CINTAS CORPORATION NO. 2 UNDERWRITING AGREEMENT
Exhibit 1
CINTAS CORPORATION NO. 2
6.15% Senior Notes due August 15, 2036
August 17, 2006
KeyBanc Capital Markets, a division of
McDonald Investments Inc.
As Representative of the several Underwriters
c/o KeyBanc Capital Markets
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Ladies and Gentlemen:
Cintas Corporation No. 2, a Nevada corporation (the “Company”), proposes, subject to the terms
and conditions stated in this Underwriting Agreement (the “Agreement”), to issue and sell
$250,000,000 aggregate principal amount of its 6.15% Senior Notes due August 15, 2036 (the “Notes”)
to be guaranteed (collectively, the “Guarantees”) by Cintas Corporation, a Washington corporation
(the “Parent”), and the subsidiary guarantors listed on Schedule A hereto (the “Subsidiary
Guarantors” and, together with the Parent, the “Guarantors”), to be issued under an Indenture,
dated as of May 28, 2002 (the “Indenture”), by and among the Company, the Parent, the Subsidiary
Guarantors, and Wachovia Bank, National Association, as trustee (the “Trustee”), to the several
underwriters named in Schedule B hereto (the “Underwriters”), for whom you are acting as
representative (the “Representative”). The Notes, as guaranteed, are herein called the
“Securities.” The Company hereby confirms the agreement with you, acting as the Representative of
the Underwriters.
1. Representations and Warranties of the Company and the Guarantors. Each of the Company, the
Parent, and the Subsidiary Guarantors represents and warrants to, and agrees with, each of the
Underwriters that:
(a) The Company and the Guarantors meet the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the “Securities Act”), and have prepared and filed with the
Securities and Exchange Commission (the “Commission”) a shelf registration statement on Form S-3
(File No. 333-136631), which contains a base prospectus dated August 15, 2006 (the “Base
Prospectus”) to be used in connection with the public offering and sale of the Securities under the
Securities Act. Such shelf registration statement, including the financial statements, exhibits
and schedules thereto, in the form in which it became effective, including all documents
incorporated or deemed to be incorporated by reference therein and any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430B under the Securities Act and the
rules and regulations promulgated thereunder (the “Securities Act Regulations”), is herein referred
to as the “Registration Statement.” Any preliminary prospectus supplement to the Base Prospectus
that describes the Securities and the offering
thereof and is used prior to the filing of the Prospectus (as defined below), together with
the Base Prospectus, is called a “Preliminary Prospectus.” The Preliminary Prospectus, dated
August 15, 2006, as amended or supplemented immediately prior to the Applicable Time (as defined
below), is herein called the “Time of Sale Prospectus.” The final prospectus supplement to the
Base Prospectus that describes the Securities and the offering thereof, together with the Base
Prospectus, in the form first used by the Underwriters to confirm sales of the Securities or in the
form first made available to the Underwriters by the Company to meet requests of purchasers
pursuant to Rule 173 under the Securities Act is herein called the “Prospectus.” Any “issuer free
writing prospectus” (as defined in Rule 433 under the Securities Act Regulations) is herein called
an “Issuer Free Writing Prospectus.” For purposes of this Agreement, all references to the
Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Time of Sale
Prospectus, or the Prospectus, or any amendment or supplement to any of the foregoing, shall be
deemed to refer to and include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system (“XXXXX”). For purposes of this Agreement, the
“Applicable Time” is 4:00 p.m. (Eastern time) on the date of this Agreement.
(b) No order preventing or suspending the use of any Preliminary Prospectus, the Time of Sale
Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission. Each
Preliminary Prospectus, at the time of filing thereof, complied, and any further amendments or
supplements thereto will comply, in all material respects, with the Securities Act and the
Securities Act Regulations, and did not or will not contain an untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The representations and warranties
set forth in the immediately preceding sentence do not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to the Company or any of the
Guarantors by an Underwriter expressly for inclusion therein, which information consists solely of
the information described as such in Section 7(b).
(c) The Time of Sale Prospectus, as supplemented by those Issuer Free Writing Prospectuses and
other documents and information listed in Schedule C hereto, taken together (collectively,
the “Disclosure Package”), as of the Applicable Time, did not contain an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. Each Issuer Free
Writing Prospectus listed on Schedule C hereto does not conflict with the information
contained in the Registration Statement, the Time of Sale Prospectus or the Prospectus, and each
such Issuer Free Writing Prospectus, as supplemented by and taken together with the Disclosure
Package as of the Applicable Time, did not contain an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations and warranties set
forth in the two immediately preceding sentences do not apply to statements or omissions made in
reliance upon and in conformity with written information furnished to the Company or any of the
Guarantors by an Underwriter expressly for inclusion therein, which information consists solely of
the information described as such in Section 7(b).
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(d) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent
amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act
(whether such amendment was by post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or
form of prospectus), (iii) at the time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c) under the Securities Act Regulations) made any offer
relating to the Securities in reliance on the exemption in Rule 163 under the Securities Act
Regulations, and (iv) on the date of this Agreement (with such date being used as the determination
date for purposes of this clause (iv)), each of the Company and the Guarantors was or is (as the
case may be) a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act
Regulations.
(e) (i) At the earliest time after the filing of the Registration Statement that the Company
or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under
the Securities Act Regulations) of the Securities and (ii) as of the date of this Agreement (with
such date being used as the determination date for purposes of this clause (ii)), each of the
Company and the Guarantors was not and is not an “ineligible issuer” (as defined in Rule 405 under
the Securities Act Regulations), without taking account of any determination by the Commission
pursuant to Rule 405 under the Securities Act Regulations that it is not necessary that the Company
or any Guarantor be considered an “ineligible issuer.”
(f) The Registration Statement is an “automatic shelf registration statement,” as defined in
Rule 405 under the Securities Act Regulations, that became effective on August 15, 2006. Neither
the Company nor any of the Guarantors have received from the Commission any notice pursuant to Rule
401(g)(2) under the Securities Act objecting to the Company’s or the Guarantors’ use of the
automatic shelf registration form. No stop order suspending the effectiveness of the Registration
Statement is in effect and no proceedings for such purpose or pursuant to Section 8A of the
Securities Act against the Company or any of the Guarantors or related to the offering of the
Securities have been initiated or are pending or, to the Company or the Guarantors’ knowledge, are
contemplated by the Commission. The Company has paid the required Commission filing fees relating
to the Securities within the time required by Rule 456(b)(1) under the Securities Act without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the
Securities Act. The Company has complied to the Commission’s satisfaction with all requests of the
Commission for additional or supplemental information.
(g) The Registration Statement complies, and the Prospectus and any amendment or supplement
thereto will comply, in all material respects, with the Securities Act the Securities Act
Regulations, the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Trust Indenture Act”). The Registration Statement, and any
post-effective amendment thereto, at the time it first became effective and at any deemed new
effective date under Rule 430B(f) under the Securities Act occurring prior to the Delivery Date (as
defined below), does not and will not contain, as of the applicable effective date, any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, and any amendment or
supplement thereto, as of its applicable date and on the Delivery Date, did not and will not
contain any untrue statement of a material fact or omit to state a material fact necessary
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in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties set forth in the three immediately
preceding sentences do not apply to statements in or omissions from the Registration Statement, any
post-effective amendment thereto, or the Prospectus, or any amendment or supplement thereto, made
in reliance upon and in conformity with written information furnished to the Company or any of the
Guarantors by an Underwriter expressly for inclusion therein, which information consists solely of
the information described as such in Section 7(b). There are no contracts or documents of a
character that are required to be filed as exhibits to the Registration Statement or required to be
described or summarized in the Time of Sale Prospectus or the Prospectus that have not been so
filed, summarized or described, and all such summaries and descriptions fairly and accurately set
forth the material provisions of such contracts and documents. On the date of this Agreement and
the Delivery Date, the Indenture complies or will comply, as applicable, in all material respects
with the applicable requirements of the Trust Indenture Act.
(h) The documents incorporated by reference in the Registration Statement, the Time of Sale
Prospectus and the Prospectus, at the time they were filed with the Commission, complied, in all
material respects, with the requirements of the Exchange Act and the rules and regulations of the
Commission under the Exchange Act (the “Exchange Act Regulations”). Any further documents so filed
and incorporated by reference in the Registration Statement, the Time of Sale Prospectus and the
Prospectus will comply, in all material respects, the Exchange Act and the Exchange Act
Regulations.
