Company
Accounting Oversight Board. The historical financial statements
(including the notes thereto) included in the General Disclosure Package and
Final Offering Circular present fairly in all material respects the consolidated
financial position, results of operations, cash flows and changes in
stockholder’s equity of the entities to which they relate at the respective
dates and for the respective periods indicated. All such financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) applied on a consistent
basis throughout the periods presented (except as disclosed therein) and in
compliance with Regulation S-X (“Regulation S-X”) under
the Exchange Act, except that the interim financial statements do not include
full footnote disclosure. The historical information set forth under
the captions “Offering Circular Summary — Summary Historical Financial
Information” included in the General Disclosure Package and Final Offering
Circular and the “Selected Historical Financial
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Information”
incorporated therein by reference have been prepared on a basis consistent with
that of the audited financial statements of Holdings. Since the date
as of which information is given in the General Disclosure Package, except as
set forth or contemplated in the General Disclosure Package, (i) neither
the Issuer nor Holdings nor any Subsidiary has (a) incurred any liabilities
or obligations, direct or contingent, that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, or
(b) entered into any material transaction not in the ordinary course of
business, (ii) there has not been any event or development in respect of
the business or condition (financial or other) of the Issuer, Holdings or any
Subsidiary that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Issuer or
Holdings on any of its equity interests and (iv) there has not been any
change in the long-term debt of the Issuer, Holdings or any
Subsidiary.
(x) [intentionally
omitted]
(y) The
statistical and market-related data included in the General Disclosure Package
and Final Offering Circular, any document incorporated into the Preliminary
Offering Circular and Final Offering Circular or any Issuer Free Writing
Communication are based on or derived from sources that the Issuer and
Guarantors believe to be reliable and accurate in all material
respects. All forward-looking statements included in the General
Disclosure Package and Final Offering Circular, except for statistical and
market-related data, represent the Issuer’s and Guarantors’ good faith estimates
that are made on the basis of data derived from sources they believe to be
reliable and accurate in all material respects. The Issuer has
obtained the written consent to the use of such data from such sources to the
extent required.
(z) Neither
the Issuer, Holdings nor any of the Subsidiary Guarantors is an open-end
investment company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the United
States Investment Company Act of 1940 (the “Investment Company Act”); and
the Issuer is not, after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the
General Disclosure Package, an “investment company” as defined in the Investment
Company Act.
(aa) There are
no securities of the Issuer or Guarantors that are listed on a national
securities exchange registered under Section 6 of the Exchange Act or that
are quoted in a United States
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automated
interdealer quotation system of the same class, within the meaning of
Rule 144A, as the Securities.
(bb) Assuming
the accuracy of, and compliance with, the representations, warranties and
agreements of the Purchasers in Section 4 of this Agreement and the compliance
by the holders of the Offered Securities with the offering and transfer
restrictions set forth in the General Disclosure Package and Final Offering
Circular, the offer and sale of the Offered Securities in the manner
contemplated by this Agreement will be exempt from the registration requirements
of the Securities Act; and it is not necessary to qualify an indenture in
respect of the Offered Securities under the Trust Indenture Act.
(cc) Neither
the Issuer, nor the Guarantors, nor any of its or their affiliates, nor any
person acting on its or their behalf (other than the Initial Purchasers, as to
whom the Issuer makes no representation) (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States or to any
U.S. person (as such terms are defined in Regulation S under the
Securities Act) the Offered Securities or any security of the same class or
series as the Offered Securities or (ii) has offered or will offer or sell
the Offered Securities (A) in the United States by means of any form
of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S under the
Securities Act, by means of any directed selling efforts within the meaning of
Rule 902(c) of Regulation S. The Issuer, the Guarantors,
their respective affiliates and any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Issuer makes no representation) have
complied and will comply with the offering restrictions requirement of
Regulation S. Neither the Issuer nor any Guarantor has entered
and neither the Issuer nor any Guarantor will enter into any contractual
arrangement with respect to the distribution of the Offered Securities except
for this Agreement.
(dd) Neither
the Issuer, nor Holdings nor any Subsidiary is (i) in violation of its
charter, bylaws or other similar constitutive documents, (ii) in default
(or, with notice or lapse of time or both, would be in default) in the
performance or observance of any obligation, agreement, covenant or condition
contained in any bond, debenture, note, indenture, mortgage, deed of trust, loan
or credit agreement, lease, license, franchise agreement, authorization, permit,
certificate or other agreement or instrument to which the Issuer, Holding or any
Subsidiary is a party or by which any of them is bound or to which any of their
assets or properties is subject (collectively, “Agreements and Instruments”),
or (iii) in violation
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of any
law, statute, rule or regulation or any judgment, order or decree of any
domestic or foreign court or other governmental or regulatory authority, agency
or other body with jurisdiction over any of them or any of their assets or
properties (“Governmental
Authority”), except, in the case of clauses (ii) and (iii), for such
defaults or violations as could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(ee) The sale
of the Offered Securities pursuant to Regulation S is not part of a plan or
scheme to evade the registration process of the Securities Act.
(ff) Neither
the Issuer nor Holdings nor any of its Subsidiaries nor any agent (other than
the Initial Purchasers, as to whom the Issuer makes no representation) thereof
acting on the behalf of them has taken, and none of them will take, any action
that might cause this Agreement or the issuance or sale of the Offered
Securities to violate Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System.
(gg) The
Registration Rights Agreement has been duly and validly authorized by the Issuer
and the Guarantors and, when duly executed and delivered by the Issuer and
Guarantors (assuming the due authorization, execution and delivery thereof by
the Initial Purchasers), will constitute a valid and legally binding obligation
of the Issuer and the Guarantors, enforceable against them in accordance with
its terms, except that (i) the enforcement thereof may be limited by the
Bankruptcy Exceptions and (ii) any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public policy
considerations. The Registration Rights Agreement, when executed and
delivered, will conform in all material respects to the description thereof in
the General Disclosure Package and in the Final Offering Circular.
(hh) No
“nationally recognized statistical rating organization” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act (i) has imposed (or has
informed the Issuer that it is considering imposing) any condition (financial or
otherwise) on the Issuer’s retaining any rating assigned to the Issuer, any
securities of the Issuer or (ii) has indicated to the Issuer that it is
considering (A) the downgrading, suspension, or withdrawal of, or any review for
a possible change that does not indicate the direction of the possible change
in, any rating so assigned or (B) any change in the outlook for any rating of
the Issuer or any securities of the Issuer.
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(ii) The
Issuer and Holdings maintain disclosure controls and procedures (as defined as
Rule 13a-15(e) of the Exchange Act) designed to ensure that information required
to be disclosed by Holdings in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported in accordance with
the Exchange Act and the rules and regulations thereunder. Holdings
has carried out and will carry out evaluations, under the supervision and with
the participation of the management of Holdings and the Issuer, of the
effectiveness of the design and operation of the Issuer’s disclosure controls
and procedures in accordance with Rule 13a-15 of the Exchange Act.
(jj) The
Issuer, Holdings and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance in all material respects
that: (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of their financial statements in
conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for
their assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Issuer is not aware of any material weaknesses in its or its subsidiaries’
internal controls.
(kk) Each of
the Security Documents has been duly authorized by each of the Issuer and each
of the Guarantors party thereto and on the Closing Date will be duly executed
and delivered by each of the Issuer and each of the Guarantors party thereto
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
each of the Issuer and each of the Guarantors party thereto enforceable against
each of the Issuer and each of the Guarantors party thereto in accordance with
its terms, subject to the Bankruptcy Exceptions.
(ll) As of the
Closing Date, the Security Documents will represent all of the collateral and
guarantee agreements, security agreements and other similar agreements necessary
to grant to the holders of the Offered Securities a valid first-priority lien on
the Notes Collateral and a valid second-priority lien on the Bank Collateral
subject only to the liens or encumbrances permitted under the Indenture on the
Collateral, except the deposit account control agreements, security account
control agreements and mortgages.
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(mm) The
Security Documents, when duly executed and delivered, will create valid and
(when all required filings and recordings with respect to, and deliveries of,
Collateral have been made as described in the Security Documents) perfected
security interests in the Collateral (subject to the exceptions contemplated or
permitted by the Indenture and the Security Documents).
(nn) On and as
of the Closing Date:
(i) Upon
delivery to the Notes Collateral Agent or the Bank Collateral Agent of the
certificates or instruments representing or evidencing the Pledged Collateral
(as defined in the Collateral Agreement) in accordance with the
Credit Agreement and the Collateral Agreement (or in the case of certificates or
instruments representing or evidencing Collateral which are then in the
possession of the Notes Collateral Agent or the Bank Collateral Agent, upon the
execution and delivery of the Intercreditor Agreement) and, in the case of
Collateral not constituting certificated securities or instruments, the filing
of Uniform Commercial Code (“UCC”) financing statements in
the appropriate filing office, the Notes Collateral Agent will obtain a valid
and perfected first-priority lien in the Notes Collateral and a valid and
perfected second-priority lien in the Bank Collateral, subject only to the liens
or encumbrances permitted under the Indenture and the Security Documents upon
and security interest in all right, title and interest of the applicable pledgor
in such other Pledged Collateral as security for the payment and performance of
the Obligations (as defined in the Collateral Agreement) to the extent that a
security interest in such Collateral may be perfected by such
filings.
(ii) Upon
filing by the Notes Collateral Agent of (A) UCC financing statements,
(B) any filings required with the United States Patent and Trademark Office
and (C) any filings required with the United States Copyright Office, the
security interests granted pursuant to the Collateral Agreement will constitute
valid, perfected security interests subject only to the liens or encumbrances
permitted under the Indenture and the Security Documents on such Collateral
described therein for the ratable benefit of the Secured Parties to the extent
that a security interest in such Collateral may be perfected by such
filings.
(oo) In
connection with the May 23, 2008, amendment of the Issuer’s Fifth Amended and
Restated Credit Agreement, dated
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April 5,
2007, affiliates of CI Capital Partners LLC made (i) an $18 million cash
investment in Ply Gem Prime Holdings Inc., an indirect parent of the Issuer
(“Prime Holdings”) and received 14,518 shares of Prime Holdings’ common stock
and 210,482 shares of Prime Holdings’ Class A common stock and (ii) a $12
million cash investment in Ply Gem Investment Holdings Inc., an indirect parent
of the Issuer (“Investment Holdings”), and received 12,000 shares of senior
preferred stock. Prime Holdings and Investment Holdings then made an aggregate
$30 million capital contribution to Holdings, which in turn contributed such
amount to the capital of the Issuer on May 23, 2008.
Each
certificate signed by any officer of the Issuer or any Guarantor and delivered
to the Initial Purchasers or counsel for the Initial Purchasers pursuant to, or
in connection with, this Agreement shall be deemed to be a representation and
warranty by the Issuer and Guarantors to the Initial Purchasers as to the
matters covered by such certificate.
The
Issuer and Guarantors acknowledge that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to
Section 7 of this Agreement, counsel to the Issuer and Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and the Issuer and Guarantors hereby consent to such
reliance.
3. Purchase, Sale and Delivery
of Offered Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein set forth, the Issuer agrees to sell to the Purchasers, and
the Purchasers agree, severally and not jointly, to purchase from the Issuer, at
a purchase price of 96.822% of the principal amount thereof plus accrued
interest, if any, from June 2, 2008 to the Closing Date, the principal
amount of Offered Securities set forth opposite the names of the several
Purchasers in Schedule
A hereto.
The
Issuer will deliver against payment of the purchase price the Offered Securities
to be offered and sold by the Purchasers in reliance on Regulation S (the
“Regulation S
Securities”) in the form of one or more permanent global Securities in
registered form without interest coupons (the “Regulation S Global
Securities”) which will be deposited with the Trustee as custodian for
The Depository Trust Company (“DTC”) and registered in the
name of Cede & Co., as nominee for DTC. The Issuer will
deliver against payment of the purchase price the Offered Securities to be
purchased by each Purchaser hereunder and to be offered and sold by each
Purchaser in reliance on Rule 144A under the Securities Act (the “144A Securities”) in the form
of one permanent global security in definitive form without interest coupons
(the “Restricted Global
Securities”) deposited with the Trustee as custodian for DTC and
registered in the name of Cede & Co., as nominee for
DTC. The Regulation S Global Securities and the Restricted Global
Securities shall be assigned separate CUSIP numbers. The Restricted
Global Securities shall include the legend regarding restrictions on transfer
set forth under “Transfer Restrictions” in the Final Offering
Circular. Interests in any
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permanent
global securities will be held only in book-entry form through DTC, except in
the limited circumstances described in the Final Offering Circular.
Payment
for the Regulation S Securities and the 144A Securities shall be made by the
Purchasers in Federal (same day) funds by wire transfer to an account of the
Issuer or an account as the Issuer may direct at a bank acceptable to
Purchasers, at the office of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP at
9:00 a.m. (New York time) on June 9, 2008, or at such other time not later
than seven full business days thereafter as Initial Purchasers and the Issuer
determine, such time being herein referred to as the “Closing Date,” against
delivery to the Trustee as custodian for DTC of (i) the Regulation S Global
Securities representing all of the Regulation S Securities and (ii) the
Restricted Global Securities representing all of the 144A
Securities. The Regulation S Global Securities and the Restricted
Global Securities will be made available for checking at the office of Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP at least 24 hours prior to the
Closing Date.
4. Representations by Initial
Purchasers; Resale by Initial Purchasers.
(a) Each
Initial Purchaser severally represents and warrants to the Issuer that it is an
“accredited investor” within the meaning of Regulation D under the
Securities Act.
(b) Each
Initial Purchaser severally acknowledges that the Offered 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
in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act. Each Initial
Purchaser severally represents and agrees that it has offered and sold the
Offered Securities and will offer and sell the Offered Securities (i) as part of
its distribution at any time and (ii) otherwise until 40 days after the later of
the commencement of the offering and the Closing Date, only in accordance with
Rule 903 of Regulation S or Rule 144A under the Securities
Act. Accordingly, neither such Initial Purchaser nor its affiliates,
nor any persons acting on its or their behalf, have engaged or will engage in
any directed selling efforts with respect to the Offered Securities, and such
Initial Purchaser, its affiliates and all persons acting on its or their behalf
have complied and will comply with the offering restrictions requirement of
Regulation S and Rule 144A. Each Initial Purchaser severally
represents and agrees that, at or prior to confirmation of sale of the Offered
Securities, other than a sale pursuant to Rule 144A, such Initial Purchaser
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases the Offered Securities from
it during the restricted period a confirmation or notice to substantially the
following effect:
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“The
Securities covered hereby have not been registered under the U.S. Securities Act
of 1933 (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 date of the commencement of the offering and the closing date, except in
either case in accordance with Regulation S (or Rule 144A if available) under
the Securities Act. Terms used above have the meanings given to them
by Regulation S.”
Terms
used in this subsection (b) have the meanings given to them by
Regulation S.
(c) Each
Initial Purchaser severally represents and agrees that it and each of its
affiliates has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Securities except for any such
arrangements with the other Initial Purchasers or affiliates of the other
Initial Purchasers or with the prior written consent of the Issuer and the
Guarantors.
(d) Each
Initial Purchaser severally represents and agrees that it and each of its
affiliates will not offer or sell the Offered Securities by means of any form of
general solicitation or general advertising, within the meaning of
Rule 502(c) under the Securities Act, including, but not limited to
(i) any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or radio,
or (ii) any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. Each Initial Purchaser
severally represents and agrees, with respect to resales made in reliance on
Rule 144A of any of the Offered Securities, to deliver either with the
confirmation of such resale or otherwise prior to settlement of such resale a
notice to the effect that the resale of such Offered Securities has been made in
reliance upon the exemption from the registration requirements of the Securities
Act provided by Rule 144A.
(e) Each
Initial Purchaser severally represents and agrees that (i) it is a person whose
ordinary activities involve it in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of its business; (ii) it has
not offered or sold and prior to the expiry of a period of six months from the
Closing Date, will not offer or sell any Offered Securities to persons in the
United Kingdom except to persons who it is reasonable to expect will acquire,
hold, manage or dispose of investments (as principal or agent) for the purposes
of their businesses where the issue of the Offered Securities would
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otherwise
constitute a contravention of Section 19 of the Financial Services and Markets
Xxx 0000 (the “FSMA”);
and (iii) 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 FSMA)
received by it in connection with the issue or sale of any Offered Securities in
circumstances in which section 21(1) of the FSMA does not apply to the Issuer or
the Guarantors; 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 Offered Securities in, from or otherwise involving the United
Kingdom.
5. Certain Agreements of the
Issuer and each Guarantor. The Issuer and each Guarantor agree
with the several Initial Purchasers that:
(a) The
Issuer and the Guarantors will advise Credit Suisse promptly of any proposal to
amend or supplement the Preliminary or Final Offering Circular and will not
effect such amendment or supplementation without Credit Suisse’s consent, which
consent shall not be unreasonably withheld. If, at any time prior to
the completion of the resale of the Offered Securities by the Initial
Purchasers, any event occurs as a result of which any document included in the
Preliminary or Final Offering Circular, the General Disclosure Package or any
Supplemental Marketing Material, if republished immediately following such event
or development, included or would include an untrue statement of a material fact
or omitted or would omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading or if it is necessary at any time to amend or supplement
the Preliminary or Final Offering Circular, the General Disclosure Package or
any Supplemental Marketing Material to comply with any applicable law, the
Issuer and the Guarantors will promptly notify Credit Suisse of such event and
will promptly prepare, at their own expense, an amendment or supplement which
will correct such statement or omission. Neither Credit Suisse’s
consent to, nor the Initial Purchasers’ delivery to offerees or investors of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 7. The second sentence of this
subsection does not apply to statements in or omissions from any document in the
Preliminary or Final Offering Circular, the General Disclosure Package or any
Supplemental Marketing Material made in reliance upon and in conformity with
written information furnished to the Issuer by Initial Purchasers specifically
for use therein, it being understood and agreed that the only such information
is that described in Section 8(b) hereof.
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(b) The
Issuer and the Guarantors will furnish to the Initial Purchasers copies of the
Preliminary Offering Circular, each other document comprising a part of the
General Disclosure Package, the Final Offering Circular, all amendments and
supplements to such documents and each item of Supplemental Marketing Material,
in each case as soon as available and in such quantities as Credit Suisse
reasonably requests. At any time when the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act, the Issuer and the Guarantors will
promptly furnish or cause to be furnished to Credit Suisse (and, upon request,
to each of the other Initial Purchasers) and, upon request of holders and
prospective purchasers of the Offered Securities, to such holders and
purchasers, copies of the information required to be delivered to holders and
prospective purchasers of the Offered Securities pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision
thereto) to the extent necessary to permit compliance with Rule 144A in
connection with resales by such holders of the Offered
Securities. The Issuer will pay the expenses of printing and
distributing to the Initial Purchasers all such documents.