(i) Each Preliminary Prospectus and the Time of Sale Prospectus was, and the Prospectus
delivered to the Underwriters for use in connection with the offering of the Securities will be,
identical to the versions of the Preliminary Prospectus, the Time of Sale Prospectus, and
Prospectus, respectively, transmitted to the Commission for filing via XXXXX, except to the extent
permitted by Regulation S-T.
(j) The Company has been duly incorporated and is validly existing and in good standing as a
corporation under the laws of the State of Nevada, with the requisite power and authority to own
and lease its properties and conduct its business as described in the Time of Sale Prospectus and
the Prospectus. The Company is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on (i) the business, condition
(financial or otherwise), results of operations, stockholders’ equity, properties or prospects of
the Parent and its subsidiaries, individually or taken as a whole, or (ii) the long-term debt or
capital stock of the Parent or any of its subsidiaries (a “Material Adverse Effect”). All of the
outstanding shares of capital stock of the Company have been duly authorized and validly issued,
are fully paid and nonassessable and are owned, free and clear of all liens, encumbrances, equities
or claims, by the Parent.
(k) Each Guarantor has been duly incorporated or formed, as applicable, and is validly
existing and in good standing as a corporation, limited partnership or limited liability company,
as applicable, under the laws of the jurisdiction of its incorporation or formation, as applicable,
with the requisite power and authority to own and lease its properties and conduct its
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business as described in the Time of Sale Prospectus and the Prospectus. Each Guarantor is
duly qualified to do business as a foreign corporation, limited partnership or limited liability
company, as applicable, in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except where the failure to be
so qualified would not, individually or in the aggregate, have a Material Adverse Effect. All of
the issued and outstanding shares of capital stock, limited partner interests or general partner
interests or membership interests, as applicable, of each Subsidiary Guarantor have been duly
authorized and validly issued, are fully paid and nonassessable (except with respect to limited
partner interests and general partner interests) and are owned by the Parent, directly or
indirectly through subsidiaries, free and clear of all liens, encumbrances, equities or claims,
including any preemptive rights, rights of first refusal or similar rights.
(l) The Parent has no subsidiaries within the meaning of Rule 405 under the Securities Act
Regulations that are considered “Significant Subsidiaries,” as defined in Regulation S-X under the
Securities Act Regulations, other than the Subsidiary Guarantors.
(m) The authorized, issued and outstanding capital stock of the Parent is as set forth in the
consolidated balance sheet as of May 31, 2006 contained in the Parent’s Annual Report on Form 10-K
for the year ended May 31, 2006 incorporated by reference in the Time of Sale Prospectus and the
Prospectus. All of the issued and outstanding shares of capital stock of the Parent have been duly
authorized and validly issued, are fully paid and nonassessable, are free of any preemptive rights,
rights of first refusal or similar rights and were issued and sold in compliance with all
applicable federal and state securities laws. Except as described in the Time of Sale Prospectus
and the Prospectus, there are no outstanding options, warrants, convertible debt securities or
other rights to purchase, agreements or other obligations to issue, or rights to convert any
obligation into or exchange any securities for, shares of capital stock of the Parent or any
security convertible or exchangeable or exercisable for shares of capital stock of the Parent.
(n) This Agreement has been duly authorized, executed and delivered by the Company and each of
the Guarantors.
(o) The Indenture has been duly qualified under the Trust Indenture Act with respect to the
Securities. The Indenture has been duly authorized, executed and delivered by the Company and each
of the Guarantors and constitutes a valid and binding obligation of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in accordance with its
terms, except that enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, conveyance, voidable preference, moratorium or other similar
laws of general applicability relating to or affecting creditors’ rights and remedies generally and
(ii) general equitable principles, whether such principles are considered in a proceeding at law or
in equity. The Indenture conforms to the description thereof contained in the Disclosure Package
and the Prospectus.
(p) The Notes have been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture and delivered
against payment for the Securities in accordance with the terms of this Agreement, will constitute
valid and binding obligations of the Company, enforceable against
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the Company in accordance with their terms, except that enforcement thereof may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent transfer, conveyance, voidable preference,
moratorium or other similar laws of general applicability relating to or affecting creditors’
rights and remedies generally and (ii) general equitable principles, whether such principles are
considered in a proceeding at law or in equity. The Notes will conform to the description thereof
contained in the Disclosure Package and the Prospectus.
(q) The Guarantee of each Guarantor has been duly authorized by such Guarantor and, when
executed by such Guarantor in accordance with the provisions of the Indenture and delivered against
payment for the Securities in accordance with the terms of this Agreement, will constitute the
valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, except that enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent transfer, conveyance, voidable preference, moratorium or other similar
laws of general applicability relating to or affecting creditors’ rights and remedies generally,
and (ii) general equitable principles, whether such principles are considered in a proceeding at
law or in equity. The Guarantees will conform to the description thereof contained in the
Disclosure Package and the Prospectus.
(r) There are no contracts, agreements or understandings between the Company or any of the
Guarantors and any person granting such person the right to require the Company or any of the
Guarantors to file a registration statement under the Securities Act with respect to any capital
stock or debt securities of the Company or any of the Guarantors owned or to be owned by such
person or to require the Company or any of the Guarantors to include such capital stock or debt
securities in the Registration Statement. To the extent any person has such registration rights,
such rights have been waived with respect to the registration of capital stock or debt securities
in connection with the Registration Statement.
(s) No consent, approval, authorization, or order of, or filing or registration with, any
insurance regulatory authority or governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement or the Indenture in connection with
the issuance or sale of the Notes by the Company and the issuance of the Guarantees by the
Guarantors, except as has been obtained or made under the Securities Act and the Trust Indenture
Act and as may be required by state securities or “blue sky” laws.
(t) The (i) execution, delivery and performance of (A) the Indenture by the Company and the
Guarantors and (B) this Agreement by the Company and the Guarantors, (ii) issuance and sale of the
Notes by the Company, (iii) issuance of the Guarantees by the Guarantors and (iv) compliance with
the terms and provisions thereof by the Company and the Guarantors, as applicable, will not
conflict with, or result in a breach or violation of any of the terms and provisions of, or
constitute a default or Repayment Event (as defined below) under (i) the charter or bylaws or
similar organizational document, as applicable, of the Company or any of the Guarantors, (ii) any
indenture, mortgage, deed of trust, loan agreement, note or other agreement or instrument to which
the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is
bound or to which any of the property or assets of the Company or any of the Guarantors is subject,
or (iii) any statute, law, order, rule or regulation of any governmental agency or body or any
court applicable to the Company or any of the Guarantors or any of their respective property,
assets or operations. As used herein, “Repayment
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Event” means any event or condition that gives the holder of any note, debenture or other
evidence of indebtedness of the Company or any of the Guarantors (or any person acting on such
holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any of the Guarantors.
(u) None of the Company nor any of the Guarantors is (i) in violation of its the charter or
bylaws or similar organizational document, (ii) in default (or, with the giving of notice or lapse
of time or both, would be in default) under any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of the Guarantors or by which the
Company or any of the Guarantors is bound or to which any of the property or assets of the Company
or any of the Guarantors is subject, or (iii) in violation of any statute, law, order, rule or
regulation of any governmental agency or body or any court applicable to the Company or any of the
Guarantors or any of their respective property, assets or operations, except, in the case of each
of clauses (ii) or (iii), for such violations as would not, individually or in the aggregate, have
a Material Adverse Effect.
(v) Each of the Company and the Guarantors owns or leases all such properties as are necessary
to the conduct of its business as presently conducted and as proposed to be conducted as described
in the Time of Sale Prospectus and the Prospectus. The Company and the Guarantors have good and
marketable title in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free from mortgages, pledges, liens, security interests,
claims, restrictions, encumbrances and defects of any kind, except as (i) are described in the Time
of Sale Prospectus and the Prospectus and (ii) such would not, individually or in the aggregate,
materially affect the value of such property or materially interfere with the use made or to be
made of such property by them. The Company and the Guarantors hold any leased real or personal
property under valid, subsisting and enforceable leases with no exceptions that would materially
interfere with the use made or to be made of such property by them. Neither the Company nor any
Guarantor has received any notice of any claim adverse to its ownership of any real or personal
property or of any claim against the continued possession of any real property, whether owned or
held under lease or sublease by the Company or any Guarantor.