(c) The
Issuer and the Guarantors will use their commercially reasonable efforts, in
cooperation with the Initial Purchasers, to arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility for
investment under the laws of such states in the United States as Credit Suisse
reasonably designates and will continue such qualifications in effect so long as
required for the resale of the Offered Securities by the Initial Purchasers,
provided that the Issuer will not be required to qualify as a foreign
corporation or to file a general consent to service of process or subject itself
to taxation in any such state.
(d) [intentionally
omitted]
(e) During
the period of one year after the Closing Date, the Issuer will, upon request,
furnish to Initial Purchasers and any holder of Offered Securities a copy of the
restrictions on transfer applicable to the Offered Securities.
(f) During
the period of one year after the Closing Date, the Issuer will not, and will not
permit any of its affiliates (as defined in Rule 144 under the Securities Act)
to, resell any of the Offered Securities which constitute “restricted
securities” under Rule 144 that have been reacquired by any of them, unless
(i) such Offered Securities are sold pursuant to a registration statement
which is effective under the Securities Act or (ii) such Offered Securities are
sold accompanied by an opinion of counsel that the buyer of such Offered
Securities is acquiring freely tradable securities.
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(g) During
the period of one year after the Closing Date, the Issuer will not be or become
an open-end investment company, unit investment trust or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act.
(h) The
Issuer and the Guarantors will pay all expenses incidental to the performance of
their respective obligations under this Agreement, the Purchase Agreement
Counterparts, the Indenture, the Supplemental Indenture and the Registration
Rights Agreement including (i) the fees and expenses of the Trustee, and
its professional advisers; (ii) all expenses in connection with the
execution, issue, authentication, packaging and initial delivery of the Offered
Securities and, as applicable, the Exchange Securities, the preparation and
printing of this Agreement, the Registration Rights Agreement, the Offered
Securities, the Indenture, the Preliminary Offering Circular, any other
documents comprising any part of the General Disclosure Package, the Final
Offering Circular, all amendments and supplements thereto, each item of
Supplemental Marketing Material and any other document relating to the issuance,
offer, sale and delivery of the Offered Securities and, as applicable, the
Exchange Securities; (iii) the cost of qualifying the Offered Securities
for trading in The PortalSM Market
(“PORTAL”) of The NASDAQ
Stock Market, Inc. and any expenses incidental thereto; (iv) the cost of
any advertising approved by the Issuer in connection with the issue of the
Offered Securities; (v) any reasonable expenses (including reasonable fees
and disbursements of counsel) incurred in connection with qualification of the
Offered Securities or the Exchange Securities for sale under the laws of such
jurisdictions as Initial Purchasers designate and the printing of memoranda
relating thereto; (vi) any fees charged by investment rating agencies for
the rating of the Offered Securities; and (vii) expenses incurred in
distributing the Preliminary Offering Circular, any other documents comprising
any part of the General Disclosure Package, the Final Offering Circular
(including any amendments and supplements thereto) and any Supplemental
Marketing Material to the Initial Purchasers.
(i) In
connection with the offering, until the Initial Purchasers shall have notified
the Issuer of the completion of the resale of the Offered Securities, neither
the Issuer nor the Guarantors, nor any of their affiliates has or will (other
than the Initial Purchasers or their affiliates as to which the Issuer makes no
agreement) either alone or with one or more other persons, bid for or purchase
for any account in which they or any of their affiliates has a beneficial
interest any Offered Securities or attempt to induce any person to purchase any
Offered Securities; and neither they nor
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any of
their affiliates (other than the Initial Purchasers or their affiliates as to
which the Issuer makes no agreement) will make bids or purchases for the purpose
of creating actual, or apparent, active trading in, or of raising the price of,
the Offered Securities.
(j) For a
period of 90 days after the date of this Agreement, the Issuer will not offer,
sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly,
without the written consent of the Representatives, any United States
dollar-denominated debt securities (which does not include borrowings under the
New Credit Facility or evidence of such borrowings or the Exchange Securities)
issued or guaranteed by the Issuer and having a maturity of more than one year
from the date of issue. The Issuer will not at any time offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, pledge, contract or
disposition would cause the exemption afforded by Section 4(2) of the
Securities Act to cease to be applicable to the offer and sale of the Offered
Securities.
(k) The
Issuer will use its commercially reasonable efforts to cause the Offered
Securities to become qualified for trading in PORTAL.
6. Free Writing
Communications. (a) The Issuer and each Guarantor
each represents and agrees that, unless it obtains the prior consent of the
Initial Purchasers, and each Initial Purchaser represents and agrees with the
Issuer that, unless it obtains the prior consent of the Issuer and Credit
Suisse, it has not made and will not make any offer relating to the Offered
Securities that would constitute an Issuer Free Writing Communication; provided
that the prior written consent of the parties hereto shall be deemed to have
been given in respect of the Issuer Free Writing Communications included in
Schedule C
and the Supplemental Marketing Material included in Schedule D to this
Agreement.
(b) The
Issuer consents to the use by any Initial Purchaser of a Free Writing
Communication that (i) contains only (A) information describing the
preliminary terms of the Offered Securities or their offering or
(B) information that describes the final terms of the Offered Securities or
their offering and that is included in the Terms Communication or is included in
or is subsequently included in the Final Offering Circular or (ii) does not
contain any material information about the Issuer or any Guarantor or their
securities that was provided by or on behalf of the Issuer or any Guarantor, it
being understood and agreed that any such Free Writing Communication referred to
in clause (i) or (ii) shall not be Issuer Free Writing Communication for
purposes of this Agreement.
7. Conditions of the
Obligations of the Initial Purchasers. The obligation of the
several Initial Purchasers to purchase and pay for the Offered Securities will
be subject to the accuracy of the representations and warranties on the part of
the Issuer and the Guarantors herein as of the date hereof and as of the Closing
Date, to the accuracy of the
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statements
of officers of the Issuer and Guarantors made pursuant to the provisions hereof,
to the performance by the Issuer and the Guarantors of their obligations
hereunder in all material respects and to the following additional conditions
precedent:
(a) The
Representatives, on behalf of the Initial Purchasers, shall have received a
customary “comfort letter”, dated the date of this Agreement, of KPMG LLP, in
form and substance reasonably satisfactory to the Initial Purchasers concerning
certain financial information with respect to Holdings and its subsidiaries set
forth in the General Disclosure Package.
(b) No stop
order suspending the qualification or exemption from qualification of the
Offered Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(c) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
(i) any change, or any development or event involving a prospective change,
in the condition (financial or other), business, properties or results of
operations of Holdings and its subsidiaries taken as one enterprise which, in
the reasonable judgment of the Initial Purchasers, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the offering
or the sale of and payment for the Offered Securities; (ii) any downgrading
in the rating of any debt securities of the Issuer or any of its subsidiaries by
any “nationally recognized statistical rating organization” (as defined for
purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or review its
rating of any debt securities of the Issuer or any of its subsidiaries (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or any announcement that
the Issuer or any of its subsidiaries has been placed on negative outlook;
(iii) any change in U.S. or international financial, political or economic
conditions or currency exchange rates or exchange controls as would, in the
reasonable judgment of a majority in interest of the Initial Purchasers
including Credit Suisse, be likely to prejudice materially the success of the
proposed issue, sale or distribution of the Offered Securities, whether in the
primary market or in respect of dealings in the secondary market; (iv) any
material suspension or material limitation of trading in securities generally on
the New York Stock Exchange or any setting of minimum prices for trading on such
exchange; (v) any banking moratorium declared by U.S. Federal or New York
authorities; (vi) any major disruption of settlements of securities,
payment or clearance services in the United States; or (vii) any attack on,
outbreak or escalation of
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hostilities
or act of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency if, in the
reasonable judgment of a majority in interest of the Initial Purchasers
including Credit Suisse, the effect of any such attack, outbreak, escalation,
act, declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the offering or sale of and payment for the Offered
Securities.
(d) The
Initial Purchasers shall have received opinions, dated the Closing Date, of
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP, counsel for the Issuer,
in substantially the form attached hereto as Exhibit A and
reasonably acceptable to the Initial Purchasers.
(e) The
Initial Purchasers shall have received an opinion, dated the Closing Date from
Xxxxxxx & Xxxx X.X., Missouri counsel for the Issuer in the form of Exhibit B hereto and
reasonably acceptable to the Initial Purchasers.
(f) The
Initial Purchasers shall have received an opinion, dated the Closing Date from
Xxxxxxxx & Xxxxxxx LLC, Ohio counsel for the Issuer in the form of Exhibit C hereto and
reasonably acceptable to the Initial Purchasers.
(g) The
Initial Purchasers shall have received an opinion, dated the Closing Date from
Xxxxx & Xxxxx LLP, Texas counsel for the Issuer in the form of Exhibit D hereto and
reasonably acceptable to the Initial Purchasers.
(h) The
Initial Purchasers shall have received a certificate, dated the Closing Date,
signed by the chief executive officer and the chief financial officer of the
Issuer, certifying all information for the years 2003 and 2004 in Item 6. Selected Financial
Data of the annual report on Form 10-K for the fiscal year ended 2007 for
Holdings.