(w) Each of the Company and the Guarantors has all requisite corporate power and authority,
and all necessary consents, approvals, authorizations, orders, registrations, qualifications,
licenses, filings and permits of, with and from the appropriate federal, state or local
governmental or regulatory agencies or bodies and all third parties, foreign and domestic
(collectively, “Consents”), to own and lease its properties and conduct its business as it is now
being conducted and as it is proposed to be conducted and as described in the Time of Sale
Prospectus and the Prospectus and each such Consent is valid and in full force and effect, and
neither the Company nor any Guarantor has received notice of any investigation or proceedings that
results in or, if decided adversely to the Company or any Guarantor, would result in, the
revocation of, or imposition of a materially burdensome restriction on, any Consent. Each of the
Company and the Guarantors is in compliance with all applicable laws, rules, regulations,
ordinances, directives, judgments, decrees and orders, foreign and domestic, except where failure
to be in compliance would not result in a Material Adverse Effect. No Consent contains a
materially burdensome restriction not adequately disclosed in the Time of Sale Prospectus and the
Prospectus.
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(x) Except as disclosed in the Time of Sale Prospectus and the Prospectus, there are no legal
or governmental actions, suits, proceedings, inquiries or investigations pending as to which the
Company or any of the Guarantors is a party or of which any property of the Company or any of the
Guarantors is the subject that, if determined adversely to the Company or any of the Guarantors,
would, individually or in the aggregate, have a Material Adverse Effect or would materially and
adversely affect the ability of the Company or any of the Guarantors to perform their respective
obligations under this Agreement; and no such actions, suits or proceedings are threatened or, to
the Company’s and the Guarantors’ knowledge, contemplated.
(y) Except as disclosed in the Time of Sale Prospectus and the Prospectus, no material labor
disturbance by the employees of the Company or any Guarantor exists or, to the Company’s and
Guarantors’ knowledge, is threatened or imminent, and neither the Company nor any Guarantor is
aware of any existing or threatened or imminent labor disturbances by the employees of any of its
principal suppliers, manufacturers or contractors.
(z) Each of the Company and the Guarantors (i) owns or possesses adequate right to use all
patents, patent applications, trademarks, service marks, trade names, trademark registrations,
service xxxx registrations, copyrights, licenses, formulae, customer lists, and know-how and other
intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary
or confidential information, systems or procedures, “Intellectual Property”) necessary to conduct
its business as it is now being conducted and as it is proposed to be conducted and as described in
the Time of Sale Prospectus and the Prospectus and (ii) has no reason to believe that the conduct
of its business does or will conflict with, and has not received any notice of any claim of
conflict with, any such right of others. To the best of the Company’s knowledge, all material
technical information developed by and belonging to the Company that has not been patented has been
kept confidential. Neither the Company nor any Guarantor has granted or assigned to any other
person or entity any right to manufacture, have manufactured, assemble or sell the current products
and services of the Company and its Guarantors or those products and services described in the Time
of Sale Prospectus and the Prospectus. There is no infringement by third parties of any such
Intellectual Property; there is no pending or, to the Company’s and the Guarantors’ knowledge,
threatened action, suit, proceeding or claim by others challenging the Company’s or any Guarantor’s
rights in or to any such Intellectual Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; and there is no pending or, to the Company’s and the
Guarantors’ knowledge, threatened action, suit, proceeding or claim by others that the Company or
any Guarantor infringes or otherwise violates any patent, trademark, copyright, trade secret or
other proprietary rights of others, and the Company and the Guarantors are unaware of any other
fact which would form a reasonable basis for any such claim.
(aa) Neither the Company nor any of the Guarantors is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court relating to the use,
disposal or release of hazardous or toxic substances or relating to the protection or restoration
of the environment or human exposure to hazardous or toxic substances (collectively,
“Environmental Laws”), owns or operates any real property contaminated with any substance that is
subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to
any Environmental Laws, or is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim would, individually or in
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the aggregate, have a Material Adverse Effect; and neither the Company nor any Guarantor is
aware of any pending investigation which might lead to such a claim.
(bb) Each of the Company and the Guarantors has fulfilled its obligations, if any, under the
minimum funding standards of Section 302 of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and the regulations and published interpretations thereunder with respect to
each “plan” (as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company and the Subsidiaries are eligible to
participate. No such plan has or has incurred an accumulated funding deficiency within the meaning
of Section 302 of ERISA or Section 412 of the Internal Revenue Code of 1986, as amended (the
“Code”). No lien in favor of any such plan has arisen under Section 302(f) of ERISA or Section
412(n) of the Code. Each such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published interpretations. Neither the
Company nor any of the Guarantors has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(cc) The Company and the Guarantors have filed on a timely basis all necessary federal, state,
local and foreign income and franchise tax returns required to be filed through the date hereof and
have paid all taxes due thereon and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them, except for taxes being contested in good faith for which
reserves in accordance with generally accepted accounting principles have been provided. No tax
deficiency has been asserted against the Company or any of the Guarantors which has had, nor does
the Company or any of the Guarantors know of any tax deficiency that is likely to be asserted
against the Company or any of the Guarantors which, if determined adversely to the Company or any
of the Guarantors, would have, a Material Adverse Effect.
(dd) Each of the Company and the Guarantors maintain insurance of the types, in the amounts
and covering such risks as generally deemed adequate for the conduct of its business and the value
of its properties and, to the Company’s knowledge, consistent with insurance coverage maintained by
similar companies in similar businesses, all of which insurance is in full force and effect. There
are no material claims by the Company or any Guarantors under any such policy or instrument as to
which any insurance company is denying liability or defending under a reservation of rights clause.
The Company reasonably believes that it will be able to renew its existing insurance as and when
such coverage expires or will be able to obtain replacement insurance adequate for the conduct of
the business and the value of its properties at a cost that would not have a Material Adverse
Effect.
(ee) No relationship, direct or indirect, exists between or among any of the Company or any of
the Guarantors or any of their affiliates, on the one hand, and any director, officer, stockholder,
customer or supplier of the Company of any of the Guarantors or any of their affiliates, on the
other hand, which is required by the Securities Act or the Securities Act Regulations to be
described in the Time of Sale Prospectus or the Prospectus which is not so described and described
as required. There are no outstanding loans, advances (except normal advances for business expenses
in the ordinary course of business) or guarantees of indebtedness by the Company or any of the
Guarantors to or for the benefit of any of the officers or directors
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of the Company or any of the Guarantors or any of their respective family members, except as
disclosed in the Time of Sale Prospectus and the Prospectus. The Parent has not, in violation of
the Xxxxxxxx-Xxxxx Act of 2002, directly or indirectly, including through a Guarantor, extended or
maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the
form of a personal loan to or for any director or executive officer of the Parent.
(ff) None of the Subsidiary Guarantors is currently restricted, directly or indirectly, from
(i) paying any dividends or distributions to the Company or the Parent (or any other Subsidiary
Guarantor that owns all of the capital stock of such Subsidiary Guarantor), (ii) repaying to the
Company, the Parent or any other Subsidiary Guarantor any loans or advances to such Subsidiary
Guarantor from the Company, the Parent or such other Subsidiary Guarantor or (iii) transferring any
property or assets to the Company, the Parent or any other Subsidiary Guarantor.
(gg) Neither the Company nor any of the Guarantors has sustained since the date of the last
audited financial statements included in the Registration Statement, the Time of Sale Prospectus
and the Prospectus any loss or interference with its business material to the Company and the
Guarantors considered as a whole, otherwise than as set forth or contemplated in the Registration
Statement, the Time of Sale Prospectus and the Prospectus. Subsequent to the respective dates as
of which information is given in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, except as disclosed in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, the Parent has not declared, paid or made any dividends or other distributions of any
kind on or in respect of its capital stock and there has been no material adverse change or any
development involving a prospective material adverse change, whether or not arising from
transactions in the ordinary course of business, in or affecting (i) the business, condition
(financial or otherwise), results of operations, stockholders’ equity, properties or prospects of
the Company or any of the Guarantors, individually or taken as a whole, or (ii) the long-term or
short-term debt or capital stock of the Company or any of the Guarantors. Since the date of the
latest balance sheet presented in the Registration Statement, the Time of Sale Prospectus and the
Prospectus, neither the Company nor any Guarantor has incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered
into any transactions, including any acquisition or disposition of any business or asset, which are
material to the Company and the Guarantors, individually or taken as a whole, except for
liabilities, obligations and transactions that are disclosed in the Registration Statement, the
Time of Sale Prospectus and the Prospectus.
(hh) The consolidated financial statements and supporting schedules, including the notes
thereto, included in the Registration Statement, the Time of Sale Prospectus and the Prospectus
fairly present the financial condition of the Parent and its consolidated subsidiaries as of the
respective dates indicated and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Parent and its consolidated subsidiaries for the periods specified, in
each case for the respective periods to which they apply, in each case in conformity with generally
accepted accounting principles applied on a consistent basis throughout the periods involved
(except as otherwise indicated in the notes thereto). No other financial statements or supporting
schedules are required to be included in the Registration Statement, the Time of Sale Prospectus
and the Prospectus, including, without limitation, any pro forma or as adjusted financial
statements otherwise required to be included in accordance with Regulation S-X.
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The summary and selected historical financial data and other financial information of the
Parent and its consolidated subsidiaries included in the Registration Statement, the Time of Sale
Prospectus and the Prospectus fairly present the information shown therein and have been compiled
on a basis consistent with that of the consolidated interim or audited financial statements of the
Parent and its consolidated subsidiaries included in the Registration Statement, the Time of Sale
Prospectus and the Prospectus. The Registration Statement, the Time of Sale Prospectus, the
Disclosure Package and the Prospectus include all financial and other information required to be
included in connection with the presentation of “non-GAAP financial measures” (as defined in Item
10 of Regulation S-K) therein, and the presentation of such non-GAAP financial measures therein
complies with Regulation G and Item 10 of Regulation S-K, as applicable. The Parent and its
consolidated subsidiaries do not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the Registration Statement, the
Time of Sale Prospectus and the Prospectus.
(ii) Ernst & Young LLP, who have audited and reviewed the financial statements and supporting
schedules of the Parent and its consolidated subsidiaries included in the Registration Statement,
the Time of Sale Prospectus, and the Prospectus, are independent registered public accountants as
required by the Securities Act, the Securities Act Regulations, the Exchange Act and the Exchange
Act Regulations. Ernst & Young LLP is registered with Public Company Accounting Oversight Board.
(jj) Each of the Company and the Guarantors maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization, (ii) transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting
principles and to maintain accountability for assets, (iii) access to its assets is permitted only
in accordance with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(kk) The Parent has established and maintains “disclosure controls and procedures” (as such
term is defined in the Rules 13a-15(e) and 15d-15(e) under the Exchange Act Regulations) and
“internal control over financial reporting” (as such term is defined in the Rules 13a-15(f) and
15d-15(f) under the Exchange Act Regulations). There has not been any change in the Parent’s
internal control over financial reporting that has materially affected, or is reasonably likely to
materially affect, either the Parent’s or the Company’s internal control over financial reporting.
The Parent is not aware of (i) any “significant deficiency” or “material weakness” (in each case,
as defined in Public Company Oversight Board Standard No. 2) in the design or operation of the
Parent’s internal control over financial reporting, or (ii) any fraud, whether or not material,
that involves management or other employees who have a significant role in the Parent’s internal
control over financial reporting.
(ll) The statistical and market-related data included in the Time of Sale Prospectus and the
Prospectus are based on or derived from sources that the Company and the Guarantors believe to be
reliable and accurate or represent the Company’s or the Guarantors’ good faith estimates that are
made on the basis of data derived from such sources.
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(mm) The Parent is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act and files reports with the Commission via XXXXX.
(nn) Neither the Parent, the Company or any Guarantor or any of their affiliates has taken or
will take, directly or indirectly, any action designed to stabilize or manipulate the price of any
security of the Parent or the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or manipulation of the price
of any security of the Parent or the Company, to facilitate the sale or resale of any of the
Securities.
(oo) None of the Company and the Guarantors is, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described in the Time of Sale
Prospectus and the Prospectus, will be, required to register as an “investment company” as such
term is defined under the Investment Company Act of 1940, as amended (the “Investment Company
Act”).
Any certificate signed by or on behalf of any of the Company and the Guarantors and delivered
to the Representative or to counsel for the Underwriters shall be deemed to be a representation and
warranty by the Company and the Guarantors, as applicable, to each Underwriter as to the matters
covered thereby.
2. Sale, Purchase and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company hereby agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company,
at a purchase price of 98.602% of the aggregate principal amount thereof plus accrued interest from
August 22, 2006 to the Closing Date, the respective principal amount of Notes set forth opposite
such Underwriter’s name in Schedule B hereto.
(b) The several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
(c) The Company shall deliver the Securities to be purchased by each Underwriter hereunder,
against payment by or on behalf of the Underwriters of the purchase price therefor by wire transfer
of federal (same-day) funds to the account specified by the Company to McDonald Investments Inc. at
least forty-eight hours in advance, in the form of one or more permanent global Securities in
definitive form (the “Global Securities”) deposited with the Trustee as custodian for The
Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent Global Securities will be held only in book-entry form through DTC,
except in the limited circumstances described in the Time of Sale Prospectus and the Prospectus.
The date of such delivery and payment shall be August 22, 2006, or such other time and date as the
Representative and the Company may agree upon in writing. Such date for delivery of the Securities
is herein called the “Delivery Date” or the “Closing Date.”
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(d) Time shall be of the essence, and delivery at the time and place specified pursuant to
this Agreement is a further condition of the obligations of the Underwriters hereunder.
3. Certain Agreements of the Company and the Guarantor. The Company and the Guarantor agree
with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by the Representative and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act Regulations not later than the
Commission’s close of business on the second business day following the execution and delivery of
this Agreement; prior to the termination of the offering of the Securities, to make no further
amendment or any supplement to the Registration Statement, Time of Sale Prospectus or Prospectus
which shall be disapproved by the Representative promptly after reasonable notice thereof; to
advise the Representative, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the Representative with
copies thereof; to file promptly, and in any event within the applicable required time period, all
reports and any definitive proxy or information statements required to be filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus for so long as the delivery of a prospectus (or in lieu thereof, the notice referred to
in Rule 173(a) under the Securities Act Regulations) is required in connection with the offering or
sale of the Securities; to advise the Representative, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus, the Prospectus, or any other prospectus in respect of the
Securities, of the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration Statement, Time of
Sale Prospectus or Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any Preliminary Prospectus, the
Prospectus or other prospectus or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order.
(b) To prepare a final term sheet, substantially in the form of Exhibit A hereto,
containing solely a description of the final terms of the Securities and the offering thereof, in a
final form approved by the Representative, and to file such term sheet pursuant to Rule 433(d)
under the Securities Act Regulations within the time period required by such rule.
(c) If, at any time prior to the filing of the Prospectus pursuant to Rule 424(b) under the
Securities Act Regulations, any events shall have occurred as a result of which the Disclosure
Package would include an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made at such time, not misleading, to notify promptly the Representative so that any use
of the Disclosure Package may cease until it is amended or supplemented and to prepare and furnish
without charge to each Underwriter and to any dealer in Securities as many written and electronic
copies as the Representative may from time to time reasonably request of
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an amended Disclosure Package or a supplement to the Disclosure Package which will correct
such statement or omission or effect such compliance.
(d) No later than 12:00 p.m., New York City time, on the second business day succeeding the
date of this Agreement, and from time to time, to furnish the Underwriters with written and
electronic copies of the Prospectus in such quantities as the Representative may reasonably
request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act Regulations) is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with the offering or sale of
the Securities and, if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the Securities Act Regulations) is delivered, not misleading, or,
if for any other reason it shall be necessary during such period to amend or supplement the
Prospectus in order to comply with the Securities Act, to notify promptly the Representative and
upon its request to prepare and furnish without charge to each Underwriter and to any dealer in
Securities as many written and electronic copies as the Representative may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance, and in case any Underwriter is required by
law, rule or regulation to deliver a prospectus (or in lieu thereof, the notice referred to in Rule
173(a) under the Securities Act Regulations) in connection with sales of any of the Securities at
any time nine months or more after the time of issue of the Prospectus, upon the request of the
Representative but at the expense of such Underwriter, to prepare and deliver to such Underwriter
as many written and electronic copies as the Representative may reasonably request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Securities Act.