(i) The
Initial Purchasers shall have received from Cravath, Swaine & Xxxxx
LLP, counsel for the Initial Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Issuer, the validity of
the Offered Securities, the Final Offering Circular and the General Disclosure
Package, the exemption from registration for the offer and sale of the Offered
Securities by the Issuer to the Initial Purchasers and the resales by the
Initial Purchasers as contemplated hereby and other related matters as Initial
Purchasers may require, and the Issuer shall have
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furnished
to such counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(j) The
Initial Purchasers shall have received a certificate, dated the Closing Date, of
the President or any Vice President and a principal financial or accounting
officer of the Issuer and each Guarantor in which such officers, to the best of
their knowledge and after reasonable investigation, shall state on behalf of the
Issuer and the Guarantors that the representations and warranties of the Issuer
and the Guarantors in this Agreement are true and correct, that the Issuer and
the Guarantors 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 that, subsequent to the date of the most recent financial statements
in the General Disclosure Package, there has been no material adverse change,
nor any development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Issuer and its subsidiaries taken as a whole except as set
forth in or contemplated by the General Disclosure Package or as described in
such certificate.
(k) The
Initial Purchasers shall have received a letter, dated the Closing Date, of KPMG
which meets the requirements of subsection (a) of this Section, except that
the specified date referred to in such subsection will be a date not more than
three business days prior to the Closing Date for the purposes of this
subsection and except it shall refer to financial information with respect to
Holdings and its subsidiaries in the Final Offering Circular.
(l) The
Issuer and the Guarantors shall have executed and delivered the Registration
Rights Agreement and the Indenture.
(m) The
Initial Purchasers shall have been furnished with wiring instructions for the
application of the proceeds of the Offered Securities in accordance with this
Agreement and such other information as they may reasonably
request.
(n) The
Offered Securities shall be eligible for trading in PORTAL upon
issuance. All agreements set forth in the blanket representation
letter of the Issuer to DTC relating to the approval of the Offered Securities
by DTC for “book-entry” transfer shall have been complied with.
(o) On or
prior to the Closing Date, the Credit Agreement, the Collateral Agreement, the
Intercreditor Agreement and the other Security Documents shall have been entered
into by the parties thereto, and the Notes Collateral Agent and the Initial
Purchasers
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shall
have received a copy of each of the duly executed Security Documents and the
Credit Agreement.
(p) On or
prior to the Closing Date, all documents and instruments, including UCC
financing statements, required by law or reasonably requested by the Notes
Collateral Agent to be filed, registered or recorded to create liens intended to
be created by the Indenture and the Security Documents and perfect such liens to
the extent required by, and with the priority required by, the Collateral
Agreement and the Intercreditor Agreement, shall have been filed, registered or
recorded or delivered to the Notes Collateral Agent.
(q) All
filing fees, taxes and other amounts payable in connection with filings,
recordings, registrations and other actions referred to in Section 7(p) shall
have been paid or payment by the Issuer provided for to the reasonable
satisfaction of the Notes Collateral Agent.
(r) On or
prior to the Closing Date, the Initial Purchasers shall have received the
results of lien searches, conducted by the lien search service previously
identified to counsel for the Representatives or another search service
reasonably satisfactory to the Representatives, and the Representatives shall be
satisfied that no material liens are outstanding on the property or assets of
the Issuer and the Guarantors, other than any such liens (i) which are permitted
under the Indenture or (ii) as to which the Representatives have received
documentation reasonably satisfactory to it evidencing the termination of such
liens.
(s) On or
prior to the Closing Date, the Initial Purchasers shall have received a
completed certificate in the form attached to the Collateral Agreement (the
“Perfection
Certificate”) to be dated as of the Closing Date, executed by an
executive officer of the Issuer, together with all attachments contemplated
thereby, which shall be correct and complete as of the Closing
Date.
The
Issuer will furnish the Initial Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Initial Purchasers
reasonably request. Credit Suisse may in its sole discretion waive on
behalf of the Initial Purchasers compliance with any conditions to the
obligations of the Initial Purchasers hereunder.
8. Indemnification and
Contribution. (a) The Issuer and the Guarantors,
jointly and severally, will indemnify and hold harmless each Initial Purchaser,
its partners, directors, members and officers, affiliates 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 (each, an “Indemnified Party”), against
any and all losses, claims, damages or liabilities, joint or several, to which
such Indemnified Party may become
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subject,
under the Securities Act, the Exchange Act, other Federal or state statutory law
or regulation or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Preliminary Offering Circular or the Final Offering Circular, in each case
as amended or supplemented, or any Issuer Free Writing Communication (including
without limitation, any Supplemental Marketing Material), or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, including any losses, claims,
damages or liabilities arising out of or based upon the Issuer’s or Guarantors’
failure to perform their obligations under Section 5(a) of this Agreement,
and will reimburse each Indemnified Party for any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the
Issuer and the Guarantors will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Issuer by any Initial Purchaser through Credit
Suisse specifically for use therein, it being understood and agreed that the
only such information consists of the information described as such in
subsection (b) below.
(b) Each
Initial Purchaser will severally and not jointly indemnify and hold harmless
each of the Issuer and the Guarantors, their respective directors and officers
and each person, if any, who controls the Issuer or such Guarantor within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities to which the Issuer may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Preliminary Offering Circular or the Final Offering Circular,
in each case as amended or supplemented or any Issuer Free Writing
Communication, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Issuer by such Initial Purchaser through Credit Suisse specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Issuer in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Initial Purchaser
consists of the following information in the Preliminary and Final Offering
Circular: paragraph three, and the third and fourth sentences of paragraph eight
under the caption “Plan of Distribution”; provided, however, that the
Initial Purchasers shall not be liable for any losses, claims, damages or
liabilities arising out of or based upon the Issuer’s failure to perform its
obligations under Section 5(a) of this Agreement.
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(c) Promptly
after receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under subsection (a)
or (b) above, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
subsection (a) or (b) above, except to the extent that it has been
materially prejudiced by such failure. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action and does not include a statement as
to any admission of fault, culpability or failure to act by or on behalf of any
indemnified party. No indemnifying party shall be liable for any
settlement or compromise of, or consent to the entry of judgment with respect
to, any such action or claim effected without its consent.
(d) If the
indemnification provided for in this Section 8 is unavailable or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer and the
Guarantors on the one hand and the Initial Purchasers on the other from the
offering of the Offered Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Issuer and the Guarantors on the one
hand and the Initial Purchasers on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative
benefits received by the Issuer and the Guarantors on the one hand and the
Initial Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Issuer bear to the total discounts and commissions received by the Initial
Purchasers from the Issuer under this Agreement. The relative fault
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 Issuer and the
Guarantors or the Initial Purchasers and the
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parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Initial Purchaser shall be required
to contribute any amount in excess of the amount by which the total price at
which the Offered Securities purchased by it were resold exceeds the amount of
any damages which such Initial Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. The Initial Purchasers’ obligations in this
subsection (d) to contribute are several in proportion to their respective
purchase obligations and not joint. The Issuer, the Guarantors and
the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 8(d).
(e) The
obligations of the Issuer and the Guarantors under this Section 8 shall be
in addition to any liability which the Issuer and the Guarantors may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Initial Purchaser within the meaning of the Securities Act
or the Exchange Act; and the obligations of the Initial Purchasers under this
Section 8 shall be in addition to any liability which the respective
Initial Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Issuer or such Guarantor
within the meaning of the Securities Act or the Exchange Act.
9. Default of Initial
Purchasers. If any Initial Purchaser or Initial Purchasers
default in their obligations to purchase Offered Securities hereunder and the
aggregate principal amount number of Offered Securities that such defaulting
Initial Purchaser or Initial Purchasers agreed but failed to purchase does not
exceed 10% of the total principal number of Offered Securities, Credit Suisse
may make arrangements satisfactory to the Issuer for the purchase of such
Offered Securities by other persons, including any of the Initial Purchasers,
but if no such arrangements are made by the Closing Date, the non-defaulting
Initial Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Initial Purchasers agreed but failed to purchase. If any
Initial Purchaser or Initial Purchasers so default and the aggregate number of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Initial
Purchasers are obligated to purchase on such Closing Date and arrangements
satisfactory to Credit Suisse and the Issuer for the purchase of
such Offered Securities by other persons are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Initial Purchaser or the Issuer, except as provided in
Section 10. As used in this Agreement, the term “Initial Purchaser”
includes any person substituted for an Initial Purchaser under this
Section. Nothing herein will relieve a defaulting Initial Purchaser
from liability for its default.
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10. Survival of Certain
Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Issuer and
the Guarantors and their respective officers and of the several Initial
Purchasers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Initial Purchaser, the Issuer, the
Guarantors, or any of the representatives, officers or directors or any
controlling person of the Issuer or Guarantors, and will survive delivery of and
payment for the Offered Securities. If this Agreement is terminated
pursuant to Section 9 or if for any reason the purchase of the Offered
Securities by the Initial Purchasers is not consummated, the Issuer and the
Guarantors shall remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 5 and the respective obligations of the Issuer and
the Guarantors and the Initial Purchasers pursuant to Section 8 shall
remain in effect. If the purchase of the Offered Securities by the
Initial Purchasers is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 9 or the
occurrence of any event specified in clause (iii), (iv), (v), (vi) or (vii) of
Section 7(c), the Issuer will reimburse the Initial Purchasers for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by it in connection with the offering of the Offered
Securities.