(e) Promptly from time to time, to take such action as the Representative may reasonably
request to qualify the Securities for offering and sale under the securities laws of such
jurisdictions as the Representative may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Securities, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction.
(f) As soon as practicable, to make generally available to the securityholders of the Parent
within the required time periods after the effective date of the Registration Statement (as the
term “effective date” is defined in Rule 158(c) under the Securities Act Regulations), an earnings
statement of the Parent and its consolidated subsidiaries (which need not be audited) complying
with the provisions of Section 11(a) of the Securities Act and the Securities Act Regulations
(including Rule 158 under the Securities Act Regulations).
(g) During the period beginning on the date hereof and continuing to and including the 30 days
following the Delivery Date, not to offer, sell, contract to sell or otherwise transfer or dispose
of any debt securities issued or guaranteed by the Company or any Guarantor or any warrants, rights
or options to purchase or otherwise acquire debt securities issued or
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guaranteed by the Company or any Guarantor(other than the Securities) or publicly announce an
intention to effect any such transaction.
(h) To use the net proceeds received by it from the sale of the Securities pursuant to this
Agreement in the manner specified in the Time of Sale Prospectus under the caption “Use of
Proceeds.”
(i) Not to, and to use its best efforts to cause its officers, directors and affiliates not
to, take, directly or indirectly, any action designed to stabilize or manipulate the price of any
security of the Parent or the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or manipulation of the price
of any security of the Parent or the Company, to facilitate the sale or resale of any of the
Securities.
(j) To comply with all of the provisions of any undertakings in the Registration Statement.
(k) To use their best efforts to do and perform all things required to be done or performed
under this Agreement by the Company or any of the Guarantors prior to the Delivery Date and to
satisfy all conditions precedent to the delivery of the Securities.
4. Additional Agreements.
(a) Each of the Company and the Guarantors represents and agrees that, without the prior
consent of the Representative, it has not made and will not make any offer relating to the
Securities that would constitute a “free writing prospectus” (as defined in Rule 405 under the
Securities Act Regulations). Each Underwriter, severally and not jointly, represents and agrees
that, without the prior consent of the Company and the Representative, it has not made and will not
make any offer relating to the Securities that would constitute a free writing prospectus other
than a free writing prospectus listed on Schedule C hereto or a free writing prospectus
that, solely as a result of the use of such free writing prospectus by such Underwriter, would not
required to be filed with the Commission pursuant to Rule 433 under the Securities Act Regulations
(for the avoidance of doubt, the Underwriters are authorized to use the information contained in
the final term sheet prepared and filed pursuant to Section 3(b) hereof relating to the final terms
of the Securities in communications conveying information relating to the offering to investors).
(b) Each of the Company and the Guarantors has complied and will comply with the requirements
of Rules 164 and 433 under the Securities Act Regulations applicable to any Issuer Free Writing
Prospectus, including timely filing with the Commission or retention where required and legending.
(c) Each of the Company and the Guarantors agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free
Writing Prospectus would conflict with the information in the Registration Statement, the Time of
Sale Prospectus, or the Prospectus or would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the
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Company will give prompt notice thereof to the Representative and, if requested by the
Representative, will prepare and furnish without charge to each Underwriter an Issuer Free Writing
Prospectus or other document which will correct such conflict, statement or omission. The
representation and warranty set forth in the immediately preceding sentence does not apply to
statements or omissions made in reliance upon and in conformity with written information furnished
to the Company or any of the Guarantors by an Underwriter expressly for inclusion therein, which
information consists solely of the information described as such in Section 7(b).
5. Expenses. The Company and the Guarantors will pay or cause to be paid: (a) the fees,
disbursements and expenses of the Company’s and the Guarantors’ counsel and accountants in
connection with the registration of the Securities under the Securities Act and all other expenses
in connection with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the Underwriters and
dealers; (b) the cost of printing or producing of a reasonable number of each of this Agreement,
any underwriting and selling group documents, a Blue Sky Memorandum, closing documents (including
any compilations thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (c) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in Section 3(e) hereof,
including the reasonable fees, disbursements and expenses of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky Memorandum (such fees,
disbursements and expenses not to exceed $10,000); (d) the filing fees incident to, and the
reasonable fees, disbursements and expenses of counsel for the Underwriters in connection with,
securing any required review by the National Association of Securities Dealers, Inc. of the terms
of the sale of the Securities; (e) the fees, disbursements and expenses of the Trustee and any
paying agent (including the related fees, disbursements and expenses of any counsel to such
parties; (f) any fees charged by rating agencies for rating the Securities; (g) all expenses
incurred by the Company and the Guarantors in connection with any “road show” presentation to
potential investors; and (h) all other costs and expenses incident to the performance of their
obligations hereunder which are not otherwise specifically provided for in this Section 5.
6. Conditions of the Obligation of the Underwriters. The obligations of the several
Underwriters hereunder shall be subject to the accuracy, as of the Delivery Date, of the
representations and warranties of the Company and the Guarantors contained herein, to the
performance by the Company and the Guarantors of their obligations hereunder, and to each of the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the Securities Act Regulations and in
accordance with Section 3(a) hereof; all material required to be filed by the Company pursuant to
Rule 433(d) under the Securities Act Regulations shall have been filed with the Commission within
the applicable time period prescribed for such filing by Rule 433, including, without limitation,
the final term sheet contemplated by Section 3(b) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the Securities Act against the Company
or any of the Guarantors or related to the offering of the Securities
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shall have been initiated or threatened by the Commission; no stop order suspending or
preventing the use of the Prospectus or any Issuer Free Writing Prospectus or any part thereof
shall have been issued and no proceedings for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the part of the Commission shall
have been complied with to the reasonable satisfaction of the Representative.
(b) The Underwriters shall not have discovered and disclosed to the Company that the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, or the
Prospectus or any amendment or supplement thereto contains any untrue statement of fact that, in
the opinion of counsel for the Underwriters, is material or omits to state a fact that is material
and is required to be stated therein or is necessary to make the statements therein not misleading.
(c) Xxxxxxx Xxxxxxxx & Xxxxxxx PLL, counsel for the Company, shall have furnished to the
Representative their written opinion, dated the Delivery Date, in form and substance satisfactory
to the Representative, to the effect that:
(i) The Company has been duly incorporated and is validly existing and in good standing as a
corporation under the laws of the State of Nevada, with the requisite power and authority to own
and lease its properties and conduct its business as described in the Time of Sale Prospectus and
the Prospectus. The Company is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification.
(ii) The Parent has been duly incorporated and is validly existing and in good standing as a
corporation under the laws of the State of Washington, with the requisite power and authority to
own and lease its properties and conduct its business as described in the Time of Sale Prospectus
and the Prospectus. The Parent is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect.
(iii) Each Subsidiary Guarantor has been duly incorporated or formed, as applicable, and is
validly existing and in good standing as a corporation, limited partnership or limited liability
company, as applicable, under the laws of the jurisdiction of its incorporation or formation, as
applicable, with the requisite power and authority to own and lease its properties and conduct its
business as described in the Time of Sale Prospectus and the Prospectus. Each Subsidiary Guarantor
is duly qualified to do business as a foreign corporation, limited partnership or limited liability
company, as applicable, in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, except where the failure to be
so qualified would not, individually or in the aggregate, have a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the Parent is as set forth in the
consolidated balance sheet as of May 31, 2006 contained in the Parent’s Annual Report on Form 10-K
for the year ended May 31, 2006 incorporated by reference in the Time of Sale Prospectus and the
Prospectus. All of the issued and outstanding shares of capital
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stock of the Parent have been duly authorized and validly issued, are fully paid and
nonassessable.
(v) All of the issued and outstanding shares of capital stock, limited partner interests or
general partner interests or membership interests of the Company and each Subsidiary Guarantor have
been duly authorized and validly issued, are fully paid and nonassessable (except with respect to
limited partner interests and general partner interests) and are owned by the Parent, directly or
indirectly through subsidiaries, free and clear of all liens, encumbrances, equities or claims,
including any preemptive rights, rights of first refusal or similar rights.
(vi) The Indenture has been duly qualified under the Trust Indenture Act with respect to the
Securities. The Indenture has been duly authorized, executed and delivered by the Company and each
of the Guarantors and constitutes a valid and binding obligation of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in accordance with its
terms, except that enforcement thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent transfer, conveyance, voidable preference, moratorium or other similar
laws of general applicability relating to or affecting creditors’ rights and remedies generally and
(B) general equitable principles, whether such principles are considered in a proceeding at law or
in equity.
(vii) The Notes have been duly authorized by the Company and, when executed by the Company and
authenticated by the Trustee in accordance with the provisions of the Indenture and delivered
against payment for the Securities in accordance with the terms of this Agreement, will constitute
valid and binding obligations of the Company, enforceable against the Company in accordance with
their terms, except that enforcement thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent transfer, conveyance, voidable preference, moratorium or other similar
laws of general applicability relating to or affecting creditors’ rights and remedies generally and
(B) general equitable principles, whether such principles are considered in a proceeding at law or
in equity.
(viii) The Guarantee of each Guarantor has been duly authorized by such Guarantor and, when
executed by such Guarantor in accordance with the provisions of the Indenture and delivered against
payment for the Securities in accordance with the terms of this Agreement, will constitute the
valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, except that enforcement thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent transfer, conveyance, voidable preference, moratorium or other similar
laws of general applicability relating to or affecting creditors’ rights and remedies generally,
and (B) general equitable principles, whether such principles are considered in a proceeding at law
or in equity.
(ix) This Agreement has been duly authorized, executed and delivered by the Company and each
of the Guarantors.
(x) The Registration Statement is an “automatic shelf registration statement,” as defined in
Rule 405 under the Securities Act Regulations, that became effective on the date specified in such
opinion. The Company has not received from the Commission any
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notice pursuant to Rule 401(g)(2) under the Securities Act objecting to the Company’s use of
the automatic shelf registration form. No stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act and no proceedings for such purpose
or pursuant to Section 8A under the Securities Act against the Company or any of the Guarantors or
related to the offering of the Securities have been initiated or are pending or are contemplated or
threatened by the Commission. The Prospectus was filed with the Commission within the time period
required by such Rule 424(b) under the Securities Act Regulations.
(xi) The Registration Statement and the Prospectus, and each amendment or supplement to the
Registration Statement and the Prospectus (other than the financial statements or other financial
data contained therein, as to which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Securities Act and the Securities Act
Regulations. Each document filed with the Commission pursuant to the Exchange Act and incorporated
by reference in the Registration Statement, when filed with the Commission, complied as to form in
all material respects with the Exchange Act and the Exchange Act Regulations (other than the
financial statements or other financial data contained therein, as to which such counsel need
express no opinion).
(xii) There are no contracts or documents of a character that are required to be filed as
exhibits to the Registration Statement or required to be described or summarized in the Time of
Sale Prospectus or the Prospectus that have not been so filed, summarized or described, and all
such summaries and descriptions fairly and accurately set forth the material provisions of such
contracts and documents.
(xiii) No consent, approval, authorization, or order of, or filing or registration with, any
insurance regulatory authority or governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement or the Indenture in connection with
the issuance or sale of the Notes by the Company and the issuance of the Guarantees by the
Guarantors, except as has been obtained or made under the Securities Act and the Trust Indenture
Act and as may be required by state securities or “blue sky” laws.
(xiv) The (A) execution, delivery and performance of (1) the Indenture by the Company and the
Guarantors and (2) this Agreement by the Company and the Guarantors, (B) issuance and sale of the
Notes by the Company, (C) issuance of the Guarantees by the Guarantors and (D) compliance with the
terms and provisions thereof by the Company and the Guarantors, as applicable, will not conflict
with, or result in a breach or violation of any of the terms and provisions of, or constitute a
default or Repayment Event under (i) the charter or bylaws or similar organizational document, as
applicable, of the Company or any of the Guarantors, (ii) any indenture, mortgage, deed of trust,
loan agreement, note or other agreement or instrument to which the Company or any of the Guarantors
is a party or by which the Company or any of the Guarantors is bound or to which any of the
property or assets of the Company or any of the Guarantors is subject, or (iii) any statute, law,
order, rule or regulation of any governmental agency or body or any court applicable to the Company
or any of the Guarantors or any of their respective property, assets or operations.
(xv) None of the Company and the Guarantors is, and after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
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in the Time of Sale Prospectus and the Prospectus will be, required to register as an
“investment company” as such term is defined under the Investment Company Act.
(xvi) To such counsel’s knowledge, there are no legal or governmental actions, suits,
proceedings, inquiries or investigations pending as to which the Company or any of the Guarantors
is a party or of which any property of the Company or any of the Guarantors is the subject that, if
determined adversely to the Company or any of the Guarantors, would, individually or in the
aggregate, have a Material Adverse Effect or would materially and adversely affect the ability of
the Company or any of the Guarantors to perform their respective obligations under this Agreement.
(xvii) The statements contained in (A) the Time of Sale Prospectus and the Prospectus under
the captions “Description of Senior Debt Securities,” “Description of Senior Notes,” “Material
United States Federal Income Tax Consequences,” “Underwriting” and “Offer to Repurchase upon a
Change of Control Repurchase Event” and (B) in Item 15 of the Registration Statement, insofar as
such statements purport to summarize legal matters or provisions of the documents referred to
therein, present accurate and fair summaries of such legal matters and provisions.
Such counsel shall state that, although such counsel has not independently verified, is not
passing upon, and does not assume any responsibility for, the accuracy or completeness (except as
and to the extent set forth in subsection (xvii) above) of the information contained in the
Registration Statement, the Disclosure Package and the Prospectus, they have participated in the
preparation of the Registration Statement, the Disclosure Package and the Prospectus; from time to
time, such counsel has had discussions with officers, directors and employees of the Parent and its
subsidiaries, with representatives of Ernst & Young LLP, the independent accountants who examined
the financial statements of the Parent included or incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus, with representatives of the Underwriters and
with counsel to the Underwriters; and, on the basis of the foregoing, such counsel advises you that
nothing has come to such counsel’s attention which would lead them to believe that (A) the
Registration Statement, at the time it first became effective and at any deemed new effective date
under Rule 430B(f) under the Securities Act Regulations, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements or other financial data contained in the
Registration Statement), (B) the Disclosure Package, as of the Applicable Time and at the Delivery
Date, contained an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that such counsel need express no opinion with
respect to the financial statements or other financial data contained in the Disclosure Package) or
(C) or that the Prospectus, as of its date and at the Delivery Date, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the financial statements or
other financial data contained in the Prospectus).
-20-
(d) Xxxxx Day, counsel for the Underwriters, shall have furnished to the Representative their
written opinion, dated the Delivery Date, in form and substance satisfactory to the Representative.
(e) The Underwriters shall have received, on each of the date hereof and the Delivery Date, a
letter dated the date hereof or the Delivery Date, as applicable, in form and substance
satisfactory to the Representative, from Ernst & Young LLP containing statements and information of
the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information of the Parent and its consolidated
subsidiaries contained in the Registration Statement, the Disclosure Package and the Prospectus.