11. Notices. All
communications with respect to or under this Agreement, except as may be
otherwise specifically provided in this Agreement, shall be in writing and, if
sent to the Initial Purchasers, shall be mailed, delivered or telecopied and
confirmed in writing to c/o Credit Suisse Securities (USA) LLC, Eleven Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (fax number: (000) 000-0000),
Attention: LCD-IBD, with a copy for information purposes only to
Cravath, Swaine & Xxxxx LLP, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(fax number: 000-000-0000), Attention: Xxxxxxx X. Xxxxxx, III, Esq.; or, if sent
to the Issuer, will be mailed, delivered or telegraphed and confirmed to it at
Ply Gem Industries, Inc., 0000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxx, XX 00000,
Attention: Xxxxx Xxx, with a copy to Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000,
Attention: Xxxx X. Xxxxxxx.
12. Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the controlling persons referred to in
Section 8, and no other person will have any right or obligation hereunder,
except that holders of Offered Securities shall be entitled to enforce the
agreements for their benefit contained in the second and third sentences of
Section 5(b) hereof against the Issuer as if such holders were parties
hereto.
13. Representation of Initial
Purchasers. You will act for the several Initial Purchasers in
connection with this purchase, and any action under this Agreement taken by you
will be binding upon all the Initial Purchasers.
14. Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.
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15. Absence of Fiduciary
Relationship. The Issuer acknowledges and agrees
that:
(a) the
Initial Purchasers have been retained solely to act as initial purchasers in
connection with the initial purchase, offering and resale of the Offered
Securities and that no fiduciary, advisory or agency relationship between the
Issuer and the Initial Purchasers has been created in respect of any of the
transactions contemplated by this Agreement or the Preliminary or Final Offering
Circular, irrespective of whether the Initial Purchasers have advised or is
advising the Issuer on other matters;
(b) the
purchase price of the Offered Securities set forth in this Agreement was
established by the Issuer following discussions and arm’s-length negotiations
with the Initial Purchasers and the Issuer is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c) the
Issuer has been advised that the Initial Purchasers and their affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Issuer and that the Initial Purchasers have no obligation to
disclose such interests and transactions to Issuer by virtue of any fiduciary,
advisory or agency relationship; and
(d) the
Issuer waives, to the fullest extent permitted by law, any claims it may have
against the Initial Purchasers for breach of fiduciary duty or alleged breach of
fiduciary duty and agrees that the Initial Purchasers shall have no liability
(whether direct or indirect) to the Issuer in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Issuer, including stockholders, employees or creditors of the
Issuer.
16. Applicable
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
The
Issuer and the Initial Purchasers hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
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If the
foregoing is in accordance with your understanding of our agreement, please sign
and return to the Issuer a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the several Initial
Purchasers, the Guarantors and the Issuer in accordance with its
terms.
Very
truly yours,
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PLY
GEM INDUSTRIES, INC.
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By
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Name:
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Title:
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PLY
GEM HOLDINGS, INC.
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By
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Name:
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Title:
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CWD
WINDOWS AND DOORS, INC.
GREAT
LAKES WINDOW, INC.
KROY
BUILDING PRODUCTS, INC.
NAPCO,
INC.
VARIFORM,
INC.
MWM
HOLDING, INC.
MW
MANUFACTURERS INC.
AWC
HOLDING COMPANY
ALENCO
HOLDING CORPORATION
AWC
ARIZONA, INC.
ALENCO
INTERESTS, L.L.C.
ALENCO
EXTRUSION
MANAGEMENT, L.L.C.
ALENCO
BUILDING PRODUCTS MANAGEMENT, L.L.C.
ALENCO
TRANS, INC.
GLAZING
INDUSTRIES MANAGEMENT, L.L.C.
NEW
ALENCO EXTRUSTION, LTD.
NEW
ALENCO WINDOW, LTD.
NEW
GLAZING INDUSTRIES, LTD.
ALENCO
EXTRUSION GA, L.L.C.
ALUMINUM
SCRAP RECYCLE, L.L.C.
ALENCO
WINDOW GA, L.L.C.
ALCOA
HOME EXTERIORS, INC.
PLY
GEM PACIFIC WINDOWS CORPORATION
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By
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Name:
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Title:
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-37-
The
foregoing Purchase Agreement is hereby confirmed
and
accepted as of the date first
above
written.
CREDIT SUISSE SECURITIES (USA)
LLC
UBS
SECURITIES LLC
X.X.
XXXXXX SECURITIES INC.
XXXXXXX,
SACHS & CO.
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By: CREDIT
SUISSE SECURITIES (USA) LLC
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By:
_____________________________________
Name:
Title:
By: UBS
SECURITIES LLC
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By:
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Name:
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Title:
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By:
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Name:
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Title:
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as
Representatives of the several Initial
Purchasers.
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-38-
SCHEDULE
A
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Initial Purchaser
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Principal Amount Offered
Securities
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Credit
Suisse Securities (USA) LLC
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$315,000,000
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UBS
Securities LLC
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$210,000,000
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X.X.
Xxxxxx Securities Inc.
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$105,000,000
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Xxxxxxx,
Sachs & Co.
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$ 70,000,000
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Total
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$700,000,000
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-39-
SCHEDULE
B
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Subsidiary
Guarantors
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Great
Lakes Window, Inc.
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Kroy
Building Products, Inc.
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Napco,
Inc.
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Variform,
Inc.
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MWM
Holding, Inc.
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MW
Manufacturers Inc.
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AWC
Holding Company
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Alenco
Holding Corporation
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AWC
Arizona, Inc.
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Alenco
Interests, L.L.C.
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Alenco
Extrusion Management, L.L.C.
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Alenco
Building Products Management, L.L.C.
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Alenco
Trans, Inc.
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Glazing
Industries Management, L.L.C.
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New
Alenco Extrusion, Ltd.
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New
Alenco Window, Ltd.
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New
Glazing Industries, Ltd.
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Alenco
Extrusion GA, L.L.C.
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Aluminum
Scrap Recycle, L.L.C.
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Alenco
Window GA, L.L.C.
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Alcoa
Home Exteriors, Inc.
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Ply
Gem Pacific Windows Corporation
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-40-
SCHEDULE
C
-41-
EXHIBIT
C-1
[See
following page.]
-42-
SCHEDULE
D
SUPPLEMENTAL
MARKETING MATERIAL
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·
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Electronic
Bloomberg roadshow slides and accompanying audio
recording.
|
-43-
SCHEDULE
E
LIST
OF SUBSIDIARIES
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Parent
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Subsidiary
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Jurisdiction
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Alenco
Holding Corporation
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Alenco
Building Products Management, L.L.C.
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Delaware
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Alenco
Holding Corporation
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Alenco
Extrusion Management, L.L.C.
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Delaware
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Alenco
Holding Corporation
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Alenco
Interests, L.L.C.
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Delaware
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Alenco
Holding Corporation
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Alenco
Trans, Inc.
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Delaware
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Alenco
Holding Corporation
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AWC
Arizona, Inc.
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Delaware
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Alenco
Holding Corporation
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Glazing
Industries Management, L.L.C.
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Delaware
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Alenco
Interests, L.L.C. (95%); Alenco Building Products Management, L.L.C. (5% -
GP)
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New
Alenco Window, Ltd.
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Texas
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Alenco
Interests, L.L.C. (95%); Alenco Extrusion Management, L.L.C. (5% -
GP)
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New
Alenco Extrusion, Ltd.
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Texas
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Alenco
Interests, L.L.C. (95%); Glazing Industries Management, L.L.C. (5% -
GP)
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New
Glazing Industries, Ltd.
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Texas
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AWC
Holding Company
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Alenco
Holding Corporation
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Delaware
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MWM
Holding, Inc.
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MW
Manufacturers Inc.
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Delaware
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New
Alenco Extrusion, Ltd.
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Alenco
Extrusion GA, L.L.C.
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Delaware
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New
Alenco Extrusion, Ltd.
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Aluminum
Scrap Recycle, L.L.C.
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Delaware
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New
Alenco Window, Ltd.
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Alenco
Window GA, L.L.C.
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Delaware
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Ply
Gem Industries, Inc.
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Alcoa
Home Exteriors, Inc.
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Ohio
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Ply
Gem Industries, Inc.
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AWC
Holding Company
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Delaware
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Ply
Gem Industries, Inc.
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CWD
Windows and Doors, Inc.
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Canada
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Ply
Gem Industries, Inc.
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Great
Lakes Window, Inc.
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Ohio
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Ply
Gem Industries, Inc.
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Kroy
Building Products, Inc.
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Delaware
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Ply
Gem Industries, Inc.
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MWM
Holding, Inc.
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Delaware
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Ply
Gem Industries, Inc.
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Napco,
Inc.
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Delaware
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Ply
Gem Industries, Inc.
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Ply
Gem Pacific Windows Corporation
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Delaware
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Ply
Gem Industries, Inc.
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Variform,
Inc.
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Missouri
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-44-
EXHIBIT
A
FORM
OF XXXX, WEISS, RIFKIND,
XXXXXXX
& XXXXXXXX LLP OPINION
[See
following page.]