(f) The Parent shall have furnished to the Underwriters a certificate, dated the Delivery
Date, executed by the Chief Executive Officer and the Chief Financial Officer of the Parent, to the
effect that:
(i) The representations, warranties and agreements of the Company and the Guarantors in
Section 1 of this Agreement are true and correct as of the date given and as of the Delivery Date;
(ii) No stop order suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose or pursuant to Section 8A under the
Securities Act against the Company or any of the Guarantors or related to the offering of the
Securities have been initiated or threatened by the Commission;
(iii) No stop order suspending or preventing the use of the Prospectus or any Issuer Free
Writing Prospectus or any part thereof has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Securities Act;
(iv) When the Registration Statement became effective and at all times subsequent thereto up
to the date hereof, the Registration Statement and the Prospectus, and any amendments or
supplements thereto contained all material information required to be included therein by the
Securities Act or the Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, and in all material respects conformed to the requirements of the
Securities Act or the Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be; the Registration Statement, the Disclosure Package and the
Prospectus, and any amendments or supplements thereto, did not and do not include any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading; and, since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amendment or supplemented Prospectus which has not
been so set forth; and
(v) Subsequent to the respective dates as of which information is given in the Time of Sale
Prospectus and Prospectus, except as set forth in the Time of Sale Prospectus and the Prospectus,
neither the Company nor any of the Guarantors has sustained any loss or interference with its
business material to the Company and the Guarantors considered as a whole,
-21-
and there has not been any (a) transaction or event which has a Material Adverse Effect, (b)
change in the capitalization of the Company or any of the Guarantors that is material to the
Company and the Guarantors taken as a whole, (c) any obligation, contingent or otherwise, directly
or indirectly incurred by the Company or any Guarantors that is material to the Company and the
Guarantors taken as a whole or (d) any dividend or distribution of any kind declared, paid or made
by the Parent on any class of its capital stock.
(g) (i) Neither the Company nor any of the Guarantors shall have sustained since the date of
the latest audited financial statements included in the Time of Sale Prospectus and the Prospectus
any loss or interference with its business, otherwise than as set forth or contemplated in the Time
of Sale Prospectus and the Prospectus and (ii) since the respective dates as of which information
is given in the Time of Sale Prospectus, and the Prospectus, there shall not have been any material
adverse change or any development involving a prospective material adverse change, whether or not
arising from transactions in the ordinary course of business, in or affecting (A) the business,
condition (financial or otherwise), results of operations, stockholders’ equity, properties or
prospects of the Parent and its subsidiaries, individually or taken as a whole, or (B) the
long-term or short-term debt or capital stock of the Company or any of the Guarantors, the effect
of which, in any such case described in clause (i) or (ii), is in the judgment of the
Representative so material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities being delivered on the Delivery Date on the
terms and in the manner contemplated in the Time of Sale Prospectus and the Prospectus.
(h) On or after the date hereof, (i) no downgrading shall have occurred in the rating accorded
the debt securities of the Company or any of the Guarantors by any “nationally recognized
statistical rating organization,” as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act Regulations, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative implications, its rating
of any of the debt securities of the Company or any of the Guarantors.
(i) On or after the date hereof, there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ Stock Market (“Nasdaq”); (ii) a suspension or
material limitation in trading in the Parent’s securities on Nasdaq; (iii) a general moratorium on
commercial banking activities declared by United States federal or New York or Ohio state
authorities or a material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war; or (v) the
occurrence of any other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event specified in clause
(iv) or (v) in the judgment of the Representative makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being delivered on the Delivery Date on
the terms and in the manner contemplated in the Prospectus.
(j) The Company shall have furnished to the Representative such further information,
certificates and documents as the Representative may reasonably request.
-22-
All opinions, certificates, letters and documents mentioned above or elsewhere in this
Agreement shall be deemed to be compliance with the provisions hereof only if they are in form and
substance satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) The Company and each of the Guarantors shall jointly and severally indemnify and hold
harmless each Underwriter, its affiliates, their respective officers, directors, employees and
agents, and each person, if any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus or any “issuer information”
filed or required to be filed pursuant to Rule 433(d) under the Securities Act Regulations, or
arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses incurred by such Underwriter in
connection with investigating or defending against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company and the Guarantors shall
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 or omission or alleged
omission made in the Registration Statement, any Preliminary Prospectus, the Time of Sale
Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus, in reliance upon and in conformity with written information furnished to the Company or
any of the Guarantors by an Underwriter expressly for inclusion therein, which information consists
solely of the information described as such in Section 7(b). This indemnity agreement will be in
addition to any liability that the Company and the Guarantors may otherwise have, including, but
not limited to, other liability under this Agreement.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Company, each Guarantor, their respective affiliates, officers, directors, employees and agents,
and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15
of the Securities Act, against any losses, claims, damages or liabilities to which the Company may
become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Time of Sale Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission
was made in the Registration Statement, any Preliminary Prospectus, the Time of Sale Prospectus, or
the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
-23-
Company or any of the Guarantors by such Underwriter expressly for inclusion therein, and will
reimburse the Company for any legal or other expenses incurred by the Company in connection with
investigating or defending against any such loss, claim, damage, liability or action as such
expenses are incurred, it being understood and agreed that the only such information furnished to
the Company or any of the Guarantors by any Underwriter consists of the following information in
the Time of Sale Prospectus and the Prospectus: (i) the fifth paragraph, (ii) the eighth paragraph
and (iii) the last sentence of the ninth paragraph under the caption “Underwriting.” This
indemnity agreement will be in addition to any liability that any Underwriter may otherwise have,
including, but not limited to, other liability under this Agreement.
(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the indemnifying party
shall 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
satisfactory to such indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, except as provided in the following sentence,
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 7 for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation. After notice
from the indemnifying party to the indemnified party of the indemnifying party’s election to assume
the defense of such action, the indemnified party shall have the right to employ its own counsel in
any such action, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel, (ii) if the named parties in any such action include both
the indemnifying party and the indemnified party and the indemnified party shall have reasonably
concluded that there is an actual or potential conflict between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or that there may be
legal defenses available to it or other indemnified parties that are different from or additional
to those available to the indemnifying party or (iii) the indemnifying party shall not have
employed counsel to assume the defense of such action within a reasonable time after notice of
commencement thereof, in each of which cases the fees and expenses of such counsel shall be at the
expense of the indemnifying party (it being understood, however, that the indemnifying party shall
not be liable for the fees and expenses of more than one separate counsel in addition to any local
counsel). No indemnifying party shall, without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (x) includes an unconditional
release of the indemnified party from all liability arising out of such action or claim and (y)
does not
-24-
include a statement as to or an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is unavailable to or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Underwriters on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and the Guarantors on the one hand and the
Underwriters on the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by the Company and the Guarantors
on the one hand and the Underwriters 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 Company bear
to the total underwriting discounts and commissions received by the Underwriters, in each case as
set forth in the table on the cover page of the Prospectus. 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 Company and the Guarantors or the Underwriters and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue statement or omission. The
Company and the Guarantors and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the
Underwriters 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 above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above in 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 such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Securities purchased by such
Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute
are several in proportion to their respective purchase obligations and not joint.
8. Default of One or More of the Several Underwriters. If, on the Delivery Date, any one or
more of the several Underwriters shall fail or refuse to purchase Securities that it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not
exceed 10% of the aggregate principal amount of the Securities to be purchased on such date, the
other Underwriters shall be obligated, severally, in the proportions
-25-
that the aggregate principal amount of Securities set forth opposite their respective names on
Schedule B bears to the aggregate principal amount of Securities set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as may be specified by
the Representative with the consent of the non-defaulting Underwriters, to purchase the Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the Delivery Date, any one or more of the Underwriters shall fail or refuse to
purchase Securities and the aggregate principal amount of Securities with respect to which such
default occurs exceeds 10% of the aggregate principal amount of Securities to be purchased on such
date, and arrangements satisfactory to the Representative and the Company for the purchase of such
Securities are not made within forty-eight hours after such default, this Agreement shall terminate
without liability of any party to any other party except that the provisions of Section 5, Section
7 and Section 10 shall at all times be effective and shall survive such termination. In any such
case, either the Representative or the Company shall have the right to postpone the Delivery Date
but in no event for longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term “Underwriter” shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 8. Any action taken under this Section
8 shall not relieve any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
-26-
9. Termination. The obligations of the Underwriters hereunder may be terminated by the
Underwriters by notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section 6(g), Section 6(h) or
Section 6(i) shall have occurred or if the Underwriters shall decline to purchase such Securities
for any reason permitted under this Agreement. In such case, the Company shall have no liability
hereunder except as provided by Section 5, Section 7 and Section 10 hereof.
10. Reimbursement of Underwriters’ Expenses. If (a) the Company and the Guarantors shall fail
to tender the Securities for delivery to the Underwriters for any reason under this Agreement other
than a breach by the Underwriters of their representations herein or obligations hereunder or (b)
the Underwriters shall decline to purchase the Securities for any reason permitted under this
Agreement (including the termination of this Agreement pursuant to Section 9 but excluding the
failure of any of the conditions herein to be satisfied as a result of a breach by the Underwriters
of their representations herein), the Company and the Guarantors shall reimburse the Underwriters
for the reasonable fees and expenses of their counsel and for such other out-of-pocket expenses as
shall have been reasonably incurred by them in connection with this Agreement and the proposed
purchase of the Securities, and upon demand, the Company and the Guarantors shall pay the full
amount thereof to the Underwriters. If this Agreement is terminated pursuant to Section 8 hereof
by reason of the default of one or more Underwriters, the Company and the Guarantors shall not be
obligated to reimburse any defaulting Underwriter on account of those expenses.
11. Notices. All statements, requests, notices and agreements hereunder shall be in writing,
and:
(a) If to the Underwriters, shall be delivered or sent by mail, telex or facsimile
transmission to KeyBanc Capital Markets, a division of McDonald Investments Inc., XxxXxxx Xxxxx,
000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxx X. Xxxx (Facsimile: 000-000-0000;
Telephone: 000-000-0000); and with a copy (which shall not constitute notice) to Xxxxx Day, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxx, Esq. (Facsimile:
000-000-0000; Telephone: 000-000-0000);
(b) if to the Company or the Guarantors, shall be delivered or sent by mail, telex or
facsimile transmission to it at 0000 Xxxxxx Xxxxxxxxx, X.X. Xxx 000000, Xxxxxxxxxx, Xxxx 00000,
Attention: Xxxxxx X. Xxxxxxx (Facsimile: 000-000-0000; Telephone: 000-000-0000); with a copy (which
shall not constitute notice) to Xxxxxxx Muething & Klekamp PLL, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq. (Facsimile: 000-000-0000; Telephone:
000-000-0000).
Any notice of a change of address or facsimile transmission number must be given by the
Company or the Underwriters, as the case maybe, in writing at least three days in advance of such
change.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Company, the Guarantors and their respective successors.
This Agreement and the terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and
-27-
agreements of the Company and the Guarantors contained in this Agreement shall also be deemed
to be for the benefit of the officers and employees of the Underwriters and the person or persons,
if any, who control the Underwriters within the meaning of Section 15 of the Securities Act and (b)
the representations and warranties of the Underwriters in this Agreement and the indemnity
agreement of the Underwriters contained in Section 7(b) of this Agreement shall be deemed to be for
the benefit of directors, officers and employees of the Company and the Guarantors, and any person
controlling the Company or any Guarantor within the meaning of Section 15 of the Securities Act.
Nothing contained in this Agreement is intended or shall be construed to give any person, other
than the persons referred to in this Section 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. Survival. The respective indemnities, representations, warranties and agreements of the
Company and the Guarantors and the Underwriters contained in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for
the Securities and shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any of them or any
person controlling any of them.
14. Absence of Fiduciary Relationship. Each of the Company and the Guarantors acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement is an
arm’s-length commercial transaction between the Company and the Guarantors on the one hand and the
several Underwriters on the other, (b) in connection therewith and with the process leading to such
transaction, each Underwriter is acting solely as a principal and not the agent or fiduciary of the
Company or any of the Guarantors, (c) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company or any of the Guarantors with respect to the offering
contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has
advised or is currently advising the Company or any of the Guarantors on other matters) or any
other obligation to the Company except the obligations expressly set forth in this Agreement and
(d) each of the Company and the Guarantors has consulted its own legal and financial advisors to
the extent it deemed appropriate. Each of the Company and the Guarantors agrees that it will not
claim that the Underwriters, or any of them, has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Company or any of the Guarantors, in connection
with such transaction or the process leading thereto.
15. Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Ohio, without giving effect to the principles of conflicts of laws thereof.
16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original but
all such counterparts shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
-28-
If the foregoing correctly sets forth the agreement among the Company, the Guarantors and the
Underwriters, please indicate your acceptance in the space provided for that purpose below.
| Very truly yours, Cintas Corporation No. 2 (as Issuer) |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President & Secretary-General Counsel | |||
| Cintas Corporation (as Guarantor) |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President & Secretary-General Counsel | |||
| Affirmed Medical, Inc. American First Aid Company Cintas Corporation No. 3 Cintas Corp. No. 8, Inc. Cintas Corp. No. 15, Inc. Cintas First Aid Holdings Corporation LLT, Inc. Respond Industries, Incorporated Xpect First Aid Corporation (as Guarantors) |
||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President & Secretary-General Counsel | |||
| Cintas-RUS, L.P. (as Guarantor) |
||||
| By: | Cintas Corporation No. 8, Inc., its General Partner |
|||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Vice President & Secretary-General Counsel | |||
Accepted and agreed by:
KeyBanc Capital Markets, a division of
McDonald Investments Inc.
Acting as Representative of the
several Underwriters named in
attached Schedule B
| McDonald Investments Inc. |
||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Director | |||
SCHEDULE A
SUBSIDIARY GUARANTORS
Affirmed Medical, Inc.
American First Aid Company
Cintas Corporation No. 3
Cintas Corp. No. 8, Inc.
Cintas Corp. No. 15, Inc.
Cintas-RUS, L.P.
Cintas First Aid Holdings Corporation
LLT, Inc.
Respond Industries, Incorporated
Xpect First Aid Corporation
SCHEDULE B
| Amount of | ||||
| Securities to be | ||||
| Underwriters | Purchased | |||
KeyBanc Capital Markets, a division of
McDonald Investments Inc. |
$ | 162,500,000 | ||
Xxxxxxx, Sachs & Co. |
37,500,000 | |||
X.X. Xxxxxx Securities Inc. |
12,500,000 | |||
Lazard Capital Markets LLC |
12,500,000 | |||
NatCity Investments, Inc. |
12,500,000 | |||
Xxxxx Fargo Securities, LLC |
12,500,000 | |||
Total |
$ | 250,000,000 | ||
SCHEDULE C
DISCLOSURE PACKAGE DOCUMENTS
Free writing prospectus regarding Change of Control provisions dated August 17, 2006
Final term sheet substantially in the form of Exhibit A dated August 17, 2006
EXHIBIT A
FORM OF TERM SHEET
| Issuer: | Cintas Corporation No. 2 |
|
| Guarantors: | Cintas Corporation and the subsidiary guarantors. |
|
| Anticipated Ratings: | A2 (Xxxxx’x); A (S&P) |
|
| Issue of Securities: | 6.15% Senior Notes due 2036 |
|
| Principal Amount: | $250,000,000 |
|
| Coupon: | 6.15% |
|
| Interest Payment Dates: | Semi-annually on February 15 and March 15,
commencing February 15, 2007. |
|
| Maturity: | August 15, 2036 |
|
| Treasury Benchmark: | 4.5% due February 15, 2031 |
|
| US Treasury Yield: | 4.998% |
|
| Spread to Treasury: | 120 basis points |
|
| Re-offer Yield: | 6.198% |
|
| Initial Price to Public: | Per Senior Note: 99.352%; Total: $248,380,000 |
|
| Underwriters Discount: | Per Senior Note: 0.750%; Total: $1,875,000 |
|
| Proceeds, before expenses, to us: | Per Senior Note: 98.602%; Total: $246,505,000 |
|
| Optional Redemption: | Make Whole Spread: 20 basis points |
|
| Minimum Denomination: | $1,000 |
|
| Expected Settlement Date: | August 18, 2006 (T+3) |
|
| CUSIP: | 00000XXX0 |
|
| ISIN: | US17252MAG50 |
| Sole Book-Running Manager: | KeyBanc Capital Markets, a division of McDonald
Investments Inc. ($162,500,000) |
|
| Co-Managers: | Xxxxxxx, Sachs & Co. ($37,500,000), JPMorgan
($12,500,000), Lazard Capital Markets
($12,500,000), NatCity Investments, Inc.
($12,500,000), Xxxxx Fargo Securities
($12,500,000) |
The security ratings above are not a recommendation to buy, sell or hold the securities offered
hereby. The ratings may be subject to revision or withdrawal at any time by Xxxxx’x and Standard
and Poor’s. Each of the security ratings above should be evaluated independently of any other
security rating.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
KeyBanc Capital Markets at (000) 000-0000.
D-2