-45-
EXHIBIT
B
FORM
OF MISSOURI OPINION
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Suite
2800
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0000
Xxxxx Xxxxxxxxx
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Xxxxxx
Xxxx, Xxxxxxxx 00000-0000
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xxx.xxxxxxxxxxx.xxx
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(000)
000-0000, FAX (000) 000-0000
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June __,
2008
Credit
Suisse Securities (USA) LLC
UBS
Securities LLC
As Representatives of the several
Initial Purchasers
c/o
Credit Suisse Securities (USA) LLC
Eleven
Xxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000-0000
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Re:
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Ply
Gem Industries, Inc. $700,000,000 __% Senior Notes due
2013
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Ladies and
Gentlemen:
We have acted as special
counsel in the State of Missouri to Variform, Inc., a Missouri corporation (the
“Company”), in connection with the issuance and sale of $700,000,000
aggregate principal amount of __% Senior Secured Notes due 2013 (the “Notes”) of
Ply Gem Industries, Inc. (the “Issuer”). The Company has requested us
to deliver this opinion pursuant to Section 7(e) of the Purchase Agreement dated
as of June __, 2008, among the Issuer, the Guarantors named therein and the
Initial Purchasers named therein (the “Purchase Agreement”).
Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
assigned to such terms in the Purchase Agreement.
As such
counsel, we have examined, among other things, originals or copies of the
following:
(1) the
final Offering Circular, dated June [3], 2008, relating to the sale
of the Notes (the “Offering
Circular”);
(2) the
executed Indenture, dated as of June [10], 2008 (the “Indenture”), among
the Issuer, the Guarantors and
[ ], as
Trustee (the “Trustee”) relating to
the Notes and the Guarantees (as defined in the Indenture);
(3) the
executed global notes evidencing the Notes;
(4) the
executed Purchase Agreement;
-46-
(5) the
Guarantee of the Notes executed by the Company (the “Guarantee”);
(6) the
executed Registration Rights Agreement, dated as of June [10], 2008, among the Issuer,
the Guarantors and the Initial Purchasers (the “Registration Rights
Agreement”);
(7) the
executed Collateral Agreement, dated as of June [10], 2008 (the “Collateral
Agreement”), among the Issuer, the Guarantors and
[ ], as
collateral agent (the “Notes Collateral
Agent”);
(8) the
executed Intercreditor Agreement, dated as of June [10], 2008 among the Issuer,
the Guarantors, the Bank Collateral Agent, the Trustee and the Notes Collateral
Agent (the “Intercreditor
Agreement”);
(9) the
executed Intellectual Property Collateral Agreement (as defined in the
Collateral Agreement);
(10) the
financing statements attached hereto on Schedule I (the “Financing
Statements”); and
(11) such
other records, agreements, certificates and documents that we have deemed
relevant and necessary as a basis for the opinions expressed
herein.
The
agreements and documents referred to in clauses (2) through (8) above are
referred to herein collectively as the “Documents”.
As to
matters of fact, we have relied upon representations of officers of the Company,
including but not limited to those set forth in the Certificate of the Secretary
of even date herewith, and upon certain certificates of public
officials. We have also received a certificate of the Missouri
Secretary of State regarding the good standing of the Company in the State of
Missouri. As to matters of law, we express no opinion as to any
matter relating to the laws of any jurisdiction other than the laws of the State
of Missouri.
We have
assumed due authorization and execution of the Documents and the other
agreements and documents referred to in this opinion by all parties thereto
other than the Company and the delivery and enforceability of the Documents and
such other agreements and documents against all parties thereto. We have also
assumed the correctness of all statements of fact contained in all agreements,
certificates and other documents examined by us; the correctness of all
statements of fact made in response to our inquiries by officers and other
representatives of the Company and by public officials; the legal capacity of
all natural persons; the genuineness of all signatures on all agreements and
other documents examined by us; the authenticity of all documents submitted to
us as originals and the conformity to authentic original documents of all
documents submitted to us as copies. We have also assumed that the
Company has rights in the Collateral (as defined in the Collateral Agreement) in
which the Company has granted a security interest in the Collateral Agreement
(the “Company Collateral”), and that none of the Company Collateral is described
in Section 9-501(a)(1) of the Uniform Commercial Code as enacted in the State of
Missouri (the “Missouri UCC”).
-47-
References
herein to our “Actual Knowledge,” and other references herein of similar import,
refer to the present, conscious and actual knowledge of lawyers in this firm
currently engaged in the provision of services to the Company, and do not imply
that we have conducted a general review of our files or other factual
investigation (beyond the examination of the documents described above) relating
to the Company or that any other lawyers in this firm have been consulted with
respect to their knowledge regarding any matter referred to herein.
Based
upon, and subject to, the foregoing, we are of the opinion that:
The
Company is validly existing as a corporation and in good standing under the laws
of the State of Missouri.
The
Company has all necessary corporate power and authority to execute, deliver and
perform its obligations under the Documents to which it is a party and to own
and hold its properties and conduct its business as described in the Offering
Circular.
Each of
the Documents to which it is a party has been duly authorized, executed and
delivered by the Company.
The
Company has duly authorized the Guarantee.
The
Company has duly authorized its guarantee of the Exchange Notes.
The
issuance of the Guarantee by the Company, the compliance by the Company with all
of the provisions of each of the Documents to which it is a party, the execution
and delivery by the Company of each of the Documents to which it is a party and
the performance of its obligations thereunder will not result in a violation of
the articles of incorporation, as amended, or by-laws, as amended, of the
Company, as certified by the Company as in effect on the date of this opinion or
any Missouri statute, rule or regulation binding on the Company or any judgment,
order or decree of any Missouri court or regulatory authority that names the
Company and is specifically applicable to the Company or its assets or
properties and of which we have Actual Knowledge.
No
consent, approval, license or exemption by, or order or authorization of, or
filing, recording or registration with, any Missouri governmental authority or
regulatory body is required in connection with the execution, delivery and
consummation by the Company of the Documents to which it is a
party.
The
Collateral Agreement is effective to create, in favor of the Notes Collateral
Agent, for the benefit of the Secured Parties, a valid security interest under
the Missouri UCC in that portion of the Company Collateral in which a security
interest can be created under Article 9 of the Missouri UCC.
The
Financing Statements are in proper form for filing in the State of Missouri.
Upon the proper filing of the Financing Statements with the Secretary of the
State of Missouri and assuming that a termination statement has not been filed
with respect to the Financing Statements and that the security interest has not
otherwise been released as to any of the Company
-48-
Collateral,
the security interest granted in that portion of the Company Collateral, in
which a security interest may be perfected by the filing of a financing
statement with the office of the Missouri Secretary of State under the Missouri
UCC, will be perfected.
(x) The
choice of [New York] law
to govern the Documents that select the laws of the State of [New York] as the governing law
thereof, except as otherwise required by mandatory choice of law rules of the
UCC and except to the extent that remedies provided by the laws of any
jurisdiction other than the State of [New York] are governed by the
laws of such jurisdiction, would be a valid and effective choice of law under
the laws of the State, and adherence to existing judicial precedents would lead
a Missouri state court or federal court sitting in the State that applies
Missouri law to give effect to such choice of law to govern the parties’
contractual obligations. The only exceptions would be if such a
court, pursuant to the principles set forth in Section 187 of the Restatement
(Second) of Conflict of Laws, determines either (i) that the State of [New York] has no substantial
relationship to the parties or the transaction or there is not otherwise a
reasonable basis for the parties’ choice, or (ii) that the application of [New York] law is contrary to a
fundamental policy of a state that has an interest with respect to the
particular issue being considered that is materially greater than the interest
therein of the State of [New
York]. In addition, such a court might apply the law of the
State if the issue in controversy had never been determined in [New York]. If such
a court took the approach of Section 1-105(1) of the UCC, the choice of law
provision in the Documents would be enforceable, except for certain limited
exceptions, unless the State of [New York] does not bear a
“reasonable relation” to the transaction (although no reported decision by a
Missouri court describes what constitutes a “reasonable relation” under Section
1-105(1) of the Missouri UCC). The foregoing
assumes that the choice of [New York] law to govern the
Documents was bona fide and devoid of fraud.
The
opinions set forth above are subject to the following
qualifications:
A. In
the event of foreclosure under the Security Agreement, the rights, titles and
interests of any purchaser will be subject to statutory and equitable redemption
rights.
B. We
have made no examination of the title to the Company Collateral or any other
property of the Company (collectively, the "Property"), and we express no
opinion (i) as to the Company's title to and rights in the Property and
(ii) as to whether the description of the Property included in the Security
Agreement or the Financing Statement is accurate and complete.
C. We
express no opinion with respect to any environmental laws, rules, or
regulations, or any laws or regulations governing the sale or issuance of
securities.
D. For
purposes of the opinions furnished herein, we have assumed the validity, binding
effect and enforceability of the Guarantee, the sufficiency of the Guarantee to
support and render enforceable the incidental obligations of the Company for the
payment of money under the Documents other than the Guarantee and the corporate
power of the Company to enter into and perform its obligations under the
Guarantee.
-49-
This
opinion letter is being furnished to the Representatives and Initial Purchasers
for their use and the use of their respective counsel and each of their
permitted successors and assigns in connection with the transactions
contemplated by the Documents. No other use or distribution of this
opinion may be made without our prior written consent.
The
opinions set forth in this letter are effective as of the date
hereof. We express no opinions other than as herein expressly set
forth, and no expansion of our opinions may be made by implication or
otherwise. We do not undertake to advise you of any matter within the
scope of this letter which comes to our attention after the delivery of this
letter and disclaim any responsibility to advise you of future changes in law or
fact which may affect the above opinions. This letter is solely for
your and the Initial Purchasers’ use in the transactions contemplated by the
Documents and is not to be relied upon by any other person or quoted from in
whole or in part without the express written consent of this firm.
Very
truly yours,
-50-
EXHIBIT
C
FORM
OF OHIO OPINION
June ___,
2008
Credit
Suisse Securities (USA) LLC
UBS
Securities LLC
X.X.
Xxxxxx Securities Inc.
Xxxxxxx,
Xxxxx & Co.
c/o
Credit Suisse Securities (USA) LLC
Eleven
Xxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000-0000
Re: Ply
Gem Industries, Inc. – $700,000,000 Senior Secured Notes Due 2013 (the “Notes”)
Ladies
and Gentlemen:
We have
acted as special counsel in the State of Ohio (the “State”) to Great Lakes
Window, Inc., an Ohio corporation (the “Company”), in connection with
the execution and delivery by the Company as a “Guarantor” of, and the
consummation of the transactions contemplated by, the Purchase Agreement dated
June ____, 2008 (the “Purchase
Agreement”) among Ply Gem Industries, Inc., a Delaware corporation (the
“Issuer”), each of the
Guarantors named in the Purchase Agreement (the “Guarantors”) and the Initial
Purchasers named in the Purchase Agreement (the “Initial Purchasers”) for the
sole purpose of rendering certain opinions relative to laws of the State with
regard to Company and, in particular, with regard to certain of the “Operative Documents” (as
defined in the Purchase Agreement), and the “Security Documents”(as
defined in the Purchase Agreement and together with the Operative Documents, the
“Documents”).
Initial
capitalized terms not otherwise defined herein, unless the context clearly
requires a different meaning, shall have the meaning ascribed to such terms in
the Purchase Agreement.
In
addition to the Documents, in rendering our opinions we have reviewed and relied
upon: (x) the financing statements attached hereto on Schedule I (the “Financing
Statements”); (y) the certificate of the Secretary of the
Company as attached hereto as Exhibit “A” (the “Officer Certificate”) with
regard to the
-51-
matters
certified therein, inclusive of the articles of incorporation, as amended, of
the Company (the “Articles”), the bylaws, as
amended, of the Company (the “Bylaws”), each as attached to
the Officer Certificate (collectively, the Articles and Bylaws, the “Organizational Documents”),
and the relevant resolutions of the Board of Directors of the Company as
attached to the Officer Certificate; and (z) such other certificates, documents,
and records as we have deemed relevant to our opinions and the factual
assumptions underlying the legal conclusions set forth herein.
Whenever our opinion with respect to
the existence or absence of facts is indicated to be based on our knowledge or
awareness as indicated by the use of the words “to our knowledge” or “known to
us,” we are referring to the actual, present knowledge of the particular
Xxxxxxxx & Xxxxxxx, LLC attorneys who have represented the Company and are
indicating that during the course of such representation no information has come
to the attention of such attorneys which would give such attorneys current
actual knowledge of the existence of the facts so qualified. The term
“knowledge” further does not confirm nor is it intended to imply that the
lawyers drafting this opinion letter have made inquiry of one or more
representatives of the Company. Except as expressly set forth herein,
we have not undertaken any independent investigation, examination or inquiry to
determine the existence or absence of any facts (and have not caused the review
of any court file or indices) and no inference as to our knowledge concerning
any facts should be drawn as a result of the limited purpose of rendering this
opinion letter. As such, we have not been requested nor have we
reviewed any agreement or other instrument to which the Company is a party or by
which any of the Company’s properties or assets are bound except as expressly
referenced herein
.
I. ASSUMPTIONS
The
opinions rendered in this letter are based upon the following assumptions,
together with such additional assumptions and qualifications as may be more
specifically set forth in other sections of this letter (collectively, “Assumptions”).
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1.
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The
negotiation, execution, delivery and performance of the Documents were and
will be free from any fraud, misrepresentation, duress or criminal
activity on the part of any party.
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2.
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All
signatures on all original documents are genuine and
authentic. All documents that were submitted to us as originals
are authentic, true, accurate and complete. All documents that
were submitted to us as certified or photographic copies conform to the
original documents, which are themselves authentic, true, accurate and
complete.
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3.
|
All
certificates and other statements, documents and records reviewed by us
are accurate and complete, and all representations, warranties, schedules
and exhibits contained in the Documents, with respect to the factual
matters set forth therein, are accurate and
complete.
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4.
|
The
Initial Purchasers do not have actual knowledge that any of the factual
assumptions or opinions contained herein are
incorrect.
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5.
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All
documents have been duly authorized, executed and delivered by all parties
(other than the Company) and are enforceable against them in accordance
with their respective terms.
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-52-
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6.
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Each
natural person executing any of the Documents is legally competent to do
so, and all signatures of the parties on the Documents are
genuine.
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7.
|
There
are no other agreements or understandings between or among
Company, the Guarantors or the Initial Purchasers that would expand,
modify or otherwise affect the terms of the Documents or the respective
rights or obligations of the parties thereunder and that the Documents
correctly and completely set forth the complete understanding of all
parties thereto;
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8.
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Each
of the Documents has been executed and delivered in the form reviewed by
us.
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II. OPINIONS
Subject
to the foregoing Assumptions and the Limitations set forth below, it is our
opinion that:
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1.
|
The
Company (a) is an Ohio corporation, duly organized and validly existing
and in good standing under the laws of the State, (b) has all requisite
corporate or other power and authority to own its property and carry on
its business in the State as now being conducted, and (c) is qualified to
do business and is in good standing in the
State.
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2.
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The
Company has all requisite corporate or other power and authority to
execute, deliver and perform all of its obligations under the Documents to
which it is a party.
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3.
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Each
of the Documents to which the Company is a party have been duly and
validly authorized, executed and delivered by the
Company.
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4.
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The
Company’s guarantee of the Notes has been duly and validly
authorized.
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5.
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The
issuance of the Guarantee by the Company, the execution, delivery and
compliance by the Company with all of the provisions of the Documents and
the performance of its obligations thereunder will not result in a
violation of the Company’s Organizational Documents or, to our knowledge,
any law of the State of Ohio or any judgment, order or decree of any Ohio
court or regulatory authority applicable to the Company or its assets or
properties.
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6.
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To
our knowledge, other than the filing of the Financing Statements in the
Office of the Ohio Secretary of State and the Office of the Xxxxx County,
Ohio Recorder, no consent, approval, license or exemption by, or order or
authorization of, or filing, recording or registration with, any Ohio
governmental authority or regulatory body is required in connection with
the execution, delivery and consummation by the Company of each Document
to which it is a party.
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7.
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The
provisions of the Security Documents are sufficient to create in favor of
the Secured Parties (as defined in the Purchase Agreement) a security
interest in all right, title and interest of the Company in those items
and types of collateral described in the Security Documents (the
"Collateral") in which the Company has rights and in which a security
interest may be created under Article 9 of the Ohio Uniform Commercial
Code as collateral security for the payment of the Obligations (as defined
in the Indenture). The Financing Statements are in proper form
for filing and, when filed in the Office of the Ohio Secretary of State
and the Office of the Xxxxx County, Ohio Recorder, are sufficient to
perfect the security interests created by the Security Documents in all
right, title and
|
-53-
interest
of the Company in those items and types of Collateral listed therein in which a
security interest may be perfected by the filing of a financing statement under
the Uniform Commercial Code as in effect in the State of Ohio.
III. LIMITATIONS
The
foregoing opinion is subject to the following exceptions and limitations
(collectively, “Limitations”):
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1.
|
The
enforcement and enforceability of the Documents and of the rights and
remedies set forth therein are subject to established and evolving
principles of equity (whether applied by a court of law or equity),
commercial reasonableness, conscienability, good faith and fair dealing
and to the limitations imposed by applicable law on: (i) the exercise and
availability of remedies and defenses; (ii) the enforceability of
purported waivers of rights and defenses; and (iii) the availability of
equitable remedies and defenses
generally.
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2.
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Our
opinions above relating to the existence and good standing of the Company
under the laws of the State of Ohio are based solely on the Good Standing
Certificate issued by the Ohio Secretary of State dated June ___,
2008.
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3.
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The
opinions expressed in this opinion letter are limited to the laws of the
State of Ohio and the federal laws of the United States of America, and we
assume no responsibility as to the applicability or the effect of any
other laws. No opinion is expressed herein with respect to any
laws of any county, city or other political subdivision of the State of
Ohio.
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4.
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Our
opinions set forth in this opinion letter are based upon the facts in
existence and laws in effect on the date hereof and we expressly disclaim
any obligation to update our opinions herein, regardless of whether
changes in such facts or laws come to our attention after the delivery
hereof.
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5.
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Insofar
as our opinion relates to enforceability of any Document, such opinion is
subject to the qualifications that such enforceability may be limited by
(i) all applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent conveyances and fraudulent transfers),
receivership, reorganization, moratorium, liquidation, conservation,
dissolution or similar laws affecting the enforcement of creditors’ rights
generally, (ii) the rights of the United States under the Federal Tax Lien
Act of 1966, as amended, (iii) the application of general principles of
equity, including, without limitation, concepts of materiality,
reasonableness, unconscionability, diligence, good faith and fair dealing,
regardless of whether such enforceability is considered in a proceeding at
law or in equity, and (iv) certain laws and judicial decisions that may
limit or make unavailable certain of the rights and remedies provided in
the Documents, except that such laws and decisions do not, in our opinion,
materially interfere with the practical realization of the benefits
contemplated by the Documents except for the economic consequence of any
procedural delay with may result from such laws and
decisions.
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6.
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No
opinion is given on the enforceability of any provisions in the Documents
obligating any party to pay attorneys’ fees and
expenses.
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7.
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No
opinion is given on the enforceability of any due on sale clause; due on
encumbrance clause; prepayment or make-whole premium in the event that it
is held to be a penalty, an unreasonable charge or anything other than a
valid liquidated damages clause by a reviewing
court.
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8.
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No
opinion is given on the validity, binding effect or enforceability of
provisions, if any, in the Documents that waive objection to jurisdiction
or the manner of service of process; confess a judgment or authorize
another to confess a judgment; establish jurisdiction or venue for
disputes and causes of action; waive the right to trial by jury; create
self-help remedies; impose indemnity liability on others for acts or
omissions of the parties thereto; establish indemnities or transfer or
attempt to transfer liabilities or risks under any environmental laws or
regulations; appoint any person as attorney-in-fact; waive rights to
contest a judgment or waive rights to notice and a court trial; or waive
the right to assert lack of consideration or waive the requirements of
good faith, notice and commercial reasonableness under the Uniform
Commercial Code (Chapter 1309 of the Ohio Revised Code) (the “Ohio
UCC”).
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9..
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We
also express no opinion as to the following
matters:
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(i)
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(1)
title to or rights in any of the Collateral, (2) the perfection of any
lien or security interest except as expressly set forth above, (3) the
priority of any lien or security interest, or (4) the accuracy and
sufficiency of the legal description attached to the Financing Statement
filed with the Office of the Xxxxx County, Ohio
Recorder;
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(ii)
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The
(a) creation of any security interest purported to be granted in or in
respect of the following: (i) any real property or equipment
used in farming operations, farm products, crops, timber to be cut,
as-extracted collateral, or rights therein; (ii) policies of insurance
(other than as proceeds of Collateral), receivables due from any
government or agency thereof, inventory which is subject to any negotiable
documents of title (such as negotiable bills of lading or warehouse
receipts), consumer goods, beneficial interests in a trust, letters of
credit or accounts resulting from the sale of any of the foregoing; or
(iii) any other property or assets, the creation of a security interest in
which is excluded from the coverage of the Ohio UCC, and (b) the
perfection of any security interest purported to be granted in (i) any of
the assets described under clause (a) above, (ii) except as specifically
provided herein, the effect of federal laws related to “know-how,”
copyrights, patents, trademarks, service marks, licenses, trade secrets,
trade names and other intellectual property, or (iii) any other property
or assets, the perfection of a security interest in which is subject to
(x) a statute or treaty of the United States which provides for a national
or international registration or a national or international certificate
of title for the perfection by recordation of a security interest therein
or which specifies a place of filing different from that specified in the
Ohio Revised Code for filing to perfect or record such security interest,
(y) a certificate of title statute, or (z) the laws of any jurisdiction
other than the State of Ohio or the United
States;
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(iii)
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The
enforceability of any lien on or security interest in any
Collateral:
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(a)
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consisting
of goods of a consignor who has delivered such goods to the Company under
a true consignment (as distinguished from a consignment intended as
security); and
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(b)
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as
against a “buyer in the ordinary course of business” (within the meaning
of the Ohio UCC) of the Collateral.
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(iv)
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The
continuation and perfection of the Secured Parties’ security interest in
the proceeds of the Collateral are limited to the extent set forth in the
Ohio UCC;
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(v)
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We
express no opinion as to any actions that may be required to be taken
periodically under the Ohio UCC or any other applicable law for the
effectiveness of any financing statements, or the validity or perfection
of any security interest, to be
maintained;
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(vi)
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A
security interest in any Collateral that constitutes after-acquired
collateral does not attach until the Company has rights in such
after-acquired Collateral;
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(vii)
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In
the case of property which becomes part of the Collateral after the date
hereof, Section 552 of the Bankruptcy Reform Act of 1978, as amended (the
“Bankruptcy
Code”) limits the extent to which property acquired by a debtor
after the commencement of a case under the Bankruptcy Code may be subject
to a security interest arising from a security agreement entered into by
the debtor before the commencement of such
case;
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(viii)
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In
the case of property which becomes part of the Collateral after the date
hereof, Section 547 of the Bankruptcy Code provides that a transfer is not
made until the debtor has rights in the property transferred, so a
security interest in after-acquired property which is security for other
than a contemporaneous advance may be treated as a voidable preference
under the conditions (and subject to the exceptions) provided by Section
547 of the Bankruptcy Code;
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(ix)
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The
rights of the Secured Parties with respect to Collateral consisting of
accounts, instruments, licenses, leases, contracts or other agreements
will be subject to the claims, rights and defenses of the other parties
thereto against the Company;
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(x)
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In
the case of any Collateral consisting of licenses or permits issued by
governmental authorities or other persons or entities, the Company may not
have sufficient rights therein for the security interest of the Secured
Parties to attach and, even if the Company has sufficient rights for the
security interest of the Secured Parties to attach, the exercise of
remedies may be limited by the terms of the license or permit or require
the consent of the governmental authority issuing such license or
permit;
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(xi)
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We
note that, if any of the Collateral is evidenced by instruments or
tangible chattel paper or any other property in which a security interest
may be perfected by taking possession (in each case as defined, and as
provided for, in the Ohio UCC), the local law of the jurisdiction where
such property is located will govern the priority of a possessory security
interest in such property and the effect
of
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perfection
or non-perfection of a non-possessory security interest in such
property;
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(xii)
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Notwithstanding
that Sections 1309.406(D), 1309.407(A) and 1309.408(A) of the Ohio Revised
Code render ineffective terms in agreements which prohibit, restrict or
require the consent of the person obligated thereon to the assignment,
transfer of, or the creation, attachment, perfection or enforcement of a
security interest therein or which provide that any such assignment,
transfer, creation, attachment or enforcement gives rise to a default,
breach, right of recoupment, claim, defense, termination, right of
termination or remedy thereunder, such ineffectiveness may nonetheless be
limited as provided in Section 1309.408(C) of the Ohio Revised Code;
and
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(xiii)
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The
opinions set forth above may also be limited by Sections 1309.320,
1309.323, 1309.335, and 1309.336 of the Ohio Revised
Code.
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This opinion is furnished by us solely
for your benefit and the benefit of the Initial Purchasers and your and their
respective successors and assignees upon the understanding that we are not
hereby assuming any professional responsibility to any other person whatsoever.
The opinions expressed herein may not be used or relied upon by any other
person, nor may this letter or any copies of this letter be furnished to any
third party, filed with a governmental agency, quoted, cited or otherwise
referred to without our prior written consent, other than to bank regulatory
authorities or as otherwise required by law. This opinion is given as of
the date hereof, and we hereby undertake no, and disclaim any, obligation to
advise you of any change in any matters set forth herein or upon which this
opinion is based. This opinion is provided as a legal opinion only, and
not as a guaranty or warranty of the matters discussed herein.
Very
truly yours,
(a) Xxxxxxxx
& Xxxxxxx, LLC
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EXHIBIT
A
OFFICER
CERTIFICATE
[To
come]
EXHIBIT
D
FORM
OF TEXAS OPINION
TEXAS
LEGAL OPINION
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1.
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Each
Partnership is validly existing and in good standing under the laws of the
State of Texas.
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2.
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Each
Partnership:
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(a)
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has
all requisite limited partnership power and authority to execute and
deliver the Documents to which such Partnership is a party, and to perform
their respective obligations under the Documents to which such Partnership
is a party,
|
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(b)
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has
taken all limited partnership action necessary to authorize the execution
and delivery of, and performance of its obligations under, the Documents
to which such Partnership is a party,
and
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(c)
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has
duly executed and delivered the Documents to which such Partnership is a
party.
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3.
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The
execution and delivery of, and performance by each Partnership of its
obligations under, each Document to which it is a party do
not:
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(a) violate
the Certificate of Limited Partnership or the Agreement
of Limited Partnership of such Partnership;
or
(b) to
our knowledge, violate any Applicable Laws (defined below), in each
case, which would have a Material Adverse Effect (defined below).
For purposes of this opinion, the term
“Material Adverse Effect” when used in connection with the Partnership means any
change, effect or circumstance that is materially adverse to the business,
assets, financial conditions or results of operations of the
Partnership.
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4.
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The
Collateral Agreement is effective to create, in favor of the Notes
Collateral Agent, a security interest under the Texas Uniform Commercial
Code as in effect on the date hereof (the “Texas UCC”) in all of the
respective right, title and interest of each Partnership in, and under the
Collateral in which a security interest can be created under Article 9 of
the Texas UCC (“Article 9
Collateral”).
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5.
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(a)
Under the Texas UCC (including the choice of laws provisions thereof)
while a debtor is “located” in a jurisdiction, the local law of that
jurisdiction governes the perfection of a security interest in that
portion of the Article 9 Collateral in which a security interest may be
perfected by filing a financing statement under the UCC as in effect in
the state of filing of such debtor (the “Filing
Collateral”).
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(b) Upon
filing of the fully authorized UCC-1 financing statements, attached hereto as
Exhibit “A” (the “Financing Statements”), in the office of the Secretary of the
State of Texas, the security interest created under the Collateral Agreement
with respect to such Partnerships’ right, title, and interest in the Filing
Collateral will be perfected. The Financing Statements are in
appropriate form for filing in Texas.
EXHIBIT
E
REGISTRATION
RIGHTS AGREEMENT
[To be
provided separately.]
